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3. Impacts of Price Hikes on
the Lives and Livelihoods of
the Rural Poor
3.1 Price hikes at rural study sites
3.1.1 The “double-edged” prices
In the rural sites of the study prices of inputs increased faster than prices of outputs between June 2007 and June
2008. Of the three sites, Dak Lak seems to have experienced “double-edged” prices most acutely (Figure 3.1).
• In Dien Bien, where most of the farmers are surplus producers of rice, the price of paddy has
increased by 50-60 percent (the rice price has increased at the same rate) while the price of
fertilizers has increased by 60-100 percent. Between June and August 2008 the price of paddy
began to fall (due to declining export prices and a successful Summer-Autumn crop). However,
the price of fertilisers continues to rise, which worsens the “double-edged price” effect.
• In Dak Lak where most farmers rely on coffee and maize sales in exchange for rice, the price of
maize (dry grains) has risen by 30 percent and coffee (dry beans) by more than 20 percent over
2007. The purchase price of rice has increased by more than 60 percent and fertilizers by 70-100
percent. The price of kali fertilizer in particular has increased 1.5 times.
• In Quang Tri where farmers typically trade cassava for rice, the price of fresh cassava sold to
processing plants has increased by 45 percent; while the price of regular rice transported from
lower land areas has risen by 70 percent.
Figure 3.1: Price index at the study sites 06/2007 – 06/2008 (price at 06/2007 = 100 percent)
%
220
200
180
160
140
120
100
Dien Bien
6/07 10/07 2/08 6/08
Plain Rice (IR64)
Bac Thom Rice
Urea Fertilizer
NPK Fertilizer
(5.10.3) Lion
Kali Fertilizer
(Chinese)
%
260
240
220
200
180
160
140
120
100
80
Đak Lak
6/07 10/07 2/08 6/08
Maize (dried
grain)
Coffee (dried
grain)
Plain Rice
(IR64)
NPK
Fertilizer
(16.16.8)
Kali Fertilizer
(Russian)
Quang Tri
%
180
160
140
Fresh highyield
cassava
Plain rice
120
100
6/07 10/07 2/08 6/08
Glutinous
rice
Source: Retail prices at the study sites provided by local agents and residents (July-August 2008)
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