Economic impact of linkage in rice production and consumption in the Mekong River Delta, Vietnam: A farm level study

This study examines the economic impact of linkage in rice production and consumption in the Mekong River Delta, Vietnam. Since 2018, the Vietnamese government has implemented an incentive policy aimed at fostering linkages in the production and consumption of agricultural products. Despite this initiative, there is a scarcity of research examining the effects of contract farming on the economic performance of farms in Vietnam. Consequently, this study aims to investigate the causal relationships between farmers' involvement in the linkages of rice production and consumption, facilitated by both private and public enterprises, and various farm performance metrics, including productivity, selling prices, and farm income. Empirical data for this analysis were gathered from 390 rice farmers located in the Vietnamese Mekong Delta. The data were divided into two categories based on the type of linking contract systems, specifically those led by public and private firms. The propensity score matching method was primarily utilized to assess the impact of these linking contract systems on rice farm performance. The results indicate that participation in linkage schemes, whether led by public or private entities, positively influences farm incomes and selling prices, although it does not affect rice yield. This study suggests that the Vietnamese government should expand the linkage models for rice production and consumption to benefit farmers and various business types, including both public and private enterprises.