Climate change and income diversification in the mekong river delta, a panel data analysis

UNIVERSITY OF ECONOMICS ERASMUS UNVERSITY ROTTERDAM HO CHI MINH CITY INSTITUTE OF SOCIAL STUDIES PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS CLIMATE CHANGE AND INCOME DIVERSIFICATION

UNIVERSITY OF ECONOMICS ERASMUS UNVERSITY ROTTERDAM

HO CHI MINH CITY INSTITUTE OF SOCIAL STUDIES

PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS

CLIMATE CHANGE AND INCOME

DIVERSIFICATION IN THE MEKONG RIVER

DELTA: A PANEL DATA ANALYSIS

BY

NGUYEN THI TUYET NGA

MASTER OF ARTS IN DEVELOPMENT ECONOMICS

HO CHI MINH CITY, December 2016

UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES

VIETNAM - NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS

CLIMATE CHANGE AND INCOME

DIVERSIFICATION IN THE MEKONG RIVER

DELTA: A PANEL DATA ANALYSIS

A thesis submitted in partial fulfilment of the requirements for the degree of

MASTER OF ARTS IN DEVELOPMENT ECONOMICS

By

NGUYEN THI TUYET NGA

Academic Supervisor:

PHAM KHANH NAM

HO CHI MINH CITY, December 2016

ACKNOWLEDGEMENT

I would first like to thank my thesis supervisorDr Pham Khanh Nam of the Vietnam – The Netherlands Programme (VNP) at Ho Chi Minh City University of Economics He consistently allowed this paper to be my own work, but steered me in the right direction whenever he thought I needed it

I would like to express my gratitude to the VNP officers who were involved in mythesis processby updating thesis schedule and providing good conditions for my research process Without their passionate participation, the thesis process could not have been successfully conducted

Finally, thanks are also due to my classmates for providing me with unfailing support and continuous encouragement throughout my years of study and through the process of researching and writing this thesis This accomplishment would not have been possible without them Thank you

Nguyen ThiTuyetNga

Ho Chi Minh City, December 2016

ABSTRACT

The main objective of this study is to analyze the impact of climate change and other socio – economic determinants on the income diversification strategy in Mekong River Delta The data set is drawn from the VHLSS 2010,2012 and 2014, while climatic data including temperature and precipitation are extracted from the statistics website of The Ministry of Agriculture and Rural Development (MARD) Salinity data is collected from the Vietnam Institute of Meteorology, Hydrology and Climate Change.Findings of the study show that farmers have tendency to diversify their activities to reduce risk of crops failure when there is increasing temperature in dry season and precipitation in wet season However, it is recognized that those relationships are non-linear Diversification behavior

is discovered not to be sensitive with the salinity intrusion and other climate variables Regarding socio-economic determinants, the household labor ratio and land area holding are found to be positively correlated with the income diversification, while educational qualification has the negative effect A male household head would more likely to diversify their activities to disperse risk of climate change than female head From this result, many policies are recommended in order to support farmers to access an effective diversification strategy, helping them to response actively to climate change consequences

TABLE OF CONTENT

Acknowledgement i

Abstract ii

Table of content iii

List of tables v

List of figures vi

1 Introduction .1

1.1 Research problem .1

1.2 Research objective .3

1.3 Research scope .3

1.4 Thesis structure .3

2 Literature review .4

2.1 Theoretical review 4

2.1.1 Climate change .4

2.1.2 Impact of climate change .4

2.1.3 Adaptation of people to climate change .5

2.1.4 Income diversification 7

2.1.4.1 Definition and classification of income diversification 7

2.1.4.2 Motivations of income diversification .8

2.1.4.3 Income diversification measurements 9

2.2 Empirical review .10

2.2.1 Impact of temperature and precipitation variation 10

2.2.2 Impact of high salinity intrusion to income diversification 12

2.2.3 Impact of socio-economic characteristics on income diversification 14

3 Research methodology .16

3.1 Analytical framework 16

3.2 Methodology 17

3.2.1 Income diversification index 17

3.2.2 Model specification 18

3.2.3 Variable description 20

3.3 Data sources 24

3.4 Salinity measurement 26

4 Result and discussion 28

4.1 Overview of the Mekong River Delta 28

4.1.1 Geographical position and natural conditions 28

4.1.2 Socio – economic conditions 28

4.1.3 Impact of climate change on the Mekong River Delta 29

4.2 Salinity intrusion in the Mekong River Delta 31

4.3 Descriptive statistics of variables 34

4.3.1 Dependent variable 34

4.3.2 Independent variables 35

4.4 Empirical results 41

4.4.1 Findings of the Poisson model .41

4.4.2 Findings of the Tobit model .44

4.4.3 Interpretation 45

5 Conclusion .50

5.1Conclusion .50

5.2Policy implications 51

5.3Research limitations and research directions 52

Reference .53

Appendix .57

LIST OF TABLES

Table 3.1.Variable description 21 Table 4.1.Descriptive statistics 34 Table 4.2.Results of the panel Poisson model and panel Tobit model 42

LIST OF FIGURES

Figure 3.1.Analytical framework 16

Figure 3.2.Salinity stations in Mekong River Delta 27

Figure 4.1.GDP share per sector in Mekong River Delta 29

Figure 4.2.Regional Division of Mekong River Delta 31

Figure 4.3.The salinity intrusion map of Mekong River Delta 32

Figure 4.4.Income shares of households in Mekong River Delta 35

Figure 4.5.Precipitation in Mekong River Delta 37

Figure 4.6.Temperature in Mekong River Delta 38

Figure 4.7.Salinity at stations in Long An and Ca Mau – Bac Lieu 40

Figure 4.8.Marginal effect of precipitation in wet season 44

Figure 4.9.Marginal effect of temperature in dry season 45

Figure A.1.Salinity at stations in Mekong River Delta 59

CHAPTER 1: INTRODUCTION

1.1 Research problem

Climate change has been the most controversial issue in the world due to its significant impacts on many aspects of society and economy in which agriculture is the most vulnerable sector The variationof climate conditions is reflected through temperature rising, abnormal precipitation, droughts, or floods Thoseare the main reasons for insects, diseases, and crop failures (Zerihun, 2012) Climate change is generally harmful for crop production, but indeed, the impact is much diversified (IPCC, 2014).Specifically, higher temperature shortens the growing period of rice, leading to rice yield reduction; however, in some study the increased CO2 from the pollution has supported the photosynthesis process of some crops such as maize and wheatresulting in a better productivity of cereals In Japan, the increase of

