Introduction
Research problem
Climate change is a highly debated global issue with profound impacts on society and the economy, particularly affecting the vulnerable agriculture sector Changes in climate conditions—such as rising temperatures, abnormal precipitation, droughts, and floods—are major drivers of insect outbreaks, plant diseases, and crop failures While climate change generally hampers crop production, its effects are diverse; higher temperatures can shorten the rice-growing period and reduce yields, whereas increased atmospheric CO2 may enhance photosynthesis in crops like maize and wheat, potentially improving cereal productivity.
Climate change in the 20th century has led to significant declines in the production of wheat, vegetables, milk, and eggs, with Russia experiencing an estimated 50% decrease in major crop yields due to climate impacts The effects of climate change on agriculture vary across different regions, influenced by local natural conditions and socio-economic factors Demographic characteristics and regional adaptive capacities are key determinants of vulnerability to climate change's impacts on food security Despite regional differences, it is undeniable that climate change has severely compromised global food security, threatening the stability of agricultural systems worldwide.
Vietnam is the second-largest rice exporter globally, with 90% of its rice production coming from the Mekong River Delta This fertile region, located near the final branches of the Mekong River before it meets the ocean, is Vietnam’s largest rice granary and ideal for rice farming However, recent years have seen the Mekong River Delta face severe threats from climate change, including increased saline intrusion, droughts, and freshwater shortages during dry seasons, which have limited arable land Climate projections indicate that by 2100, a 1-meter sea level rise could submerge approximately 40% of arable land in saltwater, significantly impacting rice yields and threatening Vietnam’s agricultural future.
Page 2 income loss for farmers, theincrease of poverty, and the social insecurity at the same time
However,overcoming all difficulties of natural conditions, Mekong River Delta still keeps a stable development rate of production
Farmers have adopted various strategies to address environmental challenges caused by climate change and enhance their livelihoods Among these solutions, income diversification is recognized as an effective approach to cope with climate variability (Smit et al., 2000; Bryan et al., 2011) Implementing diverse income sources helps farmers build resilience and adapt more effectively to changing environmental conditions.
Income diversification helps farmers reduce the risk of crop failure and increase household income, contributing to financial stability (Zerihun, 2012; Haiwang et al., 2015) It involves farmers engaging in various activities such as cultivating diverse crops, livestock breeding, aquaculture, and non-farm enterprises to generate additional income Understanding the key drivers behind income diversification—such as temperature fluctuations, drought, salinity, price changes, and institutional factors—is crucial for designing effective policies These drivers can vary across regions, making it essential to identify specific influences within the Mekong River Delta to tailor policies that effectively support local farmers.
In Vietnam, income diversification is recognized as a vital strategy for farmers to mitigate the threats of climate change and is actively supported by government policies These policies also focus on improving physical infrastructure, providing financial subsidies, and enhancing market openness within the agriculture sector However, uncertainties regarding the determinants of income diversification and farmers’ responses to climate change may reduce the effectiveness of government support initiatives Therefore, research on the relationship between climate change and income diversification is essential to provide reliable and sustainable evidence for policymakers Such empirical findings enable the formulation of more effective policies that better assist farmers in their income diversification efforts amidst changing climate conditions.
Research objective
This study aims to analyze the impact of climate change on income diversification, focusing on key climatic factors such as temperature variation, changes in precipitation, and salinity intrusion during both dry and wet seasons Additionally, socio-economic characteristics are examined to understand how different households respond in terms of income diversification behavior The findings highlight the significant influence of climate variability on household income strategies and underscore the importance of considering both environmental and socio-economic factors in resilience planning.
This study provides empirical insights into how farmers diversify their income sources, highlighting the key determinants influencing income diversification By understanding farmers' behavior across different socio-economic backgrounds in response to climate change, policymakers can design targeted policies that support adaptable and resilient farming practices Implementing such policies can mitigate the risks associated with traditional agricultural activities affected by climate change, thereby helping to sustain and improve farmers' living standards These findings enable the development of more effective, climate-smart agricultural policies that promote income diversification and ensure long-term farm resilience.
Research scope
This study utilizes panel data analysis of 362 households in the Mekong River Delta of Vietnam, a coastal area severely impacted by climate change The region's households primarily engage in vulnerable agricultural activities, which are most affected by environmental shifts Covering the period from 2010 to 2014, the research provides an overall picture of how climate change and socio-economic factors influence income diversification—an essential and effective adaptation strategy for local communities.
Thesis structure
This study is structured into four key chapters Chapter 2 provides a comprehensive review of relevant theoretical and empirical studies related to the research topic Chapter 3 outlines the analytical framework, including the empirical model and variable descriptions used in the analysis Chapter 4 presents a detailed description of the data and discusses the empirical findings on how climate change and socio-economic factors influence income diversification behaviors in the Mekong River Delta Finally, Chapter 5 summarizes the main research findings, offers policy recommendations, acknowledges study limitations, and suggests directions for future research.
Literature review
Theoretical review
Climate change refers to significant changes in the climate system, identified by shifts in the average conditions and variability of climate properties, persisting over decades or longer (IPCC, 2007) It includes all changes over time, whether caused by natural variability or human activities According to the UNFCCC, climate change specifically refers to alterations in the climate attributable directly or indirectly to human actions that modify the composition of the Earth's atmosphere, beyond what is observed through natural climate fluctuations over similar time frames.
Climate change can originate from natural factors such as changes in Earth’s orbit, variations in solar energy received, and volcanic eruptions However, the rapid warming observed in recent decades cannot be attributed solely to these natural processes Scientific evidence, including the IPCC Fourth Assessment Report, shows that human activities are the primary driver of recent climate change, contributing to over 100% of the observed global temperature rise.
90 percent possibility of the greenhouse effect intensification, a phenomenon that long-lived gases absorb heat radiated from the earth to space, making the earth surface warmer
Increasing greenhouse gas emissions are causing severe climate change, which significantly threatens natural environments and human societies The ongoing rise in these emissions intensifies the adverse effects on global weather patterns, ecosystems, and public health Addressing climate change requires urgent action to reduce emissions and implement sustainable practices to protect the planet for future generations.
