THE ECONOMIC EFFICIENCY OF CORN PRODUCTION IN HUONG LONG WARD, HUE CITY, THUA THIEN HUE PROVINCE

HUE UNIVERSITY COLLEGE OF ECONOMICS THE ADVANCED PROGRAMUNDERGRADUATE THESIS THE ECONOMIC EFFICIENCY OF CORN PRODUCTION IN HUONG LONG WARD, HUE CITY, THUA THIEN HUE PROVINCE NGUYEN TAN L

HUE UNIVERSITY COLLEGE OF ECONOMICS THE ADVANCED PROGRAM

UNDERGRADUATE THESIS

THE ECONOMIC EFFICIENCY OF CORN PRODUCTION IN HUONG

LONG WARD, HUE CITY, THUA THIEN HUE PROVINCE

NGUYEN TAN LAI

Academic Year: 2011-2016

It is important to realize that without the help of all the organization andpeople I met with, I would not have been able to complete my first Bachelor’sthesis Hence, I am deeply grateful to many people for their help and supportduring the various stages of writing this thesis

First and foremost, I would like to express my sincere appreciation toDr.Truong Tan Quan, my thesis supervisor, for his enthusiasm andencouragement at every stage of my thesis I could not have imagined havingbetter adviser and mentor for my teacher Besides, I would like to thank all localstaffs in Huong Long ward, who helped me in collecting data process Likewise,

my sincere thanks also go to all teacher in Agricultural Economics- FinanceDepartment

The thesis is examining empirically economic efficiency of corn production

in Huong Long ward, Hue city, Thua Thien Hue province The secondary data forestimating regression models on relationships between the input factors, such asthe breed costs, the labor costs, the fertilizer costs, the pesticide costs,, the age ofhousehold head, the education level of household, the size of household, and theacreage of household are acquired from the 2015-2016 Summary results fromthe corn farmer review and survey in Huong Long Ward By the use regressionmodels of Cobb Douglas function in combination with the statistics methods anduse the evaluation criteria of economic efficiency , the study shows the economicefficiency of corn cultivation, economic efficiency compare with other crops,namely rice; however, the economic efficiency of corn is still smaller than localpotential Besides, the thesis finds that the farmer hasn't used appropriately inputsources to get maximize benefit

CONTENTS i

LIST OF SYMBOLS AND ABBREVIATIONS v

LIST OF FUGURES vi

LIST OF TABLE vii

PART I: INTRODUCTION 1

1 Rationality 1

2 The objectives of research 2

2.1 The overall objective 2

2.1.The specific objectives 2

3 The research content and research scope 2

3.1 The research content 2

3.2 The scope of research 3

3.2.1 The study site 3

3.2.2 The study period 3

4 The research Methodology 3

4.1 Data collection 3

4.2 Data analyzed methods 3

4.3 The indicators evaluating the economic efficiency of corn production 4

4.4 The average indicators 5

4.5 The indicators of margin performance per unit of the independent variable 5

PART II:CONTENTS AND FINDINGS 7

CHAPTER I: LITERATURE REVIEW 7

1.1 Economic efficiency 7

1.1.1 Concepts 7

1.1.2 Role of economic efficiency 9

1.1.3 Classification 10

1.2 Biological and economic-social characteristics of corn crop 14

1.2.1 Origin and development of corn crop 15

1.2.2 Biological characteristics of corn crop 16

1.2.3 Economic and social characteristics of corn crop 18

1.2.4 Factors influencing on production and economic efficiency of corn crop 19

1.3.1 The world 22

Figure 1.1 Acreage and yield of corn in the World 23

Figure 1.2 Quantity of corn in the World 23

Table 1.1 Yield of corn in some countries, 2014 24

Figure 1.3 The top coutries producing corn in 2013/2014 24

Table 1.2 Data on some domestic corn output and consume 25

1.3.2 Vietnam 25

Figure 1.4 The corn production in Viet Nam 26

Figure 1.5 Vietnam: Imports of corn from 01/2013 - 3/2014 26

Table 1.3 Import corn in Viet Nam 26

1.4 Corn sector's contribution to Vietnam's economy 28

CHAPTER II: EXISTING SITUATION OF PRODUCTION AND ECONOMIC EFFICIENCY OF CORN CROP IN HUONG LONG WARD, HUE CITY, THUA THIEN HUE PROVINCE 30

2.1 The characteristics of the research site: 30

2.1.1 The natural conditions: 30

2.1.1.1 Geographical location: 30

2.1.1.2 Weather and Climate: 30

2.1.1.3 Land and topography : 32

Table 2.1 The current status of land use in Huong Long ward in 2015 32

2.1.2 Economic conditions of Huong Long ward: 33

2.1.2.1 Population and labors : 33

Huong Long is the ward that along the city with the population relatively crowded To understand better about the situation of population and labors in the ward,we consider the following table 33

Table 2.2.: The situation of population and labor of Huong Long ward in 2015 33

2.1.2.2 The infrastructure : 34

2.1.2.3 economic growth and social development : 34

Table2.3: The economic structure of years Huong Long Ward through two years 2014- 2015 35

2.2 The existing situation of production Ngo in Huong Long Ward 36

2.2.1 Cropping area, yield and production 36

Table 2.4 The area, yield and yield of corn are in Huong Long Ward from 2013 to 2015 37

