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Are there socio-economic benefits in adopting AWD technology in water-abundant rice growing areas in An Giang Province, Southern Vietnam?

Emma D. Quicho SSD Division Seminar July 26, 2013

Outline
Introduction - Rice production in Vietnam/An Giang - Irrigation practices before AWD - History of AWD in the province Objective Methodology - Farm survey - Comparison of Means - Cost and Return - Propensity Score Matching - Difference-in-difference Results Conclusions

Introduction
Rice remains the staple food and livelihood of most people in Asia

In Vietnam, area planted to rice increased from 5.6 M ha in 1980 to 7.6 M ha in 2011; likewise in 2011 rice production was 42.2 M mt from 11.6 M mt in 1980 and exported 7.0 M mt of rice
An Giang is one of the top most rice producing province with 246,821 hectares of agricultural land in which 82% is devoted to rice

Rice production, area planted, and yield, An Giang Province, Vietnam, 1995-2011
Year
1995 1996 1997 1998 1999 2000

Production (tons)
2,169,496 2,178,000 2,037,832 2,219,879 2,364,260 2,349,377

Area planted (ha)


412,960 432,229 421,750 444,450 477,062 464,533

Yield (tons/ha)
5.25 5.04 4.83 4.99 4.96 5.06

Average annual growth rate (%) Production


0.39 -6.44 8.93 6.50 -0.63

Area
4.67 -2.42 5.45 7.27 -2.63

Yield
-4.08 -4.11 3.30 -0.71 2.05

2001
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Average

2,113,362
2,593,690 2,686,215 3,006,900 3,141,544 2,923,207 3,142,868 3,519,343 3,421,540 3,659,078 3,856,796 2,787,258

459,051
477,180 503,856 523,037 529,698 503,464 520,322 564,425 557,290 589,254 607,590 499,303

4.60
5.44 5.33 5.75 5.93 5.81 6.04 6.24 6.14 6.21 6.35 5.53

-10.05
22.73 3.57 11.94 4.48 -6.95 7.51 11.98 -2.78 6.94 5.40 3.97

-1.18
3.95 5.59 3.81 1.27 -4.95 3.35 8.48 -1.26 5.74 3.11 2.52

-8.97
18.07 -1.92 7.83 3.16 -2.10 4.03 3.23 -1.53 1.14 2.22 1.35

Source: World Rice Statistics, IRRI

Introduction
Before the introduction of AWD, rice is grown in a continuously flooded condition. Farmers irrigate their fields in two ways: -- through gravity flow -- by pumping water from canal to their field --- communal pump (commercial/private) --- individual pump user Rice cropping seasons -- winter-spring (Dec to April) -- summer-autumn (May to August) -- autumn-winter (August to November)

Introduction
Contrary to popular belief that An Giang has plenty of water, there are some parts of the province that are also experiencing water shortage

In 2005, alternate wetting and drying technology was introduced in the province of An Giang

Alternate Wetting and Drying


- mature technology for widespread dissemination - reduce seepage and percolation losses
Field water depth (cm) 10.0
flowering

CF
5.0 2.5 0 -5 -10 -15 -20 0 10 20 30 40
Late tillering

AWD
soil surface

50

60

70

80

90
Grain filling

100

110

transp Early recovery tillering

PI to complete flowering

Maturity

Days after transplanting

Objective
This study aims to identify the socio-economic benefits of adopting AWD in water-abundant ricegrowing areas of an Giang province. find out if there any changes in farmers irrigation practices after AWD introduction; compare the AWD adopters and non-adopters in terms of their rice yield, inputs costs, and income to assess the impacts of AWD technology on rice yield and income of adopters and non-adopters

Methodology
Data collection and sampling procedure Primary data - individual farmer survey (panel data) - focus group discussion - key informant interview Secondary data - time series data on yield, prodn, and area planted to rice - previous reports on AWD (if any) and reports by other students

Methodology
Data collection and sampling procedure Sampling procedure - selection of six districts - stratified random sampling in selecting farmer-respondents --- farmer-respondents are group into three - AWD adopters - Non-AWD1 (non-AWD adopters within the commune) - Non-AWD2 (non-AWD adopters outside the commune)