Page 5 diversifiesvia its unequal magnitude for different areas, and depends on vulnerability, sensitivity, and adaptation capacity of affected zones to climate change
Rising temperatures are intensifying the atmosphere’s heat, leading to increased evaporation, precipitation, and more extreme weather events Melting glaciers and polar ice contribute to rising sea levels globally, heightening the risk of storms and floods Additionally, hotter, drier conditions in various regions have caused an uptick in devastating wildfires and forest fires, damaging ecosystems and threatening both wildlife and human lives.
By the end of the 21st century, global temperatures are projected to rise by approximately 1.9 to 3.4°C, with global precipitation increasing by 3.3 to 5.0%, and sea levels rising over 18 to 24 cm compared to the 1990s (IPCC, 2013) Climate change has caused significant and long-lasting alterations to Earth's surface structures and widespread changes in ecosystems across continents and oceans worldwide These changes have adversely impacted water resources, leading to reductions in both water quantity and quality Specifically, freshwater shortages are becoming more severe, while increasingly saline water encroaches into previously freshwater habitats.
The agriculture sector faces significant challenges in both crop cultivation and animal husbandry, with crop failures increasing due to drought, pests, diseases, and salinity intrusion Soil degradation further exacerbates these issues, impacting productivity Additionally, livestock mortality rises during droughts and floods, threatening the livelihoods of farmers and pastoralists Addressing these environmental threats is crucial for sustainable agricultural development.
2.1.3 Adaptation of people to climate change
The agricultural system, comprising biological, physical, and chemical agents, is significantly influenced by climate Climate change impacts all these processes, affecting crop productivity and sustainability The vulnerability of the agricultural sector depends not only on the adverse effects of climate change but also on the adaptive capacity of people to overcome these challenges Developing resilient agricultural practices is essential to enhance adaptation and ensure food security in the face of climate variability (Marshall et al., 2010).
Parry et al (2007) define "adaptation to climate change" as the adjustments made in natural or human systems in response to actual or expected climatic stimuli, aiming to reduce harm or capitalize on beneficial opportunities (IPCC, 2007) While adaptation and mitigation are often viewed as similar, their core differences lie in purpose: mitigation involves reducing greenhouse gas emissions to prevent climate change, whereas adaptation focuses on responding to climate impacts by leveraging new opportunities Understanding these distinctions is crucial for developing effective strategies to address climate change impacts comprehensively.
Page 6 climate variation According to Mastrandreaet al (2010), adaptationcould reduce the sensitivity and vulnerability of a society to the impacts of climate change
In the agriculture sector, key drivers influencing adaptive behaviors include farmers' awareness and preferences, their experience in coping with climate change impacts, and market signals along with government policies (Godfray et al., 2010; Parry et al., 2007; Spies et al., 2011; Preston et al., 2011) Additionally, research-driven innovations provide new, effective solutions that guide adaptation investments Harmonizing these drivers enhances the efficiency of adaptation strategies and promotes optimal responses to climate variability A critical factor in selecting adaptation methods is the assessment of costs and benefits, though the complex and uncertain nature of climate scenarios complicates the measurement of the economic effectiveness of different adaptive approaches.
Researchers proposed that the adjustment action would be more efficient if it is taken at large scale (Adger et al., 2007)
Adaptation behaviors can be classified based on multiple dimensions, including spatial and temporal scope, intentionality (active versus passive actions), and specific objectives such as enhancing resilience or reducing vulnerability These behaviors vary depending on the performer, whether it's individuals, households, enterprises, or governments, and their intended outcomes—such as increasing heat tolerance or maintaining income levels Additionally, adaptation strategies can involve physical measures or technological solutions, reflecting a comprehensive approach to climate resilience.
Adaptation behaviors often involve a combination of various attributes, reflecting the complexity of climate change impacts (Smit et al., 2002; Adger et al., 2007) Due to the intricate and unpredictable nature of climate change, effective adaptation strategies must encompass multiple dimensions, necessitating collaboration among farmers, researchers, and policymakers Implementing multi-stakeholder approaches enhances resilience and ensures comprehensive responses to climate challenges.
Enhancing the adaptive capacity of agriculture is crucial for building resilience against climate change, as human behaviors play a vital role in this process Improving awareness of socio-economic and biological factors that influence adaptation, evaluating response costs and benefits, and assessing social, technological, and resource feasibility are essential steps All adaptation strategies aim to create a sustainable agricultural economy capable of withstanding climate-related challenges.
The classification of adaptation strategies is complex due to the dynamic relationship between climate change, agricultural systems, and natural resource limitations Smit et al (2002) highlight various adaptation behaviors aimed at responding to climate variability, with rising seasonal temperatures and decreased precipitation identified as key driving factors To maintain farm productivity, farmers are advised to adopt practices such as switching cultivars, adjusting planting dates, cultivating drought-resistant crops, and developing irrigation systems Financial management strategies recommended by economists include crop insurance, investing in crop futures, and diversifying income sources Additionally, investments in farm infrastructure, such as water management systems, irrigation, and weather forecasting, are essential for effective adaptation These strategies collectively enhance the resilience of agricultural systems to climate impacts.
Scientific research emphasizes the importance of studying drought-tolerant crops, accurate weather forecasting, and monitoring abnormal climate phenomena to enhance agricultural resilience Governments play a critical role by planning and supporting adaptive strategies through subsidies, government insurance, market connections, and technological investments These efforts are essential for developing effective solutions to mitigate the impacts of climate variability and ensure food security.
Income diversification is regarded as one of the most effective agricultural adaptation strategies to climate change, suitable for almost all conditions It can be achieved by expanding crop varieties, engaging in additional income sources such as animal husbandry and aquaculture, or participating in non-farm activities This approach enhances financial resilience by minimizing the risk of losses caused by climate impacts Due to its convenience and efficiency, income diversification is highly promoted by policymakers in the development of climate change adaptation strategies.