2.2.2 The advantages and disadvantages of production, processing and consumption of corn in Huong Long ward 37

2.3 Existing situation of corn production at surveyed households 38

2.3.1 Sampling structure 38

2.3.2 Characteristics of production resources at Households 39

Table2.5 Basic characteristics of the group household investigated 39

2.3.3 land 40

Table2.6 Land situation of households serveyed 40

Figure 2.1 Acreage of households 41

2.3.4 Labor 41

2.3.5 Capitals 41

2.3.6 Economic efficiency of corn production 42

2.3.7 market 42

2.4 The general situation of research groups 42

Table 2.7: Acreage, yield, price and quantity of corn 2015 – 2016 43

2.5 The corn production results of the groups surveyed 46

Table 2.9 Corn production results of surveyed group 47

Figure 2.1 Corn production results of surveyed group 47

2.6 Analysis Corn production efficiency of households 48

2.6.1 Efficiency analysis of Corn production per hectare of the investigation group 48

Table 2.10 Capital efficiency index of Corn 48

Figure 2.3 Capital efficiency of Corn production 49

Table 2.11 Labor efficiency index of corn production 49

Figure 2.4 Labor efficiency of Corn 50

2.6.2 Compare the results and production efficiency of corn and rice 51

Table 2.12 The results and efficiency of Corn and Rice 51

Table 2.13 Production results between Corn and Rice 51

Figure 2.5 The production results between corn and rice 52

Table 2.14 The capital efficiency index between corn and rice 52

Figure 2.6 Capital efficiency between corn and rice 53

Table 2.15 The labor efficiency index between corn and rice 54

Figure 2.7 The labor efficiency between corn plant and rice plant 54

2.6.3 Evaluate the impact of the inputs to the efficiency of household corn production 55

Table 2.16: Regression results 56

2.7 Some comments about the development of production of corn farmers 58 CHAPTER III SOLUTIONS TO IMPROVE THE ECONOMIC EFFICIENCY OF CORN CROP IN HUONG LONG

3.1 The development strategy of corn crop in Huong Long Ward 59

3.2 Some solutions to enhance the economic efficiency of corn production in Huong Long Ward 60

3.2.1 General solutions 60

3.2.2 Specific solutions 61

3.2.2.1 Solutions for breed: 61

3.2.2.2 Capital solutions 61

3.2.2.2.1 For local governments 61

3.2.2.2.2 For farmers 62

3.2.2.3 Technical Solutions 62

3.2.2.4 Solutions for mechanisms and policies 63

3.2.2.5 Technical Solutions 63

3.2.2.6 Some other solutions 63

PART III: CONCLUSIONS AND RECOMMENDATIONS 64

1 Conclutions 64

2 Recommendations 65

REFERENCES 66

66

LIST OF SYMBOLS AND ABBREVIATIONS

7 AMIS Agricultural Market Information System

8 USDA U.S Department of Agriculture

10 USA The United States of America

13 SNA The System of National Accounts

14 GDP Gross Domestic Product

15 MPS Meta Programming System

16 CAGR CIMMYT Compound Annual Growth Rate

17 CIMMYT International Corn and Wheat Improvement Center

18 Mil VND Million of Vietnamese Dong

LIST OF FUGURES

Figure 1.1 Acreage and yield of corn in the World 23

Figure 1.2 Quantity of corn in the World 23

Figure 1.3 The top coutries producing corn in 2013/2014 24

Figure 1.4 The corn production in Viet Nam 26

Figure 1.5 Vietnam: Imports of corn from 01/2013 - 3/2014 26

Figure 2.1 Acreage of households 41

Figure 2.2 Corn production results of surveyed group 47

Figure 2.3 Capital efficiency of Corn production 49

Figure 2.4 Labor efficiency of Corn 50

Figure 2.5 The production results between corn and rice 52

Figure 2.6 Capital efficiency between corn and rice 53

Figure 2.7 The labor efficiency between corn plant and rice plant 54

LIST OF TABLE

Table 1.1 Yield of corn in some countries, 2014 24

Table 1.2 Data on some domestic corn output and consume 25

Table 1.3 Import corn in Viet Nam 26

Table 1.4 Corn import market of Vietnam 27

Table 2.1 The current status of land use in Huong Long ward in 2015 32

Table 2.2.: The situation of population and labor of Huong Long ward in 2015 33

Table 2.3: The economic structure of years Huong Long Ward through two years 2014- 2015 35

Table 2.4 The area, yield and yield of corn are in Huong Long Ward from 2013 to 2015 37

Table 2.5 Basic characteristics of the group household investigated 39

Table 2.6 Land situation of households serveyed 40

Table 2.7: Acreage, yield, price and quantity of corn 2015 – 2016 43

Table 2.8 The costs of corn in a corn season 44

Table 2.9 Corn production results of surveyed group 47

Table 2.10 Capital efficiency index of Corn 48

Table 2.11 Labor efficiency index of corn production 49

Table 2.12 The results and efficiency of Corn and Rice 51

Table 2.13 Production results between Corn and Rice 51

Table 2.14 The capital efficiency index between corn and rice 52

Table 2.15 The labor efficiency index between corn and rice 54

Table 2.16: Regression results 56

Table 3.1 The development plan of corn in Huong Long ward up to 2019 59

PART I: INTRODUCTION

1 Rationality

Vietnam is an developing country in which agriculture is an importanteconomic sector in the strategy of social-economic development Therefore,several policies of agricultural and rural development have been enabled toaccelerate the economic development, increase of income and improvement ofwelfare of people Thanks to above policies, agriculture in Vietnam in general andcropping activities have been experienced significant changes in production andconsumption These achievements have contributed very significantly to theeconomic and social stability, creating the premise to accelerate industrialization

