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Overview
Table 2.2: Percentage of Net Rice Selling Households ( percent)
Non-poor
Nearpoor
*
Poor
Average
Near-poor households as
a percentage of the total
number of households
All 29.2 38.4 34.4 30.0 4.3
Rural
Urban
38.4
6.3
39.7
25.0
35.2
19.0
37.8
6.8
5.2
1.6
By Region
Red River Delta
North East
North West
North Central Coast
South Central Coast
Central Highlands
South East
Mekong River Delta
40.3
24.2
19.7
34.7
31.9
14.8
9.7
34.7
64.9
32.4
22.6
45.3
37.5
27.6
11.1
34.2
55.0
32.5
38.0
37.6
27.5
25.2
15.8
27.3
41.6
26.1
28.9
35.4
31.5
17.4
10.1
34.0
3.8
5.6
7.2
5.2
3.8
5.0
2.3
4.1
Ethnic Majority
Ethnic Minority
29.0
31.4
41.9
28.6
36.7
31.7
29.7
31.6
3.7
7.6
(*) A near-poor household is defined as a household with total expenditure within 10 percent of the poverty line
Source: calculations by Linh Vu and Paul Glewwe on basis of VHLSS 2006, June 2008
Expenditure. The 2006 VHLSS data show that food constitutes 50 percent of households’ real expenditure,
about 47 percent for the non-poor population and 67 percent for the poor population. The percentage of
total expenditure devoted to food is largest for the poorest quintile (65 percent) and smallest for the richest
quintile (37 percent). For the population as a whole, food purchases constitute 72 percent of total food
consumption, and self-produced food constitutes the remaining 28 percent. The poorest quintile consumes
the least purchased food (52 percent), while the richest quintile consumes the most (88 percent).
Rice is the most important food item in Viet Nam, accounting for 69 percent of the daily calorie intake and
15 percent of household total expenditure (29 percent of poor household expenditure and 12 percent of
non-poor household expenditure). Rice constitutes 27.5 percent of average household food expenditure, or
44 percent among the poor households and 24.5 percent among the non-poor households. Rice is most
important for households in the poorest quintile; accounting for 78 percent of their daily calorie intake and
almost half of their food expenditure. Therefore, an increase in the price of rice could have severe
consequences on the welfare of this poorest group.
2.3 Selected Studies on Poverty Impacts of Food Prices
Linh Vu and Paul Glewwe (2008) 7 examine the impacts of rising food prices on poverty and welfare in Viet
Nam using the VHLSS 2006 data (assuming other factors remain unchanged). Increases in food prices raise
the real incomes of those selling food, but net food purchasers are worse off. Overall, the net impact on the
welfare of an average Vietnamesehousehold is positive. In a scenario where food prices increase by ten
percent, the average household welfare increases by 1.7 percent and the national poverty rate falls by 0.6
percentage points. In another scenario when the price of rice increases by 10 percent, the average
household’s welfare increases by 0.6 percent and the national poverty rate falls slightly, by 0.1 percent 8 .
However, the costs and benefits are not spread evenly across the population. A majority of the population
would be worse-off from increases in food prices. A ten percent increase in food prices would make 56
percent of households worse off. Similarly, a ten percent increase in the price of rice would reduce the
welfare of about 54 percent of rural households and about 92 percent of urban households. Average
household welfare increases because the average welfare losses of the households whose welfare declines
(net consumers) are smaller than the average welfare gains of the households that benefit (net producers),
7 Linh V and Paul Glewwe, June 2008.
8 The poverty line used (in GSO surveys) corresponds to the expenditure required to purchase 2100 calorie per person per day, plus an amount for essential nonfood
expenditures. This yields a poverty line of VND 2.56 million per person or about VND 213,000 per person per month against 2006 prices. This poverty line,
as calculated by Linh Vu and Paul Glewwe. implies that about 15.9 percent of Viet Namese population, 3.8 percent of urban and 20.3 percent of rural population,
are poor.
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