2.1.4 Income diversification 2.1.4.1 Definition and classification of income diversification
Empirical review
Seo and Mendelsohn (2008) made a significant breakthrough in understanding how farmers adapt to climate change by switching crops, shifting focus from the previously emphasized harmful impacts of severe weather on specific yields Unlike earlier studies that relied on Ricardian models to quantify crop failures and their economic effects, their research highlights farmers' proactive adaptation strategies through crop switching to endure harsh environmental conditions Using a multinomial logit model to analyze farmers’ crop choices in South America, Seo and Mendelsohn demonstrated that crop switching is a vital adaptive behavior crucial for maintaining agricultural productivity amid climate variations.
A study analyzing data from 949 farmers across seven countries reveals a significant link between farmers' crop choices and climate variables such as precipitation and temperature The findings indicate that farmers tend to favor growing fruits and vegetables over maize and wheat as a strategy to adapt to global warming This shift in agricultural practices highlights the impact of climate change on cropping patterns and underscores the importance of understanding farmer behavior in climate resilience efforts.
A wetter climate is more suitable for crops like potatoes, rice, and fruits, while a dry climate favors maize and wheat Studies also indicate that farmers are increasingly switching from cultivating a single crop to adopting multiple crop combinations simultaneously to maximize their profits Additionally, farmers are aiming to optimize yield and income through diversified planting strategies, enhancing agricultural productivity in various climate conditions.
A study by Seo and Mendelsohn (2007) examined African farmers’ livestock management behaviors and found that income diversification choices are heavily influenced by climate change The researchers employed three econometric models: a multinomial logit model to identify the most profitable livestock species, an optimal portfolio model to analyze possible combinations of livestock, and a multivariate probit model to assess the likelihood of farmers selecting specific species.
A comprehensive study across ten countries with data from 9,000 households reveals that farmers’ crop and livestock choices are closely linked to climate variability Under cool, moist conditions, farmers prefer crops, while increased temperatures prompt a shift towards goats and sheep over beef cattle and chickens Higher precipitation favors goats and chickens, which thrive in forested environments, as opposed to savanna regions Climate scenario simulations indicate that livestock production is likely to continue expanding in warm, dry climates but may decline with higher rainfall, with heat-tolerant species expected to dominate in Africa in the future.
Livestock diversification is a crucial strategy for income resilience in Southern Ethiopia, where agriculture faces high vulnerability due to an arid climate and water shortages A study by Megersa, Markemann, and Ay (2014) surveyed 242 households across Dike and Yabelo provinces, collecting data on socio-demographic factors and livestock holding behaviors through direct interviews The research focused on five common livestock species—cattle, camel, goat, chicken, and donkey—and defined livestock diversification as households owning at least three species Findings indicate that climate variables like temperature, precipitation, and drought significantly influence livestock holding decisions, with linear regression assessing climate impacts, ranking models identifying livestock priorities, and logit models estimating the likelihood of adopting different livestock types This study underscores the importance of diversification in mitigating climate-related risks and enhancing income stability for rural households in arid regions.
Evaluation of livestock tolerance to drought reveals that cattle are the least adaptable among four species, whereas camels and goats demonstrate greater resilience to water scarcity and food shortages Long-term analysis of rainfall and temperature shows a significant increase in drought frequency, leading to reduced annual precipitation, while average temperatures remain relatively stable Consequently, livestock diversification is negatively correlated with precipitation levels but shows no meaningful relationship with temperature changes.
Brenshaw, Dollan, and Smit (2004) found that, contrary to existing research, Canadian prairie farmers tend to specialize in cropping rather than diversify Their study, which analyzed cropping behaviors from 1994 to 2002 using the Herfindahl index to measure crop diversity, revealed that farmers face significant barriers to diversification, including high start-up costs, limited access to new technologies, and diminished benefits due to economies of scale Interestingly, the research also highlights that farmers prefer diversifying off-farm income sources over crop diversification to mitigate climate and economic risks, indicating a strategic shift in risk management practices.
2.2.2 Impact of high salinity intrusion to income diversification:
Coastal and low-lying delta regions are most threatened by seawater inundation and rising salinity levels in soil and underground water These factors significantly negatively impact agriculture by reducing soil fertility and crop yields, posing a serious risk to local livelihoods and food security.
IPCC (2014) proposed many adaptation measures to respond with salinity intrusion, in which new and diversified livelihood seems to be the most important method Shannon
Research by 1997 highlights the importance of assessing the salinity tolerance thresholds of different plants when selecting species for coastal areas The study finds that barley and wheat are more salt-tolerant than rice and maize, while cotton and sugar beet exhibit higher salinity tolerance compared to beans, peas, and potatoes Among oilseed crops, sunflower, linseed, and soybean demonstrate varying degrees of tolerance, emphasizing the need to choose appropriate plants based on their salt resilience for successful coastal cultivation.
Page 13 more sensitive to salinity than canola and safflower Fruits and citrus are not popular in the condition of saline area Bithal et al (2011) suggested that crop varieties in the coastal and low-lying delta should enhance the ability to resist to drought, heat and salinity Pitmann and Michael (2002) recommend genetic engineering as the effective approach to make plants endurable with high salinity and even be irrigated by brackish water Besides, Ahmed (2010) and Khan et al (2012) introduced other adaptation methods including non-rice crops in floating gardens, or exploiting small-scale fish and other aquacultures on inundated land
The Mekong Delta in Vietnam faces significant risks from salinity intrusion, especially during the dry season, with seawater penetrating 40-60 km inland, according to Miller (2003) This phenomenon has caused millions of hectares of arable land to become highly saline, resulting in frequent crop failures Consequently, both the quantity and quality of agricultural production are severely impacted, illustrating the critical threat of salinity intrusion to the region's farming stability.
Binh (2015) assessed the increasing vulnerability to salinity intrusion in the Mekong River Delta from 1995 to 2011 using both quantitative and qualitative methods, finding that salinity intrusion has become more rapid and widespread over time A survey of 512 households in Tra Vinh revealed adaptation strategies such as dyke construction, crop rotation, and groundwater management to mitigate salinity hazards Previous studies highlight that the development of dyke systems has effectively prevented floods and salinity intrusion, enabling farmers to cultivate two to three crops annually and boosting rice production (Hoanh et al., 2003; Tuong et al., 2003; Can, 2005) Additionally, De et al (2002) introduced new short-day, high-salinity tolerant rice varieties, which are well-suited for cultivation in coastal areas, offering promising solutions for increasing agricultural resilience.