1oC in the 20th century has resulted in the drop of wheat, vegetables, milk, and egg production In Russia, the potential production of major crops is acknowledged to fallby 50%

on average due to the climate change.On the other side, climate change does notgive identical effects on agriculture sector in different areas in the world due to alternative natural conditions and specific socio-economic characteristics of each region All demographic properties and adaptive solutions of people in an area are the main factors, which determined the vulnerability to climate change.In spite of diversified impacts,it is undeniable that climate change has severely affected food security all over the world

Being the second biggestrice exporter in the world just after Thailand, Vietnam has 90%

of exported production derived from the Mekong River Delta Located nearby the final branches of Mekong River before converging into the ocean, Mekong River Delta is the wide fertile area, which is appropriatefor rice paddy cultivation and is known as the biggest rice granary in Vietnam However, in recent years, Mekong River Deltaisseriously exposed to threat of climate change, which is clearly shown in high saline intrusion in coastal areas, droughts, and the shortage of fresh water in dry season, resulting in the restriction of arable land.In particular, according to the projected climate scenario in 2100 of the Ministry of Agriculture and Rural Development, if the sea level risesby 1meter, an approximate of 40% arable land could be sunk in salt water The yield shortfall has significantly caused the

income loss for farmers, theincrease of poverty, and the social insecurity at the same time However,overcoming all difficulties of natural conditions, Mekong River Delta still keeps a stable development rate of production

In order to deal with environmental challenge, farmers have applied many solutions to adapt with climate change and improve their lives In those solutions, income diversification

is considered as an effective response to climate change (Smit et al., 2000; Bryan et al.,2011) Specifically, income diversification helps farmers to reduce the risk of crop failureand increase household’s total revenue (Zerihun, 2012;Haiwang et al., 2015).Income diversification process is understood as the way in which farmers participate in manyactivities to generate incomefor their households For example, household’s income sources could stem fromgrowing varieties of rice, fruits and other cereals; livestock breeding; aquaculture rearing; or non-farm activities Although income diversification is observed in various levels, researchers still concern aboutthe drivers of income diversification Several studies suggested that drivers are temperature, drought, salinity,price change, and institutional change Understanding separate channels that lead to the farmer’s behavior on diversifying income is important since it allows policy makers to know what to focus on in their policies for farmers Moreover, drivers of income diversification in the Mekong River Delta could be different from other areas and in the world where evidences could be found.Specific evidences for the Mekong River Delta are what policy makers need

In Vietnam, income diversification process, which is considered as an effort to reduce thethreatens of climate change, is favorablyrecommended for farmers by Vietnamese Government.Besides,Government policies also relate to the improvement of physical infrastructure, financial subsidy, and the openness of agriculture market However, both uncertainties about determinants of income diversification and the response of farmers to climate changecould lead to the inefficiency or less efficiency of Government supporting policies Therefore, a research of climate change and income diversification could producereliable and sustainable evidences for policy makers about the impact of climate change on income diversification Based on those empirical findings, policy makers could implement policies, which are more efficient to support farmers in income diversification process

1.2 Research objective

The main objective of this study is to analyze the impact of climate change on the degree of incomediversification Climate change is reflected by the variation of temperature, precipitation, and salinity intrusionin both dry season and wet season.Besides, other socio-economic characteristicsare also investigated to clarify the responses of different households

in term of income diversification behavior

Relying on the empirical findings, this study helps policy makersto understandhow farmers diversify their income, the reliable determinants of income diversification, and the behavior of farmers with different socio-economic characteristics to climate change through income diversification Then, policy makers could design current and futurepolicies that are more appropriate for farmers Those policies could reduce the potential risks of a specific conventional agricultural activity due to harmful effect of climate change, maintain and improve the living standard of farmers

1.3 Research scope

This study employs apanel data analysis for 362 households in the Mekong River Delta of Vietnam, which is a coastal areaseverelyaffected by the climate change Most of households participate in the agricultural activities, which are the most vulnerable sectors The time span for the study is the period2010 – 2014 whichdraws an overall picture of the impact of climate change and other socio-economicfactors on the income diversification, a common and effective approach of adaptation

1.4 Thesis structure

The remaining of this study includes four chapters.Chapter 2 concentrates on theoretical and empirical reviews from previous studies.Chapter 3 gives analytical framework of the studyin term of empirical model and variable description Chapter 4 shows us the data description and givesempirical findings of the impact of climate change and other socio-economic determinants on income diversification behaviors in Mekong River Delta Finally, chapter 5 summarizes the main findings of research paper, suggests policy recommendations, figures out research limitations, and gives several further research directions

CHAPTER 2:LITERATURE REVIEW

The chapter starts with the review of relevant issues on climate change, including the concept, the impact and the response of people to climate change Then, the chapter provides

a brief theory on the motivations of income diversification, an effective adaptation behavior

to climate change and approaches to measure diversification degree An overview of empirical researches contributes to the construction of a framework for estimating the impact

of climate change and other determinants on income diversification

2.1 Theoretical review

2.1.1 Climate change

Climate change is defined as: “A change in the state of the climate that can be identified by changes in the mean and/or the variability of its properties, and that persists for an extended period, typically decades or longer It refers to any change in climate over time, whether due

to natural variability or as a result of human activity”(IPCC,2007).That definition has a little difference from the explanation of the United Nations Framework Convention on Climate Change (UNFCCC) onclimate change: “A change of climate that is attributed directly or indirectly to human activity that alters the composition of the global atmosphere and that is in addition to natural climate variability observed over comparable time periods”

(UNFCCC,1992)

Following the definition, climate change could originate from natural changes of global climate such as the change of the Earth’s orbit, the ability to receive energy from sun, and volcanic eruption However, the rapid warming of the Earth in recent decades could not flame only for the natural activities, but human activity is likely to be the main reason In the fourth report of IPCC, scientists demonstrated that human activities are responsible for over

90 percent possibility of the greenhouse effect intensification, a phenomenon that long-lived gases absorb heat radiated from the earth to space, making the earth surface warmer

2.1.2 Impact of climate change

The increase of greenhouse gas emission has produced harsh effects to the climate, making the climate change become more and more severe Climate change intensifies potential threats for natural conditions and human society Impact of climate change much

diversifiesvia its unequal magnitude for different areas, and depends on vulnerability, sensitivity, and adaptation capacity of affected zones to climate change

