Factors determining upland farmers' participation in non-timber forest product value chains for sustainable poverty reduction in Vietnam

Abstract

The development of non-timber forest products (NTFPs) plays an active role in overall economic development and is considered a new direction for sustainable forestry development to help people escape poverty. From micro data collected by a survey of poor, rural households living in the mountainous region of Central Vietnam, a structural equation model (SEM) incorporating the six factors of household head characteristics, household characteristics, reputation statuses of households, forest characteristics, willingness to participate in NTFP value chains, and financial effects of NTFP value chains was established. An empirical study of the effects of farmers' behaviors on NTFP financial value chains was also conducted. The results showed that household head characteristics, household characteristics, reputation statuses of households, and forest characteristics were positively correlated with people's willingness to participate in NTFP value chains and increase the financial efficiency of the value chains. However, each factor has a different level of influence. Additional empirical factors affecting farmers' awareness of poverty reduction policies were investigated. It was found that the more farmers understand sustainable poverty reduction policies, the more willing they are to participate in the value chains. The willingness to participate in the value chains strongly affects the financial performances of the value chains. Farmers are expected to be willing to fulfill their obligations and their enthusiasm for participating in the value chains has increased the financial efficiency of the value chains. In the future, the government can cooperate with official financial institutions, policy finance institutions, and local rural intermediaries to increase public financial knowledge, poverty reduction policies and projects in poor areas, and the participation of poor farmers, as well as solve their credit problems. Meanwhile, in developing a financial model of new NTFP value chains, more attention should be paid to the needs of farmers and this model should be built with the aim of the sustainable development of NTFP value chains.