First Six Monthly Report—Stage 1 dated 11 December 2006 First Technical Report dated 12 April 2007 revised 30 November 2007 Second Six Monthly Report—part of Stage 2 dated 16 April 200
Trang 1025/05VIE Capacity Building in Applied Natural Resource Economics and Management for Vietnam
MS 6 & 8: Technical Reports 2 and 3
April 2010
Trang 21 Institute Information 2
2 Project Abstract 3
3 Executive Summary 3
4 Introduction 4
5 Workshop Training Materials 4
5.2 Training materials 4
Training Course, Hanoi, 12-16 July 2006 6
Training Course, Can Tho, 17-21 July 2006 7
Extension Course, Hanoi, 22-26 January 2007 8
Extension Course, Can Tho, 29 Jan – 2 Feb 2007 9
Extension Course, Hanoi, 16-20 July 2007 10
Extension Course, Soc Trang, 23-27 July 2007 11
Pilot Farmer Workshop Program, 16-17 January 2008 12
Pilot Farmer Workshop Program, Soc Trang, 23-24 January 2008 13
Pilot Farmer Workshop Program, Vinh, Hung Nguyen, Nghe An, 14-15 July 200814 Pilot Farmer Workshop Program, Van Giang, Hung Yen, 18-19 July 2008 15
Pilot Farmer Workshop Program, Soc Trang, 21-22 July 2008 16
Roundtable on Resource Management Issues in Vietnam, 17 July 2008 17
5 2 Workshop evaluations 18
6 Natural Resource Economics Network 19
7 Policy Briefs 19
7.1 The Efficiency of prawn production in the Mekong Delta 20
7.2 Alternative systems of shrimp culture in the Lagoon area of Thua Thien, Vietnam 22
7.3 Benefits from variable rate nitrogen application in rice production 24
7.4 Optimal investment decisions in shrimp farming in Vietnam 26
7.5 Environmental compliance under uncertain enforcement in Vietnam 28
7.6 Knowledge of farmers on natural resource management 31
8 Research Scholar Reports 34
8.1 Technical Efficiency of prawn farms in the Mekong Delta, Vietnam 35
8.2 An Inquiry into Four Alternative Systems of Shrimp Culture in the Lagoon Area of Thua Thien, Hue, Vietnam 46
8.3 Evaluating the Benefits of Site-Specific Crop Management of Nitrogen Application to Rice Production 60
8.4 Farmers’ Decisions Under Market Uncertainty: A Real Options Analysis of Shrimp Farming in Vietnam 67
9 Decision Support Modules 76
9.1 Decision Support for Water Quality Management in a River 77
9.2 Shrimp Feeding and Water Pollution 91
9.3 Optimal Length of Production Period 94
10 Report Authorisation 97
Trang 3Vietnamese Institution Faculty of Economics and Rural Development,
Hanoi Agricultural University Gialam, Hanoi, Vietnam
University of Sydney, NSW, 2006, Australia
Contact Officer(s)
In Australia: Team Leader
Organisation Faculty of Agriculture, Food and
Natural Resources University of Sydney, NSW 2006, Australia
a.vervoort@usyd.edu.au
In Australia: Administrative contact
University of Sydney, NSW 2006, Australia
In Vietnam
Organisation Faculty of Economics and Rural
Development Hanoi Agricultural University Gialam, Hanoi, Vietnam
Or pvhung@hau.edu.vn
Trang 43 Executive Summary
The project is aimed at strengthening the teaching and research capacity in the field of natural resource economics in several key Vietnamese Institutions (a number of Universities, MARD and provincial and regional extension systems) and encouraging the transfer of knowledge from the University teaching and research staff to extension staff and farmers The project is also designed to strengthen the use of resource management concepts in Vietnam through a participatory approach using training workshops in Vietnam on natural resource economics in three stages
First Six Monthly Report—Stage 1 (dated 11 December 2006)
First Technical Report (dated 12 April 2007 revised 30 November 2007
Second Six Monthly Report—part of Stage 2 (dated 16 April 2007)
Third Six Monthly Report—Extension Workshops July 2007 (dated 28 April 2008)
Fourth Six Monthly Report—Stage 3 Pilot Workshops January 2008 (dated March 2010) Fifth Six Monthly Report—Final Farmer Workshops July 2008 (dated April 2010)
Second and Third (combined) Technical Report (dated April 2010)
As a part of the third stage of the project, 5 pilot extension workshops for farmers were conducted in Vinh, Van Giang (2) and Soc Trang (2) with a focus on economically efficient natural resource management, where practical knowledge and skills in resource
With very rapid growth and development in Vietnam, there is a danger of overuse and mismanagement of natural resources, thus compromising sustainable development The level of knowledge, understanding and use of the principles of natural resource economics (NRE) and management is limited in Vietnamese agriculture The designed outcome of the project is to begin to have resource management concepts used in various institutions in Vietnam (Universities, MARD, and the extension system) and to strengthen the ability to deliver knowledge, set policies and advise farmers in this area This outcome is being approached through a participatory approach using workshops in Vietnam on natural resource economics held by the University of Sydney staff and the staff of the participating organizations One training workshop each in Hanoi and Can Tho, four extension workshops, two each in Hanoi and Can Tho, Vietnam have been conducted at the provincial level by Vietnamese staff with participation of the University of Sydney team members, thus transferring the acquired knowledge to extension specialists and thereby eventually to smallholder farmers Two Vietnamese scholars had three-month visits to the University of Sydney in 2006 and two more visited Sydney from August to October 2007 so as to broaden their understanding of natural resource economics and to undertake research projects under the guidance of academics at the University of Sydney Five pilot workshops with farmers have been conducted in January and July 2008 to demonstrate the use and practical knowledge and skills in resource management with the training largely provided
by participants in the extension workshops Discussions on curriculum development and revisions with appropriate staff at Hanoi University of Agriculture and CanTho University have been held
Trang 5preparation by the academic staff at Hanoi University of Agriculture and Can Tho University
4 Introduction
This report has been prepared as milestones 6 and 8 and includes:
1 Extension workshop training material, decision support modules, extension packages and extension aids
2 Establishment of the Natural Resource Economics Network, delivery of policy advice and action plan for sustainability of network
3 Policy briefs (4)
4 Research Scholar Reports (4)
5 Decision support model documentation
5 Workshop and Training Materials
This project was designed to strengthen the capacity building in natural resource economics in Vietnam in a layered framework In the first layer, The University of Sydney staff provided research, teaching and policy analysis training to Vietnamese academics, policy analysts and extension specialists at a national level through two training workshops held in July 2006 in Hanoi and Can Tho (details of the Training Workshop, July 2007 were reported in milestone 2 in the Second Six-Monthly Report) In the second layer, those trained in the first layer trained the extension specialists and policy analysts at the provincial level The training was designed to impact the advice and information provided to farmers on the use of natural resources demonstrated through a series of district level workshops This was implemented through conducting four extension workshops, of which two were conducted in January 2007 (Hanoi with 25 participants; Can Tho with 26 participants) and two in July 2007 (Hanoi 26 participants; Soc Trang 20 participants) Details of these workshops were provided in the Third Six Monthly Report Following the Extension workshops a set of five pilot workshops for farmers were presented with the training carried out by selected people trained in the Extension Workshops Details are reported in the Fourth and Fifth Six-Monthly Reports The workshops were held at Vinh, Van Giang and Soc Trang in January 2008 and July
2008 with a total of 151 participants For all workshops the total number of participants was 251
5.1 Training materials
Trang 6made is included in the following text for reference The details of the decision support models and documentation are given in section 9 of this document Also, provide in the package of material is a pdf file version of the 161 page Training Handbook entitled
Applied Natural Resource Economics and Management which contains a detailed
development of much of the material presented in the Training workshops
At the beginning of each workshop and at the end, short questionnaires were given to participants The first questionnaire was designed to gain some understanding of the participants’ level of knowledge and background The questionnaire given in the final session was designed to assess participant levels of satisfaction with the program and their suggestions for improvement as well as in the academic Training and Extension workshops to assess levels of understanding of the material given The detailed
questionnaires and all the results have been tabulated in the Six-Monthly Reports and are not repeated in this report
The decision models and the documentation associated with them is available for use by extension specialists as are the policy briefs and the Powerpoint presentations These are
1 Some of the Powerpoint presentations have been developed on a Mac OS X platform and therefore some
of the pictures are not in a format that can be read by Windows based machines These pictures (photos) will not appear when shown on Windows operating systems
Trang 7official opening by Rector of HAU and Dean
Competency evaluation Prof Gordon MacAulay Resource management principles
Natural resource economics in a dynamic setting, renewable and non-renewable resources, constrained optimisation over time
Economics of asset replacement Public policy processes in natural resource
economics
and Dr Pham Van Hung Basic land economics and land use
Morning break
10.15 – 11.30 am Dr Michael Harris
Key principles and methods in resource and environmental
economics
Prof Gordon MacAulay and Dr Michael Harris Compounding, discounting and present values of assets
Dr Tiho Ancev Renewable resources:
Forestry economics and optimal rotations
Dr Tiho Ancev and Dr Michael Harris Public policy instruments in the natural resource sectors (Pesticide tax case study)
Dr Tiho Ancev and Mr Tran Dinh Thao Economics of soil conservation (Soil conservation case study)
Lunch
1.30 – 3.00 pm Dr Michael Harris
Property rights, market failure and policy responses
Dr Michael Harris and
Dr Tiho Ancev Dynamic optimisation and the use of MS Excel
Dr Tiho Ancev and Ms Sally Marsh
Economics of water use and water quality
Ms Sally Marsh The role of extension in addressing natural resource problems
Prof G MacAulay Renewable resources:
Fisheries economics and aquaculture
(Case study discussion) Afternoon break
3.15 – 4.30 pm Ms Sally Marsh
Extension work and environmental economics
Prof Gordon MacAulay,
Dr Michael Harris Mini-workshop with static and dynamic problems (mining and optimal control)
Dr Tiho Ancev Mini-workshop on water use and water quality (river pollution model)
Ms Sally Marsh Mini-workshop on the practical aspects of extension in natural resource management Discussion of the
program (4.15-4.30pm)
Resource Economics debate
Competency evaluation Course Evaluation and Review
Date revised: 12 July 2006.