Since 2000, the Vietnamese Government has promoted policies to upgrade rice quality and develop integrated farming systems combining rice, fish, and shrimp to maximize the benefits of agricultural products Coastal farmers have successfully adopted rice-shrimp farming, leveraging both floods and brackish water to increase their income This integrated model involves rice cultivation during the dry season and shrimp farming in the wet season, helping farmers reduce risks associated with climate extremes, prevent crop and shrimp losses, and meet household food needs.
De et al (2002) presented a contrasting perspective to Phong et al (2002) and Brennan et al (2002), questioning their conclusions and suggesting alternative insights into the topic Their research highlighted the importance of considering different angles when analyzing the subject matter, emphasizing the need for comprehensive approaches This divergence in findings underscores the ongoing debate within the field and the necessity for further investigation to reach a consensus.
Page 14 high revenue efficiency of rice shrimp system due to salt leaching They presented evidence that yield would be higher in the rice monoculture system
Research methodology
Analytical framework
Based on theoretical and empirical literature review, an analytical framework is built to clarify the motivations and determinants of income diversification of households in Mekong River Delta (Figure 3.1)
Natural change and human activities
Salinity intrusion Temperature variability Precipitation variability
Income lost due to rice yield drop
Agriculture and aquaculture play vital roles in rural income generation, alongside livestock farming and non-farm activities Diversifying income sources through crop cultivation, livestock, and aquaculture can significantly enhance economic stability for farming communities Emphasizing sustainable practices in these sectors promotes long-term productivity and environmental health, contributing to overall rural development Integrating non-farm income opportunities alongside traditional farming ensures economic resilience and improves livelihoods in rural areas.
Climate change, driven primarily by human activities, is impacting the Mekong River Delta through rising temperatures, longer dry seasons, reduced rainfall, and increasing salinity intrusion As a low-elevation coastal area, these changes threaten local water resources and agricultural productivity The delta, known as Vietnam's rice bowl with over 50% of the national rice output, faces frequent crop failures and significant rice yield reductions due to abnormal weather patterns To adapt to these challenges, the government promotes strategies such as income diversification among local farmers to build resilience against climate change impacts.
Farmers in the Mekong River Delta diversify their income by combining rice cultivation, other crop farming, livestock rearing, aquaculture, and non-farm activities This integrated approach spreads risk and enhances economic resilience, especially in the face of climate change impacts By optimizing their diversified farming systems, farmers can better withstand adverse weather conditions and improve their overall earnings Implementing these sustainable practices ensures livelihood stability and promotes sustainable development in the region.
Methodology
This study evaluates the impact of climate change and other determinants on household income diversification behaviors by using both one-sided and two-sided proxies to measure diversification degree To ensure a comprehensive and precise analysis, both types of indices are incorporated into the regression models, providing a more accurate assessment of how various factors influence income diversification strategies among households.
The first income diversification index measures the number of income sources, making it a straightforward indicator of diversification Ranging from 0 to 4, it reflects the household's involvement in zero to four income-generating activities A higher index signifies greater income diversification, indicating a more varied income portfolio for the household.
The total income (DI) is computed by summing the income sources, where each source (m) ranges from 0 to 4 Accurately calculating income streams is essential for financial analysis and decision-making For more details or to access the full document, please contact us at z z vbhtj mk gmail.com Stay updated with the latest thesis and research projects by visiting our platform.
The Herfindahl index is a key measure of income diversification, originally developed to assess industry concentration and oligopolistic market structures (Ben, Holly, & Barry, 2004) This index quantifies the degree of diversity by considering both the number of income sources and their relative contributions to total income By evaluating these two dimensions, the Herfindahl index provides a comprehensive measure of income diversification, making it a valuable tool for analyzing financial stability and competitive dynamics.
The Herfindahl index measures income concentration among households, where P_m represents the proportion of the m-th net income in total household income This index ranges continuously from 0 to 1; a value closer to 1 indicates lower income diversification among farmers, suggesting they participate in fewer income sources.
This study employs two different models to accurately assess the impact of climate change and other factors on income diversification The panel Poisson model is used to estimate the first income diversification index, while the panel Tobit model is utilized for the second index, ensuring precise analysis given the methodological differences between the two measurement approaches.
Rural households in the Mekong River Delta adapt to climate change by diversifying their income sources Their main income activities include rice cultivation, planting alternative crops such as fruit, sesame, soybean, and coconut, as well as livestock and aquaculture breeding Additionally, non-farm income plays a crucial role in supporting these communities, helping them build resilience against climate-related challenges.
The general model is estimated as follows: it it it i
The household income diversification index (DI) is modeled as a function of climate variables, including temperature, precipitation, and salinity levels, denoted by the K variable Additionally, the model incorporates household characteristics such as gender, age, educational level of the household head, household size, labor ratio, migration status, and land ownership, represented by the S variable The study employs panel Poisson regression methods to accurately estimate the effects of these variables on household income diversification over time, ensuring robust analysis of the factors influencing income diversification in households.
Page 19 model and panel Tobit model are figured out in order to prove the existence of critical point of
The first model examines the regressand, which is the number of income sources, ranging from 0 to 4, represented as count data This variable follows a Poisson probability distribution, making it suitable for modeling the number of income sources as an integer-valued variable Understanding this relationship helps to analyze factors influencing individuals' income diversification, providing valuable insights for income stability and economic behavior analysis.
where i obeys the log linear model, and ln i x i ' Moreover, i is proved to be the mean or expected value and the variance of thePoisson distribution, due to the transformation:
The parameter could be estimated by the maximum log-likelihood function:
The first derivative of the log-likelihood equation is:
The Hessian is always negative, so could be estimated when the equation gets the maximum value.The prediction is ˆ i exp(x i ˆ) The estimated variance of the prediction is
The estimated covariance matrix for β, denoted as Vis, is a critical component in understanding the variability and uncertainty associated with parameter estimates Properly analyzing Vis allows researchers to assess the precision of their model coefficients, which is essential for reliable statistical inference Ensuring accurate calculation of this matrix enhances the robustness of the overall analysis and supports valid conclusions in research studies.
