AN ECONOMIC ANALYSIS OF GINGER PRODUCTION IN THUY BIEU WARD, THUA THIEN HUE PROVINCE

HUE UNIVERSITY COLLEGE OF ECONOMICS THE ADVANCED PROGRAMUNDERGRADUATE THESIS AN ECONOMIC ANALYSIS OF GINGER PRODUCTION IN THUY BIEU WARD, THUA THIEN HUE PROVINCE NGUYEN KHANH VAN Academi

HUE UNIVERSITY COLLEGE OF ECONOMICS THE ADVANCED PROGRAM

UNDERGRADUATE THESIS

AN ECONOMIC ANALYSIS OF GINGER PRODUCTION IN THUY BIEU WARD, THUA

THIEN HUE PROVINCE

NGUYEN KHANH VAN

Academic year 2011 - 2016

HUE UNIVERSITY COLLEGE OF ECONOMICS THE ADVANCED PROGRAM

UNDERGRADUATE THESIS

AN ECONOMIC ANALYSIS OF GINGER PRODUCTION IN THUY BIEU WARD, THUA

THIEN HUE PROVINCE

Name of student: Ms Nguyen Khanh Van Name of supervisor: Class: K45 Agricultural Economics – Finance Assoc Prof Dr Bui Dung The

Academic year: 2011 - 2016

Hue, June 2016

First of all, I would like to express sincere and profound gratitude to mysupervisor Assoc Prof Dr Bui Dung The for his enthusiastic supervision duringroughly three months of working on the thesis Without his help, I would nevercomplete my undergraduate thesis

I would also like to thank all office staffs in Thua Thien Hue Department ofAgriculture and Rural Development as well as all officers in Thuy Bieu Cooperativetheir enthusiastic help on searching necessary data for my research

Grateful acknowledgement goes to ginger households in Thuy Bieu Ward inThua Thien Hue province, who were willing to participate in my survey, they treated

me so well and kindly during the interview even though weather was extremely hotand they were very exhausted after working for hours under the sun I had manyunforgettable memories with them within nearly twenty days doing interview and Itruly love and miss them so much

I would like to save my last gratitude for my family and my friends, I owethem everything and they mean the world to me I would never reach this pointwithout their unconditional and immeasurable love I am absolutely indebted to theirsacrifices and I love them more than words

Nguyen Khanh Van Hue, May 2016

TABLE OF CONTENTS

ACKNOWLEDGEMENTS i

TABLE OF CONTENTS ii

ABBREVIATIONS iv

LIST OF TABLES v

ABSTRACT vi

PART I INTRODUCTION 1

1 Statement of Problem 1

2 Objective of Research 2

3 Scope of Research 3

4 Research Methodologies 3

PART II: RESEARCH CONTENTS AND RESULTS 7

CHAPTER 1: THEORETICAL FRAMEWORK AND EMPIRICAL FRAMEWORK OF THE RESEARCH 7

1.1 THEORETICAL FRAMEWORK 7

1.1.1 Characteristics of ginger 7

1.1.2 Values of ginger 8

1.1.3 The factors affecting the production of ginger 10

1.1.4 Methods of ginger cultivation 12

1.1.5 Economic criteria 13

1.1.6 Modeling Research 13

1.2 EMPIRICAL FRAMEWORK 15

1.2.1 The situation of production in the world 15

1.2.2 The situation of production and consumption in Viet Nam 16

CHAPTER 2: AN ECONOMIC ANALYSIS OF GINGER PRODUCTION IN THUY BIEU WARD, THUA THIEN HUE PROVINCE 18

2.1 OVERVIEW OF THUY BIEU WARD 18

2.1.1 Natural features of Thuy Bieu 18

2.1.2 Socio-economic characteristics of Thuy Bieu 20

2.2 THE SITUATION OF GINGER PRODUCTION AND CONSUMPTION IN

THUY BIEU 27

2.2.1 The situation of ginger production 27

2.2.2 The situation of ginger consumption 28

2.3 ECONOMIC ANALYSIS OF GINGER PRODUCTION THROUGH THE SURVEYED HOUSEHOLDS IN THE STUDY 30

2.3.1 Overview of the surveyed households 30

2.3.2 Economic analysis of ginger production 37

CHAPTER 3: ORIENTATIONS AND PROPOSED SOLUTIONS TO DEVELOPTMENT OF THUY BIEU GINGER 52

3.1 ORIENTATIONS 52

3.2 SOLUTIONS 53

3.2.1 Planning solutions and expansion the production area of ginger 53

3.2.2 Solutions for seed and technique to improve ginger productivity 54

3.2.3 Solution for capital 55

3.2.4 Solution for consumption market 55

PART III: CONCLUSION AND RECOMMENDATIONS 56

1 CONCLUSION 56

2 RECOMMENDATIONS 57

REFERENCES 59

APPENDICES 61

ABBREVIATIONS

TTH : Thua Thien Hue Province

1.