Trang 88.00 – 9.45 am 9.00 am Welcome and
official opening Competency evaluation Prof Gordon MacAulay Resource management principles
Dr Michael Harris Natural resource economics in a dynamic setting, renewable and non-renewable resources, constrained optimisation over time
Prof MacAulay Economics of asset replacement
Prof Gordon MacAulay Public policy processes
in natural resource economics
Prof Gordon MacAulay Basic land economics and land use
Morning break
10.10 – 11.30 am Dr Michael Harris
Key principles and methods in resource and environmental
economics
Prof Gordon MacAulay and Dr Michael Harris Compounding, discounting and present values of assets
Dr Tiho Ancev Renewable resources:
Forestry economics and optimal rotations
Dr Tiho Ancev and Dr Michael Harris Public policy instruments in the natural resource sectors (Pesticide tax case study)
Dr Nguyen Phu Son Deforestation of the Melaleuca in Long Xuyen area in the Mekong Delta
Lunch
1.30 – 3.15 pm Dr Michael Harris
Property rights, market failure and policy responses
Prof G MacAulay Renewable resources:
Fisheries economics and aquaculture
(Case study discussion)
Dr Tiho Ancev and Ms Sally Marsh
Economics of water use and water quality
Ms Sally Marsh The role of extension in addressing natural resource problems
Dr Michael Harris and
Dr Tiho Ancev Dynamic optimisation and the use of MS Excel Afternoon break
3.30 – 5.00 pm Ms Sally Marsh
Extension work and environmental economics
Prof Gordon MacAulay,
Dr Michael Harris Mini-workshop with static and dynamic problems (mining and fisheries)
Dr Tiho Ancev Mini-workshop on water use and water quality (river pollution model)
Ms Sally Marsh Mini-workshop on the practical aspects of extension in natural resource management Discussion of the
program (4.15-4.30pm)
Resource Economics debate
Competency evaluation Course Evaluation and Review
Date revised: 12 July 2006.
Trang 99.00 am Welcome and official opening
by Rector or Vice-Rector of HAU and Dean/Vice Dean òf FERD
Competency evaluation Prof Gordon MacAulay Resource management principles for Extension specialists
Ass Prof Ngo Thi Thuan Basic extension methods and tools including measures of extension performance in knowledge dissemination
Dr Pham Van Hung Sustainable development, land use management and land markets (value of land)
6 am, departure from the Guess House (HAU) Field trip in Luong Son district Hoa Binh province
Dr Nguyen Nghia Bien Economics of small-scale forestry and harvesting models (spreadsheet analysis)
Morning break
10.15–11.30 am Dr Michael Harris
Key principles and methods in resource and environmental economics for extension specialists
Ass Prof Ngo Thi Thuan Skills in extension and applications
Dr Nguyen Thi Minh Hien Gender roles in extension and gender in natural resource management
Field trip in Luong Son district Hoa Binh province
Dr Nguyen Nghia Bien Basic forestry economics and spreadsheet analysis of harvesting and replacement Lunch
1.30 – 3.00 pm
Dr Michael Harris Property rights, market failure and policy responses
Dr Pham Van Hung Update on the use of MS Excel spreadsheets Basic compounding and discounting
Mr Tran Dinh Thao Economics of soil conservation (Soil conservation case study)
Afternoon break
3.15 – 4.30 pm Professor Gordon MacAulay Extension
work, resource management and environmental economics, eg trading permits
Dr Pham Van Hung Workshop on a simple LP model and interpretation
of results
Dr Nguyen Duong Nga Mini-workshop on water use and water quality (river pollution model, Spreadsheet exercises)
Field trip in Luong Son district Hoa Binh province
Debate Competency evaluation Course Evaluation and Review Workshop held in the Faculty of Economics and Rural Development, Hanoi Agricultural University No 1
Trang 10Mr Duong Tri Dung
Introduction to water Economic
- Importance of water quality
- Today’s lecture objectives
- Some important water quality parameters
6 am, departure from the Dormitory (MDI) Field trips
- study tour Field trips in An Giang province
Mrs Tran Thuy Ai Dong
Basic compounding and discounting
Dr Vo Thi Thanh Loc
Discuss about Renewable Resources Management:
Fisheries
Mr Duong Tri Dung
Economics of water quality
- Analysis of collective water use and water quality
- Water management in a community
Field trips
- study tour Field trips in An Giang province
Mrs Tran Thuy Ai Dong
Spreadsheet exercises Update on the use of MS Excel spreadsheets Spreadsheet exercises Lunch
13.30 – 15.00
pm Dr Michael Harris Property rights, market
failure and policy responses
Dr Tran Thanh Be
Basic extension methods and tools including measures of extension performance in knowledge dissemination
Dr Tran Kim Tinh
Land use management, cropping patterns, soil conservation and land markets (value of land)
Field trips
- study tour Field trips in An Giang province
Dr Tran Thanh Be
Debate Discussion
Afternoon
break
15.15 – 17.00
pm Professor Gordon MacAulay Extension work,
resource management and
Mrs Vo Thi Lang
Economics of soil conservation
Field trips
- study tour Field trips in An Giang province
Debate (continued) Discussion (continued) Competency evaluation Course Evaluation and Review
Trang 11am by the Vice-Rector of HAU
and the Dean of FERD
Sustainable development, land use management and land markets (value of land)
Guess House (HAU) Field trip in Hung Yen province
Economics of scale forestry and harvesting models (spreadsheet analysis)
Mr Tran Dinh Thao/
Nguyen Duy Linh Skills in extension and applications
Dr Nguyen Thi Minh Hien Gender roles in extension and gender in natural resource management
Field trip in Hung Yen province
Dr Nguyen Nghia Bien Basic forestry
economics and spreadsheet analysis of harvesting and replacement Lunch
1.30 – 3.00
pm Sally P Marsh Resource management
principles for extension
specialists
Dr Pham Van Hung Basic compounding and discounting
Mr Nguyen Duy Linh Spreadsheet exercises Farm budgeting Field trip in Hung Yen province
Participant presentations + discussions
Basic principles of Resource
economics and management
Dr Pham Van Hung Update on the use of MS Excel spreadsheets Spreadsheet exercises
Dr Nguyen Duong Nga Mini-workshop on water use and water quality (river pollution model, Spreadsheet exercises)
Field trip in Hung Yen province
A short report on the use
of natural resources (farms visited only)
Debate Competency evaluation Course Evaluation and Review
Workshop held in the Faculty of Economics and Rural Development, Hanoi Agricultural University No 1
Trang 128:30 – 9:30 am -Welcome and official
opening
Miss Quach Ngoc Mai
- Basic extension methods and tools
Miss Ngyuen Thi Xuan Trang
Environmental and Resource Economics Principles
Dr Vo Thi Thanh Loc
Renewable Resources Management: Fisheries
Mrs Vo Thi Lang Land use management, cropping patterns, soil conservation and land markets (value of land)
Field trip in Vinh Chau
Morning break
10:00 – 11.30
am Miss Quach Ngoc Mai Extension work, Resource
Management and Environmental Economics
Miss Nguyen Thi Xuan Trang
Environmental and Resource Economics Principles
Dr Vo Thi Thanh Loc
Discuss about Renewable Resources Management: Fisheries