Study Area

-An Giang Province in Southern Vietnam - 6 districts were identified as the study sites

Number of farmer-respondents interviewed by study sites, An Giang Province, Vietnam, 2009 and 2011,
2009 (n=471) District Commune Treatment Control w/in Commune 20 30 30 20 30 30 11 38 30 20 30 29 20 30 27 18 30 23 17 27 142 24 20 26 149 28 17 26 151 27 10 34 150 28 17 27 152 Control outside Commune Treatment 2011 (n=418) Control w/in Commune 19 25 147 Control outside Commune Total

Nui Voi Tinh Binh Tan Lap Ta Danh Tri Ton Long Xuyen Chau Thanh Tan Tuyen My Khanh Binh Duc Vinh An Vinh Hanh Long Dien B Choi Moi Tan My Cho Vam Phu Tan Phu Thanh

28

23

TOTAL

174

109

188

153

100

165

891

Methodology
Comparison of Means -- simplest approach to determine if there are significant differences in mean variables (i.e., area planted, levels of input used, yield, etc.) between the treatment and control groups Cost and Return -- most commonly used ex-ante and ex-post analytical method of determining and comparing profitability
Gross Income (GI) = Cash Income + Non-Cash Income
Total Cost (TC) = Cash Cost + Non-Cash Cost Profit = GI TC

Methodology
Propensity Score Matching (PSM) -- used when treatment cannot be randomized -- PSM constructs a statistical comparison group by modeling the probability of adopting technology on the basis of observed characteristics unaffected by the program -- match the non-AWD adopters to AWD adopters based on OBSERVABLE characteristics -- propensity scores techniques used - 1-to-1 nearest neighbor - kernel matching techniques

Methodology
How does PSM works?
Treated Control

Methodology
Difference-in-difference (DID) -- DID is a technique used to measure the differences between treatment and control groups, before and after an intervention -- DID accounts for selection on unobservables as long as as those unobservables are time in-variant and additive -- after applying the PSM method, the matched sample was used to assign the economic impact of AWD on interest outcomes of rice farmers in the study sites using the DID method.

Results

Socio-economic characteristics of AWD and non-AWD farmers, An Giang province, Winter-spring season, 2009
Characteristics Number of respondents Average age (years) Gender Male (%) Female (%) Average education (years) 96 4 6.9 99 1 6.5 96 4.3 6.9 97 3.4 6.8 AWD 145 43.4 NonAWD1 95 44.2 NonAWD2 157 46.8 Total 397 44.9

Average household size Average farm size (ha)


Average years in farming Tenure status (%) Owner Rent- in Mortgage/Share Cropping pattern Rice-rice Rice-rice-rice

4 2.0
17.3 96.7 2 1.3

4 1.9
17.3 99 1 -

4 1.9
18.2 98.7 1.3 -

4
1.9 17.6 98.1 1.4 0.5 67.7 32.3

70.3 29.7

65.2 33.7

67.5 32.5

AWD AWD adopters; non-AWD1 control within commune; non-AWD2 control outside the commune

Comparison of mean levels of input use, yield, irrigation frequency between AWD and non-AWD adopters in An Giang Province, Winter-spring season 2011.
VARIABLES MEAN AWD Non-AWD1 Non-AWD2 (n=253) Yield (kg/ha) Input area (ha) Inputs used Seeds (kg/ha) Fertilizer (kg/ha) N P K Herbicide (li/ha) Pesticides (li/ha) Insecticide Fungicide Rodenticide/Molluscicide Total labor (man-days/ha) Hired labor Family or exchange labor Irrigation frequency (days, total) Water depth (cm) 7908.9 2.0 149.3 112.4 28.8 44.7 1.4 6.8 1.6 2.3 3 28.9 16.1 13 6.6 5.7 (n=55) 7789.8 1.6 156.4 118.2 31.4 40.2 1.5 8.8 2.3 2.3 4.2 39.6 23.9 16 7.3 6.6 (n=89) 7738.2 1.6 175.9 117.4 28.6 44.2 1.4 8.4 2.7 2.9 2.8 30.0 13.1 16.9 6.9 6.6 MEAN DIFFERENCE AWD AWD vs. nonvs. non- AWD2 AWD1 ns ns 119.1 170.7 ns ns 0.4 0.4 -7.1
ns

