Market dynamics in household cropland redistribution in Vietnam

Abstract

Purpose - The paper aims to explore market dynamics in rural household cropland redistribution in Vietnam through empirical tests of the two hypotheses that are fundamental for the economic transitions in household cropland redistribution: the economies of scale in crop production and efficiency motivation in cropland market transactions. Methodology - The Gini coefficient and land shares are used to measure land distribution equality. A stochastic frontier analysis is applied to test the hypothesis of an “inverse relationship” between farm size and efficiency; the probit model is used to study the farmer’s efficiency motivations in the cropland market. Findings - In the last two decades, the cropland distribution of rural Vietnamese households has been almost unchanged. While there has been clear evidence for the efficiency of large farms, the cropland market transactions have not been driven by farming efficiency. Therefore, there has been no evidence for a natural economic transition towards larger farms. Practical implication - The study’s results can serve as a reference for policy related to restructuring the agriculture sector. Originality - This is the first paper that uses secondary data at the national level to undertake an empirical test of the hypothesizes of the inversed relationship between farm size and efficiency in crop cultivation and the efficiency motivation of households in the cropland market.