Mrs Vo Thi Lang
Economics of Soil Conservation (Soil Conservation Case Study)
Field trip in Vinh Chau
Lunch
13:30 – 15.00
pm Mr Le Canh Dung Resource Management
Principles Dr Duong Ngoc Thanh Agricultural Economics
and Natural Resources
Mr Duong Tri Dung
Analysis of collective water use and water quality Water management in a community
Dr Duong Ngoc Thanh
- Update on the use of MS Excel spreadsheets
- Basic compounding and discounting
Mr Duong Tri Dung
Mini-workshop on water use and water quality
Dr Duong Ngoc Thanh
- Workshop on a simple
LP model and interpretation of resulta Spreadsheet Exercises
Competency evaluation Course Evaluation and Review
Trang 13VAN GIANG, HUNG YEN, 16-17 JANUARY 2008
8.30 – 10.00 am Welcome and opening
Ms Nguyen Thanh Hien, Chair of the District People’s Committee
Introduction of CARD project and workshop – Gordon MacAulay
Resource Management – Gordon MacAulay
Chemical fertiliser use: Issues and Challenges for Environment and Agricultural Production
Mr Nguyen Quoc Chuong (+ Group discussion)
Morning break
10.20 – 11.50 am Natural Resource Management
Gordon MacAulay and Sally Marsh Pesticide use: Issues and Challenges for Environment and Agricultural Production
Mr Nguyen Quoc Chuong (+ Group discussion) Lunch
1.30 – 3.00 pm Fish feeding in Van Giang: Issues for Agricultural Production and
Environment
Mr Le Trung Can (+ Group discussion)
Irrigation and Water Use for Agricultural Production
Mr Le Hong Sy (+ Group discussion) Afternoon break
3.20 – 4.30 pm Fish feeding in Van Giang: Challenges for Environment
Mr Le Trung Can (+ Group discussion)
Group discussion General discussion and post evaluation Closing
Workshop held at the District Office in Van Giang, Hung Yen province
Presenters: Mr Le Trung Can and Mr Le Hong Sy were participants of the first and second extension workshops held in the Faculty of Economics and Rural Development, HAU They are in charge in agricultural production at Van Giang district Mr Nguyen Quoc Chuong is a staff member of the Department of Agriculture and Rural Development, Van Giang District
Trang 14ECONOMICS AND NATURAL RESOURCE MANAGEMENT
SOC TRANG, 23-24 JANUARY 2008
8.00 – 9.30 am Opening: Mr Hoang, Director of the Extension Centre and Ms
Hien, Vice-Director of the Extension Centre, Prof Gordon MacAulay: Introduction to the CARD Project Pre-workshop evaluation questionnaire
Ms Nguyen Thi ThanhTam, Extension specialist Fertiliser use and management
Exercises/questions/discussion
Tea break
10.00 – 11.30 am Prof Gordon MacAulay and Dr Michael Harris
Natural resource management Video and radio presentations Discussion of natural resource management
Ms Nguyen Thi ThanhTam, Extension specialist Pesticide use and management
Exercises/questions/discussion Lunch time
1.30 - 3.00 pm Ms Huynh Thi My Lan, Extension specialist, Aquaculture in
Soc Trang Situation of rice and shrimp Production Techniques and experiences applied by farmers Exercises/questions/discussion
Ms Huynh Thi My Lan, Extension specialist Water use in agriculture (irrigation) and management
Exercises/questions/discussion
Tea break
3.20 – 4.30 pm Ms Huynh Thi My Lan, Extension specialist,
Water management problems in aquaculture Exercises/questions/discussion
Post-workshop evaluation (Dr Thanh) Discussion of workshop and post evaluation Certificate presentations
Trang 15VINH, HUNG NGUYEN, NGHE AN , 14-15 JULY 2008
8.30 – 10.00 am Welcome and introduction (Dr Pham Van Hung)
Opening: Vice chairman Mr Ho Thuc Nam Prof Gordon MacAulay: Introduction to the CARD Project
Pre-questionnaire
Mr Phan Van Truong Land using condition in Hung Nguyen District Discussion
Tea break
10.20 – 11.30 am Prof Gordon MacAulay
Natural resource management Discussion
Mr Phan Van Truong Solutions to develop sustainable animal husbandry Discussion
Lunch time
2.00 - 3.20 pm Mr Nguyen Huu Nhuan
Cost – Benefit Analysis Discussion
Mr Nguyen Quy Linh Environmental pollution: Situation and Solutions Discussion
Tea break
3.40 – 5.00 pm Mr Nguyen Huu Nhuan
Sustainable husbandry development Discussion
Summary Post-evaluation Certificate presentations
Trang 16ECONOMICS AND NATURAL RESOURCE MANAGEMENT
VAN GIANG, HUNG YEN, 18-19 JULY 2008
8.00 – 9.40 am Welcome and introduction (Dr Pham Van Hung)
Opening: Vice chairman, Mr Vien, Deputy Chair Prof Gordon MacAulay: Introduction to the CARD Project
Pre-questionnaire
Mr Le Trung Can Cattle livestock in Van Giang: Issues in feeding Discussion
Tea break
10.00 – 11.30 am Prof Gordon MacAulay
Natural resource management Discussion
Mr Le Trung Can Treatment of waste from animal husbandry Discussion
Lunch time
1.30.3.00 pm Mr Nguyen Huu Phuong
Cost – Benefit Analysis Discussion
Mr Le Hong Sy Pig livestock in Van Giang: Situation and Solutions Discussion
Tea break
3.20 – 4.50 pm Mr Nguyen Huu Phuong
Sustainable animal husbandry development Discussion
Summary Post-evaluation Certificate presentations
Trang 17SOC TRANG, 21-22 JULY 2008
8.00 – 9.30 am Welcome and introduction, Dr Be, Mekong Delta Farming
Systems Institute Opening: Mr Hoang, Director, Soc Trang Extension Centre, Prof Gordon MacAulay: Introduction to the CARD Project Pre-workshop evaluation questionnaire
Ms Huynh Thi My Lan, Extension specialist Aquaculture in Soc Trang province
Situation of rice, shrimp production Techniques and experiences applied by farmers Exercises/questions/discussion
Tea break
10.00 – 11.30 am Prof Gordon MacAulay and Dr Tiho Ancev
Natural resource management Video and radio presentations Discussion of natural resource management
Ms Huynh Thi My Lan, Extension specialist Water management in aquaculture; problems in aquaculture
Exercises/questions/discussion Lunch time
1.30 - 3.00 pm Ms Nguyen Thi ThanhTam, Extension specialist
Fertiliser use and management Exercises/questions/discussion
Ms Huynh Thi My Lan, Extension specialist Water use in agriculture (irrigation) and management
Exercises/questions/discussion Tea break
3.20 – 4.30 pm Ms Nguyen Thi ThanhTam, Extension specialist
Pesticide use and management Exercises/questions/discussion
Post-workshop evaluation (Dr Thanh) Discussion of workshop, post evaluation Certificate presentations
Trang 18Roundtable on Resource Management Issues in Vietnam, 17 July 2008
Roundtable on Resource Management Issues in Vietnam
Sponsored by AusAID, Hanoi University of Agriculture and The University of Sydney 9.00-9.05 am Welcome and guidelines (Dr Hung)
Opening by Dr Prof Tran Duc Vien Rector, Hanoi University of Agriculture 9.05-9.25 am CARD Project and Resource Management Issues
Prof Gordon MacAulay Emeritus Professor of Agricultural Economics, University of Sydney and BRI Research, Australia 9.25-9.40 am Discussion: Extension and resource management
9.40-10.00 am Resource Management Principles and Challenges
Dr Tiho Ancev, Senior Lecturer University of Sydney
10.00-10.15 am Coffee break
10.15-10.45 am Discussion—What are the key issues in Vietnam?
10.45-11.00 am Some solutions to resource management problems
Dr Pham Van Hung and Mr Thao or Dr Hien Hanoi Agricultural University
11.00-12.00 am Discussion: What are the solutions?