-26.7

***

-5.9 ns -2.6 ns 4.5 ns -0.1 ns -1.9 ns -0.7 ns .01 ns -1.3 *** -10.6 ** -7.8 ns -3.0 ** -0.7 ** -0.8

ns

-5.0 ns 0.2 ns 0.5 ns -0.0 ns -1.6 ** -1.1 ** -0.6 ns .16 ns -1.1 * 3.0 * -3.9 ns -0.3 ns -0.1

ns

Comparison of means of AWD adopters (n=108), before and after AWD technology Implementation in An Giang Province, Winter-spring season 2011.
VARIABLES Yield (kg/ha) Input area (ha) Inputs used Seeds (kg/ha) Fertilizer (kg/ha) N P K Herbicide (li/ha) Pesticides (li/ha) Fungicide Insecticide Rodenticide/Molluscicide Total labor (man-days/ha) Hired labor Family or exchange labor Irrigation frequency (total) Water depth (cm)
***, **, ns

MEAN Before 7116.7 1.8 153.0 122.7 31.8 48.4 1.1 8.1 2.4 2.3 3.3 44.5 29.1 17.2 7.3 7.1 After 7816.9 2.0 161.2 113.7 28.3 45.6 1.3 6.6 2.5 1.8 2.3 29.9 17.5 12.4 7.0 5.8 Difference 700.2*** 0.2ns 8.2 ns -9.0** -3.5* -2.8ns 0.3*** -1.4ns 0.1ns -0.5 ns -1.0 ns -14.6 *** -11.6 *** -4.8 ** -0.2 ns -1.3*

and * - means significant at 1%, 5%, and 10% probability level, respectively. not significant at 10% probability level

Cost and returns per hectare of AWD and non-AWD adopters, An Giang Province, Winter-spring season, 2011.
MEAN VARIABLES AWD (n=253) Gross income (000VND/ha) (A) Yield (kg/ha) Price (VND) Cash Costs (B) Seeds Fertilizer Herbicide Pesticides Hired labor Irrigation cost Power cost Sub-total Imputed Costs Family labor Sub-total Total Costs (B) NET INCOME (A-B) 796 796 10,890 23,101 964 964 11,900 19,684 1,061 1,061 11,859 22,384 -168 - 168
ns ns ***

Non-AWD1 (n=55) 31,586 7,790 5,213 786 3,926 187 1,535 1,646 820 2,066 10,937

Non-AWD2 (n=89) 34,243 7,738 5,723 (000 VND) 1,109 4,096 221 1,428 1,156 713 2,153 10,797

MEAN DIFFERENCE AWD AWD

vs. non-AWD1 vs. non- AWD2


2,407 119
*

33,991 7,909 5,531 918 3,906 197 1,150 1,416 574 1,983 10,094

- 252 171

ns

ns **

ns ns

-300 132 - 20 10

- 200 -191 -190 - 24

*** ns ns **

ns

ns *** ns **

- 385 - 230 - 246 83

- 277 260 -140 - 70

* ns

ns *

ns *

- 843

- 703

- 266 - 266 - 969 -717

** **

- 1,010 3,417

***

***

ns

***, **, and * - means significant at 1%, 5%, and 10% probability level, respectively. ns not significant at 10% probability level 1 USD = 20,000 VND

Cost and returns per hectare of farmer-respondents (n=108), before and after AWD technology in An Giang Province, winter-spring season.
VARIABLES MEAN

Before
Gross Income Yield (kg/ha) Price (VND/kg) Cash Costs Seeds Fertilizer Herbicide Pesticides 31,084 7,117 4,358 879 4,790 254 1,949

After
32,895 7,817 5,412 (000 VND) 963 3,803 199 1,223

Difference
1,811 *** 700 *** 1,054 *** 84 ns -987 *** -55 ns -726 ***

Insecticide
Fungicide Rodenticide/Molluscicide Hired labor Irrigation Power Sub-total Imputed Cost Family labor Total Costs NET INCOME