LIST OF TABLES

Table 1.1: Nutrition Facts of ginger 8

Table 1.2: Top Five Ginger Producing Countries 16

Table 2.1: The economic structure of Thuy Bieu from 2014 to 2015 20

Table 2.2: Total production value of Thuy Bieu (2013-2015) 21

Table 2.3: The population and labor of TB in 2015 22

Table 2.4: The situation of using land in TB (2013-2015) 23

Table 2.5: Planting area and value of ginger production in TB (2013-2015) 27

Table 2.6: Age and Experience of ginger farmers 30

Table 2.7: Socio-economic characteristics of sample respondents 32

Table 2.8: The situation of planting area 33

Table 2.9: Input cost of ginger production 34

Table 2.10: Seed selection of household 35

Table 2.11: Fertilizer usage of households 36

Table 2.12: Detailed cost of Ginger production 37

Table 2.13: Yield of Ginger production 39

Table 2.14: Economic target of Ginger production 39

Table 2.15: Effects of planting area to Ginger production 44

Table 2.16: Effects of costs to Traditional Ginger production 45

Table 2.17: Effects of costs to In Bag Ginger production 45

Table 2.18: Estimates of the stochastic Cobb-Douglas frontier production function and technical inefficiency model for ginger 48

The purpose of this thesis was to describe the economic analysis of ginger production in Thuy Bieu Ward, Thua Thien Hue Province The thesis's research design was quantitative and descriptive Farmers in Thuy Bieu Ward who have been planting ginger with kept records in their production during 2013-2015 became the thesis's population The unit of measurement was defined as Vietnamese Analysis of the 60 qualifying surveys took the form of descriptive statistical calculations and economic modeling in Cobb-Douglass, a production function The function in Cobb– Douglas production is widely used to represent the technological relationship between the amounts of inputs, particularly physical labor, seed, fertilizer, agrochemical and others (materials, loan…) and the amount of output of ginger that can be produced by those inputs In the end, the total thesis output effect from these factors was summed and extracted to describe the effect of farmer investments on the ginger production The study provided documentation to support the experiential planning mission of agricultural development As an average result of the VND 425,352 of gross production value, VND 218,029 of farmer total cost, an estimated total profit for the production equaled VND 207,323 It is important to 2 notes that the majority of the thesis's impact came from the effect of the scale of production and the assumptions made about farmer spending The thesis revealed a 1.95 output multiplier; it meant each new VND spent by farmers, a VND 0.95 of product value was created The findings are consistent with other related economic researches and demonstrations on the region's economy Implications suggest a need for increased support of local authorities and other work-based agricultural encouragement programs A number of practices, including stronger emphasis on promoting economic acumen of farmers and greater accuracy of recordkeeping, could be instituted Following thesis recommendations could result in increased farmer participation in work-based knowledge improving and additional economic impact for Thuy Bieu’s economy.

Farmers with these opportunities are more likely to possess skills, ready to meet demands of a growing global economy.

Ginger is the one of the most important and most widely used spices worldwide Due

to its universal appeal, ginger has spread to most tropical and subtropical countriesfrom the China-India region, where ginger cultivation was prevalent probably from thedays of unrecorded history In ancient time, ginger was more valued for its medicalproperties and played an important role in primary health care in India and China.Ginger has been grown for long time in Hue city as a spice plant serving the needs ofthe family Through many years of cultivation, ginger proved to be quite easy to growand suitable to cultivation conditions here Thuy Bieu which is a ward of Hue city has

a lot of households growing ginger for long time According to the Agricultural operative of this ward, I know the majority of farmers planting ginger in traditionalmethod which means growing ginger in land so it is difficult to care and preventdiseases and disasters On the other hand, Thuy Bieu ward covers a large area land ofperennials especially Thanh Tra pomelo tree The development of Thanh Tra pomeloplants has brought huge economic efficiency to the local and contributed to change therural face of Thuy Bieu in recent years However, the Thanh Tra pomelo tree isperennial with five year period from planting until the first harvest, so it is big wastefor a fertile alluvial area here during that period when the soil is idle From this reality,

co-farmers of Thuy Bieu ward actively found out a new ginger method using more kinds

of seedlings with high economic efficiency for intercropping in order to utilize idleland area under Thanh Tra plants Recently model of growing ginger proved to be anew and effective one in many parts of our country Realizing the potential of thismodel on the ward area, The Agricultural co-operative bravely piloted in the local andinitially obtained positive results However, farmers here are still quite unassertive due

to long production practices and fear of no output

Through research, I find it necessary to apply my knowledge gained from theUniversity for helping farmers here see the opportunity from ginger then they can getsuitable production directions to solve the existing problems in the productionsituation here In the final course internship, I was given a chance to visit the local by

my university for grasping the specific situation so I decided to choose the theme: "Aneconomic analysis of ginger production in Thuy Bieu Ward, Thua Thien HueProvince" According to this research, I hope to contribute partially for providing givethe local authority and people useful supporting information to get proper productiondirection in the future

2 Objective of Research

2.1 General objective:

Under these circumstances, the principal purpose of the thesis is analyzing ofeconomic of ginger production in Thuy Bieu ward, Hue province According to theresearch’s results to put forward proposed solutions to improve the economics ofginger production, as well as promoting the consumption and production of ginger inHue

2.2 Specific objective

There are three specific objectives which will be resolved and fulfilled clearlythroughout three main parts of the thesis In the first part, the thesis aims to describe

ginger situation in TB Ward in overall as well as general problems leading toimplementation of the research.

In the second part, firstly, the objectives are all issues related to ginger such as history,allocation, values, production situation and consumption situation over the world aswell as Viet Nam Secondly, how the characteristics of TB Ward and households thatresearched what the results and economic values of ginger in Thuy Bieu Ward, HueCity is Thirdly, it estimates how factors that affect production efficiency of ginger Inaddition, some measures are considered to improve the efficiency in the studied site.Lastly, the objective is set to point recommendations for local ginger farms, aswell as local authorities in the third part

3 Scope of Research

Scope of space: Research in TB Ward, Hue Focus on ginger farmers in Thuy Bieu

ward

Time range: Secondary data collected from 2013-2015 Primary data collected by

questionnaire in morning (9 AM - 11 AM) and afternoon (16 PM - 19 PM); the surveywas conducted from 20th April 2016 to 10th May 2016 until achieving the number ofneeded samples

Scope of content: An economic analysis of ginger production in Thuy Bieu Ward,

Thua Thien Hue Province and proposing a number of solutions to develop gingerproduction in the future

