Shocks, agricultural productivity, and natural resource extraction in rural Southeast Asia

Abstract

Natural resources are depleting at an alarming rate, causing severe threats to the sustainable development in many developing countries. Given an ambiguous relationship between shocks, agricultural productivity, and natural resource extraction, we used a dataset of about 4200 rural households surveyed in four Southeast Asian countries (Cambodia, Laos, Thailand, and Vietnam) to investigate the impact of shocks and agricultural productivity on natural resource extraction by rural households. Our results show that weather shocks and market shocks force households to extract more natural resources. An increased agricultural productivity, however, discourages natural resource extraction. In addition, our results show that low education and low access to electricity are positively associated with natural resource extraction. We suggest that measures enhancing agricultural productivity should be prioritized, and more assistance and support to farmers for mitigating the severe effects of weather shocks and market shocks should be provided. Furthermore, accelerating farm mechanization, land defragmentation, rural electrification, supporting the development of communication systems and local markets, and promoting rural education should be encouraged.