985
734 230 2,465 674 1,480 12,478 1,081 13,559 17,525
ns

491
585 147 1,434 522 1,906 10,114 757 10,871 22,102

-493 ***
-150 ns -83 * -1,031 *** - 152** -426 *** -2,365
***

-324 ** -2,766*** 4,577***

***, **, and * - mean significant at 1%, 5%, and 10% probability level, respectively; 1 USD = 20,000 VND

not significant at 10% probability level

PSM results
Comparison of means of observable characteristics of AWD vs. non-AWD farmers using unmatched and matched samples in the study sites, An Giang Province, Vietnam
OBSERVABLE CHARACTERISTICS UNMATCHED SAMPLE MATCHED SAMPLE 1-TO-1 NEAREST NEIGBOR MATCHING AWD adopters (N=102) 6.85 0.85 17.25 MATCHED SAMPLE KERNEL MATCHING b

AWD adopters (N=108) Education AWD knowledge Farm Experience 6.89 0.85 17.14

NonAWD adopters (N=144)


6.61 0.84 18.26

p-Value

NonAWD adopters (N=138)


6.69 0.85 17.92

p-Value

AWD adopters (N=102) 6.85 0.85 17.25

Non-AWD adopters c (N=138)


6.74 0.84 17.52

p-Value

0.417 0.788 0.346

0.660 0.954 0.603

0.771 0.827 0.827

High elevation
Rice area Cropping pattern Rice variety Seed type Irrigation frequency
a b

0.35
1.79 0.69 0.67 0.60 7.30

0.35
1.38 0.63 0.72 0.54 7.89

0.979
0.025 0.318 0.459 0.354 0.015

0.34
1.68 0.69 0.68 0.59 7.32

0.39
1.59 0.70 0.71 0.58 7.37

0.470
0.624 0.880 0.651 0.888 0.844

0.34
1.68 0.69 0.68 0.59 7.32

0.37
1.63 0.71 0.69 0.59 7.23

0.688
0.776 0.670 0.819 0.990 0.708

In the 1-to-1 Nearest Neighbor matching with no replacement, only 102 observations lie within the common support. In the Kernel matching only 102 observations lie within the common support. c The means of the matched Non-AWD sample is a weighted average based on the weights produced in the kernel matching procedure. It means that the weight given to each Non-AWD observation depends on how close its propensity score to a particular AWD adopter.

Estimated economic impact of AWD on yield of rice farmers in rice-growing area of An Giang province using 1-to-1 nearest neighbor and kernel matching technique.
1-to-1 Nearest Neighbor Matching Cross Section Data Independent Variable OLSa Estimates 9274.90*** -10.16 ns -1.63 ns 0.22 ns -9.94 ns 2.01 ns -45.44 ns -3.98 ns 62.86 ns 40.22*** -11.50*** -101.69** 0.14*** 204 Panel Data (DID) OLSb Estimates 8533.60*** -19.13 ns -1.92 ns 1.36 ns -8.45* 1.63 ns -147.76 * -4.33 ns 56.98* 16.20** -7.09*** -103.66*** 607.56*** 0.20*** 408 Random Effects Estimates 8226.71*** 21.33 ns -1.12 ns 1.16ns -8.67 * 2.22 ns -147.47 ** -6.03 ns 51.61 * 17.80*** -5.91 ** -86.01*** 605.93*** 0.32*** 408 Cross Section Data OLSa Estimates 9040.85*** 39.75 ns -0.87ns 0.12 ns -7.49 ns 3.33 ns -59.47 ns 4.30 ns 42.77 ns 39.17*** -12.74*** -111.72** 0.14*** 239 Kernel Matching Panel Data (DID) OLSb Estimates 8424.60*** 35.38 ns -1.24 ns 0.91 ns -8.26** 2.48 ns -92.32 ns 0.42 ns 34.67 ns 16.98** -6.24*** -98.23*** 538.02*** 0.18*** 478 Random Effects Estimates 8186.36*** 84.75 ns -0.80 ns 0.30 ns -8.20 ** 3.13 ns -81.79 ns 2.23 ns 27.44 ns 17.89*** -4.95 ** -88.92 *** 530.30*** 0.29*** 478