4 Research Methodologies

4.1 Secondary data collection

Secondary data was collected from the relevant previous research in the world and inVietnam in order to synthesize information and data from the report on gingerproduction and its economic efficiency Besides that, secondary data used for thisresearch were also collected from various sources including relevant books borrowedfrom Hue College of Economics library, previous researches, Journals, Articles and

other sources on the internet such as annual report, forums, and blogs and so on Thishelps the researchers to save time and minimize cost Some information on this paperwas translated in to English by the translation tools and be rephrased by the authors so

as to remain the closest meaning of the content from the original language

4.2 Primary data collection

An advantage of using primary data is that researcher is collecting information for thespecific purposes of study In essence, the questions the researcher asks are tailored toelicit the data that will help them with their study Researchers collect the datathemselves, using surveys, interviews and direct observations The primary data issurveyed through a structured questionnaire to collect detailed information from 60interviewed households in Thuy Bieu ward on various aspects of ginger productionsuch as input (seed, irrigation, fertilizer, …), output of ginger, price of ginger or gingerseed and factors affecting production Based on the primary data collected, data will beprocessed and analyzed to achieve a specific objective is assessment on economicanalysis of ginger production in Thuy Bieu ward

 Questionnaire:

The questionnaire is the set of questions framed for the specific purpose of datacollection through field work First, it translates the objectives of the field work intospecific questions which help in the collection of necessary data such as age, farmingexperience, level of education, cost of ginger production, input materials of gingerproduction, land situation, ginger price The second purpose of questionnaire is toassist interviewer in motivating the respondent to communicate the requiredinformation The quantity and quality of data collected depends largely on the nature

of questionnaire The form of questionnaire depends upon some of the factors such aswillingness of the respondents, usefulness of the information and its level, language,sequence of questions, single idea and so on Hence, I used types of question in thequestionnaire as qualitative questions, quantitative questions, contingency questionsand closed-ended questions (two-point questions)

in the Thuy Bieu resettlement area To conduct a disproportionate stratified sample,the population of sampling units are divided into two groups including householdsgrowing traditional method and households growing in-bag method I surveyed asample of 30 households growing traditional method and 30 households growing in-bag method is to be selected from ginger household in TB with over 150 householdsplanting ginger.

 Interview methods:

The author use personal interview method which is a face to face communicationbetween the interviewer and the respondents Generally the personal interview iscarried out in a planned manner and is referred to as ‘structured interview’ (rapportbuilding, introduction, recording and closing) Surveys were conducted with preparedquestions

4.3 Data analysis

 Method of descriptive statistics

The descriptive statistic is combination of measurement, description and presentation

of the data The aim of descriptive statistical analysis is to provide the importantcharacteristics of the respondents (ginger growers) such as age, sexual, educationlevel, production experience and examine and describe some of the variable,particularly the amount of seeds, muck, fertilizers and pesticide and so on by usingsimple statistical analysis as average, variance, range, maximum and minimum values

of the variables Methods of information and data analysis: statistical methods,comparative, analytical and integrated methods and multiple regression models byusing the Excel and Eview software program

 Method of Regression Analysis

Regression analysis is used in applied agricultural economics research with two mainpurposes, which are forecasting and making statistical inferences about the effect ofexogenous variables on the dependent variable In economics, the Cobb–Douglasproduction function is a particular functional form of the production function, widelyused to represent the technological relationship between the amounts of two or moreinputs and the amount of output that can be produced by those inputs The stochasticCobb-Douglas production frontier model was used for estimating technical efficiency

of ginger producer in the study areas and the model is given below:

be estimated

β6 = unknown parameters to be estimated

PART II: RESEARCH CONTENTS AND RESULTS

CHAPTER 1: THEORETICAL FRAMEWORK AND EMPIRICAL

FRAMEWORK OF THE RESEARCH

1.1 THEORETICAL FRAMEWORK

1.1.1 Characteristics of ginger

a Origin and distribution of ginger

Ginger (Zingiberofficinale) is a flowering plant in the family Zingiberaceae whoserhizome, ginger root or simply ginger, is widely used as a spice or a folk medicine.Tropical areas having high rainfall and hot and humid weather conditions are favorablefor Ginger The name ‘ginger’ is derived from the Sanskrit word “Srngaveram” whichmeans ‘horn root’ It is a herbaceous perennial which grows annual stems about ameter tall bearing narrow green leaves and yellow flowers Ginger originated in thelush tropical jungles in Southern Asia In South East Asia, the most popular form ofginger is raw ginger It is revered as one of the most important and valued spices of theworld For over 5000 years ginger has been recognized as the “universal medicine” bythe ancient oriental of China and India Although ginger no longer grows wild, it isthought to have originated on the Indian subcontinent The ginger plants grown inIndia show the largest amount of genetic variation In Vietnam, ginger is grown quitepopular but households only grow on a small scale with fewer yields that providesmainly the local and domestic market

b Characteristics of ginger

Ginger is herbaceous perennial which grows annual stems about 0.6-1 meter tall Thepart of ginger that's used most often is the root Ginger root is beige in color with aknotted, rough appearance The part of the plant above the ground is a foot longupright stem with long, narrow leaves The leaves are green and ribbed in texture

Ginger flowers are small and white or yellow-green in color The useable part of theroot is a rhizome, which is how the plant propagates itself.

