The effects of multiple climate change responses on economic performance of rice farms: Evidence from the Mekong Delta of Vietnam

Abstract

The most important challenge for agriculture under the impact of climate change is the need to reduce vulnerability or enhance resilience and to maintain food security and rural livelihood. A special focus on potential climate change responses at national, regional, and international levels is necessary. This study aims to examine the effects of climate change responses related to salinity intrusion and drought on the economic performance of rice farms using observational data from 352 rice farmers in the Mekong Delta of Vietnam. The multinomial endogenous treatment effect model was used in combination with a propensity score analysis for categorical treatment to reduce selection bias from both observed and unobserved heterogeneities and to check the robustness of the estimated results. Although the magnitudes vary significantly across two econometric methods, their qualitative results are similar indicating that performing one to multiple packages of climate change responses significantly improves rice yield, profitability, and income, and reduces chemical fertilizer use. The results from the multinomial endogenous treatment effect model indicate that responding farmers with a package related to crop management has a large impact on all outcomes related to rice farming, such as improving yield by 13%, profitability by 14%, and income by 19%, as well as reducing chemical fertilizer use by 7%. Additionally, a package related to income diversification plays a key role in improving household income by 25%. Notably, a more comprehensive package achieves higher yield and income but may not always result in greater profitability than less comprehensive packages. This study concludes with implications for policies to promote climate change responses and encourage the use of those responses while considering geographical context and its different effects on specific outcomes of rice farming.