Intercept AWD Seeds used Nitrogen Phosphorous Potassium Herbicide Insecticide Fungicide Rodent/Mollus Total labor Irrigation freq Year dummy R2 Sample size

***, **, and * - mean significant at 1%, 5%, and 10% probability level, respectively. ns not significant at 10% probability level a OLS estimation using cross section data (2011) after AWD implementation; b The AWD coefficient is the estimated parameter of interaction variable between time and AWD dummy in DID models; c Figures in parenthesis is the p-value

Estimated economic impact of AWD on net income of rice farmers in rice-growing areas of An Giang province using 1-to-1 nearest neighbor and kernel matching technique
1-to-1 Nearest Neighbor Matching Independent Variable Cross Section Data OLSa Estimates Intercept AWD Price Yield Input costs Hired labor cost Irrigation cost Power cost -34139.99*** 299.22* 5,935.41 *** 4.32 *** -1.02*** -0.60*** -1.39*** -1.06*** Panel Data (DID) OLSb Estimates -27784.96*** 380.87** 6,355.15*** 4.17*** -1.01*** -0.73*** -1.25*** -1.05*** Random Effects Estimates 28029.40 *** 352.49 ** 6,481.91*** 4.19 *** -1.02*** -0.70*** -1.23*** -1.06*** Cross Section Data OLSa Estimates -33,947.46*** 256.92* 5983.26*** 4.23*** -1.04*** -0.59*** -1.36*** -1.06*** 0.98*** 231 Kernel Matching Panel Data (DID) OLSb Estimates 27,610.96*** 341.8761** 6390.03*** 4.12*** -1.02*** -0.72*** -1.23*** -1.06*** -7368.82*** 0.98*** 464 Random Effects Estimates -27,712.34 *** 300.51 ** 6413.61*** 4.12*** -1.03*** -0.70*** -1.22*** -1.07*** -7373.39*** 0.98*** 399

Year dummy
R2 Sample size

0.98*** 201

-7473.78***
0.98*** 399

-7481.40***
0.98*** 399

***, **, and * - mean significant at 1%, 5%, and 10% probability level, respectively. ns not significant at 10% probability level; a OLS estimation using cross section data (2011) after AWD implementation. b The AWD coefficient is the estimated parameter of interaction variable between time and AWD dummy in DID models.

Benefits of AWD in An Giang Province, Winter-spring season, 2011


Benefits of AWD technology Reduced total pumping costs and labor Hardened soil surface enabling farmers to use machines in harvesting Sunlight were able to reach/penetrated on the soil surface destroying the fungi and bacteria borne on the soil surface

Can increase rice yield


Rice grains are brighter/lighter in color and were able to command higher price Increase knowledge on AWD and rice production
Source: Farmers focus group discussion in each district.

AWD adoption rates by district in An Giang province, 205,694 rice farmers, winter-spring season 2011.
Districts Long Xuyen Phu Tan Chau Thanh Choi Moi Tri Ton Tin Bien Chau Doc An Phu Chau Tan Total rice area (ha) 5,433 22, 387 29,214 14,807 40,015 16,407 7,118 15,182 11,906 Total rice farmers 8,117 27,671 27,330 30,104 13,899 13,728 5,724 15,987 AWD area (ha) 4,882 4,830 2,558 3,634 6,987 3,431 1,480 3,290 2,869 AWD rice farmers 7,003 5,788 1,465 5,113 3,422 1,710 440 3,162 % area adopting AWD 90 22 9 25 17 21 21 22 24 % farmers adopting AWD 86 21 5 17 25 12 8 20

Chau Phu
Thoai Son TOTAL

34,128
36,599 233,196

32,305
30,829 205,694

10,763
5,106 49,829

9,425
3,160 40,688

32
14 21

29
10 20

Source: An Giang Plant Protection sub-department, winter-spring season 2011

Conclusions
Based on the results of the study it shows that using AWD does not cause yield penalty; reduces water and labor inputs; less expensive, less pest and diseases
Likewise, the AWD technology has the potential to increase the income of rice farmers as a result of reduced labor and irrigation costs

Adoption of AWD technology by farmers throughout the province is increasing since the start of the implementation because of the perceived benefits that farmers get

End

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