Ginger is widely cultivated in tropical climates with the annual average temperature of21-270C, annual average rainfall of 1500-2500mm That is a reason why the south ofViet Nam is suitable for growing ginger The ginger needs quality and thick land that

is able to hold and drain water flexibly, the best land is rich soil and the worst one issandy or clay soil Ginger is appropriate for land with pH=4-5.5 but the strongestdevelopment in pH=5.5-7 Ginger is the preferred humidity but not flooding the root, italso needs an amount of N, P and K fertilizer relatively high

1.1.2 Values of ginger

a Nutrition value of ginger

Primarily a spice, Ginger root is commonly used in Asian cuisine, baked goods andbeverages As a seasoning, ginger root provides a spicy and pungent flavor to foods,but is not a significant source of nutrition However, it does provide trace amounts ofcertain vitamins and minerals

Table 1.1: Nutrition Facts of ginger

(Per 100g of ginger)

Nutrition Facts Fresh ginger Dried ginger

b Medicinal value of ginger

Because it contains amounts of fiber, essential vitamins and minerals, raw ginger root

is used both in cooking and in herbal medicine According to the University ofMaryland Medical Center, ginger root is used medicinally to treat a range of disordersincluding motion sickness, nausea and vomiting associated with pregnancy,chemotherapy treatment and post-surgical recovery, chemotherapy and inflammatoryillnesses

c Industrial value of ginger

Ginger is not used for spice but also industry such as ginger oil, gingercream, Ginger oil is extracted by steam distillation from the root of the plant It isused for its antiseptic, aphrodisiac, laxative, stimulant and tonic properties and isoften blended with other essential oils to produce many different mixtures for manydifferent ailments Ginger oil has a spicy and peppery aroma

It also has a history in the perfume industry and is considered to have an oriental note

to it Ginger oil is widely used in the food industry It may be added to a blend to bediffused into the air, or to a carrier oil and rubbed on the earlobes, temples, or base ofthe neck It is used in burners and vaporizers, in bath, blended in base cream, and inhot compress

d Economic value of ginger

Ginger is basically in spice that using for cooking as well as medicines in alternativemedicines and industry such as crystallized ginger, ginger tea, ginger oil…those areproductions of ginger to serve people’s life Growing ginger is developing day by day.Many farmers become rich and have comfortable life as relying on ginger production.For example, Mr Le Van Man( An Hoa A, Ba Chuc town, An Giang Province) hadfarming experience of 10 years , said that:” Ginger cultivation must be complied withtechniques of cultivation If ginger growers do that and work hard, they will have

stable life My family has 4000 m2 for growing ginger We can harvest 6-7 tones/1000

m2 Ginger is sold at 26,000 VND/kg If we give our mine to improving production ,prevention and control diseaes, we profit about from 130 millions VND to 180millions VND from ginger cultivation It means that we minused total cost.”

Thus, ginger in our country has high economic value It is grown everywhere andsuitable for natural conditions of TTH It is a one of plants bringing high incomes topeople completely

1.1.3 The factors affecting the production of ginger

a Natural factors

- Soil type and quality: Soil is the fundamental resource base for all agricultural productionsystems Soil type refers to the physical composition or properties of the soil Soilsconsist of decomposed mineral matter (sand, silt, and clay) and decomposed organicmatter Optimum ginger production is achieved on well-drained loam soils Althoughginger can be grown on a wide range of soil types, most ginger are not well adapted toclay and sandy soil types Soils of this type tend to have poor aeration and drainage andcan restrict root growth In ginger production, soil health is essential Soil qualityinfluences its ability to provide an optimum media for growth; sustain crop productivityand maintain environmental quality Therefore, soil quality and soil health are viewed asthe foundation to successful ginger production

- The weather and climate: there are varieties of weather and climate factors effect onginger production such as light, air moisture, temperature, rainfall…

b Social-economic factors

- Labor: Labor is the effort that people contribute to the production of goods Gingerproduction process mainly conducted in manual methods, particularly in theprevention and control on diseases The reasonable use labor is an effective on using

of resources and leisure time

- Capital: Think of capital as the machinery, tools and buildings humans use to producegoods Ginger is a short-term plant and its production cost quite low compare toother plants The existing time of ginger is only about from six months to 12 months

so payback period is also brief

- Facilities: in order to produce ginger efficiently, we must build a good transportationsystem and watering system Besides that, a consumption network is also needed

- Market: the current demand is increasing with high requirements in quality, design andform so market research is always an issue of concern for ginger farmer and localauthorities

c Technical factors

- Seed: High-quality seed is vital to the production of a successful yield and thereforecareful selection of planting material is required—special care is taken in selectingmaterial free of pest and disease Ginger is mainly grown by maintaining seed ofginger the previous crop

- Fertilizer: Large amounts of fertilizer inputs throughout the production cycle are required

to ensure high yields It is common practice for growers to use a range of fertilizers—including poultry manure, sawdust, urea, phosphate, potassium nitrate or (N, P, K)fertilizer —twice in the season (before planting and once the field has germinated) toboost nutrient levels in the soil and accelerate plant growth

- Water and irrigation: Ginger is a subtropical crop requiring large amounts of quality water to maintain rapid growth On average, a ginger crop requiresapproximately 2.5 mega liters per hectare of water and growers need provide waterfully

good Managing pests and diseases: Pests and diseases pose the largest production concern

to most ginger growers and are a constant threat to yields All growers anticipatesome losses every season due to disease The most common disease threats areFusarium yellow rot and root-knot nematode Hence, ginger growers have to usechemicals throughout the production cycle to combat pests and diseases

