This study attempts to examine the effects of contract farming on rice growers’ productivity and profitability in terms of yield, cost, selling price and return in Vietnam’s Mekong Delta using different propensity-score matching techniques. By using cross-sectional data collected from 166 rice farmers located in the central Delta, the findings reveal that participation in a contract scheme has a robust positive significant effect on rice farmers’ output price and return but has no impact on yield and variable cost. The results of this study suggest that contract farming led by export enterprise enables rice farmers to raise their output price and profitability, which may magnify their household income.
This study aims at investigating profitability of rice contract farming in Vietnam's Mekong delta. We used data from a farm-household survey comprising of 70 contract and 96 noncontract respondents, and apply the Student's t-test and ordinary least square regression model for data analysis. We found that farmers with larger rice plantations are unlikely to engage in contract farming, and that market outlets and output price for contract growers tend to be ensured compared with noncontract ones. The findings reveal that contract farming has a significantly positive impact on rice-farming profitability in terms of average return and average rate of return on variable cost when controlling for observable characteristics of household and farm. The results suggest that contract farming may enable rice farmers to raise their rice income as well as household income. The policy implication may be that contract farming may not be feasible for all rice farmers and rice business firms.
The major goal of this study is to examine the impact of agricultural cooperative membership on the net return on production cost (ROC). The data used for the study were gathered from 233 rice farmers in the central Mekong River Delta’s province of Hau Giang, Vietnam. Propensity score matching and two-step Heckman selection models were employed to account for possible selection bias stemming from systematically different observable and unobservable attributes between cooperative members and non-members. The findings reveal that cooperative membership has a positive and statistically significant impact on rice farmers’ ROC, suggesting that agricultural cooperatives could help increase the profitability of rice farms.
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