To analyze the determinants of income diversification, a two-limit Tobit model is employed due to the Herfindahl index's continuous range from zero to one This double-censored regression approach effectively accounts for the censored nature of the dependent variable The Herfindahl index for each household in year t is regressed on time-varying independent variables, enabling a comprehensive understanding of factors influencing income diversification over time.
The article discusses a latent variable representing the desired Herfindahl index, while the observed Herfindahl index is also considered An error term, vi, follows a standard normal distribution, capturing the variability in the measurement The correlation between the observed and latent Herfindahl indices is analyzed to understand their relationship, providing insights into the accuracy of observed data versus the true desired level This approach highlights the importance of accounting for measurement error in analyzing market concentration using the Herfindahl index.
* ' with 1, 2, , ; 1, 2, , it it it i y x u i n t T it i it u v
1 if 1 if 0 1 it it it it it it it y y y y y y y
The log-likelihood of the censored model is:
The Hessian of the log-likelihood function, obtained by taking the first and second derivatives with respect to β, is consistently negative This indicates that the log-likelihood function is concave, allowing it to reach a maximum point Consequently, the estimated value of β can be reliably determined at this maximum, ensuring optimal parameter estimation in statistical modeling and analysis.
Table 3.1 gives a brief description of variables, which are incorporated into the model
The study examines two types of income diversification indices as dependent variables, while independent variables are categorized into two groups Climate change proxies include scaled salinity, along with the average values of temperature and precipitation during both dry and wet seasons, and their quadratic forms Control variables encompass socio-economic characteristics such as the age, gender, educational level of the household head, household size, household labor ratio, land area, and migration status of the household.
Variable Denotation Unit Description Expected sign to diversification behavior
Income diversification index1 diversity_index1 Number of income sources: 0,1,2,3,4
Income diversification index 2 diversity_index2
Equal sum of square of the net revenue from each income source in the total income, and continuous from 0-1
Average temperature in the dry season dry_temp o C +/-
Average temperature in the wet season wet_temp o C +/-
Average precipitation in the dry season dry_precipitation mmHg +/-
Average precipitation in the wet season wet_precipitation mmHg +/-
Square of average temperature in the dry season sqr_dry_temp o C 2 +/-
Square of average temperature in the wet season sqr_wet_temp o C 2 +/-
The square of the average precipitation during the dry season, measured in mmHg², is a critical indicator for understanding seasonal climate patterns Monitoring changes in dry season precipitation helps in assessing drought risks and managing water resources effectively Accurate data collection and analysis are essential for developing reliable climate models and informing agricultural planning Ensuring precise measurements of dry season precipitation contributes to better climate resilience strategies and sustainable development efforts.
Square of average precipitation in the wet season sqr_wetprecipitation mmHg 2 +/-
Variable Denotation Unit Description Expected sign to diversification behavior
Age of household head age year old +/-
Household size hh_size member +
Household’s labor ratio hh_labor_ratio % +
Number of migrators in a household migration member +/-
Educational qualification of household head education
Gender of household head gender =1: male
Data sources
The study utilizes data from the Vietnam Household Living Standards Surveys (VHLSS), a biennial survey conducted by the General Statistics Organization (GSO) with technical assistance from UNDP and the World Bank This comprehensive dataset provides valuable insights into household living conditions and socioeconomic factors across Vietnam.
Page 2 nation-wide scale, the survey provides detailed information at households and communes level of 64 provinces through direct interview approach The investigation is strictly conducted by carefully trained enumerators Respondents are interviewed face to face a carefully designed questionnaire covering many varieties of social economic aspects The core content of the survey is concentrated on the income and expenditure information of individuals and households Besides, education, health status and many other demographic characteristics are incorporated into the survey Over many years, results from VHLSS database processing have greatly contributed to the social economic policy planning of the government
The study focuses on the Mekong River Delta, covering 13 provinces including Long An, Dong Thap, Ben Tre, Vinh Long, Can Tho, Tien Giang, Hau Giang, Kien Giang, An Giang, Soc Trang, Tra Vinh, Bac Lieu, and Ca Mau Its primary objective is to evaluate how climate change influences household adaptation behaviors, particularly through income diversification from 2010 to 2014 The empirical analysis is based on data collected from 362 households that completed three surveys conducted by the General Statistics Office (GSO), resulting in a total of 1,086 observations across the 13 southern provinces in 2010, 2012, and 2014.
Income diversification involves households engaging in multiple income-generating activities to enhance their financial stability In the Mekong River Delta, the four primary sources of income are rice cultivation, other crop cultivation, livestock and aquaculture husbandry, and non-farm activities The empirical study evaluates income diversification using two variables: one measures the number of income sources a household participates in, and the other assesses the concentration of income through the sum of squares of each net income source relative to total household income Household net income in each economic sector is calculated by subtracting relevant expenses from revenue Additionally, socio-economic factors such as household size, labor ratio, education level, gender and age of household head, migration status, and land area are considered as control variables in the analysis using VHLSS data.
The study site spans a vast area of 390,000 km² along a 740 km stretch of coastline in the Mekong River Delta This region features a tropical monsoon climate, but it encompasses diverse ecological zones, each with distinct climatic characteristics that vary significantly across regions Key climatic variables examined in the study include temperature and other environmental factors, providing insights into the varied ecological dynamics within this extensive and diverse landscape.
Page 3 precipitation, which are recorded at 10 meteorology stations across the Mekong River Deltawith available figures posted in the statistics website of The Ministry of Agriculture and Rural Development (MARD) Climatic data is collected by months per year at each station
The South of Vietnam experiences two distinct seasons: the rainy season from May to November and the dry season during the remaining months Climate data, including temperature and precipitation, are averaged for each season to facilitate accurate analysis Household climatic variables are linked to climate figures obtained from the nearest meteorology station, ensuring precise environmental assessment for research purposes.