1.1.4 Methods of ginger cultivation

a Growing ginger with tradition method

Depending on altitude and rainfall, planting is done from early spring February) and goes up to end of spring (April - May) The rhizomes are planted in 2-3rows in the beds and covered with soil The land should be ploughed three to fourtimes thoroughly with receipt of early summer showers to bring the soil to the finefarmyard Three to four crosswise harrowing should be given to make soil loose andfriable Beds of about 1 meter width, 15 cm height and of convenient length should beprepared with an inter-space of 50 cm in between beds In the case of irrigated crop,ridges are formed 40 cm apart Selecting a planting material is important in gingerfarming Healthy rhizomes free from diseases and pets should be selected Whileselecting, make sure rhizomes are broken into pieces keeping two to three sprouted eyebuds on each rhizome Also make sure that each piece is 2.5 cm to 5 cm long and 20grams to 25 grams in weight When ginger is intercropped with other crops inter-rowdistance is generally kept at wide 60-90 cm

(January-b Growing ginger with in-bag method

The selecting seed on growing ginger in bags is the same way with traditional method.Basically, they have different cultivation method The poly bags can be found easily atagricultural equipment stores or plastic stores or can be reused by old bags and areavailable in various sizes depending on people’s needs Thus, the poly bags arerelatively cheap The uniqueness of the in bag model can take advantage of all spacessuch as outside the fence, under trees, along the walkway or flat surfaces to put bags.Before putting the plant inside the poly bags, you need to create holes on the right andleft sides of the plastics The holes function as water disposal unit thereby adjustingthe soil moisture level Ginger planting seeds in sacks or plastic bag should carefully.Make the hole as big as the size of the plastic bag seedlings, put ginger seed into theplanting hole, then cover with the surrounding medium and condense moderation

After planting, the seeds should be watered with water so that the plants get enoughwater.

1.1.5 Economic criteria

Efficiency is concerned with the optimal production and distribution or these scarceresources The economic efficiency includes productive efficiency and allocation.Productive efficiency is concerned with producing goods and services with the optimalcombination of inputs to produce maximum output for the minimum cost Allocationefficiency occurs when there is an optimal distribution of goods and services, takinginto account consumer’s preferences There are criteria that are often shows theeconomic efficiency

- Gross production value: Gross rate of production value is the total rate of return

on an investment before the deduction of any fees or expenses The gross rate ofproduction value is quoted over a specific period of time, such as a month, quarter

or year

- Total production cost: The total cost of production and is made up of variable

costs, which vary according to the quantity of a good produced and include inputssuch as labor and raw materials, plus fixed costs, which are independent of thequantity of a good produced and include inputs (capital) that cannot be varied inthe short term, such as buildings and machinery

- Gross Margin: is a net sale less the cost of goods sold The gross margin reveals

the amount that an entity earns from the sale of its products and services, before thededuction of any selling and administrative expenses

- Cash cost: Cash cost is a cash basis accounting cost recognition process that

classifies costs as they are paid for in cash

1.1.6 Modeling Research

a The related researches

Some studies about economic analysis of ginger and factors affect the gingerproduction have been made around the world Research (June 2015) in Sirmour

district of Himachal Pradesh, India was conducted with the objective to evaluate thesocio-economics of ginger growers such as household composition, educational status,occupational status, cropping pattern and cropping intensity, benefit cost ratio, factorsaffecting productivity of ginger crop(seed, input issues, agronomic issues, marketingissues ) and strongly suggested the strengthening of R&D work, extension services,training of farmers, establishment of semi-processing and cold storage facilities,and co-operatives farming societies for better ginger farming Another the study wasconducted in two ginger growing districts, namely Nilphamari and Khagrachari ofBangladesh during the period of 2009-2010 to estimate the technical efficiency ofginger growers; it revealed that ginger production was profitable and focus on almostfactors of ginger production (the average benefit cost ratio, Input use pattern, Cost ofginger production, maximum likelihood estimates of the stochastic Cobb-Douglasfrontier production function,….)

Journal of Agricultural Science (2014) suggests that ginger production was boostedwith the aim of generating internal trade for the people and improved foreign exchangeearnings for Nigeria However, ginger yields in Nigeria are comparatively very low;and this is ascribed to various factors such as poor agronomic practices, unimprovedvarieties, laborious farming, harvesting and processing operations amongst others It isagainst this background that this study carried out to examine the production,constraints and efficiency of production It can be concluded that specific factors such

as age, household size, year of farming experience, and the narrow gene pool (variety)

of ginger planted, contributed positively to the technical and allocated efficiencies ofginger producers in the region Ginger farmers could be said to be inefficient in the use

of resources or were under-utilizing their input in the research shows that they canstill use more resources to increase the output of ginger Therefore, addressing thesetechnical deficiencies or inefficiencies could, in effect, boost ginger production, withthe concomitant multiplier effect of increasing the profitability of the entire enterpriseand the socio-economic living conditions of these predominantly, low technology baseand resource poor farmers of the Southern Kaduna State, Nigeria

In Vietnam, the recent research by Le Ngoc Phong (2012) has pointed out theeconomic efficiency of ginger production in Hue city particularly TB Ward Moreover,the author also mentions about the factors affecting economic efficiency of ginger;solutions and orientations to improve the productivity as well as output of gingerproduction.

