Income Diversification and Poverty Income Diversification and Poverty

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Chapter 2. Background on the Northern Uplands region Some general trends in the Northern Uplands can be identified by comparing statistics for 1995 and 2000. Although the agricultural sector is growing rapidly (6 percent per year), the agricultural share of GDP has fallen from 47 percent to 42 percent over this period, indicating that non-agricultural diversification is occurring at the regional level. The area allocated to rice has been almost unchanged over this period, but rice production per capita has grown significantly due to rising yields and, to a lesser extent, cropping intensification. At the same time, there is evidence of crop diversification in that the share of crop land allocated to non-rice crops and non-food crops has increased by 5-6 percentage points. Finally, the growth in agricultural GDP per hectare suggests a trend of diversification into higher-value crops and other agricultural activities. These trends, and their impact on living standards, are discussed in the next chapter. Page 38
CHAPTER THREE PATTERNS AND TRENDS IN DIVERSIFICATION: ANALYSIS OF THREE NATIONAL HOUSEHOLD SURVEYS 3.1 Introduction Between 1993 and 1998, rural poverty fell from 66 percent to 45 percent (Joint Government- World Bank-NGO Working Group, 2000). Part of the reduction in poverty is due to higher yields of rice and other crops, which have allowed Vietnam to become the second largest rice exporter with no expansion in rice area and no reduction in domestic consumption (Minot and Goletti, 2000). In addition, Vietnamese farmers have diversified into higher-value crops. Vietnam has become the second largest coffee producer in the world, and production and export of fruits and vegetables have risen dramatically over this period. And part of the income growth and poverty reduction is undoubtedly due to diversification into non-crop activities such as aquaculture, livestock raising, and non-farm activities. The importance of each of these factors in rural income growth and poverty reduction has implications for policy and public investment. If most income growth comes from technological change which increases yields, then investments in agricultural research deserve priority 1 . If income growth derives largely from crop diversification, then research into the constraint that prevent some farmers from diversifying deserves greater attention. And if income growth or poverty rises mostly due to the switch to non-farm activities, then non-farm employment generation should be the focus of research. Furthermore, the most important factor in raising rural incomes may be different than the most important factor in reducing rural poverty. For example, it may be that low-income households benefit more from higher yields and crop diversification, while higher-income households gain with diversification into non-farm activities. The latter effect could dominate the increase in average rural income, while the former would have a larger impact on the incidence of poverty. Finally, it is possible that the importance of each factor will vary depending on household characteristics and location. For example, yield increases may be more important for farmers in irrigated lowland areas, crop diversification may be important to household near roads and market infrastructure, and diversification into non-farm activities to be important near urban areas. In light of the rapid growth in rural income in Vietnam and the lack of information on the sources of growth, this study will focus on the following questions: 1 In theory, investment decisions should be made based on the size of the marginal contribution to growth from alternative investments. However, since this information is generally not available, a reasonable approximation is to allocate investment among growth strategies according to the average contribution to economic growth. Page 39
Page 1 and 2: Income Diversification and Poverty
Page 3 and 4: Contact information: Nicholas Minot
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Page 7 and 8: USA), with assistance from Dr. Finn
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Page 12 and 13: CHAPTER ONE INTRODUCTION 1.1 Introd
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Chapter 4. Analysis of food demand
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Chapter 5: Income Diversification f
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Figure 5-1. Location of provinces,
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Table 7.4: Structure of Marketed Su
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Chapter 8. Summary and conclusions
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References Page 200
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References Escobal, J. 2001. “The
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References Stone, R. 1981. Aspects
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Glossary Page 206
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Marshallian price elasticity: the r
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Appendix A: Supply response analysi
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Appendix B: Interview Guidelines fo
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Appendix D: Constructing a standard
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Appendix E: Details of MacroSAM Con
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Appendix E: Details of MacroSAM con
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Appendix E: Details of MacroSAM con
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Appendix E: Details of MacroSAM Con
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Table A7.3: Ha Giang: Provincial Ma
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Table A7.7: Lang Son: Provincial Ma
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Table A7.11: Phu Tho: Provincial Ma
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Table A7.15: Son La: Provincial Mac
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