First, the temperature increase makes the atmosphere becomehotter and more unpleasant, and promotes the evaporation and precipitation Glaciers and ice in the oceans are remarkably meltedwhen the oceans water becomes warmer, making the sea level rise constantly around the world As a result, storms and floods happen more frequently and intensely The dry and hot weather in some regions has led to an increase of violent forest fires and wildfires over recent decades, destroying the fresh atmosphere and threatening habitats and lives

At the end of the 21st century, the average temperature increases by about 1.9 – 3.4oC, the global precipitation increases by 3.3 – 5.0%, and the sea level risesby over 18 – 24 cm in comparison with those of the 1990s (IPCC,2013) The climate change has been the reason for many long-lasting changes in the structure of the Earth surface and the remarkable, pervasive change of the ecosystem in both continents and oceansall over the world The water reserve

is harmfully influenced in term of both quantity and quality In detail, fresh water shortage becomes more hazardous, and high saline water gradually encroaches to the interior field Agriculture sector is heavily affected in both cultivation and animal husbandry, for example, cropfailure rises due to drought, insects, diseases and salinity intrusion, soil degradation;increase of cattle dead is caused by droughts or floods

2.1.3 Adaptation of people to climate change

Agricultural system is the combination of biological, physical and chemical agents, while climate plays a key part in influencing all three above processes.The vulnerability of the agricultural sector is determined not only by harmful effects of climate change but also by the adaptive capacity taken by people to overcome difficulties(Marshallet al.,2010)

Parry et al.(2007) gave a definition for “adaptation to climate change”as the “adjustment

in natural orhuman systems in response to actual or expected climatic stimuli or their effects, whichmoderates harm or exploits beneficial opportunities” (IPCC, 2007).Adaptation and mitigation areusually considered as the same, but in fact, they are just similar in the purposeaspect Mitigation is the practice to reduce emissions of greenhouse gases, while adaptation is the response to climate change by exploiting new opportunities resulting from

climate variation According to Mastrandreaet al (2010), adaptationcould reduce the sensitivity and vulnerability of a society to the impacts of climate change

In agriculture sector, key drivers which determine adaptive behaviors consist of awareness and preferences of farmers (Godfray et al., 2010), the experience to cope with the influences of climate change (Parry et al., 2007; Spies et al., 2011), market signals and government policies (Preston et al., 2011) Besides, inventions and innovations from researches contribute to the determination of adaptation investments because they propose new and effective solutions.The harmonization of those drivers would promote the efficiency

of the adaptation solution and facilitate the optimal measure to response to climate variability.One of the most important factors, which affects the adaptation method decision,

is the assessment of the costs and benefits achieved from the adaptation response The complicated happening of the climate scenario and the tentative performance of the adaptive process make it difficult to measure the economic effectiveness of the adaptive typology Researchers proposed that the adjustment action would be more efficient if it is taken at large scale (Adger et al., 2007)

Adaptation behaviors are categorized by multi-dimensional aspects such as space or time span, intentionality (active or non-active behaviors), specific purpose (to adjust or reduce susceptibility), the performer (individual, household, enterprise or government), the outcome (increase heat tolerance or remain income), or approach(physical or technological measure) Adaptation behaviors could also be the combination of many abovementioned attributes(Smit

et al., 2002; Adger et al.,2007).Because of the complex and ambiguous happenings of climate change, adaptation solutions should be taken at multiple dimensions, requiring the collaboration of many participants including farmers, researchers and policy makers

The vulnerability of the agricultural system strongly depends on human behaviors to adjust with the climate change Therefore, the mission to improve the adaptive capacity of agriculture is very necessary to intense the resilience of the system This process is implemented through improving the awareness of socio-economic and biological determinants of the adaptive capacity, evaluating the costs and benefits of the response, assessing the social and technological feasibility and resource limitation All the adaptation strategies focus on the objective of developing a sustainable agriculture economy

The designation of a typology of adaptation strategies is rather complicated due to the dynamic and complex relationship between the climate change, the agricultural system and the limitation of natural resources The typology of adaptation behaviors is described obviously in the case of Smit et al (2002), in order to response to the variability of climate conditions The rising of seasonal temperature and reducing precipitation are determined as the key drivers of adaptive strategies In term of farm production, farmers are encouraged

to switch cultivars, change planting dates, use drought resistant crops, and build irrigation system In the aspect of financial management, economists suggest that farmers should engage in crops insurance, invest on crops shares future, or diversify their income generating activities Regarding to farm infrastructure, the installation of the water management, irrigation system, and weather forecast systems are essential Concerningscientific researches, demands for studying drought tolerant crops, accurate weather forecasting or abnormal climate phenomenon areproposed Among many actors, government plays a major role in planning and supporting the most effective and appropriate adaptive strategies through subsidy, government insurance, market connection

or investment on technology

Among many adaptation strategies of the agriculture system to climate change, income diversification is assessed to be one of the most effective approach, which is suitable for almost conditions Diversification could be implemented in scope of farms by expanding crops, engaging in more sources of farm income (animal husbandry, aquaculture), or participating in non-farm activities Income diversification is highly appreciated by its efficient financial management aspect, which presents by the ability to prevent excess loss due to harmful impact of climate change Due to the convenience and efficiency aspects, income diversification is greatly encouraged by policy makers when establishing adaptation typologies

2.1.4 Income diversification

2.1.4.1 Definition and classification of income diversification

Income diversification is defined as an effective adaptation method in which a household engages in a portfolio of different income sources, including farm income, off-farm income, and remittances (Kelly &Adger, 2000; Mendelsohn, 2000; Ellis, 2000, Minot et al., 2006)

In term of farm-scale activities, Smit et al., (2000) referred two types of farm income diversification, including geographic diversification and crop diversification First, geographic diversification needs a large area for integration many crops inside, requires a high expense for fertilizers, labor, and management, and is just suitable for immense zone In the comparison with geographic diversification, crop diversification is assessed to be more suitable in case of limited labor and arable land, and is more favored due to its high economic effectiveness Crop diversification introduces growing more short-day crops that could tolerate severe natural conditions (high salinity or droughts) and could enhance the soil quality and maintain moisture for land beside the main crop (e.g rice, wheat) Diversified crops with different harvest stages are grown in rotation, and help farmers to take benefit from using land most efficiently.Moreover, farm income diversification also consists of livestock breeding and aquaculture to take advantages of products from cultivation and create additional value for farm activities (Bradshaw,Dolan, &Smit, 2004)

