Crop diversification, economic performance and household behaviour Evidence from Vietnam
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This study examines economic performance and household behaviour in multiple crop farming
in Vietnam by measuring scale and scope economies, technical efficiency, and elasticities of
substitution between inputs. The farming system in Vietnam is being transformed by
integration between a set of cash crops and main food cropping operations. This transformation
into diversified farming systems, where smallholders have a production base in rice, can affect
the economies of scope, technical efficiency, and performance of farms. By using the approach
of the input distance function, evidence is found of both scale and scope economies. These
findings have important economic performance implications. Substantial technical inefficiency
exists in multiple crop farming, which implies that by eliminating technical inefficiency crop,
outputs could, in principle, be expanded by 20 per cent. Enhancing education and further land
reforms are the main technical efficiency shifters. Evidence is also found for complementary
between family labour and other inputs, except hired labour. The findings show further that the
more adverse the farm production conditions, the more efficiently resources are allocated.