- modernization of the country

There are several crops that are cultivated in Vietnam and Central regionbut corn is one of the important food crops, after rice plants, it has greatproductive and economic value Besides the tremendous value in terms of food,corn is also an important plant to feed animals About 70% of starches in food arefrom corn In recent years corn is still popular foods In addition, corn is alsomaterial for food processing industry and light industry

Corn is not only great value in economic value but also its adaptability verygood Corn is grown around the world and its can be grow on many different soiltypes Corn is a short- day plants with simple of planting techniques and care andhas a larger markets and bring high economic efficiency for farmer

In recent years, Vietnam corn production has continued to increase in botharea and yield, however, that development seems not commensurate with thepotential and needs of the country Every year, Vietnam spends about half abillion dollars import corn to serve domestic demand Average corn yield ofVietnam reached only 4 tons / ha, lower than corn yield of many countries such

as the corn yield of US is 9-11 t / ha This shows that the efficiency of corn inVietnam is low Therefore, important goal of corn in the near next time is to fully

meet domestic demand, reducing imports and towards exports for foreigncurrency earnings.

Huong Long is a ward located in the outskirts of Hue city With existinggeographical features, it is a very favorable land for the production of crops,especially corn However, most of these techniques as well as methods ofproducing corn in Huong Long ward are artisanal Whether the economicefficiency of corn bring economic vale for local people or not is still a big questionwithout answer and correct assessment Therefore, I chose the topic " Theeconomic efficiency of corn production in Huong Long ward, Hue city, Thua ThienHue province" to solve these problems

2 The objectives of research.

2.1 The overall objective

Based on assessing economic efficiency of corn production, the studyrecommend some proposed solutions to increase economic efficiency of corn,then facilitate sustainable development of corn farming activity and improveincome for local farmers

2.1.The specific objectives.

To achieve above overall objective, following specific objectives are clarifiedReviewing theories related economic efficiency of production, particularly incorn cultivation

Assessing the existing situation on economic efficiency of corn production ofcorn crop at Huong Long Ward, Hue city, Thua Thien Hue province

Recommending the appropriate and feasibility solution to improveeconomic efficiency of corn production at Huong Long Ward in next coming years

3 The research content and research scope.

3.1 The research content.

Analyzing the situation of corn production in 2015 – 2016

Analyzing economic efficiency of the production over the years 2012 - 2015Analyzing factors affecting the production and economic efficiency bringing

to farmers based on actual costs over three periods 2012 -2015

Recommending possible solutions to improve economic efficiency of cornproduction in next coming years

3.2 The scope of research

3.2.1 The study site

Agricultural cooperatives Huong Long, Hue City

3.2.2 The study period

Secondary data: Secondary data are collected from 2012 to 2015

Primary data: Questionnaires and in depth interview are collected from02/22/2016 to 20/05/2016, through direct interview

4 The research Methodology

4.1 Data collection

I selected 50 households in 3 typical cultivation area in Huong Long ward,the selection was totally random based on arrangement of typical cornproduction households in local area

After identifying the number of samples, the next step was to conductquestionnaire of production and consumption situation of corn cultivation inHuong Long Ward

4.2 Data analyzed methods

Currently, our country's economy is in the process of development tointegration with the world economy One of the economic problems need to do isconvert the calculation of the synthetic indicator system from the balance sheet ofthe national economy (MPS) into the system of national accounts (SNA) Since

that, we have the conditions for international comparisons on many aspects ofeconomic life - social and also consistent with the requirements of the currentchange management.

Monograph methods: collecting data from local staffs, the leader incommunity and farmers who have experience This methods can exploit localknowledge from local people

Descriptive statistics is used for studying economic and social phenomenonthrough describing the data collected This method is used for analyzingproduction and consumption situation of corn

Comparative method: is used for comparing quantitative and qualitative,comparing indicators, economic and social phenomenon which are estimatedwith same content, similar characteristics to identify volatility of content Thismethod is used in my thesis for comparing production situation of corn throughyears, comparing corn and rice in terms of fields: production cost, results

Statistical graphs method: this method is used for presenting and analyzing

by graphs, charts It also combines combine with the shapes, lines and colors topresent the characteristics and quantities of phenomena This method also helps

us understand the basic characteristics of phenomena by phenomena easily andrapidly

Regression analysis method

To analyze factors affecting production cost of households, I use Douglass function to analyze

Cobb-m

md c d

c d c

bn n



Y: dependent variable, in model, Y is coefficient of productivity

Xi quantitative independent variables (i 1,n)

4.3 The indicators evaluating the economic efficiency of corn production

The indicators reflect efficiency of production per area unit

GO/ha is the total value production per hectare

VA/ha is the value-added per hectare

The capital efficiency indicators

GO/IC is the production value per 1 VND of intermediate costs

VA/IC is the value added per 1 VND of intermediate costs

MI/IC is the mixed income per 1 VND of intermediate costs

Pr/IC is the profit per 1 VND intermediate costs

The indicators of labor efficiency

GO/LB is the production value per 1 VND labor cost

VA/LB is the value added per 1 VND labor cost

MI/LB is the mixed income per 1 VND labor cost

Pr/LB is the profit per 1 VND labor cost

4.4 The average indicators

The formula: l

X X

l

k k

Y  i



Meaning: invest additional a unit factor i will bring how much additional unit

of income elements (Y)