Besides farm activities, more and more farmers have tendency to involve in non-farm activities, which are not volatile and independent on the abnormal weather Non-farm activities develop together with the growth of infrastructure (Escobal, 2001; Lanjouw, 2001) Building new roads and expansion of water supply and electricity network have opened new opportunities for the market economy,supported processing industry and services, and provided hundreds of jobs for people in rural areas

2.1.4.2 Motivations of income diversification

There are three main purposes of income diversification First, diversification could reduce the volatility result from yield risk caused by climate change or price risk caused by the market instability Income diversification is “a trade-off between a higher total income involving greater probability of income failure, and a lower total income involving smaller probability of income failure” (Ellis, 2000) Farmers accept to diversify in order to ensure security although income may not be as much as specialization in just one income source Second, diversification is a medium of meeting household’s requirement, especially with remote areas from the city The difficult conditions, high expense of exchangingconsumption goods, and necessities motivate farmers to engage in new activities to meet their own demand Finally, diversification is appreciated as an effective strategy to overcome “the

diminishing marginal returns to labor problem” which is a common problem of farm activities

The motivations of income diversification could be classified into push and pull factors (Davis &Bezemer, 2003; Haggblade et al., 2002) Push factors involve harmful exterior elements such as climate change and policy adjustment causing adverse effect on farmer’s income Pull factors mention favorable conditions, which motivate farmers to diversify Pull factors could originate not only from inside resources such as educational qualification, gender, and age, but also from outside resources such asinfrastructure improvement, industry zone investment in rural areas, and evolving market Pull factors provide opportunities for households to engage comfortably in new income generating activities, while push factors drives households to diversify compulsorily With specific conditions of each household and each zone, it is hard to compare the influence of pull and push factors on the incentive of diversification

2.1.4.3 Income diversification measurements

Income diversification measurements could be classified into two groups, including the sided indexes and two-sided indexes The first group evaluates the diversity by simply counting the number of activities that generate income for a household or focusing on the variation in the volumes of an important representative source; whereas the remaining group succeeds in the combination of both dimensions of diversity (Zhao et al.,2013)

one-First, the one-sided group consists of following proxies:

(1) The approach, which is based on the quantity of income sources, is suitable with the original definition of the concept of income diversification However, this proxy could not describe the level of participation in each activity

(2) Another method to evaluate the rural diversification is to differentiate farm and nonfarm activities, or low value and high value agricultural activities By this approach, the timespentfor each income source, or the share of income from each source in the total income are used as the measurement of diversification (Lanjouw&Feder, 2001; Davis &Bezemer, 2003)

(3) In term of commercialization characteristic of farming, diversification is regarded as the ability to switch from raw material crops to commercialized products This index is measured by several ways such as the share of yield, the share of value, and the share of income from sold or bartered products in the total agricultural output (Minot et al., 2006)

Second, the two-sided index is higher evaluated than the one-sided one due to its flexibility in describing the degree of diversification With many varieties of income generating sources unequally distributed, the proxies in this group give results that are more accurate by taking into consideration all dynamic characteristics of diversification process These proxies include Shannon-Weaver index, Simpson index, Herfindahl index, andHerfindahl-Hirschman index (Ellis, 2000; Bithal et al., 2007; Minot et al., 2006) These indexes reflect not only the income sources but also the share of each income source in total income sources or the evenness of income sources Specifically, Shannon-Weaver index is calculated by taking the sum of the proportion of each income source multiplied with its natural logarithm This index is less popular than the remaining indexes because of its less sensitivity to the evenness of the sample(Colwell& Robert, 2009) Simpson index and Herfindahl index are closely related due to the relevant calculation, based on the sum of square of proportion of income source, with reverse value in the same range from 0 to 1 Both Simpson index and Herfindahl indexare considered as the most common indexes in measuring income diversification in many previous studies

2.2 Empirical review

2.2.1 Impact of temperature and precipitation variation

Seo and Mendelsohn (2008) have made a breakthrough in the history of researching the way

to switch crops to adapt with climate change In previous studies, researchers only focused on the harmful impact of severe climate on a specific crop yield The crop failure makes the revenue of farmers drop down significantly, and the quantitative method by using Ricardian model is often estimated to evaluate the effects However, in reality, farmers always try their best to adapt by switching main crop to alternative crops that could sustain harsh natural conditions By observing these adaptation behaviors, Seo and Mendelsohn (2008) conducted

a research on the farmers’ crop choice on South America by using a multinomial logit model

By collecting data from 949 farmers in seven countries, that study indicates a relationship between farmer’s choice with both precipitation and temperature Farmers have tendency to grow fruits and vegetables rather than maize and wheat to cope with the global warming Wetter climate is more suitable for potatoes, rice and fruits, whereas dry climate seems to be appropriate for maize and wheat Study also indicates that farmers switch to not only a single crop but also a combination of multiple crops at the same time, as well as reaching the goal

to maximize their profits

Similarly, in a study about African farmer’s behaviors in livestock management, Seo and Mendelsohn (2007) showed that the choice of income diversification much depends on climate change Three econometric models have been used to investigate the farmer’s performance First, primary choice multinomial logit model is applied to find out the most profitable livestock species Second, the optimal portfolio model is used to investigate the possible portfolio of livestock that farmers feed together Finally, the demand system multivariate probit model is regressed to check the probability of choosing specific species The research is performed in ten countries with a data collection of 9000 households, and has revealed that farm options always correlate with the variation of climate change Farmers prefer crops to livestock under cool temperature and high moisture climate When the temperature increases, farmers tend to choose goat and sheep rather than beef cattle and chicken With higher precipitation, goats and chicken are more chosen than cattle and sheep because the goats and chicken favor forest, which is more popular than savanna in wet weather Furthermore, the study simulated the models based on climate scenarios, and gave results that livestock would continue to develop in warm and dry climate, but would decrease

in case of high precipitation, and heat tolerant species would be dominant in African in future

