Agricultural Commercialization in the Uplands of Northern Vietnam: How to Achieve Both Poverty Reduction and Environmental Sustainability Goals?

Abstract

Income growth and urbanization in developing countries have enlarged markets for high-value agricultural commodities. However, there are concerns that lacking access to physical, financial, and human capital, as well as infrastructure and institutions limit the ability of the poor to participate in and benefit from such commercial agricultural activities. There may further be a trade-off between wealth enhancing effects of intensive commercial agriculture and adverse long-term effects on farmers’ livelihoods due to natural resource degradation. This study provides empirical evidence on these crucial issues and derives related policy recommendations using the example of Vietnam. Here, economic growth has boosted the demand for animal products and, consequently, commercial maize production for animal feed purposes especially in erosion-prone upland areas. Using data from mountainous Yen Chau district in north-western Vietnam, the main objective of this paper is to investigate the degree of farmers’ engagement in commercial maize production and the determin ants of their land allocation decision, whereby a special focus is laid on the poorest farm households. We find that maize covers most of the sloping uplands and generates the lion’s share of farmers’ cash income. The poorest farmers are particularly sp ecialized in commercial maize production, but they are highly dependent on relatively disadvantageous input supply and marketing arrangements offered by maize traders. Although farmers in all wealth groups are well aware of soil erosion, effective soil conservation measures are rarely practiced. Due to the trade-off between short-term wealth enhancing effects of maize production and la cking sustainability we propose a two-pronged policy approach that comprises (1) measures aimed at enhancing the short-term profitability of maize produc tion for the poorest farmers while reducing the associated market related risks and (2) measures aimed at enhancing both the economic and ecological sustainability of land use in the long run through the prom otion of economically attractive soil conservation options that may gradually evolve into a more diversified land use system.