For attribute variables:Y  e C j

Meaning: If Dj = 1, income will increase by an amount of eCj

In this thesis, I have chosen this system of indicators to calculate because ofthe following reasons:

This indicator system is widely used in agriculture and other sectors of thenational economy At the same time it is also consistent with the local situationthat I study This indicator system is significant when determining the GDPaccording to the system of national accounts SNA

Today, target production of farmers is not the maximum profit, which is toaddress local employment to generate income for workers

This indicator system using quite simple, understandable to farmers, thusconvincing and practical value of this system is high

PART II:CONTENTS AND FINDINGS CHAPTER I: LITERATURE REVIEW 1.1 Economic efficiency

1.1.1 Concepts

a The theory of economic efficiency.

Economic efficiency is a category reflecting the quality of economicactivities Process of strengthen in taking advantage of the resources available toserve the interests of the people, which means raising the quality of economicactivity Improving economic efficiency is an objective demand of all socialproduction coming from the material needs of people which is increasing.Requirements of economic management requires raising the quality of economicactivity, creating economic efficiency categories

The different views on economic efficiency:

First opinion: Economic efficiency is determined by the growth rate of socialproduction or the total national product, high efficiency when the growth rate ofthese indicators is high and efficiency reached as being not wasted An efficienteconomy when it is above the frontier line of production capacity characterized

by potential output indicator of the economy, the difference between the actualpotential yield and actual output is potential output which society can not use thewaste part

The second opinion: Efficiency is the satisfactory level of basic economic law

of socialism, for that consumer fund represents the people's living standards, theindicators reflecting the efficiency of social production

The third opinion: Efficient business production is the increase of thebusiness production result per employee or profitability of production capitalabout general or specific indicator

Fourth opinion: The efficiency of a process, in general, the relationship

between the effective rate (on purpose) and the cost spent (resources) to achievethat result.

In summary: The economic efficiency shows comparative relationshipbetween the results achieved and the cost of resources spent When the resultsreached only by the cost spent is a waste of resources, the economical use ofresources to achieve a certain result is economic efficiency Overall economicefficiency still has to rely on the comparative principle between the resultsachieved and the cost of resources spent

b The essence of economic efficiency

In view of Marx, the nature of economic efficiency stems from requirements

of production and social and economic development That is the response to theincreasing demand for material and spiritual of all members of society Economicefficiency is an economic-social category with complex characteristics, sodetermine and compare the economic effects are complex and difficult problems,which are just relative value Efficiency is an indicator reflecting differentmeaning for each types of household For poor farmers, especially in the self-sufficiency economy, the creation of many products is important Regardingeconomic accounting, in terms of condition "Labor offsets profit"., the farmerspay close attention to earnings, while for farmers producing goods, in condition

of renting labor, profit is ultimate goal and that is efficiency problem

In the market economy, the goal of the manufacturer is to obtain themaximum profit in limited conditions Thus economic efficiency is directly related

to the inputs and the output element of production and business processes Theidentification of the inputs and outputs of the production process will encountercertain difficulties

As for Input:

same and for many years It can be very difficult to determine the depreciationcost, this cost is just relative.

Due to the constant volatility of the market, so that determining the fixedcosts is incorrect that only relative

Some inputs are difficult to quantify, such as information, communication,infrastructure, which can not be calculated accurately

As for Output:

The majority of the production output results can be quantified in a specificway but there also the elements can not be quantified, such as environmentalprotection, the competitiveness of manufacturers, the ability to create jobs

Economic efficiency as an objective economic categories, it is not theultimate goal of production The ultimate aim of social production is to meet therequirements of material, cultural and spiritual society So, studying in evaluatingthe economic efficiency does not only stop at the level of assessment but also tofind solutions to develop in a better way

Hence, the nature of the economic efficiency derives from the purpose ofproduction and socio-economic development in order to meet higher demands ofall members of society The nature of business efficiency is to raise laborproductivity and save social labor These two sides have close ties of economicefficiency issues associated with two corresponding rule of social productionwhich are the rule of increasing labor productivity and saving time to work

Therefore, the request of improving business efficiency is to achievemaximum efficiency and minimum cost It is understood in the wide sense thatthe cost of creating resources and costs of using resources The cost of usingresources including opportunity costs

1.1.2 Role of economic efficiency

Economic efficiency is the most common economic category, related directly

to the production of goods and all the categories, the other economic laws

Economic efficiency is expressed in the relationship between the resultsachieved and the cost spent

A management technical solution with high efficiency is a plan whichachieves optimum results with minimum investment cost

Most economists agree that the basic and overall standards to assesseconomic efficiency are the degree to meet the needs of society and the largestsavings in cost and resources consumption.