- In = The natural logarithm

- Y = Productivity of ginger (kg/ha)

- X1 =Amount of water for irrigation (m3 / ha)

- X2= Amount of Seed cost (kg / ha)

- X3= Labor (man-day / ha)

- X4= Amount of NPK fertilizer (kg / ha)

- X5= Amount of Manure (kg / ha)

- X6 = Technique training (X6=2: trained , X6=1: non-training)

- A= Intercept

- β1 – β6 = Regression coefficient or Parameters to be estimated

1.2 EMPIRICAL FRAMEWORK

1.2.1 The situation of production in the world

Ginger is produced in various countries for many purposes The table shows that India,China, Indonesia, Nigeria, the Philippines and Thailand are currently the main

producers In recent years China and India have continued to lead the world in freshginger production with a combined global share of over 50% India ranks first withrespect to ginger production contributing about 702,000 metric tons or 34.6% of theworld’s production followed by China (19.1%), Nepal (10.6%), Nigeria (7.8%) andThailand (7.5%) Asian countries lead in the supply of ginger in the world market.Production in that country has a direct impact on the prices on the world market Theannual World ginger trading is estimated to be $190 million The major importingcountries are the United Kingdom, the United States and Saudi Arabia The competitor

of India in the world market is not only China and Nigeria but also Thailand BecauseIndia has high quality of ginger as well as more labors or modern techniques, it is stillkeeping position stably

Table 1.2: Top Five Ginger Producing Countries

No Country Ginger Production Percentage to Total

Source: FAOSTAT Data, 2014

1.2.2 The situation of production and consumption in Viet Nam

The harvest time depends on the product for which the rhizomes are eventually used,prevalent price trend in the market and climatic conditions So each country hasdifferent crop calendar of ginger production In Viet Nam, planting is done from earlyspring (January- February) and goes up to end of spring (April - May) When therhizome is used as vegetable or preparation of ginger preserve, candy, soft drinks,pickles, and alcoholic beverages, harvesting should be 4-5 months after planting,whereas when it is used as dried ginger, and also for preparation of value addedproducts like ginger oil, oleoresin, dehydrated and bleached ginger harvesting should

be done between 8 and 10 months Fiber, volatile oil contents and pungency levels arethe most important criteria to assess the suitability of ginger rhizomes for processing

And relative abundance of these components depends on the stage of maturity atharvest Oleoresin and oil contents rose sharply after 5-6 months, beyond which therewas a decline and fiber development was extremely rare between 6 and 7 months ofgrowth Although there is fiber in the rhizome which develops from time to time, theamounts is insignificant in the initial stages The crude fiber content increased beyond

260 days after planting Hence, growers should harvest ginger within one year Thediameter and strength of fiber increase with the physiological age of the rhizome.Early harvest at late harvest at 230-245 days after planting gave higher yields than at200-215 days after planting However, harvest is generally carried out in the months ofNovember – February because ginger has higher price in that time (Tet holiday) andthe date may vary with the needs of people The time of harvest after planting depends

on the end-use

In summary, the best harvest time for each end-use since planted ginger has been 5months for fresh consumption, 5-7 months for preserved ginger, 8-9 months (whenleaves start yellowing) for dried ginger and 8-9 months for essential oil production.Depending on various demands, many types of gingers are planted such as “de” gingerand “Trau” ginger… Currently the demand of salted ginger and ginger oil to exportare very large, so some type of ginger from Japan, Taiwan, China were imported toplant in some provinces as Long An, Hau Giang, DakLak with large areas At thattime, Ginger in Binh Phuoc, Tien Giang, Hau Giang, Soc Trang used as food spice arebeing exported to Japanese Thus, the demand for ginger has been rising In recentyears, the market is more developing Since 2014, the price of ginger has been steadierand it is now from 25,000 - 50,000 VND/kg in 2015

CHAPTER 2: AN ECONOMIC ANALYSIS OF GINGER PRODUCTION IN

THUY BIEU WARD, THUA THIEN HUE PROVINCE

2.1 OVERVIEW OF THUY BIEU WARD

2.1.1 Natural features of Thuy Bieu

a Geography:

Thuy Bieu Ward is about 6-7 kilometers to the southwest Hue’s Center; it is thecombination of the two ancient villages of Nguyet Bieu and Luong Quan In fact, threesides of TB are surrounded by the Huong River so it has fat soil to grow ginger withthe best quality within TTH

TB Ward has six regions: Long Tho, Truong Da, Dong Phuoc 1, Dong Phuoc 2, TrungThuong and Luong Quan

b Soils and terrain:

TB Ward is on the Huong river valley and has quite flat terrain Flat region holdsalmost all area and the rest of the East TB area is high land Soil of TB ward has threemajor types:

o Alluvial soil: the square of alluvial soil estimate about 325 ha The composition

of this soil is rich soil Its depth is greater than 100 cm and allocated alongHuong River It is a good choice to grow many plants in this soil

o Red-yellow soil on clay one: estimated nearly150 ha The composition of thissoil is soft and rich soil Its depth is smaller than 30 cm This soil is allocated inTruong Da and Long Tho and very suitable for ginger production

o Soil is changed by growing rice: holding about 140.89 ha in Truong Da andTrung Thuong

 Rainfall and moisture:

TB ward has average rainfall from 2500- 2800 mm and rainy time is from 140 to 155days per year The rainy season is from September to December, 70-75% of total rainfallper year Especially, in October and November, rainfall holds 47-60% of averagerainfall per year The light rainy season is from January to August, 25-28% of totalrainfall per year The light rainy season occurs in the same time with sunny season andhot and dry westerly winds come, this makes lack of water for in irrigation

Average humidity of TB ward in the summer is quite low and it becomes more andmore in the winter Average humidity is 85% per year that create favorable conditionsfor pests and diseases

 Flood

TB ward is an area of land adjacent to a Huong river that stretches from the banks ofits channel to the base of the enclosing valley walls and experiences flooding duringperiods of high discharge Truong Da and Long Tho regions with high land are notaffected by flooding a lot The flood often occurs from October to November Eachflood usually brings large alluvium for farming land so here’s soil is very rich andfecund

d Water resources

Huong River carries water and nutrients to land areas all around the earth It plays avery important part in the water cycle, acting as drainage channels for surface water.Farmers in dry regions irrigate their cropland using water carried by irrigation ditchesfrom nearby river People in TB also use well water and tap water for activities of theirlife