Chair:
Attitudes toward conservation of resources Land and soil degradation and erosion Water quality and saline intrusion Aquaculture—feed and quality management
Forestry and biodiversity Recycling and the throw-away culture
12.00-1.00 pm Lunch (buffet with continued discussion—tables put aside)
1.00 pm Roundtable closing
by Dr Pham Van Hung or a Senior Delegate Note: Seating to be in a circular design and Chatham House rules apply
Trang 195.2 Workshop evaluations
The aim of the extension workshops was to address the strategic questions of strengthened and broadened capacity for economics training of extension personnel in Vietnam Pre and post workshop competency tests were conducted at each of the workshops and the
Roundtable These have been fully documented in the Six-Monthly Reports
At each of the workshops information was collected on either the knowledge levels pre and post the workshops or the nature of the farming business the participants were involved in managing or working
The level of knowledge of the participants in both the ‘Training’ workshops and the
‘Extension’ workshops varied greatly and was quite limited in relation to some resource management issues It was also apparent that in some cases there was improvement between pre- and post-tests and in for a few concepts there was a reversal This, of course, should be expected However, overall there were clearly significant gains in both Hanoi and Can Tho for each of the sets of workshops The conclusion to be drawn is that such training can, at least have a short-term impact on understanding of some of the more challenging ideas about resource use and management It is also likely to have a longer-term impact and will
influence the way in which resource issues are dealt with in both the academic and extension systems It should be noted that Hanoi University of Agriculture and Can Tho University as pivotal points for the training of agricultural specialists and that the academics in these universities play a very important part in what happens in relation to resource management in the broader regions There is clearly significant long-term leverage in providing training to academic staff
For the farmer workshops the numbers in relation to the total number of farmers is very small However, the impacts are likely to be significant in that local extension specialists developed the training modules and presented them in Vietnamese to the local farmers All
of the farmers in the Pilot workshops were farmers but a number also had various roles in the extension system This also added leverage to the impact of the training
Overall, there were high levels of satisfaction with all of the courses Some issues were raised in each of the assessments Significant among them was the short time of the
workshops, the need for translation at some of the sessions, the somewhat cramped
accommodation in a couple of instances and the levels of the training for some participants
In the farmer level workshops, the outstanding issue raised in the evaluations and also in the conversations in the workshops was the management of water quality both for aquaculture and for irrigation This is clearly a very significant issue for farming in many parts of
Vietnam
The Roundtable was held in Hanoi in 17 July 2008 and was designed to heighten the level of attention being given to natural resource management issues in the relevant ministries and particularly the Ministry of Agriculture and Rural Development and also with the senior levels of Hanoi University of Agriculture It was also an opportunity to present some of the results of the research activity and to reflect on some of the survey results obtained during the project
Trang 206 Natural Resource Economics (NRE) Network
The development of a natural resources network has been somewhat disappointing as the effort and time requirements have proved too significant for local academics given the
strongly increasing demands on their time with very strongly rising student numbers Early
efforts were made to use the website as a platform for such a network but this was not developed sufficiently rapidly for it to become a focus of attention
In terms of a continuing presence the http://resman.edu.vn/card/ website is still active and being hosted by Hanoi University of Agriculture and provides and ongoing source for
resource economics materials
7 Policy Briefs
Over the life of the project various results have been developed, particularly in the work of the research scholars, which have policy relevance so that these have formed the foundation for a set of policy briefs These are short summary statements on some of the important information that has been developed within the project They are designed to be
understandable to a reasonably wide audience Briefs 5 and 6 are of a more technical nature and designed for research and training specialists
The briefs cover the following areas:
1 The efficiency of prawn production in the Mekong Delta
2 Alternative systems of shrimp culture in the Logoon area Thua Thien, Hue, Vietnam
3 Benefits from variable rate nitrogen application in rice production
4 Optimal investment decisions in shrimp farming in Vietnam
5 Environmental compliance under uncertain enforcement in Vietnam
6 Knowledge of farmers on natural resource management
Trang 21Policy Brief (1) AusAID CARD Project 025/05 VIE
Economic efficiency has two components: technical efficiency and allocative efficiency (Farrell 1957) Technical efficiency reflects the ability of a farm to obtain maximum output from a given set of inputs using the available technology (Dey et al., 2000) The levels of technical efficiency of 193 prawn farms from Bac Lieu province were analysed A stochastic frontier model was used to determine the technical efficiency of each farm in the production
of prawns Then, a second regression model was run, using the technical efficiency measures and data on the characteristics of the households and farms, to determine which factors were most likely to influence the level of technical efficiency for a household
• Once measured, the key issue is what are the factors that determine or vary with the level
of efficiency of resource use Clearly some of these factors can be controlled or managed to the advantage of farmers and the economic development of regions
Findings
Data from 193 households with prawn farms in Bac Lieu Province were collected in 2004
On average, the surveyed farmers (head of household) had completed five years of education, and those operating intensive operations generally had a slightly higher level of education Those with intensive operations had smaller households The average farm area for intensive farms was 1.2 hectares and 1.74 hectares for the extensive farmers The average years of experience in prawn farming was 4 years and 5 years for intensive and extensive prawn farms respectively However, a large portion of intensive prawn farmers had very little or no experience in prawn farming The average net income of the intensive operators (VND 60
Trang 22million) was much higher than that of the extensive operators (VND 10 million) This is the result of yield being about eight times higher and the production costs being about nine times higher in intensive compared to extensive operations Intensive prawn farming was more profitable on average, however, there was about 37 per cent of both types of farmers with negative profits A small number of the farmers (7 per cent) gained very high profits of over VND 200 million Intensive farming dominated both the categories.
The average productivity of prawn farms in Vietnam was investigated in a recent survey, and was reported to be 150 kg/ha/year in extensive farming up to 6,000 – 10,000 kg/ha in the case
of intensive farming practice (Estelles et al., 2002) This can be compared to overall averages
of prawn farm productivity levels in some of the major prawn producing countries like Thailand (3,116 kg/ha), Malaysia (1,500 kg/ha), China (800 kg/ha), Philippines (770 kg/ha) and India (635 kg/ha) (Kumar et al., 2004)
Using the stochastic frontier approach, levels of efficiency were obtained and it was found that labour use, seed (fingerlings), and feed use were the important variables driving production The estimated technical efficiency ranged from zero to 90 per cent with a mean
of 46 per cent Thus, on average prawn farmers were producing at about 46 per cent of their possible efficiency (intensive 35 per cent and extensive 48 per cent) These efficiencies were lower than those estimated in India (Kumar et al 2004) and the Philippines (Dey et al 2000) Considering the factors that affect efficiency, it was found that the more experienced growers and the younger growers were generally technically more efficient, but that the higher educated were less efficient It is likely that better educated but much less experienced farmers are managing the intensive farms This type of operation requires greater skills to run and thus it is more difficult to achieve high levels of efficiency and profitability
References
Dey, M.M., Paraguas, F.J., Bimbao, G.B and Regaspi, P.B., 2000, ‘Technical efficiency of Tilapia growout pond
operations in the Philippines’, Aquaculture Economics and Management, vol 4, pp 33-47
Estelles, P., Jensen, H and Sanchez, L., 2002, Sustainable Development in the Mekong Delta, Centre for Environmental
Studies, University of Aarhus, Denmark.
Farrell, M.J., 1957, ‘The measurement of productive efficiency’, Journal of the Royal Statistical Society, Series A (General),
vol 120, no 3, pp 253-290.
Kumar, A., Birthal, P.S and Badruddin, 2004, ‘Technical efficiency in prawn farming in India: estimation and implications,’
Indian Journal of Agricultural Economics; vol 59, no 3, pp 413-420.
