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Impacts of Price Hikes on the Lives and Livelihoods of Poor People in Viet Nam • Assistance of poor workers including migrant workers with the engagement of mass organizations and enterprises; formulate enterprise support policies (for example, access to concessional loans) to encourage skills training, recruitment and security of jobs and incomes for both the local poor and migrant workers. 12
1. Introduction 1.1 Context Rising inflation has become a pressing concern for Viet Nam since its accession to the WTO. Prices of all kinds of goods including food, petrol, agricultural inputs, construction materials and other non-food products have increased. The consumer price index (CPI) at the end of 2007 was 12.63 percent higher than at the end of 2006 and the highest rate of inflation recorded in the last 12 years. In the first three months of 2008 the CPI increased by 9.19 percent (food and food supply services displayed the greatest increase), which is already above the expected GDP growth rate for the year. High prices have had an impact primarily on low-income earners in both urban and rural areas. A rise in food prices directly affects their daily life. Although in theory the farmers will benefit from higher food prices, in practice, they suffer from more expensive input costs and risks related to the weather and diseases. In this context, AAV and <strong>Oxfam</strong> have undertaken a joint study on the impacts of price hikes on the life and livelihoods of the poor. The study follows up on efforts to build a participatory poverty monitoring network in selected communities. Results of the study will hopefully serve as inputs to policy dialogue as well as to the design and implementation of AAV and <strong>Oxfam</strong> initiatives. 1.2 Objectives and Questions The objective of the study is “to study the impacts of price hikes on the lives and livelihoods of poor people in selected communities”. The key questions to be addressed by the study include: 1. How the purchase and sale prices of food, agricultural products and inputs consumed by households, particularly poor households, in the selected sites have changed over the last 12 months? 2. How the increased purchase prices of inputs and sale prices of outputs have affected agricultural performance and incomes of the rural poor? What has been the reaction by the poor? 3. What has been the impact of increased food prices on both the urban and rural poor? What has been their reaction? 4. What are the factors that have the greatest impact on the poor’s reaction, their escape from poverty or falling back into poverty? What are the roles of policies and programmes/projects in helping the poor to cope with price hikes? 1.3 Methodology 1.3.1 Analytical Framework In order to investigate the impacts of price hikes and reaction of the poor, this study uses the “sustainable livelihoods” framework that investigates the correlation between the poor’s livelihood resources and risks (increased prices) as well as the processes and institutional arrangements in which they implement strategies and achieve corresponding results. The roles of market processes and institutions (market chains, market factors, buying and selling practices) are also emphasized in this study. Poor households are affected by three main prices: (i) the food sale price; (ii) the sale price of agricultural products (and income from non-farm jobs) and; (iii) the purchase price of agricultural inputs and services. 13
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Impacts of Price Hikes on the Lives
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Province/ City (Urban/rural) Distri
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