One of the most important drivers of income diversification is the high vulnerability of the agriculture In Southern Ethiopia, the arid climate is a great challenge to the livestock production due to detrimental effect on water shortage; wither pasture, hot weather, and disease risk.Megersa, Markemann, and Ay (2014) made a survey with 242 households in two provinces Dike and Yabelo A set of data about socio-demographic properties such as family size, gender and education level of household head, and livestock holding behaviors is collected through interview process directly each household The study focused on five most common species in the region, including cattle– the most dominant species, camel, goat, chicken, and donkeys Livestock diversification is assumed to recognize when the household has at least three species The participants are asked about the tendency in livestock holding when there are changes in temperature, precipitation, and drought The study used linear regression to estimate the impact of climate variables on livestock adoption, with the ranking model to rank the livestock priorities, and then logit model to measure the probability to select livestock alternatives from the most to the least

Through evaluating the tolerance of each species by measuring the average mortality of livestock in the drought, they find out that cattle is the least adaptive species in 4 kinds of species, while camel and goat have more ability to suffer the water scarcity and food shortage Analysis of rainfall and temperature in long term has indicated that the frequency of droughts has increased remarkably, making the annual precipitation reduce much, while temperature only changes slightly on average Therefore, livestock diversification is evidenced to be negatively correlated with precipitation, but seems to be not meaningful with the temperature

By contrast,Brenshaw, Dollan, and Smit (2004) showed an opposite farming option of farmers in Canadian prairies compared to previous studies That study is conducted by estimating cropping behaviors of farmers during a long period 1994 – 2002 The average number of crops in the period is recorded for each prairies farms, and Herfindahl index is used

to measure crop diversity level Researchers believed that cropping diversification is a useful adaptation method to reduce risk from climate change In contrast to researchers’ expectation, the study shows that farmers have tendency to specialize in their cropping rather than diversification The reason for this matter is that Canadian prairies confront many difficulties and limitations in diversification The start-up cost is high, the ability to catch up new technologies in producing new crops is limited, and the benefits reduce due to economies of scale Another interesting finding from the research is that farmers feel more likely to diversify income sources rather than crops switching Off-farm activities are preferable selections of farmers to reduce challenges from climate risk and other economic risks

2.2.2 Impact of high salinity intrusion to income diversification:

The two most common threatens to the coastal and low-lying delta are the seawater inundation and the increased salinity in the soil and underground water, which adversely influence on agriculture

IPCC (2014) proposed many adaptation measures to respond with salinity intrusion, in which new and diversified livelihood seems to be the most important method Shannon (1997) emphasizes the importance of researching the threshold of salinity tolerance of each plant before selecting plants for the coastal area According to the study, barley and wheat are higher salinity tolerant than rice and corn Cotton and sugar beet have higher degree of saline than bean, pea and potato In the oil seed group, sunflower, linseed and soybean are

more sensitive to salinity than canola and safflower Fruits and citrus are not popular in the condition of saline area Bithal et al (2011) suggested that crop varieties in the coastal and low-lying delta should enhance the ability to resist to drought, heat and salinity Pitmann and Michael (2002) recommend genetic engineering as the effective approach to make plants endurable with high salinity and even be irrigated by brackish water Besides, Ahmed (2010) and Khan et al (2012) introduced other adaptation methods including non-rice crops in floating gardens, or exploiting small-scale fish and other aquacultures on inundated land

In Vietnam, as an obvious illustration for the risk of salinity intrusion, Mekong Delta has coped with detrimental effects from this phenomenon in recent years, especially in the dry season Seawater could intrude 40-60 km from the coast (Miller,2003), leading to the fact that millions hectares of arable land have been highly saline Crops failure happens more frequently, the agricultural production is strongly affected in both quantity and quality Binh (2015) measured the vulnerability to salinity intrusion of Mekong River Delta in the period 1995 – 2011 by using both the quantitative and qualitative methods Result of the study showed that the rate of intrusion becomes more and more rapidly and widespread

in the years later By a survey of 512 households in TraVinh, researchers indicated many adaptation methods, which are applied in this zone to cope with the hazard, including dyke building, crop rotation, and ground water management Many previous studies asserts that dyke system has developed to prevent floods and salinity intrusion, so that farmers could rise into 2 to 3 crops per year, contribution to the increase of rice production (Hoanh et al., 2003; Tuonget al., 2003; Can, 2005) De et al (2002) introduced new short day and high saline tolerant rice varieties, promising that these crops would be well appropriate with the coastal area

From 2000, the Vietnamese Government promoted policies for rice quality upgrade, integrated system of rice, fish or shrimp in order to induce the benefit from agricultural products, including crops and aquaculture Farmers in coastal zone has tried and succeeded with the rice – shrimp farming, taking advantage of both floods and brackish water to raise their income (Brennan et al., 2002) The system is a combination of the dry season for rice cultivation and the wet season for shrimp farming This model helps farmers to reduce risk of shrimp mortality or crops failure in the adverse climate, and satisfies household consumption Being opposite toPhong et al (2002) and Brennan et al (2002), De et al (2002)suspectedthe

high revenue efficiency of rice shrimp system due to salt leaching They presented evidence that yield would be higher in the rice monoculture system

However, almost adaptation measures are not carefully taken into consideration for the long term impact of sea level rise The vulnerability to salinity is different between distinctive regions, especially between dyke and semi dyke protection regions Renaud(2015) proposed some other adaptation methods besides advanced crops varieties, that is maintaining the agri-ecosystems by managing river flows, infrastructure development, improving the degraded areas These solutions are assessed to be long term strategy in adaptation to climate change, and should be encouraged and directed by the government to develop the Mekong Delta

2.2.3 Impact of socio-economic characteristics on income diversification

When considering the vulnerability to the global warming problem, many researchers concern about social and economic factors Kelly andAdger (2000) proposed four measures

to response to harmful effects relevant to human communities caused by climate change, consisting of poverty reduction; maintaining the security, income diversification to disperse risk, and protecting property management rights

The vulnerable state of agriculture depends much on the economic power of a country A developing country with poor living standard, less-developed infrastructure, low educational level and inefficient policies are incapable of doing many strategies to adapt with detrimental effects of climate change (Zorom et al., 2012; Kelly & Adger,2000) Zorom et al (2012) conducted a research about adaptation in Sahel, one of the poorest country in the world The research was performed mainly by survey process with direct interview of hundreds of farmers in Sahel Grain growers and livestock breeders are more vulnerable than off-farm workers and gardeners Severe climate seems not to correlate with the off-farm workers activities Grain growers are traditional farmers with the major grain crop, which is need much rain-fed, so become the most vulnerable groups The most commonly strategy of farmers to adapt with droughts in this area is combination of growing dry-tolerant vegetables and short cycle varieties Although Sahel farmers know that income diversification is the best way for them to reduce vulnerability and react with the severe climate, they meet many difficulties and barriers in achieving capital investment and suitable policies from government