Sinh, L X., 2006, Major considerations on the fishery sector in the Mekong Delta of Vietnam, Presentation to the CARD workshop, Can Tho, Vietnam, July 15-20, 2006
More information may be obtained from: Dr Tiho Ancev, Agricultural and Resource Economics, Faculty of Agriculture, Food and Natural Resources, University of Sydney, NSW, 2006 and Ms Do Thi Den, Mekong Delta Development Research Institute, CanTho,
Vietnam Email: t.ancev@usyd.edu.au
Trang 23Policy Brief (2)
AusAID CARD Project 025/05 VIE
Alternative Systems of Shrimp Culture in the Lagoon area
Purpose
To provide information on survey work carried out in three communes on alternative shrimp farming systems, their profitability, riskiness and cost structures in the lagoon area of Thua Thien area in Hue Province
Issues
• Different management systems for shrimp production have very different environmental impacts and also different economic performance
• Many factors appear to underlie the choice of management system
• Rapid development of shrimp farming appears to have led to limited consideration of the economic and environmental costs
Findings
Factors shown to affect shrimp productivity in Thua Thien province include (Phuc 2006):
• Density and variety of shrimp
• Use of industrial feeds
• Provision of fresh feed
Trang 24Table 1 Profit and productivity measures for Thua Thien Lagoon Area, Hue Province
Farming system Profit per ha
000 VND
Productivity (kg/ha)
Profit per 000VND of turnover
Profit per 000VND of costs
Source: Survey of 171 farm households in October and November 2005 (Lien 2006)
It was also observed that the intensive farming system has the highest productivity and profitability but also has the highest variability of profits and the highest production costs (both capital and variable costs)
Policy Implications
1) Poorer farmers generally are using the extensive method of production because of a lack
of capital and skills Training and education in shrimp farming techniques and good access
to capital resources would seem to be a prerequisite for economic progress in this area
2) The semi-intensive and improved intensive systems seem best suited to the area from the point of view of protection of the natural environment since the lagoon area is open to uncontrolled exploitation Some measures of control of access and use would seem to be required to manage the problem of open access
Trang 25Policy Brief (3) AusAID CARD Project 025/05 VIE
Benefits from Variable Rate Nitrogen Application in Rice
Purpose
To provide information to decision makers on a recent analysis of the potential benefits of using variable rate nitrogen applications in rice production and the associated economic and environmental benefits
Background
Given the historically small size of farms in Vietnam and that these are sometimes perceived
to be economically inefficient, recent policies (for example, “Don dien doi thua”) have promoted a process of farm enlargement However, the evidence from other countries has been that this process of farm enlargement coincides with a shift in management, whereby inputs are more intensively used, and are applied uniformly across large crop fields This has resulted in a greater farmer dependence on purchased inputs (for example, fertiliser) It has also resulted in negative environmental impacts as some of the inputs are unused by the crops and runoff or leach through the soil profile, thereby causing pollution and damage to the environment
The concept of variable rate application of inputs is based on the idea of more closely matching input use to crop requirements as they vary over space and time In practice, this means that inputs should not be applied uniformly on a relatively large field, but should be applied according to the plants needs in different areas of the field There are various new techniques that can be used for variable rate application starting from very simple leaf colour comparison cards to very sophisticated near infrared on-the-go GPS guided sensors
Issues
• Intensification of agricultural production in Vietnam has had indisputable benefits in terms of increased agricultural productivity, but has meant that farmers are more reliant on purchased inputs and these are generating environmental impacts from agriculture that are more serious and widespread
• Targeted application of inputs, such as fertiliser or pesticides, by use of variable rate application, as opposed to a uniform rate of application, alleviates some of the problems associated with intensification of agriculture
• However, as with many other technologies, it is important that variable rate application be an economical and practical way of applying inputs in Vietnam
Approach
Data from an agronomic experiment that tested several nitrogen fertiliser application rates on several soil types were used to estimate the economic and environmental performance of variable rate nitrogen application Data came from experiments conducted in the Nam Dinh province of the Red River delta in the North of Vietnam as reported in Ca (2000) and Son (2004) Rice yield response functions to nitrogen fertiliser were estimated using regression modelling for both the uniform and variable rate application strategies Based on these, the
Trang 26net returns to farmers from rice production, as well as the total quantity of nitrogen applied, were calculated for the two strategies
Results
The results are displayed in Table 1 In all cases there were significant reductions in the total nitrogen applied At the same time yield and the net benefit of the yield increased but the return varied with different soils
Table 1 Differences in rice yield between variable and uniform rate applications, calculated net benefits and differences in the nitrogen fertiliser used for three soil types in Nam Dinh province
Soil type Difference in rice
yield (kg/ha) Net benefit from variable rate (000 VND) Reduction in applied nitrogen (kg/ha) Spring
If variable rate application of inputs is practical and economical in a Vietnamese context, measures to promote this technique should be undertaken through the extension system, the academic institutions and other relevant channels Potential benefits of site-specific crop management in terms of reduced reliance of farmers on purchased inputs, and improved environmental quality in rural areas will justify such efforts
Limitations
Figures reported in this brief are indicative only and more research is needed at field and farm level (rather than in a controlled scientific experiment) to determine the broader economic viability of variable rate applications, as well as to more fully understand the environmental benefits from such applications
Rogers, D., Ancev, T., Minansy, B and McBratney, A 2007 ‘Incorporating economic criteria into the optimal delineation
of management zones’, In J.V Stafford (Ed.), Precision Agriculture '07, Wageningen Academic Publishers, p:851-858
Son Tran Thuc, 2004 Site-specific nutrient management International Rice Research Institute, The Philippines
More information may be obtained from: Dr Tiho Ancev, Agricultural and Resource Economics, Faculty of Agriculture, Food and Natural Resources, University of Sydney, NSW, 2006 and Ms Nguyen Thu Thu Huyen, Faculty of Economics and Rural Development, Hanoi University of Agriculture, Hanoi, Vietnam
Email: t.ancev@usyd.edu.au or huyenktl@hua.edu.vn
Trang 27Policy Brief (4) AusAID CARD Project 025/05 VIE
Optimal Investment Decisions in Shrimp Farming in
Purpose
To provide information to decision makers on a recent investigation into optimal timing of investment
in progressively more intensive shrimp growing operations in the regions of the Mekong Delta This analysis takes explicitly into account uncertainty about shrimp prices
Background
Shrimp pond culture in particular, has rapidly developed in the last two decades in Vietnam There are four types of shrimp production systems in Vietnam including extensive, improved extensive, semi-intensive, and intensive farming Of these, the intensive farming is the most profitable However, the presence of large, sunk investment costs, and the uncertainty of future returns, makes the investment into this production system very risky (Den et al., 2008) While significant investment has flowed into establishing more intensive shrimp farming operations, the financial results from the industry are that many of these are facing financial difficulties especially since the investments are highly leveraged
with borrowed funds (Sinh, 2006)
Issues
• Substantial investment activity into more intensive shrimp growing operations, which comprises significant and largely unrecoverable capital investment, has been taking place in Vietnam in recent years
• These investment decisions do not seem to be based on any sound economic analysis, but seem to
be simply founded in observing the success of the others, typically the early entrants into the intensive shrimp growing industry
• Such a lay approach to investment decision making may be one of the reasons why many newly established intensive shrimp growing enterprises face often insurmountable financial difficulties after they have invested
• There are several economic theories that can be used to support investment decisions One that is particularly suitable for investment projects under uncertainty is the real options approach, which can be used to determine optimal entry into an investment project, and an optimal exit point from
a project as a function of a random underlying variable (e.g price of shrimp) (Dixit and Pyndyck, 1994)
Approach
Data on shrimp production used in this study were obtained from a survey conducted in the Bac Lieu province in the Mekong Delta, in 2004 Based on the survey, and under current production conditions,
the sunk investment cost K, production cost C, and shrimp yields were obtained as given in Table 1
The shrimp price used in the model was the average shrimp price paid to farmers at the farm-gate in the Mekong River Delta, recorded in monthly intervals from January 2000 to December 2007 by the General Department of Statistics, Vietnam
The investment, production and price data were used in a standard entry and exit real options model (Luong and Tauer, 2006) Solutions to the set of equations were obtained using analytical and numerical methods, which enabled a derivation of the shrimp price that will trigger an optimal investment into a more intensive shrimp growing system (entry point), and a shrimp price that will trigger optimal divestment from an intensive shrimp growing operation
Trang 28
Table 1: Sunk investment cost and production cost per unit of output for shrimp farming
Farming type Sunk cost K
(1000VND/kg) Production cost C (1000VND/kg) Extensive 59.6 47 Improved extensive 28.22 58.71
• Invest in a semi-intensive shrimp operation when the shrimp farm-gate price rises above 72,623.03 VND/kg and abandon the operation if the shrimp price drops below 49,272.13VND/kg
• Invest in an intensive shrimp operation when the shrimp farm-gate price rises above 76,233.48 VND/kg and exit the operation if the shrimp price drops below 51,390.42VND/kg