Salinity measurement
Salinity data is collected by the Vietnam Institute of Meteorology, Hydrology, and Climate Change, revealing severe salinity intrusion in over 8 out of 13 coastal provinces along the Mekong River Delta Saline water intrudes inland through estuaries, rivers, and canals, impacting numerous regions Salinity monitoring stations are strategically located at key estuaries including Tieu, Dai, Ham Luong, Co Chien, Cung Hau, Dinh An, Tran De, Ong Doc, and Cai Lon, with a total of 29 stations along the coast These stations’ precise longitude and latitude coordinates are mapped accurately on the Mekong River Delta illustration, facilitating detailed salinity intrusion assessment.
Salinity concentration is measured using specialized sensor instruments that automatically transmit data to a processing center These measurements are recorded every two hours daily from February to May, during the peak dry season when salinity issues are most severe The raw data are used to calculate average, maximum, and minimum salinity levels, with the maximum salinity being the most critical for scientific analysis because it directly impacts the sustainability of crops and aquatic life For example, understanding the saline threshold of common rice varieties is essential for managing salinity levels effectively.
Salinity levels significantly impact crop and aquaculture productivity; rice can tolerate salinity up to 4 g/L, with some salt-tolerant varieties enduring higher levels but experiencing a 20-50% yield reduction depending on the growth stage When salinity exceeds 6 g/L, nearly all rice plants die In contrast, aquaculture species like catfish can survive in salinity levels up to 12 g/L, and shrimp thrive best at 15-25 g/L salinity (Giới thiệu hệ thống quan trắc và xâm nhập mặn, 2016) This difference in salinity tolerance highlights salinity as a potential factor for income diversification, helping to mitigate risks associated with production failures.
Salinity levels vary across different stations, but household location plays a crucial role in determining individual saline exposure According to the Water Resources Directorate, areas within approximately 45 km from the coast tend to have higher salinity levels due to proximity to saline water sources This spatial variation underscores the importance of considering geographic factors when assessing and managing salinity impacts.
Page 4 very scarce, not enough for production and daily activities At zones far from the sea around
Salinity intrusion significantly affects areas within 45 to 65 km from the sea, where salinity levels exceeding 4 g/L indicate high saline conditions To safeguard against this, regions located 70 to 75 km inland are regarded as a safe zone, effectively protected from salinity intrusion Over time, the influence of salinity gradually extends further inland, expanding the affected area each year and highlighting the need for proactive management strategies.
This study introduces a novel measurement method in Vietnam that estimates the salinity at specific household locations based on their proximity to the nearest salinity station Building upon Dasgupta et al (2015), the approach uses a simplified distance-based model due to data limitations, recognizing that salinity impact diminishes with increasing distance Specifically, salinity remains nearly unchanged within 30 km of a station, decreases by approximately 30% between 30 and 60 km, 60 and 90 km, with only about 10% of the original salinity remaining beyond 90 km This scaled salinity measurement provides a more accurate assessment of salinity intrusion's total impact on households by considering both the affected zone and the salinity level at the nearest station.
Figure 3.2 illustrates the salinity stations in the Mekong River Delta, highlighting key measurement points that are essential for monitoring salinity levels in the region Understanding salinity distribution is crucial for managing water resources, supporting agriculture, and ensuring sustainable development in the delta Accurate data collection at these stations enables researchers and policymakers to analyze trends and implement effective strategies to mitigate the impacts of salinity intrusion.
Result and discussion
Overview of the Mekong River Delta
The Mekong River Delta is located in southwestern Vietnam, bordering the Eastern Sea to both sides, covering over 3.9 million hectares It is divided by the two main branches of the Mekong River—the Bassac (Hau River) and the Tien River—along with numerous smaller branches and canals that crisscross the terrain The delta comprises 13 provinces, including Ben Tre, Long An, Vinh Long, Tra Vinh, Soc Trang, Tien Giang, Can Tho, Dong Thap, Bac Lieu, An Giang, Ca Mau, Kien Giang, and Hau Giang.
The Mekong River Delta features a flat, low-elevation terrain, averaging just 3-5 meters above sea level, with some areas only 0.5-1 meters high During the rainy season, upstream floods can reach depths of up to 3 meters, submerging large areas such as the Plain of Reeds and the Long Xuyen Quadrangle In the dry season, reduced river flow leads to significant salinity intrusion across extensive coastal regions, impacting local ecosystems and agriculture.
The agriculture sector is vital to the Mekong River Delta's economy, leveraging its large area, fertile soils, and abundant freshwater resources to sustain high levels of production The region accounts for approximately 50% of Vietnam's rice yield, making it the country's second-largest rice exporter globally In addition to rice cultivation, the delta excels in growing fruit orchards and vegetables, supporting diverse agricultural activities Aquaculture also thrives here, with rapidly increasing production of brackish water species such as shrimp and catfish, significantly contributing to the local GDP Alongside farming, rapid industrialization and modernization have boosted the non-farm sector, leading to a growing contribution of industry and services to the region's overall economic growth.
Page 6 described in Figure 4.1.Over the time, industry and services sector likely comprise larger share oftotal GDP, while agriculture sector comprises less share of total GDP
Figure 4.1 GDP share per sector in Mekong River Delta
4.1.3 Impact of climate change on The Mekong River Delta
In Vietnam, the impact of climate change is predicted based on three scenarios of Monre
By the end of the 21st century, global temperatures are projected to increase between 1.1°C and 3.6°C depending on emission scenarios, with low emission (B1) leading to 1.1–1.9°C, moderate (B2) to 1.6–2.8°C, and high emissions (A2) potentially reaching 2.1–3.6°C Climate change is expected to cause a decrease in rainfall during dry seasons and an increase during rainy seasons, with total precipitation projected to rise by 1–5% under B1, 1.5–8% under B2, and 2–10% under A2 scenarios Sea levels are anticipated to rise by at least 65 cm, with some projections reaching up to 100 cm above levels recorded between 1980 and 1999 These significant climatic changes could have severe impacts across various economic sectors, particularly agriculture, intensifying the vulnerability of natural and human systems to climate-related disruptions.