Megersa, Markemann, and Ay (2014) concluded that livestock diversification is significantly impacted by family size and per capita holdings of cattle, while other socio – economic seems to be insignificant, meaning that livestock diversification depends much on labor and income source from cattle keeping

Binh (2015) emphasized that the vulnerability also depends on financial capacity, educational standard, distance to farms, to market, to the industrialization zone, and job opportunity By measuring the vulnerability index of each ethnicity, the Khmer people is found to be more sensible than the Kinh people, mainly due to their less adaptation behaviors The study notes the importance of taking into account suitable adaptation measurements in different social groups

To sum up, it is undeniable that the efficiencyof adaptation behaviors is much influenced

by social and economic factors Therefore, it is necessary to do comprehensive assessment

before applying an approach to response with climate change

CHAPTER 3: RESEARCH METHODOLOGY

This chapter connects all information from literature review to set up an analytical framework for the research Then, the most suitable methodology is proposed to estimate the impact of climate change on income diversification behaviors Many variables, which are representative for determinants, are selected toincorporate into the empirical model Moreover, this chapter also gives a detailed discussion about the definition, presentation and expected relationship between dependent and independent variables The data source is introduced to clarify the way to employ variables used in the regression

3.1 Analytical framework

Based on theoretical and empirical literature review, an analytical framework is built to clarify the motivations and determinants of income diversification of households in Mekong River Delta (Figure 3.1)

Figure 3.1 Analytical framework

Rice cultivation

Natural change and human activities

Climate change

Salinity intrusion Temperature variability Precipitation variability

Income lost due to rice yield drop

Diversify income sources

aquaculture

Climate change is a phenomenon caused by long-term effects of natural change and human activities, in which over 90% of the reasons belongs to human activities The impact

of climate change on the agricultural activities is diversified and depends on the characteristics of specific area Because Mekong River Delta is a coastal delta with low elevation, climate change could be described through changes of temperature, precipitation and salinity intrusion In particular, the weather becomes hotter, dry season lasts longer, rainfall reduces remarkably, fresh water is scarce and the salinity intrusion gradually happens harshly, creeping far interior Being a rice bowl of the country with over 50% of national rice production, the Mekong River Delta is severely affected by climate variation Crops failure happens more frequently due to abnormal weather, and leads to the significant rice yield drop Government has oriented farmers many adaptation approaches to response to climate change In which, income diversification is encouraged and applied by many households Farmers in Mekong River Delta often incorporate rice cultivation, other crops cultivation, livestock and aquaculture breeding, and non-farm income The combination of these activities helps farmers to disperse risk of traditional rice cultivation, and optimizes their earnings in bad conditions caused by climate change

3.2 Methodology

3.2.1 Income diversification index

The income diversification degree is represented by one-sided or two-sided proxies To make

an overall and accurate assessment of the impact of climate change and other determinants on income diversification behaviors of households, the study applies both measurements in the regression, the one-sided and the two-sided index groups

The first income diversification index is the number of income sources, representing for the one-sided group It is the simplest method to calculate the diversification degree, with the integer value range from 0 to 4, corresponding with the participation in 0 to 4 income generating activities The higher the index is, the more diversified the household becomes Thus,

it

wherem is source of income, and m is from 0 to 4

The second income diversification index is Herfindahl index, which stands for the sided group (Ben, Holly,& Barry, 2004) Herfindahl index is first used to measure industry concentration, contributing to assess the oligopolistic status of an industry Based on the nature of quantifying the diversity degree, Herfindahl index was developed to calculate the income diversificationgradation This type of index reflects both dimensions of diversification: the income sources and the distribution of each income source in total Specifically,

two-2 1

l

it m m



whereP mis the proportion of th

m net income in the total income of households The Herfindahl index has continuous value, ranging from 0 to 1 The nearer to 1 the index is, the less diversification farmers participate

Due to the difference between two methods of measuring income diversification degree, the study has to use two distinct models to estimate the impact of climate change and other determinants on income diversification The panel Poisson model is applied for the first index, while the panel Tobitmodel is a more suitable option for the second index

3.2.2 Model specification

In order to adapt with the climate change, rural households in Mekong River Delta rely on many activities which could be classified into four main income sources including rice cultivation; planting other varieties such as fruit, sesame, soybean, and coconut; livestock and aquaculture breeding; and non-farm income

The general model is estimated as follows:

it it

DI   K S  whereDI itis income diversification index of household iin yeart.Kitrepresents climate variables including temperature, precipitation, and salinity levelof household iin yeart Sit

refers to some controlling variables related to farmers characteristics such as gender, age, educational level of household head, household size, labor ratio, migration status, and land area owned byhousehold i in year t Then, the estimation methods of both panel Poisson

model and panel Tobit model are figured out in order to prove the existence of critical point

of 

 The panel Poisson model

The regressand in the first model is the number of income sources with integer value from 0

to 4 It has the form of count data and follows Poisson probability distribution Specifically,

whereiobeys the log linear model, and '

lni  x i Moreover, iis proved to be the mean or expected value and the variance of thePoisson distribution, due to the transformation:

'[y | ] var[y | ] x i

n

i i i i i

.'

n

i i i i

 The panel Tobitmodel

Since the dependent variable Herfindahl index ranges continuously fromzero to one, a double censored regression model, in particular a two-limit Tobitmodel (Tobin,1958) is used to analyze the determinants of income diversification The index of thei thhousehold at year tin the sample is regressed on independent variables that changes by time for each household

*

it

y is a latent variable indicating desired Herfindahl index while y itis the observed Herfindahl index The error termv ifollows the standard normal distribution The correlation between the observed and latent variable is as below:

2 2

3.2.3 Variable description

Table 3.1 gives a brief description of variables, which are incorporated into the model Dependent variables include two types of income diversification index Independent variablesare classified into two groups.The proxies of climate change includescaled salinity, and the average value of temperature and precipitation in the dry season and wet season and its quadratic form The controlling variables group includes socio-economic characteristicssuch as age, gender, educational level of household head, household size, household’s labor ratio, land area, and migration status of the household

Table 3.1 Variable description

behavior

Dependent variables

sources: 0,1,2,3,4

Income diversification index 2 diversity_index2

Equal sum of square of the net revenue from each income source in the total income, and continuous from 0-1