Economic efficiency standards are the views and principles of economicefficiency evaluation of the specific conditions at a certain stage Enhancingeconomic efficiency is common goal and mainly through all periods, while thestandard is objective selection criteria assessed by quantitative standard selected

at each stage Each period of different economic-social development, the

efficiency evaluation criteria is also different

On the other hand, depending on the contents of the effect that we candevide economic efficiency of the national economy and of the enterprise Sodemand is diverse, changing over time and depending on the level of appliedscience and technology into production On the other hand, needs also includeseveral categories: basic needs, demand solvency and needs according to thegeneral desire It can be considered the maximum income per unit cost is thestandard to evaluate the effectiveness of the current economy

For society, the assessment criteria of economic efficiency is the ability tosatisfy the needs of production and consumption of the society by the materialasset, the market economy also requires elements quality and low price in order

to increase competitiveness For corporate or economic organizations, theevaluation criterias of economic efficiency is the maximum income calculated onthe cost spent and labor spent

As for corn, regarding economic efficiency evaluation, we consider economicaccounting, calculating the costs, the inputs and outputs

Determine the correlation between the input results spent and the resultsachieved, which is profitable

1.1.3 Classification

All activities of human production and process technical applicationsadvances in manufacturing are primary purpose of economic efficiency However,the results of these activities are not solely economic gain but also simultaneouslygenerate multiple results related to economic-socio life of human The resultswere: improving the lives, solving employment, contributing to political stabilityand social order and security, advanced social construction, improving theenvironment, improving spiritual and cultural life of the people, which meansreaching efficiency in terms of society

Especially in agricultural production, besides general economic-socioefficiency, it’s also obtains huge efficiency in environment which other economicsectors can not obtain An economic activity may also brings efficiency anindividual, a unit, but considering the whole society, it affects adversely theinterests and general efficiency Therefore, when assessing efficiency, we need toclassify them to have accurate decision

Based on the content and nature, it can be distinguished into threecategories: economic efficiency, social efficiency and economic and socialefficiency Three different categories are different in content, yet, but have arelationship interacting each other Economic efficiency is understood as thecorrelation comparison between the result of economic side and cost spent toachieve that result

In determining the economic efficiency, many economists are less stressedrelative comparative relations (division), but only interested in absolutecomparative relation ties (subtraction) and not fully consider the relationshipclosely cooperation between the relative quantity and sheer quantity

Economic result in here is represented by the value of the total product, totalincome, profits and margins

If economic efficiency is correlation comparison between the amount ofeconomic results achieved and the cost spent, the social efficiency is correlationcomparison between the society results and total cost spent.

Economic-socio efficiency is correlation between the summarized resultswhich are obtained in the fields of economy - society with the costs spent toachieve these results

We can consider the economic efficiency as the center process, It has themost decisive role and it is fully evaluated when combines with society To clarifythe effect of economic categories, we can classify them according to certaincriteria, then see clearly visible studies content of economic efficiency

Considering the scope and object of economic activity, can divide categories

of economic efficiency into:

Economic efficiency by branch of economic efficiency is calculatedseparately for each material industry such as industry, agriculture, trade, services in each sector there is time to allocate greater economic efficiency for thenarrower sectors

The efficiency of the national economy is the economic efficiency in all thesocial production

Economic efficiency by geographical regions: is considered separately foreach region, each province, each district, ect

Economic efficiency is considered for each business, because enterprisesoperating by each individual purpose and achieve profit be the highest goal, thusmany efficiency of heterogeneous enterprises with the nation efficiency Also sothat the state will have the macroeconomic policies associated with the business.There is economic efficiency of material production areas and productionservices

Based on the basic elements of the production and orientations of the impact

on producing, you can divide the economic efficiency of each type:

The capital efficiency.

The labor efficiency

The machinery efficiency

The land efficiency

The efficiency of application of scientific methods techniques andmanagement

1.1.4 Criteria for evaluating economic efficiency

The total value of household production: GO (Gross Output) is the total value

of products produced by households, defined as the sum of the products isspecified by value







n i

i

iQ P GO

1

Including:

Qi is the volume of product i

Pi is the price of product i

The Intermediate Cost (IC) is the total cost of the manufacturing process(excluding the value of labor, tax, financial expenses, depreciations) Inagriculture, intermediate costs include expenses fuels and materials such asseeds, fertilizers, pesticides, plant protection, land preparation, water supplysystem, ect

1

Including:

Cj is the expenses j in a production cycle

Value Added (VA) is the value added of the manufacturing household perarea unit

VA = GO - IC

In the market economy, producers are very interested in value-added Itrepresents the result of the investment costs of labor and raw material in themanufacturing process

Mixed income (MI) is the net income of producers, including remunerationcomponent and the profits they can get in a production cycle Mixed income iscalculated by the following formula:

MI = VA - [A+W (if any)]

Including:

A is the value of depreciation and distributed expenses

W is Labor rent (if any)

Profit (Pr) is part of net interest in mixed income per area unit

Pr = GO - TC

Including:

GO is the total value of production

TC is the total cost of production

1.2 Biological and economic-social characteristics of corn crop

Corn (Zea mays) is a plant belonging to the family of grasses (Poaceae) It iscultivated globally as one of the most important cereal crops worldwide Corn isnot only an important human nutrient, but also a basic element of animal feedand raw material for manufacture of many industrial products The productsinclude corn starch, maltodextrins, corn oil, corn syrup and products offermentation and distillation industries It is also being recently used as bio-fuel.Corn is a versatile crop grown over a range of agro climatic zones In fact thesuitability of corn to diverse environments is unmatched by any other crop It isgrown from 58o N to 40o S, from below sea level to altitudes higher than 3000 m,and in areas with 250 mm to more than 5000 mm of rainfall per year (Shaw,