The Mekong River Delta is one of the world's five most vulnerable deltas to climate change, particularly due to rising sea levels (IPCC, 2007) Projections indicate that by the middle of the 21st century, sea levels in the region could rise by approximately 22 to 30 centimeters, with potential increases of 51 to 66 centimeters, and even up to 79 to 99 centimeters by the end of the century This significant sea level rise poses a serious threat to the delta's ecosystem, agriculture, and local communities.
Page 7 corresponding with the low, medium and high emission scenario The flat area of the region could be inundated permanently in the wide scope, ranging from 12.8 – 37.8% of the total area If the sea level rises about 1meter, 70% of rice area in Mekong River Delta will be inundated, which means that the area for rice growing could lose up to 1.5 – 2 million hectares Besides, the abnormal change of weather and severe droughts induce pest, insects and diseases, causing crop failure as well as making difficulties for the preservation and processing of farm products, which threatens severely the food security of the whole region
Climate change poses a significant threat to agriculture, with a 1°C increase potentially causing a 10% reduction in rice yield and a 5–20% decline in bean-origin farm tree productivity Environmental specialists urgently warn that the adverse impacts of climate change are escalating, emphasizing the urgent need for sustainable solutions to protect crop yields and food security worldwide.
The Mekong River Delta could be divided into three ecological regions (Figure 4.2), which confront different challenges from effects of climate change, include:
1) Upper Delta – facing seasonal fluvial floods and increasing the ability to keep water via optimal land and water use
2) Middle Delta – facing the heavy fresh water shortage in dry season and, droughts and ensuring enough water supply;
3) Coastal Delta – facinginundation with excess salinity intrusion and brackish water
Among many risks, in recent years, the salinity intrusion and drought have been the most dangerous threatens to the livelihood and agricultural activities of the Mekong River Delta
Thousands of hectares of rice fields have been lost, critically impacting local food production and threatening food security The ongoing water shortage poses severe challenges for daily activities and industrial production, exacerbating economic and environmental risks Addressing these issues requires urgent sustainable water management strategies to preserve vital freshwater resources and support agricultural resilience.
Figure 4.2 Regional division of Mekong River Delta
4.2 Salinity intrusion in Mekong River Delta
All provinces in the Mekong River Delta's coastal zones are experiencing severe saline intrusion, particularly during the dry season when river flow is at its lowest and discharge is insufficient Saltwater penetrates inland through a dense network of canals, ditches, and waterways, disrupting local ecosystems and agriculture (Hashimoto, 2001).
Figure 4.3 The salinity intrusion map of the Mekong River Delta
Saltwater intrusion in the Mekong Delta is primarily influenced by six key factors, including water flow from the Mekong Riverhead, flood season water reserves, rising sea levels, water extraction practices, riverbed morphology at estuaries, and the wet season's occurrence The construction of numerous hydroelectric plants upstream significantly reduces downstream water flow, exacerbating saltwater intrusion Over the past two decades, Mekong Delta floods have gradually decreased and now tend to cease early in November due to natural conditions and lake regulation at the river's source, leading to a reduction in floodwater reserves by about 50% Rising sea levels from December to January increase tide heights by approximately 20-25 cm, further contributing to higher saltwater intrusion during these months, especially at the estuaries.
Overexploitation of water for agriculture and aquaculture significantly reduces freshwater discharge, intensifying saltwater intrusion The shape of the riverbed influences the extent of saltwater intrusion, with decreased flood events leading to the consolidation of alluvium at estuaries, causing erosion and making saltwater intrusion easier Additionally, the delayed rainy season, which now typically begins after July instead of April, contributes to prolonged dry periods, exacerbating salinity issues These combined factors cause saltwater intrusion to penetrate further inland, posing unanticipated environmental and ecological impacts (Nguyen, 2016).
Salinity intrusion in the Mekong River Delta exerts both harmful and positive effects It severely impacts agricultural activities, especially during the Autumn-Winter season when approximately 90,000 hectares of rice are affected, with predictions indicating that the affected area could expand by up to 35.5% across eight coastal provinces (SIWWR, 2016) High saline water also hampers daily water usage and industrial processes, as well water extraction faces issues such as low pH, high salinity, iron content, and bad odors Despite these challenges, local farmers have adapted by leveraging the positive aspects of salinity intrusion—such as conserving mangroves and brackish ecosystems, which support diverse coastal species (Tuan et al., 2007) Additionally, farmers have utilized brackish water for shrimp farming and aquaculture, which now accounts for nearly half of Vietnam’s aquatic exports (Miller, 2003).
Variables Unit Number of observation Mean Standard deviation Min Max
Precipitation in dry season mmHg 1,086 53.66 55.77 8.670 337.2
Precipitation in rainy season mmHg 1,086 215.9 58.86 107.1 345.3
Square of temperature in dry season o C 2 1,086 736.1 23.08 697.0 775.1
Square of temperature in rainy season o C 2 1,086 773.2 16.27 745.3 808.3
Square of precipitation in dry season mmHg 2 1,086 5,988 20,309 75.17 113,704
Square of precipitation in rainy season mmHg 2 1,086 50,067 27,233 11,479 119,225
Age of household head year old 1,086 52.00 13.72 23 89
The dependent variable in this study is the income diversification index, which is categorized into Type 1 and Type 2 The Diversity Index 1 ranges from 0 to 4, with an average value of approximately 2.37, indicating moderate levels of income diversification overall A higher value of Index 1 signifies greater diversification of income sources Meanwhile, Diversity Index 2 varies continuously, capturing additional variation in income diversification patterns across the sample This analysis highlights the importance of understanding different dimensions of income diversification to inform economic resilience and development strategies.
The Herfindahl index values range from 0 to 1, with a mean of 0.733, indicating a high level of concentration The closer the index is to 1, the less diversification farmers participate in, suggesting that their agricultural activities are more concentrated in specific sectors or products This measure helps assess the extent of market or farm diversification, providing insights into farmers' operational strategies and risks.
Figure 4.4 Income shares of households in Mekong River Delta
The column graph illustrates a clear upward trend in income diversification over the years (Figure 4.4) In 2010, the majority of households primarily relied on rice cultivation and non-farm income sources, while participation in growing other crops and breeding aquaculture and livestock remained minimal However, this pattern shifts gradually by 2012, indicating increased diversification in household income sources and a broader engagement in various agricultural and non-agricultural activities.