Independent variables

 Climate change

+/-Square of average temperature in the

+/-Square of average temperature in the

+/-Square of average precipitation in the

+/-Square of average precipitation in the

behavior

 Socio-economic characteristics

+/-Educational qualification of household

First, it is necessary to describe two popular proxies of climate change, which are temperature and precipitation The variation of the average seasonal temperature and precipitation through years between different zones are recorded and added to the estimation

It is believed that the severe climate with high temperature, drought, and scarcity of rainfall could be the push factor for farmers to diversify their activities (IPCC, 2007) The quadratic forms of temperature and precipitation are used to assess the impact of climate change in long term

The group of socio-economic characteristics of household includes gender of household head, education level of household head, age of household head, household size, household’s labor ratio, land area of household, and migration level of household Gender is a dummy variable that defineshousehold head is male or female Gender is equal to 1 if the household head is a male, 0 if otherwise It is difficult to find the correlation between gender of household head with the capacity of diversification However, it is expected that men would

be more fearless of trying new crops or new income generating activities compared to women(Kimsun&Sokcheng,2013)

Educationvariable represents for the educational level of the household head That variable is a categorical variable in which 0 corresponds with the level below the 5th class, 1

is respective with completing primary level, 2 equals finishing secondary school, 3 corresponding with passing high school level, 4 is college, and 5 is equivalent to university graduation It is believed that a higher-educated head could have more opportunities to diversify their income, approaching new technology of other farming activities beside their traditional crops cultivation as well as participating in non-farm activities (Nhan et al.,2012; Reardon et al., 2000;Minot et al.,2006) On the other hand, some points of view indicate that

a qualified household head could be more proficient in their traditional activities and focus

on agricultural specialization to increase their profits Therefore, the effect of educational qualification of household head on the diversification level of household is mixed

In addition, agevariable is the age of the household’s head Reardon et al (2006) argued that the impact of age of household head on income diversification is hard to anticipate Some people believe that an older household head could be more experienced in his family’s farming activities, so that he could facilitate specialization Another aspect also supports this viewpoint is that old person has the tendency to avoid risk He would not be ready to apply

new technology or to take part in new activities On the contrary, older household head is expected to accumulate enough assets to be self-confident when joining nonfarm activities or trying new kinds of income source

On the other hand, household size is understood as the number of members in the household Bigger households are believed to have more opportunities to engage in many kinds of labor activities, especially in case of limited farm size(Oyewole et al.,2015) The expectation of the relationship between household sizeand the income diversification degreeis a positive relationship Household’s labor ratio is the ratio of members who are at the working age in a household over total household’s member It is expected that if the number of labors increases, the family accumulate more assets to diversify their income generating activities (Abdulai&Crolerees, 2001).Land area variableis the area of land owned

by a household A household could take advantage of the large area to diversify their farming (Abdulai&Crolerees, 2001;Reardon, 1992) The expectation for the income diversification degree and land area is a positive association

Besides, migrationis the number of members who live far from home over 6 months for work.People often migrate from their hometown to the city to find a better job that could create a stable earning for them, often non-farm activities Earnings from migration, which are oftentransferred to their relatives by remittance, contribute to the revenue of the household There are two opposite viewpoints about the correlation between migration and income diversification The first idea is that migration could support the diversification behavior The remittance helps many rural families to have abundant capital to try new forms

of work Migrators also establish a new social relationship so that the family could easily widen their nonfarm activities (Reardon et al., 1997) On the contrary, the second idea is that with enough finance from remittances, families could afford their lives and do not need to diversify their livelihoods for earning money; otherwise, migration is regarded as substitute for income diversification (Sakho-Jimbira, 2007) Therefore, the impact of migration in this estimation is hard to anticipate

3.3 Data sources

The study primarily uses the dataset of Vietnam Household Living Standards Surveys (VHLSS) This is a biennial survey program provided by General Statistics Organization(GSO) under the technical assistance from UNDP and World Bank With the

nation-wide scale, the survey provides detailed information at households and communes level of 64 provinces through direct interview approach The investigation is strictly conducted by carefully trained enumerators Respondents are interviewed face to face a carefully designed questionnaire covering many varieties of social economic aspects The core content of the survey is concentrated on the income and expenditure information of individuals and households Besides, education, health status and many other demographic characteristics are incorporated into the survey Over many years, results from VHLSS database processing have greatly contributed to the social economic policy planning of the government

With the study site at Mekong River Delta, the dataset limits in 13 provinces including Long An, Dong Thap, Ben Tre, Vinh Long, Can Tho, TienGiang, HauGiang, KienGiang, An Giang, SocTrang, TraVinh, Bac Lieu and Ca Mau The aim of the empirical study is to assess the effects of climate change on adaptation behaviors of households by income diversificationin the period 2010 – 2014 Specifically,362 households who could satisfy the requirement of completing all three surveys of GSO The ultimate sample incorporates 1086 observations of 362 households scattering around 13 southern provinces in 2010, 2012 and

precipitation, which are recorded at 10 meteorology stations across the Mekong River Deltawith available figures posted in the statistics website of The Ministry of Agriculture and Rural Development (MARD) Climatic data is collected by months per year at each station The South of Vietnam has two seasons including rainy season extending from May to November, and dry season lasts the other months Temperature and precipitation used for the study are measured by taking the average of each season Climatic variables of a household are attached with the climate figures of the nearest meteorology station

3.4 Salinity measurement

Salinity data is collected from the Vietnam Institute of Meteorology, Hydrology and Climate Change With 8 over 13 provinces along the coastline, the salinity intrusion performs severely in many regions of the delta Saline water intrudes inland through estuaries, rivers and canals Salinity stations are located along Tieu, Dai, Ham Luong, Co Chien, CungHau, Dinh An, Tran De, Ong Doc, Cai Lon estuaries (Figure 3.2) There are 29 stations along the coast with detailed longitude and latitude Their co-ordinates are reflected on the map of Mekong River Delta and marked carefully

Salinity concentration (salinity) is measured by specialized sensor instruments, then

signals are transmitted automatically to the receiving and processing data center The statistical figures are recorded every two hours daily from February to May, the peak period

of the dry season with serious phenomenon The raw figures are used to calculate the average, max and min salinity concentration In scientific researches, the maximum salinity concentration is the most important and interested figure, because it affects directly the sustainable ability of crops or creatures For example, the saline threshold of common rice is