• Government, through the agricultural extension service, can provide advice to prospective investors about the optimal conditions for investing, given the expected shrimp price movements,
as well as the cost of establishment and operation
Limitations
The reported trigger prices would have been valid for actual decision making in the year 2004 (the prevailing price of shrimp at that time was around 65,000 VND/kg), and are not relevant for current decision making This is simply an implication from the available investment and production cost data that were collected in 2004 Since then, these costs would have changed substantially due to general price level increase (inflation), changes in technology available in Vietnam, and changes of relative prices of inputs Thus, for any meaningful current decision making, updated data on investment and production cost in the Mekong Delta are needed
References
Dixit, A.K., and R.S Pindyck 1994 Investment under Uncertainty Princeton, NJ: Princeton University Press
Den, D.T., T Ancev, and M Harris, 2007 Technical Efficiency of Shrimp Farms in the Mekong Delta, Vietnam, Paper
Presented to the International Seminar: Sustaining Growth? Economic Transition and Natural Resource Management
in East and Southeast Asia, Ho Chi Minh City, 21-22 June, 2007
Luong.V.Q., and L W Tauer 2006 A real options analysis of coffee planting in Vietnam Agricultural Economics 35:
49-57
Sinh, L X., 2006 Major considerations on the fishery sector in the Mekong Delta of Vietnam Presentation to the CARD workshop, July 15-20, 2006, Can Tho
More information may be obtained from: Dr Tiho Ancev, Agricultural and Resource Economics,
Faculty of Agriculture, Food and Natural Resources, University of Sydney, NSW, 2006 and Linh
Nguyen Duy, Hanoi University of Agriculture, Hanoi, Vietnam
Email: t.ancev@usyd.edu.au or linhnd@gmail.com
Trang 29Technical Policy Brief (5) AusAID CARD Project 025/05 VIE
Environmental Compliance under Uncertain Enforcement
Purpose
To provide information for policy makers on the factors affecting the compliance of firms subject to wastewater fee payments These factors need to be considered when implementing policies that promote environmental protection
Background
Compliance is an important issue in environmental regulation The factors affecting the compliance of a firm and the probability of making a wastewater fee payment have been studied by a number of researchers (Dasgupta, Laplante, Mamingi and Wang 2001; Langpap 2008)
It is reasonably assumed that firms maximise profit and that it can be represented in the following way:
Π = PQ − C(Q, M ) −θα E(Q, M )− (1−θ)δkαE(Q, M )− (1−θ)δk(βE(Q, M ) + F k)
where Π is total profit of the firm; P is the price of the product; Q is total production; M is the inputs used for emission reduction; C(Q,M) is the cost of production function; θ is a probability of voluntary wastewater payment; α is the per unit charge for effluent emission;
δk is the expected probability of enforcement (k = 0 if the firm is outside an industrial cluster and k =1 if the firm is located inside a cluster); E(Q,M) is the emission amount that depends
on the firm’s production; β is the fine per unit of emission due to non-payment of the emission charge; and Fk is a fixed fine due to non-payment of the charge
The above equation can be summarised as:
Profit = Revenue – Production costs – Environmental fees (voluntary payment before enforcement) – δk(Environmental fees + penalty) (after enforced payment)
Considering the conditions for a profit maximum (application of the first-order conditions for maximisation) the following observations can be made:
• If a firm does not pay a fee it either expects it will not be forced to pay or that it will be forced to pay less than the full amount
• Firms located outside the industrial clusters have an advantage since their probability of enforcement is perceived as lower
• If the probability of wastewater payment is higher, the firm’s profit will be lower, and vice versa
• For a profit maximum, the firm prefers that the probability of having to make a payment is zero
Trang 30
• The probability of incurring a charge depends on the unit effluent discharge fee, the unit
effluent discharge fine and the expected probability of paying in the future when
eventually forced to pay
The expected probability of payment in the future (if forced to pay) is likely to be perceived
differently by different firm owners The characteristics of plants, including plant ownership,
location, production costs, kind of products, wastewater volume, and plant owners’
characteristics, including age and education may all have different effects on the perceived
probability of wastewater payment
Inspection data from the Department of Natural Resources and Environment in Bac Ninh
province in 2006 were used to estimate the probability of making a wastewater charge
payment A total of 159 paper plants in Phong Khe commune (households and companies in
industrial clusters) were inspected to discover their compliance with the environmental
regulations and other land use issues A logit regression was used to relate various variables
to the wastewater fee payment by the firms (that is, a regression that can predict the
probability of payment or not of the wastewater charge) The results are in Table 1
The location of plant, age of owner, kind of products, and the ratio of production per number of
labourers were found to significantly affect the probability of payment Firms located inside an
industrial zone were found to be more likely to pay the wastewater fee than those outside the zones
Table 1 Logit function estimates
Variables Coefficient Standard error z-value Probability > z 95% confidence
Note: The dependent variable is wastewater charge payment with values of zero (ie no
payment) of one (ie payment)
Regarding small and medium sized firms in communes, there are a number of environmental policy
regulations, however, the important ones are:
• Decision No 132/2000/QD-TTg of the Prime Minister in 2000 on encouragement for
rural craft development including regulations on land rental, credit, and building industrial
clusters/zones
• Decree 67/2003/ND-CP of the Government in 2003 on the industrial wastewater fees
The main points are: (i) every firm that discharges wastewater into the environment has to
pay a fee; (ii) fees are calculated on the quantity of pollutants in the wastewater; (iii) the
Trang 31firms are required to self-report the wastewater volume, effluents and total fee; (iv) if the firm does not pay, a fine will be imposed
Issues
The Government and local authorities have been encouraged to establish industrial clusters or zones, but a number of small firms still operate inside residential areas (even inside households) It is apparent that the government wants to move firms into industrial zones and clusters and normally firms also want to increase their scale and size However, in order to move into such areas, firms need a certain level of capital for their production Many of the smaller firms may have difficulty raising such capital
The wastewater charge has been applied for all industrial firms, including firms at the household level Although many firms have complied with the policy, that is, they have paid
the wastewater fee many others have not paid the fee
The Decree (67/2003/ND-CP) does not refer to a Vietnamese standard on wastewater discharge Firms are required to pay the same fee for effluents regardless of any standard levels of emission regarded as ‘safe’
Policy implications
Given the findings above, government may find it appropriate to develop policies that encourage small and household firms subject to pollution compliance requirements to move into industrial clusters and zones so as to minimise enforcement costs and to enhance the level of compliance
Also, the more enforcement action that has the firm owner perceive a higher expected probability of compulsory payments the better will be the environmental compliance of firms
References
Dasgupta, S., Laplante B., Mamingi N and Wang H 2001 ‘Inspections, inspection price, and environmental performance:
evidence from China’, Journal of Ecological Economics, vol 36, pp 487-498
Langpap, C 2008, ‘Self-reporting and private enforcement in environmental regulation’, Environmental Resource Economics, vol 40, pp 489-509
More information may be obtained from: Dr Pham Van Hung, Faculty of Economics and Rural Development, Hanoi University of Agriculture, Gialam, Hanoi Email: pvhung@hua.edu.vn ; Dr Nguyen Mau Dung, Faculty
of Economics and Rural Development, Hanoi University of Agriculture, Gialam, Hanoi Email: maudung@hua.edu.vn ; or Emeritus Professor Gordon MacAulay, BRI Research, North Ryde and University of Sydney Email: g.macaulay@usyd.edu.au and Dr Tihomir Ancev, Agricultural and Resource Economics, Faculty of Agriculture, Food and Natural Resources, University of Sydney, NSW, 2006 Email: t.ancev@usyd.edu.au Funding for the project was by AusAID under the CARD project Capacity Building in Applied Natural Resource Economics and Management in Vietnam
Trang 32Technical Policy Brief (6) AusAID CARD Project 025/05 VIE
Purpose
To provide information to policy makers about the level of knowledge of farmers on natural resource use and management and to recommend to government, policies that will improve the knowledge and skills of farmers in natural resource management
Background
Natural resource management is the term used to describe the management, protection and restoration of natural assets like soil, land, water, the marine environment, native plants and animals Natural resources in agriculture that were studied and covered in the AusAID
funded project training were water, chemical fertilisers, pesticides, land use and livestock waste management
The project included five training workshops for farmers conducted in the north, central and southern regions of Vietnam Participants in those workshops were local cadres, best farmers, heads of commercial farms, and extension workers at the commune level During the training workshops, they were asked a range of questions related to natural resource management Most questions were qualitative
Issues
Responses of farmers in the north (Hung Yen province) can be summarised as follows:
• Only 36.4 percent of the respondents in January 2008 answered that irrigation water was in good condition while almost 60 percent classified it as ‘medium’ or ‘bad’ About 32 percent of them believed that water has been used wastefully but the actions
to reduce wastewater were different from farmer to farmer In another workshop conducted in July 2008, a similar group of participants were selected and about 47 per cent indicated water was in ‘medium’ or ‘bad’ condition and about 50 percent of them answered that water has been used wastefully
• About 82 percent of respondents believed that they applied an ‘adequate level’ of nitrogen There were no respondents who considered they applied ‘too much’ or ‘too little’ nitrogen A small group of 13.6 percent of respondents answered that crop productivity would increase if more nitrogen were to be used