1988; Dowswell et al., 1996) and with a growing cycle ranging from 3 to 13months (CIMMYT 2000) However the major corn production areas are located intemperate regions of the globe The United States, China, Brazil and Mexicoaccount for 70% of global production The use of corn varies in differentcountries In USA, EU, Canada and other developed countries, corn is used mainly

to feed animals directly or sold to feed industry and as raw material forextractive/ fermentation industries (Morris, 1998; Galinat, 1988; Shaw, 1988,Mexico, 1994) In Latin America and Africa the main use of corn is for food while

in Asia it is used for food and animal feed In fact in many countries it is the basicstaple food and an important ingredient in the diets of people Globally, it hasbeen estimated that approximately 21% of the total grain produced is consumed

as food

From the perception of the role of corn in the world economy in general and

in particular of agriculture Vietnam, the Party and State have had right policiesfor scientific research, absorbing the achievements of the world for the purpose

of maintaining the corn area, increased in productivity and output However, thecorn yield in our country is still not stable in the eco-region, the averageproductivity and economic efficiency remain low compared to the potential andadvantages available

1.2.1 Origin and development of corn crop

Most historians believe corn was domesticated in the Tehuacan Valley ofMexico Recent research modified this view somewhat; scholars now indicate theadjacent Balsas River Valley of south-central Mexico as the center ofdomestication

The Olmec and Mayans cultivated corn in numerous varieties throughoutMesoamerica, cooked, ground or processed through nixtamalization Beginningabout 2500 BC, the crop spread through much of the Americas The regiondeveloped a trade network based on surplus and varieties of corn crops

Nevertheless, recent data indicates that the spread of corn took place evenearlier According to Piperno.

"A large corpus of data indicates that it [corn] was dispersed into lowerCentral America by 7600 BP [5600 BC] and had moved into the inter-Andeanvalleys of Colombia between 7000 and 6000 BP [5000-4000 BC]."

Since then, even earlier dates have been published

After European contact with the Americas in the late 15th and early 16thcenturies, explorers and traders carried corn back to Europe and introduced it toother countries Corn spread to the rest of the world because of its ability to grow

in diverse climates Sugar-rich varieties called sweet corn are usually grown forhuman consumption as kernels, while field corn varieties are used for animalfeed, various corn-based human food uses (including grinding into cornmeal ormasa, pressing into corn oil, and fermentation and distillation into alcoholicbeverages like bourbon whiskey), and as chemical feedstocks

An influential 2002 study by Matsuoka et al has demonstrated that, ratherthan the multiple independent domestications model, all corn arose from a singledomestication in southern Mexico about 9,000 years ago The study alsodemonstrated that the oldest surviving corn types are those of the Mexicanhighlands Later, corn spread from this region over the Americas along two majorpaths This is consistent with a model based on the archaeological recordsuggesting that corn diversified in the highlands of Mexico before spreading tothe lowlands

Before they were domesticated, corn plants only grew small, 25 millimetres(1 in) long corn cobs, and only one per plant Many centuries of artificial selection

by the indigenous people of the Americas resulted in the development of cornplants capable of growing several cobs per plant that were usually severalcentimetres/inches long each

Corn is the most widely grown grain crop throughout the Americas, with

332 million metric tons grown annually in the United States alone Approximately

40% of the crop—130 million tons—is used for corn ethanol.Genetically modifiedcorn made up 85% of the corn planted in the United States in 2009.

1.2.2 Biological characteristics of corn crop

The corn plant is often 3 m in height, though some natural strains can grow

12 m The stem is commonly composed of 20 internodes of 18 cm length A leaf,which grows from each node, is generally 9 cm in width and 120 cm in length.Ears develop above a few of the leaves in the midsection of the plant,between the stem and leaf sheath, elongating by ~3 mm/day, to a length of 18 cmwith 60 cm being the maximum alleged in the subspecies They are femaleinflorescences, tightly enveloped by several layers of ear leaves commonly calledhusks Certain varieties of corn have been bred to produce many additionaldeveloped ears These are the source of the "baby corn" used as a vegetable inAsian cuisine

The apex of the stem ends in the tassel, an inflorescence of male flowers.When the tassel is mature and conditions are suitably warm and dry, anthers onthe tassel dehisce and release pollen Corn pollen is anemophilous (dispersed bywind), and because of its large settling velocity, most pollen falls within a fewmeters of the tassel

Elongated stigmas, called silks, emerge from the whorl of husk leaves at theend of the ear They are often pale yellow and 18 cm in length, like tufts of hair inappearance At the end of each is a carpel, which may develop into a "kernel" iffertilized by a pollen grain The pericarp of the fruit is fused with the seed coatreferred to as "caryopsis", typical of the grasses, and the entire kernel is oftenreferred to as the "seed" The cob is close to a multiple fruit in structure, exceptthat the individual fruits (the kernels) never fuse into a single mass The grainsare about the size of peas, and adhere in regular rows around a white, pithysubstance, which forms the ear- maximum size of kernel in subspecies isreputedly 2.5 cm An ear commonly holds 600 kernels They are of various colors:

flour, corn yields more flour with much less bran than wheat does It lacks theprotein gluten of wheat and, therefore, makes baked goods with poor risingcapability A genetic variant that accumulates more sugar and less starch in theear is consumed as a vegetable and is called sweet corn Young ears can beconsumed raw, with the cob and silk, but as the plant matures (usually during thesummer months), the cob becomes tougher and the silk dries to inedibility By theend of the growing season, the kernels dry out and become difficult to chewwithout cooking them tender first in boiling water