2.1.2 Socio-economic characteristics of Thuy Bieu

a Overview

With many favorable conditions, TB has growth potential to develop economic such asvisiting farming garden, famous places, ecotourism and so on Ward madeconsiderable contribution to TTH’s development Thuy Bieu Ward was approved adetailed planning by People's Committee of Thua Thien Hue province That plan bases

on trends to urbanize rural area into created places that people can visit and enjoy asgardening house, traveling services, handicraft goods In recent years, TB’s economyhas improved strongly through increasing people’s income and schools, improvingfacilities and so on

However, agricultural activities are mostly in TB economy Table 2.1 illustrates thebreakdown of TB’s economic structure It shows that, gross return tends to increase fortwo years In 2014, TB’s gross return is 18,897 million VND and the next year (2015)

it is 19,773 million VND It means that the gross return increased 4.6% and agricultureraised 3.8%

Table 2.1: The economic structure of TB ward from 2014 to 2015

(million VND) (million VND) (+/-) (%) Gross return 18,897 19,773 876 4.6

(Source: The Agricultural co-operative of TB)

Agricultural production: the area of rice and vegetables fluctuate due to withdrawingland The agricultural co-operative of TB focused on teaching techniques and givingthe right directions for farmers so that the agricultural situation in TB is stable andhave no failure of crops in many years

Breeding: the most of people’s income is also come from breeding TB has a positiveposition so breeding in here is quite developing and has fewer pests and diseases.Although having little fishing farmers, they have much more income than plantingrice.

Other jobs: clothing industry, woodwork, building trade….are developing and attractmany labors This will bring other income for farmers in the future

According to the table 2.2, total income from agriculture is quite high; about 15,624billion VND holds 96 3% in total come of TB To keep pace with the Viet Nam’sdevelopment, more and more people work in the services so that service industry isalso developing and brings an amount of income for people In 2015, people gains 223million VND from services It is approximate 130% comparing in 2013

Table 2.2: Total production value of Thuy Bieu (2013-2015)

(Source: The Agricultural co-operative of TB)

In recent years, TB ward has built more facilities to serve people such ascommunication routes, schools, medical station, safe water project…With a positiveposition, TB also is nearby many historical monuments causes service and travellingindustry is developing

b The population and labor of TB ward

To understand more about the population and labor in TB ward, we can see thefollowing table.

Table 2.3: The population and labor of TB in 2015

(Source: The Agricultural co-operative of TB)

Through above table, labor in agriculture is 1/10 of total TB’s population andHousehold has fruit garden holding over 1/3 of all household in TB

Up to now, the total population of Thuy Bieu is 10,216 with the total number ofhouseholds is 2,285 In which, the number of people in working age is 5,344 with thenon-farm employment of 4,244 people (accounting for about 79.4 percent of the totalemployment) and farm employment of 1,100 people (accounting for about 20.6percent of the total employment)

An allocated labor: Labors’ busy time is in January, February, May, June, August,September, and December That is a period that people are mostly working in crop.Thus, people recognize that time of ginger planting is not in labors’ busy time, isleisure after harvest time

c The land situation of TB ward

TB has 657.3 hectares and includes: agricultural area with 375.1ha nearly 57.07%,non-agricultural area with 272.09 ha nearly 41.4% and non-use land with 10.11 ha In

spite of non-use land is only 1.54% of total area, very little is wasted in this area It isimportant to have plan for cultivation to avoid that waste In 2015, the situation of landusing in TB increased in all aspects as agricultural production land, non-agriculturalland comparing to using land situation in 2013 Especially, non-use land decreasedsignificantly that shows people took advantage land for farming to avoid the wasteland.

Because TB bases on agriculture mostly, land will be an important factor to improvethe agricultural production Here is the fluctuation of land in TB during three years

Table 2.4: The situation of using land in TB (2013-2015)

Items Area(ha 2013 2014 2015 2015/2013

(ha)

(Source: The Agricultural co-operative of TB)

d The infrastructure situation of TB ward

In recent year, local authority of Thuy Bieu ward has improved basic infrastructure byconstructing or rehabilitating the road network as well as water supply and electricitydistribution systems, and thereby ameliorating the living conditions and economicdevelopment in these areas Thanks to the investment of state and authorities, alongwith the determination in struggling to develop of both local authorities and localpeople, up to now, Thuy Bieu ward has built many new building projects servingpeople such as 10 kilometer of roads were rehabilitation and 60 kilometer long ofwhole road network was concretized TB has a convenient and modern traffic system,consists of a main road connecting with Hue city, a lot of inter-village roads The wardhas 2.5 kilometers asphalted road Besides, it provides the link between TB and otherregions.

About irrigation, current water system supply for the people to be led from thewaterworks in city, the quality water is guaranteed Water system is about 21,096meters According to researches, it is about 75% of total household using tap-waterand the rest of household is using well-water In term of electricity andcommunication, now there are seven electrical substations serving the daily activitiesand production activities of the people The number of households using electricityreaches 100%

In term of health and education system, currently there are one pre-school, oneprimary schools and one junior high school, all physical facilities of schools areupgraded and repaired every year Besides, Thuy Bieu has newly mended and builds ahealth stations that has been recognized to meet national standard for many years.People will be cared, vaccinated some vaccines for children and pregnant.Furthermore, Ward has the historical sites such as the Ho Quyen, Voi Re temple andmany scenic spots as Vong Canh Hill

e Evaluating of natural and socio-economic conditions

- Advantages

Thuy Bieu ward has a favorable geographical location, just 6 kilometers away from thecenter of Hue city with the main road connecting the other places This is a goodcondition for the development of production, circulation and distribution of products inthe whole province, opening up a huge consumer market as well as handicraftproduction and business, besides local agriculture.