• On the other hand, there was a total of 77.2 percent of respondents who indicated they sprayed an ‘optimal’ level of pesticide, but 63.6 percent of them believed that the crop productivity would increase if more pesticide were to be used This means that their perceived level of application of pesticide may be ‘too little’
• Farmers have used waste livestock materials for a wide range of purposes such as for paddy fertiliser (13.6 percent), fish feed (18.2 percent), tree fertiliser (13.6 percent),
* Funding for this research has been provided by the AusAID CARD Program, Project 025/05 VIE
Trang 33fish and tree fertiliser (9.1 percent), and biogas (13.6 percent) For large-scale farms biogas, although expensive to install, becomes a viable option The other methods tend
to be used by smaller-scale farmers
• A question asked was ‘What are the most worrying problems you have? The highest proportion of farmers believed that pollution of water was their most worrying problem (68.2 percent of responses) Second-level problems were lack of water and low soil fertility, while poor management of irrigation and degradation of soil were ranked third-level It seems that water and land are the two main resources whose management needs to be paid much more attention
• Other questions were asked which appeared to be clear and simple, such as: ‘Is your rice land fertile?’ or ‘Is crop productivity decreasing over time?’ High levels of non-response were observed There were 22.7 and 31.8 percent of participants who gave no responses for the first and second questions, respectively This is likely to mean that their knowledge of these issues (and communication) is uncertain or very limited Similar results were obtained in South Vietnam in Soc Trang
The overall project was designed in a layered framework In the first layer, training for
Vietnamese academics, policy analysts and extension specialists at the national level was provided In the second layer, those trained in the first layer then trained the extension
specialists and policy analysts at the provincial level In the third layer, extension workshops for local cadres, best farmers and extension workers were conducted by those trained at the second level Natural resource management has been the focus in all training There were a number of topics which participants found hard to understand, especially farmers Therefore, simple language (words) needs to be used in such workshops and training programs along with broader-scale community activities to give a much wider understanding of resource management issues and concepts
Recommendations for Government
• Through the use of macro policy changes, especially natural resource management policy, create favourable conditions for efficient resource use at the household level;
• Provide accurate information (including forecasts) related to resources (amount, regional use, etc.) and thus enable farmers to make better production choices;
• Encourage research institutes to develop renewable resource management techniques which are friendly to the environment;
• Actively pursue supportive activities related to credit provision, introduction of
technology, and development of input and output markets as these are critical to
sustainable use of natural resources;
• Resource use taxes and other management techniques relating to natural resource use should be implemented widely, so that resources are used efficiently and are not
exhausted in short periods of time
Trang 34Recommendations for the National Agricultural and Aquacultural Extension Centre
• Knowledge of farmers of natural resource management is very limited, so more training
on the topic urgently needs to be conducted in a wide range of different areas, especially
in the remote and mountainous regions;
• The method of transferring knowledge should be effective Materials provided to farmers should be simple and understandable Ideas transferred to farmers through combined
“sound and visual” methods seem to be more understandable and better accepted than written material
Recommendations for local government
• Through general master planning, create a favourable environment for efficient natural resource use;
• Encourage farmers to use resources in an efficient and sustainable way; and
• Strengthen the extension system for diffusing technology to farmers relating to efficient resource use
Recommendations for farmers
• Encourage the enhancement of education levels and knowledge about natural resource use, technology and markets to help farmers take advantage of opportunities and to use resources in an efficient and sustainable way so as to obtain higher and longer-term economic returns
More information may be obtained from: Dr Pham Van Hung, Faculty of Economics and Rural Development, Hanoi University of Agriculture, Gialam, Hanoi Email: pvhung@hua.edu.vn ; or Emeritus Professor Gordon MacAulay, BRI Research, North Ryde and University of Sydney Email: g.macaulay@usyd.edu.au Funding for the project was
by AusAID under the CARD project Capacity Building in Applied Natural Resource Economics and Management in Vietnam.
Trang 358 Research Scholar Reports
The research scholar reports are reports on the research work undertaken by the Research Scholars while visiting the University of Sydney These reports are in the form of research papers and designed to provide skill development in the production of a research paper In all cases the topics involve issues of natural resource management and have involved an element
of research in the area of agricultural and resource economics The topics were:
1 ‘Technical Efficiency of Prawn Farms in the Mekong Delta, Vietnam’ by Do Thi Den
2 ‘An Inquiry into Four Alternative Systems of Shrimp Culture in the Lagoon Area of Thua Thien Hue Vietnam’ by Le Thi Kim Lien
3 Evaluating the Benefits of Site-Specific Crop Management of Nitrogen Application to
Rice Production by Nguyen Thi Thu Huyen
4 Farmers’ Decisions Under Market Uncertainty: A Real Option Analysis of Shrimp
Farming in Vietnam’, by Linh Nguyen Duy
Trang 36Technical Efficiency of Prawn Farms in the Mekong Delta, Vietnam
Research report prepared during the stay as a visiting scholar at
The University of Sydney, under the CARD Project 025/05 VIE, August – December, 2006
Prepared by:
Do Thi Den Abstract
Prawn culture has been playing an important economic role in Vietnam for the last two decades The area for aquaculture is continuously expanding in the provinces of the Mekong Delta Fisheries and aquaculture contributed 29.2% to the GDP component of the agricultural sector in the Mekong Delta in 2003 However, data from previous studies shows that more than 30% of the total prawn farms are experiencing economic loss Profitability can be increased by increasing yield through development and adoption of new technologies and improvement in the economic efficiency of prawn farming operations This paper examines the technical efficiency of prawn farming in the Mekong Delta of Vietnam using the stochastic production frontier approach The analysis was based on data collected in a survey of intensive and extensive prawn farm operations in Bac Lieu province of the Mekong delta The estimated mean technical efficiency for intensive prawn farming operations was 71.3%, while the mean technical efficiency for extensive farming operations was 47.3% Experience in prawn farming and the level of attained education of the farmers are some of the factors that were found to affect technical efficiency The prawn farms operated by more experienced prawn growers were found to attain higher technical efficiency
Keywords: Mekong delta, prawn farming, technical efficiency
1 Introduction
Over the last twenty years, prawn farming has been developing rapidly in the Asian region and particularly in Vietnam Rapid expansion has resulted in high production, currently ranking this country seventh in total global prawn production (Kautsky et al., 2000) Fisheries and aquaculture are important economic sectors in Vietnam Several types of aquaculture such as prawn culture, mangrove farming, prawn-mangrove farming, crab culture, crab-mangrove farming, fish farming and alternate rice-fish farming are present in Vietnam Prawn culture in particular has been playing an important economic role for the last two decades, thus contributing to poverty alleviation, employment and foreign currency earning (Estelles et al., 2002)
Despite high risks involved in prawn farming in Vietnam, which are mainly due to the problems associated with disease outbreaks that can lead to severe mortality, farmers in the Mekong Delta (MD) are still interested in raising prawns because of a high potential
economic return In recent years, the area for aquaculture has been continuously expanding in the provinces of the MD and most of all in the districts of the Ca Mau peninsula (Soc Trang, Bac Lieu, Ca Mau) The Mekong Delta is considered to be especially important since it supplies more than 60% of the annual export value of aquatic products in the country (Thanh
et al., 2005) According to Sinh (2006), fisheries and aquaculture contributed 8.1% and 29.2% to the agricultural sector’s contribution to the national GDP of Vietnam and the GDP
of the MD in 2003, respectively Despite this positive trend, recent data show that more than 30% of the total prawn farms are experiencing economic losses (Sinh, 2006) This high
Trang 37incidence of losses that occur in the face of growing popularity of prawn farming in the MD was one of the key motivations for this study
The profitability of the prawn growing operations depends among other things, on
productivity of the prawn farms Increases in yields can be achieved as a result of the
development and adoption of new technologies and improvement in the economic efficiency (EE) of farming operations The EE consist of two components: technical efficiency (TE) and allocative efficiency (AE) TE reflects the ability of a farm to obtain maximum output from a given set of inputs and available technology (Dey et al., 2000)
The major objective of this study is to determine the technical efficiency of prawn farms in Vietnam based on the data from a farm survey conducted in 2004 In addition, the study also aims to determine the factors that can explain the technical inefficiency The study also examines some socio-economic characteristics of the prawn growers in the MD
There are four major approaches to measure and estimate technical efficiency: the
nonparametric programming approaches, the parametric programming approach, the
deterministic statistical approach, and the stochastic frontier production function approach Among these, the stochastic frontier production function and nonparametric programming, known as data envelopment analysis (DEA), are the most popular approaches The stochastic frontier approach is preferred for assessing efficiency in agriculture because of the inherent stochastic processes involved (Dey et al., 2000) In this paper we are using the stochastic frontier approach to measure TE and identify the sources of inefficiency of prawn farming in the MD
2 Literature review
