Resource information
One area of weakness in current
agricultural policy work in Vietnam is the lack of a clear
understanding of both the private profitability of farmers
for different crop activities and the social profitability
of such activities. Agricultural performance is thus gauged
in physical terms (i.e. yields and the volume of aggregate
output) rather than in financial or economic terms. This has
hampered efforts to compare and contrast the impacts and
effectiveness of alternative policy and program measures.
Comparative metrics for different crops and farm management
systems have been lacking. The main objectives of this paper
are: (i) to describe the Policy Analysis Matrix (PAM)
methodology and how to interpret key financial and economic
indicators; (ii) to document the underlying assumptions used
for the analysis; and (iii) to provide a summary and brief
interpretation of the main quantitative results and outcome
of selected sensitivity tests. As a step towards improved
sector planning, this paper utilizes the PAM to analyze
various farm management systems for rice, maize, and cassava
in different parts of Vietnam. Tradeoffs are involved in all
production decisions and the PAM provides a systematic way
of comparing the private and underlying social costs and
returns from different agriculture enterprises together with
the effects of government policy. The paper is presented in
following five sections: section one is introduction;
section two describes the methodology and main assumptions
used for the analysis; section three presents the main
quantitative results for different kinds of rice grown for
export in An Giang province in the Mekong delta of southern
Vietnam and for domestic rice and alternative stock feed
crops grown in northern Vietnam; section four presents the
results of various sensitivity tests that looked at the
impact of changes in crop yields, commodity prices,
fertilizer costs, and labor costs; and section five
concludes with a summary of key findings and policy recommendations.
