Economic efficiency versus social equity: the productivity challenge for rice production in a `greying' rural Vietnam?

Increasing productivity in agriculture is often deemed necessary to enhance rural in come and ultimately narrow the urban-rural disparity in transitional economies. However, the objectives of social equity and economic e?ciency can contradict each other, especially in the context of ?erce competition for resources between agriculture and non-agricultural sectors and given the inherently redundant and unskilled aging rural population that of ten occurs during the economic transition to a market economy. We investigate the case of Vietnam during its high economic growth period (2000-2016), over which the country introduced policies to increase e?ciency in rice production and income for farmers. Con trary to expectations, we ?nd a steadily decreasing trend in the terms of trade for rice, indicating regression in farm income. At the same time, the Malmquist productivity in dex has been falling in most regions due to a decline in technical change, along with little improvement in technical e?ciency. We further examine the causes of ine?ciency using data from two household surveys in 2004 and 2014 (with plot-level information) along with semi-structured interviews with farmers in 2016-2017. The high ratio of aging farm workers who are unable to ?nd alternative employment during the transition emerges as an essential impediment to rice productivity, in addition to previously documented land use related issues. This demographic feature, along with government equity-targeting measures, hinders the farm amalgamation progress, further limiting e?orts to enhance productivity. Thus, the goals of economic e?ciency and social equity appear contradictory features of Vietnam’s rice policies, posing a signi?cant development challenge for the country’s current and likely future development.