In recent years, several studies have been conducted to estimate the TE in aquaculture of various species in the broader region of South-East Asia Chiang et al (2004) conducted a study in Taiwan which specified a stochastic production frontier function to estimate
potential milkfish farm output and efficiency This study compared maximum potential milkfish production per hectare under various pond conditions to provide managers with information on how to increase efficiency Another study conducted in the Philippines aimed
to determine the farm level technical efficiency of tilapia growout pond operations by using the stochastic frontier production function (Dey et al., 2000) A broader, comparative study was carried out for selected Asian countries in 2005 It presented the estimated levels and determinants of farm-level TE in fresh water pond polyculture systems in China, India, Thailand and Vietnam (Dey et al., 2005) The levels of country-specific TE were estimated for different production intensity levels by estimating stochastic production frontier functions involving the model for technical inefficiency effects In another study, conducted in India, Kumar et al (2004) determined the TE of prawn farming to be 69%
The average productivity of prawn farms in Vietnam was investigated in a recent survey (Estelles et al., 2002) It was reported that average productivity in extensive farming is 150 kg/ha/year, in semi-intensive farming 600–1,800 kg/ha/year and 6000–10,000 kg/ha in the case of intensive farming practice This can be compared to overall averages of prawn farm productivity levels in some major prawn producing countries like Thailand (3,116 kg/ha), Malaysia (1,500 kg/ha), China (800 kg/ha), Philippines (770 kg/ha) and India (635 kg/ha) (Kumar et al., 2004)
Trang 38While there has been a significant amount of research in developing countries in the area of technical efficiency of prawn farming, the TE of prawn farming in Vietnam has not yet been comprehensively studied In this paper, we build on the previous literature, and conduct a TE analysis for two farming systems used in prawn culture in the Mekong Delta, Vietnam
3 Theoretical framework
Farrell (1957) was the first to establish the possibility of estimating frontier production functions in an effort to bridge the gap between theory and empirical work (Aigner et al., 1977) Frontier functions have been applied widely in the last two decades, especially after studies of Aigner et al (1977) and Green (1980) Frontier functions include the stochastic frontier production functions, frontier cost functions and frontier profit functions The
stochastic frontier production function was independently proposed by Aigner et al (1977) and Meeusen and van den Broeck (1977) The main application of the stochastic frontier production function has been in estimating and calculating TE of various production
processes The method permits output to be specified as a function of controllable factors of production, random noise and a technical inefficiency (TI) term The technical inefficiency error term has two components; one to account for random effects (e.g measurement errors
in the output variable, weather conditions, diseases and the combined effects of
unobserved/uncontrollable inputs on production); and another to account for pure technical inefficiency in production (Dey et al., 2000)) The stochastic frontier production function can
be written as:
(1) Y i = f (X i;β) exp (V i – U i ) , (i = 1, 2,…, N)
Where Y i is the production of ith farm, X i is a vector of inputs used by the ith farm; βis a
vector of unknown parameters to be estimated; V i is a random variable which is assumed to
be independently and identically distributed (iid), usually N (0, 2
v
σ ), and is independent of the
U i U i is a random variable that accounts for technical inefficiency in production and is assumed to be independently distributed as a truncation (at zero) of the normal distribution with mean,µi and variance, 2
u
σ where,
(2) µi= Z iδ
Z i is a p x 1 vector of farm-specific variables that may cause inefficiency and δ is 1 x p
vector of parameters to be estimated The stochastic production frontier of a technically
efficient farm would represent the maximum attainable output (Y i*) as:
(3) Y i* = f (X i;β) exp (V i )
This can then be used to measure the technical efficiency of all other farms, relative to this
efficient farm The technical efficiency of the ith farm (TE i) is given by:
(4) TEi = *
i
i
Y Y = exp (– U i),
where TE may be defined as a capacity of a producer to produce a maximum output from a
certain amount of input and using the available technology
Trang 39The estimation of a stochastic production frontier function may be viewed as a variance decomposition model The variance decomposition can be expressed as:
4 Data and Method
The data used in this study were a subset of a complementary baseline survey conducted in the Bac Lieu province in 2004 Total sample size was 212 households, which was comprised
of prawn farming households without any land devoted to cropping (rice), as well as
households that in addition to the prawn farming had some land devoted to rice production Out of these, 193 prawn farms were selected and analysed in this paper The sampling frame used in the survey was developed by the Mekong Delta Development Research Institute (MDDRI) To determine the technical efficiency (TE), a two step procedure was followed In the first step, a stochastic frontier model was used to estimate TE for each prawn farming operation In the second step, TE was used as a dependent variable and was regressed on variables representing individual characteristics of the surveyed households
In Vietnam, prawn farming can be classified in one of the four types of farming systems: extensive, improved extensive, semi-intensive and intensive The key difference between these farming systems is the intensity of input use While the extensive system uses very little purchased inputs and relies on available natural resources (sea water, land, etc.), the intensive prawn farming system employs more labor, and heavily uses purchased inputs such as seed and feed
To determine the effects of the particular type of prawn farming system, the sample was classified into two classes, one called “intensive”, which included semi-intensive and intensive farming systems, and another called “extensive” (which included extensive and improved extensive farming systems The latter were dominant in the sample, with 163 surveyed households falling into the “extensive” category, with only 30 falling into the
“intensive” category A summary of the data regarding socio-economic and economic aspects
of the sampled prawn farmers are given in Tables 1, 2 and 3
4.1 Socioeconomic characteristics of prawn farming
In general, there is not much difference in the average number of completed years of
education of the head of household between the two types of prawn farmers For intensive this was 6 years, and for extensive it was 5 years, while the overall average was 5 years
(Table 1) However, it was found that most of the farmers undertaking intensive prawn
farming had obtained higher levels of education than the farmers operating extensive prawn farming (Table 1)
The household size of most of the intensive prawn farmers was found to be smaller than that
of extensive prawn farmers Data in Table 1 shows that 10% of the intensive prawn farming households had a family size of less than two members while only 3% of the extensive prawn farming households fell into this category On the other hand, 34% of the extensive prawn farming households had more than 6 members, while only 27% of the intensive prawn
farming families were in this category
Trang 40The average age of both intensive and extensive prawn farmers was found to be 50 years However, it was found that greater percentage of the intensive prawn farming respondents belonged to older age groups (Table 1) Average farm area for intensive and extensive prawn farming was found to be 1.2 ha and 1.74 ha respectively and average years of experience was reported to be 4 and 5 years respectively for intensive and extensive prawn farmers (Table1)
4.2 Economic characteristics of prawn farms
Table 2 presents the economic analysis of the two general prawn farming types in the MD (intensive and extensive) The findings reveal that average net income reported for the intensive farming system is much higher than that reported for the extensive prawn farming The reported figures were about 60 million VND and 10 million VND per hectare,
respectively The prawn yield was also found to be nearly eight times greater in the case of intensive farming However, it was found that the production cost for intensive farming is about nine times greater than the cost involved in extensive farming Family labor input was found to be 273 days for intensive and 98 days for extensive prawn farming
The data analysis shows that intensive prawn farming is on average more profitable as compared to extensive prawn farming However, when the households were allocated to groups according to the level of profitability from prawn farming there was no difference in the average percentage of the households falling into negative and positive profit groups, i.e 37% of both prawn farming types were under negative profit and 63% had positive profit (Table 3)
High positive profits were reported for intensive prawn farming, which peaked to more than
200 million VND, however high positive profits were limited only to 7% of the respondents
In the mid-range, 33% of the intensive prawn farms and 61% of extensive farms were
reported to gain profit under 50 million VND On the other hand, 7% of intensive farms and only 3% of the extensive prawn farms reported a loss greater than 20 million VND (Table 3) Thus, the data in Table 3 reveals that there is much opportunity for generating higher profits
in intensive prawn farming on the one hand, while on the other hand heavy losses can occur reflecting the higher riskiness of this type of prawn farming
4.3 Method
A model of a stochastic production frontier function was fitted to the survey data There are several functional forms that have been used in the literature to measure the physical
relationship between inputs and outputs One of the most common forms is the
Cobb-Douglas (CD) function The CD model for the survey data used in this study was specified as:
(7) Log(Y i) = β0+ β1log(S i) + β2log(F i) + β3log(L i ) + V i - U i
where, Y i is the observed prawn production in farm i (kg/ha/year), S i is seed (1000 fingerlings
/ha), F is feed (kg/ha), L is hired labor (days/ha) and V i - U i are error terms as described above
This model was run separately for the sample of intensive prawn farms, and for the sample of extensive prawn farms In effect, this meant that the data was grouped in two separate
samples There were several reasons for this One was that in terms of technology, the two systems (intensive and extensive) are so different that estimating from the data in a single sample would greatly distort the results This suspicion was confirmed by the preliminary