Descriptive statistics of variables
Variables Unit Number of observation Mean Standard deviation Min Max
Precipitation in dry season mmHg 1,086 53.66 55.77 8.670 337.2
Precipitation in rainy season mmHg 1,086 215.9 58.86 107.1 345.3
Square of temperature in dry season o C 2 1,086 736.1 23.08 697.0 775.1
Square of temperature in rainy season o C 2 1,086 773.2 16.27 745.3 808.3
Square of precipitation in dry season mmHg 2 1,086 5,988 20,309 75.17 113,704
Square of precipitation in rainy season mmHg 2 1,086 50,067 27,233 11,479 119,225
Age of household head year old 1,086 52.00 13.72 23 89
The study examines income diversification using two types of diversity indices Diversity Index 1, which ranges from 0 to 4 with an average of approximately 2.37, indicates that higher values reflect greater diversification Conversely, Diversity Index 2 varies continuously, providing an additional measure of income diversification levels These indices serve as key indicators for assessing the extent of income source variability across different contexts.
The Herfindahl index ranges from 0 to 1, with an average value of 0.733, indicating a relatively high level of market concentration The closer the Herfindahl index is to 1, the less diversified farmers are in their participation A higher Herfindahl index suggests that farmers tend to specialize in fewer crops or products, reducing diversification and increasing market concentration.
Figure 4.4 Income shares of households in Mekong River Delta
The column graph illustrates a growing trend in income diversification over the years (Figure 4.4) In 2010, the majority of households primarily engaged in rice cultivation and nonfarm activities, with only a small proportion involved in growing other crops or breeding aquaculture and livestock However, this pattern shifts through 2012 onward, indicating increased diversification in household income sources, emphasizing the importance of multiple livelihood strategies for rural households.
In 2014, the agricultural activity ratio shifted notably, with non-farm activities, other crop cultivation, aquaculture, and livestock breeding experiencing significant growth, while rice cultivation's share gradually declined These trends align with previous research by Nguyen (2012) and The (2013), and reflect the Mekong River Delta's economic restructuring policies implemented by the government.
Precipitation varies significantly between the dry and rainy seasons, with distinct monthly patterns observed throughout the year The average rainfall during the dry season is only 53.66 mmHg, with minimum monthly precipitation dropping to just 8.67 mmHg, indicating very low rainfall during these months In contrast, the rainy season experiences much higher precipitation, averaging approximately 215.88 mmHg, with monthly minimums of 107.14 mmHg, reflecting consistent and substantial rainfall Data from 2010, 2012, and 2014 reveal a clear trend, showing low or zero rainfall from December to April, particularly with rainfall reaching as low as 0 mmHg in February, highlighting the pronounced seasonal variation in precipitation.
This article covers key aspects of agriculture, including rice cultivation, other crops, aquaculture, and livestock farming It emphasizes the importance of sustainable practices in farming and diversified income sources such as non-farm activities Staying updated with the latest research and developments is crucial for improving productivity and environmental impact For more information or to access recent theses and research papers, contact us via email at vbhtj.mk@gmail.com.
Page 13 rainfall begins to increase gradually from May, get the peak at around 200 to over 300 mmHg from July to October and then declines sharply The chart also records a dramatic decline of rainfall in the whole region in 2014 compared with two remaining years This phenomenon is the result from the influence of El Nino at the end of the year 2014 until 2015, which causes serious shortage of rainfall and abnormal drought
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Figure 4.5.Precipitation in Mekong River Delta
The average temperature difference between the dry and rainy seasons is minimal, at only 0.6°C, with the rainy season experiencing slightly higher temperatures This subtle variation can be understood by analyzing the temperature chart, which reveals that temperatures tend to be higher during the rainy season than in the dry season.
From May to June, nearly all stations recorded their highest temperatures, ranging from approximately 29°C to over 30°C at the onset of the rainy season This temperature spike contributes to the generally elevated temperatures observed throughout the entire season (See Figure 4.6 for detailed data.)
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Mộc Hóa Mỹ Tho Cao Lãnh Càng Long Châu Đốc
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Figure 4.6 Temperature in Mekong River Delta Salinity
Salinity intrusion in the Mekong River Delta is particularly severe along the coast, gradually diminishing further inland Salinity data from 29 stations between 2010 and 2015 clearly illustrate the progression of this phenomenon, with higher salinity levels observed in 2010 across most stations due to the prolonged impact of the 2007-2008 El Niño event This significant ENSO event, considered one of the strongest of the 20th century, resulted in extensive droughts and forest fires, contributing to elevated salinity levels in the region.
Mộc Hóa Mỹ Tho Cao Lãnh Càng Long Châu Đốc
Cần Thơ Sóc Trăng Rạch Gía Bạc Liêu Cà Mau
Mộc Hóa Mỹ Tho Ba Tri Cao Lãnh Càng Long
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Page 16 and severe salinity intrusion in many places around the world The salinity drops substantially in two following years, bottomed out in 2012, as a result of the long rainy season in 2010 and 2011, the high total precipitation and strong floods in 2011 (Southern Institute of Water Resources Research,2012) However, in 2013, the salinity increases rapidly This could be explained by studying the precipitation graph of 2012 The rainy season in 2012 ends up soon, the rainfall intensity is lower than the average of other years
The Mekong River's flow decreased by 30-45% compared to the same periods in previous years, leading to early and far-reaching salinity intrusion in 2013 Salinity levels slightly declined in 2014 but then increased significantly in 2015, coinciding with the occurrence of another El Niño event starting at the end of 2014 This El Niño continued into 2015, bringing the lowest rainfall during the rainy season in recent years, which contributed to the heightened salinity levels.
The summary indicates that salinity levels range from 0.2 to 34.2 g/L, with an average of 7.98 g/L Salinity measurements across different stations reveal that locations farther from the estuary tend to have lower salinity concentrations, as shown in Figure 4.7 This pattern highlights the influence of proximity to the estuary on salinity distribution in the study area.