Distributional impacts of the 2008 global food price spike in Vietnam.
07/11/18 02:24PM
Andy Kay and Finn Tarp. UNU-WIDER Research Paper WP2014/030, 2014.
Abstract: Agriculture and food
cultivation production remains a key sector in the Vietnamese economy in terms
of productive activities, income generation, and national export earnings.
Higher world market prices should therefore in principle have a beneficial
impact on rural farmers. This is based however on the assumption that world
prices are transmitted and that farmers have the capacity to respond. In
addition, many poorer farm households may be net consumers. Using data from the
Vietnam Access to Resources Household Survey (VARHS) and the Vietnam Household
Living Standard Survey (VHLSS) combined with available macro-data, this paper
investigates how global price changes appear to have impacted on rural welfare
in Vietnam during 2006-12. In this paper we study the case of rice in Vietnam,
in the context of the 2008 food price spike. We analyse the responses of
domestic producer and consumer prices, and discuss the policy actions taken by
the government to help reduce the impact on consumers, as well as to continue
to encourage production. We also look at the distributional impact of the
resulting domestic price changes, using data from a specialist rural household
survey to look at production response. Vietnam was effective in taking policy
actions to limit the extent of transmission of the world price changes; and
more poorer households benefitted from the price increase than lost.