Thuy Bieu is influenced by the humid tropical monsoon climate, with hightemperatures and large alluvial land (325ha) which is raised by Huong River everyyear These are favorable conditions for the growth and good development of plants.The land fund is large and rich, suitable for variety of plants, especially Thanh Trapomelo, which is a specialty plant and a strength of Thuy Bieu Ward as well The fruittree areas are concentrated in four areas, including Luong Quan, Dong Phuoc 1, DongPhuoc 2 and Trung Thuong In the remaining areas like Long Tho, Truong Da andDong Phuoc 1, fruit trees are mainly planted for shade, which is suitable for gingercultivation Besides, these two areas could be developed in the direction ofcombination of tourism and orchards

Surrounded by the Huong River with around 2/3 of the circumference located inHuong river bank, and a lot of scenic spots, beautiful historic sites, such as Vong CanhHill, Voi Re Temple, etc and adjacent to the mausoleum to the Southwest of the city,Thuy Bieu has a great potential of tourism

The hydrological system is abundant with about 90 hectares of water surface, mainlyHuong river water Therefore, the agriculture production here has many advantages.The literacy level is quite good, with a large amount of students graduated fromuniversities, colleges and vocational schools, which have a strong impact on the laborrestructuring in the area

The training, fostering and transfer of science and technology in plants and livestockget much attention from the local government, cooperatives and farmers’ associations.The farmers are qualified and capable of acquiring and applying science and

technology, and drawing experience during the production and business to share witheach other.

 Disadvantages

The rainfall is distributed seasonally and unevenly between the months of the year,causing many disadvantages for the fruit production Especially in summer, the lowrainfall and influence of Southwest wind leads to the water shortage in production,negatively affecting the farmers

Located along the Huong River, the ward is severely affected by the floods Prolongedsoaking in water will not be good for the growth of plants, and too thick alluvialvolume will affect the plant roof activity, giving rise to many fungal diseases

The infrastructure is not commensurate with the potential and in poor conditions as aresult, there is no motivation to promote economic development The economicstructure is not in proportion to the development potential The agriculture sector stillaccounts for a high share in the economic structure with a large rate of labor

The young farmers and labors are no longer interested in agriculture production due tolow productivity, low agricultural incomes, etc and lack of investment capital Thoseare the main reason causing difficulties for farmers to maintain agricultural productionand productivity of plants and livestock Some areas have been left fallow for manyyears, in which many agricultural land areas are converted to forest land

The gardening economic sector has been confirmed with direction and development,but agriculture has not got enough attention in terms of implementation of specificplanning and structure of major plants in direction of intensification That the localoverall planning has not been implemented also makes farmers worry about theirproduction

The environmental pollution from Long Tho JSC., Binh Minh laundry factory affectedthe agricultural production, perennial gardens and health, which caused significantdamage to the farmers' lives

2.2 THE SITUATION OF GINGER PRODUCTION AND CONSUMPTION IN THUY BIEU

2.2.1 The situation of ginger production

In fact, ginger has long been a familiar plant that contributes to large income for localpeople Every year ginger is still cultivated in stable areas Through the followingtables we will have an overview of the situation of TB ginger production in recentyears

Table 2.5: Planting area and value of Ginger production in TB (2013-2015)

Items Unit 2013 2014 2015

Comparison 2014/2013 2015/2014 +/- % +/- %

(Source: The Agricultural co-operative of TB)

According to the agricultural Co-operative of TB, there are nearly 200 ginger growers

in a year They mainly cultivated in the area as Truong Da area, where has high terrain

to help prevent flooding and soil types in this hill very suitable for the growth ofginger In 2013, an area of ginger is 7.5 hectares with yield of 14.3 tons / ha Its price

at 19.5 thousand VND / kg ginger so Ward's total gross return is 1,463 million In

2014, seeing ginger has high yield and sold at high price, farmers here have expandedginger production Thus, in 2014 the area of ginger production in the ward increased0.7 ha to 8.2 ha

In 2014 and 2015, there was a breakthrough in productivity ginger (tons / ha) whichreached 16.5 tons / ha despite the area dropped to 6.6 hectares Thus, the output ofginger in TB reached 108.9 tons with a gross return of 2,237 million The gross returnhas increased significantly to compare to 2014 despite of reducing on ginger area.Through analysis of the data and situation of ginger, we can see that the situationginger production in TB has not been stable The reason is a long period of cultivationspontaneously and adverse effect of market prices This is an issue that localgovernment should help farmers find solutions to maintain the ginger planting area.

2.2.2 The situation of ginger consumption

Ginger consumption market is mainly in Thua Thien Hue province Gingers fromproducers mostly sold in the markets of Sia, Dong Ba, An Cuu areas and other markets

in Hue city Additionally, some wholesalers and retailers also sold gingers to Bai Dauwholesale market for transporting to the neighboring provinces like Quang Tri, DaNang, etc Most of the ginger output is to serve as spice every day and jam in thetraditional New Year's days Hue ginger is famous for its pungent and delicious taste

so that its special taste creates a distinctive brand that cannot mix with any kind ofother gingers

Ginger harvest time starts from November - December in lunar annually It’s time forpeople to harvest green ginger to serve the consumption demand in the Lunar NewYear This is the period when the ginger trading activity occurs vibrantly most because

of the high demand of the market During this time, gingers are often bought to makespice for various dishes in Tet days or collected to provide for jam production facilities

in Kim Long ward or some other places At the same time families also buy gingers tomake jam by themselves at home Gingers harvested on this occasion often get highprice but lighter weight because of green gingers The majority of growers try toharvest timely for their incomes used in Tet However, many households sell youngginger, which make the ginger price fell down and their profits go down too Mostpeople have retained large parts of gingers to sell steadily in the period after Tet until