Corn is a facultative short-day plant and flowers in a certain number ofgrowing degree days > 10 °C in the environment to which it is adapted Themagnitude of the influence that long nights have on the number of days that mustpass before corn flowers is genetically prescribed and regulated by thephytochrome system Photoperiodicity can be eccentric in tropical cultivars suchthat the long days characteristic of higher latitudes allow the plants to grow sotall that they do not have enough time to produce seed before being killed byfrost

Immature corn shoots accumulate a powerful antibiotic substance, dihydroxy-7-methoxy-1,4-benzoxazin-3-one (DIMBOA) DIMBOA is a member of

2,4-a group of hydrox2,4-amic 2,4-acids (2,4-also known 2,4-as benzox2,4-azinoids) th2,4-at serve 2,4-as 2,4-anatural defense against a wide range of pests, including insects, pathogenic fungiand bacteria DIMBOA is also found in related grasses, particularly wheat A cornmutant lacking DIMBOA is highly susceptible to attack by aphids and fungi.DIMBOA is also responsible for the relative resistance of immature corn to theEuropean corn borer (family Crambidae) As corn matures, DIMBOA levels andresistance to the corn borer decline

Because of its shallow roots, corn is susceptible to droughts, intolerant ofnutrient-deficient soils, and prone to be uprooted by severe winds

1.2.3 Economic and social characteristics of corn crop

Corn and cornmeal (ground dried corn) constitute a staple food in manyregions of the world

Introduced into Africa by the Portuguese in the 16th century, corn hasbecome Africa's most important staple food crop Corn meal is made into athick porridge in many cultures: from the polenta of Italy, the angu of Brazil,the mămăligă of Romania, to cornmeal mush in the US (and hominy grits in theSouth) or the food called mealie pap in South Africaand sadza, nshima and ugali in other parts of Africa Corn meal is also used as areplacement for wheat flour, to make cornbread and other baked products

Popcorn consists of kernels of certain varieties that explode when heated,forming fluffy pieces that are eaten as a snack Roasted dried corn ears withsemihardened kernels, coated with a seasoning mixture of fried chopped springonions with salt added to the oil, is a popular snack food in Vietnam Cancha,which are roasted corn chulpe kernels, are a very popular snack food in Peru, andalso appears in traditional Peruvian ceviche An unleavened bread called makki diroti is a popular bread eaten in the Punjab region of India and Pakistan

Chicha and chicha morada (purple chicha) are drinks typically made fromparticular types of corn The first one is fermented and alcoholic, the second is asoft drink commonly drunk in Peru

Corn flakes are a common breakfast cereal in North America and the UnitedKingdom, and found in many other countries all over the world

Corn can also be prepared as hominy, in which the kernels are soakedwith lye in a process called nixtamalization; or grits, which are coarsely groundhominy These are commonly eaten in the Southeastern United States, foodshanded down from Native Americans, who called the dish sagamite

The Brazilian dessert canjica is made by boiling corn kernels in sweetenedmilk Corn can also be harvested and consumed in the unripe state, when the

kernels are fully grown but still soft Unripe corn must usually be cooked tobecome palatable; this may be done by simply boiling or roasting the whole earsand eating the kernels right off the cob Sweet corn, a genetic variety that is high

in sugars and low in starch, is usually consumed in the unripe state Such corn onthe cob is a common dish in the United States, Canada, United Kingdom, Cyprus,some parts of South America, and the Balkans, but virtually unheard of in someEuropean countries Corn on the cob was hawked on the streets of early 19th-century New York City by poor, barefoot "Hot Corn Girls", who were thus theprecursors of hot dog carts, churro wagons, and fruit stands seen on the streets ofbig cities today The cooked, unripe kernels may also be shaved off the cob andserved as a vegetable in side dishes, salads, garnishes, etc Alternatively, the rawunripe kernels may also be grated off the cobs and processed into a variety ofcooked dishes

Corn is a major source of starch Cornstarch (corn flour) is a major ingredient

in home cooking and in many industrialized food products Corn is also a majorsource of cooking oil (corn oil) and of corn gluten Corn starch can

be hydrolyzed and enzymatically treated to produce syrups, particularly highfructose corn syrup, a sweetener; and also fermented and distilled to produce grainalcohol Grain alcohol from corn is traditionally the source of Bourbon whiskey Corn

is sometimes used as the starch source for beer Within the United States, the usage

of corn for human consumption constitutes about 1/40th of the amount grown inthe country In the United States and Canada, corn is mostly grown to feed livestock,

as forage, silage (made by fermentation of chopped green cornstalks), or grain Cornmeal is also a significant ingredient of some commercial animal food products, such

Land is the main mean of production, especially for corn, it is the directfactors that affected to yield and quality of corn products.

