Impact of the Input Subsidy on Farming Productivity of Maize Farmers in Son La and Hoa Binh provinces, Vietnam
Main Article Content
Abstract
Developing the agricultural system has been an urgent issue of the Vietnamese government recently. A wide range of subsiding and restructuring policies have been legislated, such as applying new technologies, agricultural materials, and hybrid seeds to improve the farming productivity of agriculture production. This article examines the outcome of the government agricultural subsidy policies for a drought-and-disease-tolerant maize variety in two north-west provinces of Vietnam. We apply the Difference in Difference (DID) model to analyze data of 255 Vietnamese maize farming households in 2016 and 2017. By combining all assumptions of the DID method, we assess the result by using three statistical estimation methods: (i) without covariates, (ii) with covariates, and (iii) propensity score matching. Our main finding is that maize farmers who received the subsidized seed variety in the two provinces had lower production compared to those who did not by approximately 1.895 tons/ha. The study therefore recommends that the government should consider other types of subsidy such as extension training programs to improve the productivity of the farmers.
Keywords:
Maize, subsidy, difference in difference, Kernel matching.
References
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[21] Gershon, O., Matthew, O., Osuagwu, E., Osabohien, R., Ekhator-Mobayode, U. E., & Osabuohien, E., “Household Access to Agricultural Credit and Agricultural Production in Nigeria: A Propensity Score Matching Model,” South African Journal of Economic and Management Sciences, 23(1) (2020), 1-11.
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[26] Jones, M. & F. Kondylis, “Does Feedback Matter? Evidence from Agricultural Services,” Journal of Development Economics, 131 (2018), 28-41.
[27] Phu, Nguyen-Van & Nguyen, To-The, “Technical Efficiency and Agricultural Policy: Evidence from the Tea Production in Vietnam,” Review of Agricultural, Food and Environmental Studies, 97 (2016), 173-184.
[2] Mulia, R., E. Simelton, T. T. Le, V. T. Pham, & T. H. Do., “Native and Endangered Timber Tree Species in Homegardens of Northeast and Northcentral Viet Nam,” Biodiversity International Journal, 2(2) (2018), 00041.
[3] Son La People’s Committee, Decision No. 3528/QD on approving the project of developing and improving the production efficiency of agriculture commodities of Son La province, 2014.
[4] Hoa Binh People’s Committee, Decision No. 1604/QD on Approving the project restructuring agriculture industry towards improving value added and developing sustainably, 2015.
[5] Baloch, M. A., and Thapa, G. B., “Review of the Agricultural Extension Modes and Services with the Focus to Balochistan, Pakistan,” Journal of the Saudi Society of Agricultural Sciences, 18(2) (2019), 188-194.
[6] To-The, N., & T., Nguyen-Anh, “Market-oriented Extension and Farming Efficiency in Small-scale Maize Farmers: Evidence from Northern Vietnam,” Journal of Agribusiness in Developing and Emerging Economies, 11(2) (2021), 194-218.
[7] Angrist, J. D., & Pischke, J. S., “Parallel Worlds: Fixed Effects, Differences-in-Differences, and Panel Data,” Mostly Harmless Econometrics, Princeton University Press, 2008, 221-248.
[8] Ashenfelter, O. C. and D. Card, “Using the Longitudinal Structure of Earnings to Estimate the Effect of Training Programs,” The Review of Economics and Statistics, 67, (1985), 648-660.
[9] Simar, L., & Wilson, P. W., “Estimation and Inference in Two-stage, Semi-parametric Models of Production Processes,” Journal of Econometrics, 136(1) (2007), 31-64.
[10] Dinar, A., Karagiannis, G., & Tzouvelekas, V., “Evaluating the Impact of Agricultural Extension on farms'’ Performance in Crete: A Nonneutral Stochastic Frontier Approach,” Agricultural Economics, 36(2) (2007), 135-146.
[11] Athey, S., & Imbens, G., “Identification and Inference in Nonlinear Difference-in-Differences Models,” Econometrica, 74(2) (2006), 431-497.
[12] Donald, S. G., & Lang, K., “Inference with Difference-in-Differences and Other Panel Data,” The Review of Economics and Statistics, 89(2) (2007), 221-233.
[13] Caliendo, M., & Kopeinig, S., “Some Practical Guidance for the Implementation of Propensity Score Matching,” Journal of Economic Surveys, 22(1) (2008), 31-72.
[14] Abadie, A., & Imbens, G. W., “Matching on the Estimated Propensity Score,” Econometrica, 84(2) (2016), 781-807.
[15] Wang, M. Z., & Hayden, B. Y., “Monkeys are Curious about Counterfactual Outcomes,” Cognition, 189 (2019), 1-10.
[16] Abadie, A., “Semiparametric Difference-in-Differences Estimators,” Review of Economic Studies, 72(1) (2005), 1-19.
[17] Heckman, J.; H. Ichimura, H. & Todd, P., “Matching as an Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme,” The Review of Economic Studies, 64(4) (1997), 605-654.
[18] Heckman, J.; Ichimura, H., & Todd, P., “Matching as an Econometric Evaluation Estimator,” The Review of Economic Studies, 65 (2) (1998), 261-294.
[19] Aalmo, G. O., & Baardsen, S., “Environmental Factors Affecting Productivity in Norwegian Steep Terrain Logging Crews: A Stochastic Frontier Analysis,” The Japanese Forest Society, 20 (2014), 18-23.
[20] Becerril, J., & Abdulai, A., “The Impact of Improved Maize Varieties on Poverty in Mexico: A Propensity Score-Matching Approach,” World Development, 38(7) (2010), 1024-1035.
[21] Gershon, O., Matthew, O., Osuagwu, E., Osabohien, R., Ekhator-Mobayode, U. E., & Osabuohien, E., “Household Access to Agricultural Credit and Agricultural Production in Nigeria: A Propensity Score Matching Model,” South African Journal of Economic and Management Sciences, 23(1) (2020), 1-11.
[22] Baha, M., Temu, A., & Philip, D., “Sources of Technical Efficiency among Small-Holders Maize Farmers in Babati District, Tanzania,” African Journal of Economic Review, 1(2) (2013), 1-14.
[23] Agitew, G., S. Yehuala, A. Demissie, & A. Dagnew, “Technological Gaps of Agricultural Extension: Mismatch between Demand and Supply in North Gondar Zone, Ethiopia,” Journal of Agricultural Extension and Rural Development, 10 (2018), 144-149.
[24] Anderson, J. R. & G. Feder, “Agricultural Extension: Good Intentions and Hard Realities,” The World Bank Research Observer, 19 (2004a), 41-60.
[25] Huy, H. T. & T. T. Nguyen, “Cropland Rental Market and Farm Technical Efficiency in Rural Vietnam,” Land Use Policy, 81 (2019), 408-423.
[26] Jones, M. & F. Kondylis, “Does Feedback Matter? Evidence from Agricultural Services,” Journal of Development Economics, 131 (2018), 28-41.
[27] Phu, Nguyen-Van & Nguyen, To-The, “Technical Efficiency and Agricultural Policy: Evidence from the Tea Production in Vietnam,” Review of Agricultural, Food and Environmental Studies, 97 (2016), 173-184.