4 g/L, some salt tolerant rice could endure higher salinity, but the yield would reduce 20-50% depending on the growing stage When the salt concentration is over 6 g/L, almost rice would completely die However, the saline threshold of aquaculture is higher than crops Catfish could live at salinity up to 12 g/L, while shrimp grows best at the saline environment 15-25 g/L (Giới thiệu hệ thống quan trắc và xâm nhập mặn,2016).That is the reason why the salinity could be regarded as a motivation for the income diversification to reduce risk from production failure

The salinity statistics are available at each station, however, the location of the household plays an important role in determining the saline level As report of the Water Resource Directorate, at regions in the radius of about 45 km far from the coast, fresh water source is

very scarce, not enough for production and daily activities At zones far from the sea around

45 to 65 km, the ability to be saline higher than 4 g/L is very high The distance 70 to 75 km

from the sea is considered to be the safety zone to be protected from salinity intrusion The

sphere of influence increases by years, gradually far inland

This study is the first in Vietnam to develop a new measurement to convert the salinity at

the nearest station to the salinity at each specific position The measurement method is

developed from Dasgupta et al.,(2015), however, due to the limitation of available data, the

study has to use a simple method based on the distance from the household location to the

nearest salinity station to re-estimate the specific salinity It is recognized that the greater the

distance is, the lower the impact would be For the distance not over 30 kmfrom the station,

the salinity is almost unchanged For the distance from 30 to 60 km, 60 to 90 km, salinity

reduces about 30% and 60%, respectively For the distance over 90 km, the salinity remains

only 10% of the origin The scaled salinity is assessed to be more accurate in estimating the

total impact of salinity intrusion at a specific household.This variable takes account not only

the saline intrusion affected zone but also the salinity level at the nearest station

Figure 3.2 Salinity stations in Mekong River Delta

CHAPTER 4: RESULT AND DISCUSSION

This chapter firstly gives an overview of the Mekong River Delta, the study site which is heavily affected by consequences of climate change Then, results of the empirical estimation are introduced and analyzed in detail to clarify: (1) determinants of income diversification strategies; (2) the relationship between climate change and income diversification

4.1 Overview of the Mekong River Delta

4.1.1 Geographical position and natural conditions

Mekong River Delta locates in the Western South of Vietnam, with two sides contiguous to the Eastern Sea The total area is over 3.9 million hectares The delta is divided by two final branches of the Mekong river (Bassac or Hau River and Tien River), with hundreds of small branches and canals across the terrain There are 13 provinces responsible for administrative management in the area, including Ben Tre, Long An, Vinh Long, TraVinh, SocTrang, TienGiang, Can Tho, Dong Thap, Bac Lieu, An Giang, Ca Mau, KienGiang, HauGiang Mekong River delta has a flat and low-elevated terrain, with the average elevation just about 3-5 meters above the mean sea level, some places only 0.5-1 meters above In the rainy season, upstream floods flows into the delta up to 3meters depth, making a large area submerged in water, especially the Plain of Reeds and the Long Xuyen Quadrangle In the dry season, the low river flow causes high salinity intrusion over a widespread coastal area

4.1.2.Socio-economic conditions

Agriculture sector plays a dominant role in the economy of Mekong River Delta With the advantages of large area, fertile soils, abundant fresh water supply, the delta has a competitive rural economy with high production of rice, about 50% of the national rice yield, contributing to the second-ranked exporter of Vietnam in the world Moreover, this region also promotes the capacity of growing fruit orchards and vegetable crops Along with cultivation, the aquaculture grows rapidly with increasing production of brackish water aquaculture, especially shrimp and catfish, contributes to the high GDP shares totally.Besides farm activities, the rapid growth of industrialization and modernization has promoted the non-farm sector, increased the ratio of industry and services contribution in GDP, which is

described in Figure 4.1.Over the time, industry and services sector likely comprise larger share oftotal GDP, while agriculture sector comprises less share of total GDP

Figure 4.1 GDP share per sector in Mekong River Delta

(Source: Mekong Delta Plan 2013)

4.1.3 Impact of climate change on The Mekong River Delta

In Vietnam, the impact of climate change is predicted based on three scenarios of Monre (2009) Until the end of the 21st century, the projected average temperature could increase by 1.1 – 1.9oC (low emission scenario B1), 1.6 – 2.8oC (average emission scenario B2), 2.1 – 3.6oC (high emission scenario A2) Rainfall has tendency to decrease in the dry season, but rise in rainy season On the average, precipitation could increase by 1 – 5% (B1 scenario), 1.5 – 8% (B2 scenario), or 2 – 10% (A2 scenario) The sea level rises by at least 65 cm, and the highest 100 cm compared to that of the period 1980 – 1999 Thus, with such the dramatic variation of climate condition, the unexpected effects of climate change would be more severe in many economic sectors, especially agriculture sector

The Mekong River Delta is among the five most vulnerable deltas in the world by the climate change, especially the sea level rise (IPCC,2007) In the scenario of sea level rise built for this region, in the middle of the 21st century, the sea level rises about 22 – 30 cm At the end of the century, the sea level rises up to 51 – 66 cm, 59 – 75 cm and 79 – 99 cm in

corresponding with the low, medium and high emission scenario The flat area of the region could be inundated permanently in the wide scope, ranging from 12.8 – 37.8% of the total area If the sea level rises about 1meter, 70% of rice area in Mekong River Delta will be inundated, which means that the area for rice growing could lose up to 1.5 – 2 million hectares Besides, the abnormal change of weather and severe droughts induce pest, insects and diseases, causing crop failure as well as making difficulties for the preservation and processing of farm products, which threatens severely the food security of the whole region For example, 1oC increase could result in 10% reduction of rice yield and 5– 20% reduction

of bean-origin farm trees yield The harmful impact of climate change is now urgently warned by environmental specialists

The Mekong River Delta could be divided into three ecological regions (Figure 4.2), which confront different challenges from effects of climate change, include:

1) Upper Delta – facing seasonal fluvial floods and increasing the ability to keep water via optimal land and water use

2) Middle Delta – facing the heavy fresh water shortage in dry season and, droughts and ensuring enough water supply;

3) Coastal Delta – facinginundation with excess salinity intrusion and brackish water Among many risks, in recent years, the salinity intrusion and drought have been the most dangerous threatens to the livelihood and agricultural activities of the Mekong River Delta Thousand hectares of rice cultivation have been lost, the hazard of fresh water shortage for daily activities and for production has been more severe