To help plants corn survive and growth, farmer have to care to the soilnutrients because crop yields high or low depends a lot on nutrition in the soil

To high-yield corn, farmer ought to intercropped corn with soybean, bothmain products and byproducts are gained benefit On the other hand, soybean islegume crops, corn intercropped legumes will provide nutrients to corn Thuscorn get higher yield

b The technical factors group

Choosing corn seed

Farmers should select varieties resistant corn had higher good, consistentgrowth time Based on corn varieties that has recommended to choose cornvarieties suit each case, each local region Dodging the disadvantages, make themost of the advantages of land, air, light, ect

Season

Depending on the specific conditions of each region that choosing theappropriate timing Seasonality is a very important factor, ensuring that theprocess of growth and development of corn are normal and get high yield Tochoose the right cultivation time, people must master planting conditions of thelocal ecology, the infrastructure conditions (possibilities for irrigation,drainage, ) and the characteristics of cultivated varieties put into production.Vietnam is not a large country, but the terrain is long and complex, ecologicalconditions between regions quite different, thus the corn planting season is alsovery diverse

For winter-spring season, corn sowed from 15/11 - 15/12

For spring-summer season, corn sowed from 15/1 - 15/2

For summer-autumn season, corn sowed from 15/5 - 15/06

season and created the right conditions to promote germination process we need:Soak seeds in lime water about 4-8 hours to kill pathogens or soak in watertemperature of 40 -50ºC.

Depth of sowing: To trees germinate and grow faster in the early sowingperiod, farmers need sowing shallow to take advantage of beneficial soiltemperature on the surface, average sowing depth is about 4 - 5 cm However, indry areas should be planted at a depth deeper

Cultivate land of corn: the most suitable land for corn is lightweight soil,fertile, easy drainage, adequate moisture, not waterlogged, so when planting,farmer have to renovate soil to soft, deeper, clear, moisturizing good and harrowweeds

Density and distance: Each region, each breed need apply logical distance,take advantage of the soil nutrients and lighting time, as well as light intensity inorder to achieve the highest yield For good ground or low light intensity, farmershould sowing varieties with low density Depending on the time growth andcharacteristics of corn varieties

For short-day plants, density is about 60,000-80,000 plants / ha, distance is60cm x 25cm x 1 tree

For average-day plants, density is about 50,000-70,000 plants / ha, distance

is 60cm x 25cm x 1 tree

Fertilization for Corn: if farmer want to get high yield, they need fertilizeenough fertilizer When manure fertilizer for crop they should be based ondevelopment ability of roots, stems, physiological demand about fertilizer andalso based on the nutrient content in the soil The amount of fertilizer: Organicfertilizers: 10-15 tons / ha Urea: 300-400 kg / ha Superphosphate 300-450 kg /

ha Kali 120-150 kg / ha

After corn plant has flower, farmer could proceed to cut out 10-15% badplant or broken tree flag Because, after fertilization complete, nutrition to focus

When searching the market, the manufacturer must choose appropriateorganization methods for the production, so that profits are maximized Forsolving "what to produce" problems, requires carefully studied the market,defined by customers, price and consumption methods To do so , we mustconsider the law of supply and demand in the market.

The price

For agricultural producers in general and the corn growers in particular, themarket price is top concern in the market, price is the determining factorproduction behavior, unstable prices affect the psychological of corn growers.The fluctuations market affected directly to the lives of producers.Therefore, the price stability and expanding consumer market are essential forthe long-term development of the corn industry

1.3 Existing situation of corn crop

1.3.1 The world

Corn is an important food plant in the global economy, it accounts for theworld's third largest farming area, the second in terms of output and productivity.Thanks to the versatility, corn is one of grains which is very interesting.2012/2013 crop, the world's corn farming area was 176 million hectares, the ratecompounded annual growth (CAGR) from 2004 to date was 2.2% (Figure 1.1);corn production is estimated at 863 million tons, far ahead of other crops such asrice (466 million tons), wheat (655 million tons), with growth rates of 3.4% CAGR(Figure 1.2) Spectacular increase to mention the yield of corn in some countriessuch as Chile, New Zealand: 12 tons / ha, US: 10 tons / ha and Switzerland,Turkey, Canada reachead 9 tons / ha, while the average yield in recent 10 years inthe world's is approximately 5 tons / ha (Figure 1.1, Table 1.1)

Corn is produced and consumed many in the US, China and Brazil (Figure1.3), mainly for animal food and industrial use (Table 1.2) US and Brazil are thetwo countries leading corn exporter in the world, while leading in importingcountries are Japan and Mexico) World production increased, then in 2013 cornprices fell gradually towards the end of the year, early 2014 corn prices tend torise, but still in low level

(Source: KPMG India Private Limited, India Corn Summit, 2014, USDA)

Figure 1.1 Acreage and yield of corn in the World

(Source: KPMG India Private Limited, India Corn Summit, 2014, USDA)

Figure 1.2 Quantity of corn in the World

Table 1.1 Yield of corn in some countries, 2014

(Source: http://www.indexmundi.com/agriculture/?

commodity=corn&graph=yield)

(Source: KPMG India Private Limited, India Corn Summit, 2014, USDA)

Figure 1.3 The top coutries producing corn in 2013/2014

Table 1.2 Data on some domestic corn output and consume.

Unit: million tons

*: Including losses, disposal; a: estimates; b: predicts

(Source: International Grains Council, Grain Market Report, 2014)

Indian market provided the most amount of corn for Viet Nam, which

accounted for 14.3% to 229.5 thousand tons; the second is the US market with 188.5 thousand tons ,worth 47.6 million USD (Table 1.5)

(Source: AMIS (Agricultural Market Information System), Market Monitor, 2014)

Figure 1.4 The corn production in Viet Nam