The economic sustainability of rice farming and its influence on farmer decision-making in the upper Mekong delta, Vietnam

Abstract

Intensive agriculture is increasingly associated with environmental degradation that may jeopardise long-term environmental and economic sustainability. The high-dike system in the upper Mekong delta that has enabled intensive rice cultivation represents a prime example of these potential negative feedbacks. The lack of seasonal flooding and the associated depletion of nutrients is expected to affect farmer income as productivity declines and more fertiliser is required. Therefore, emphasis has shifted towards more sustainable, flood-based agriculture, however farmer uptake has its challenges. Based on a compilation of different household surveys we first analyse rice farmers’ ability and willingness to transition and subsequently study the economic sustainability of intensive rice-based livelihoods. A Motivation and Ability (MOTA) survey reveals that two-thirds of the surveyed rice farmers are reluctant to change to flood-based farming systems, as they consider rice cultivation to be economically viable in the near future. They also mention financial and technical ability as key constraints. Subsequently, we analyse yield and fertiliser developments for a large sample of farming households under different dike systems between 2008 and 2015. This shows that income from rice farming grew steadily under high-dike systems as productivity growth compensated for higher input requirements. This growth is partly dampened by the slightly higher negative impacts of potential flood damage in high-dike areas, compared low-dike areas. A counterintuitive effect that is related to the fact that high dikes remain prone to dike overtopping or breaching in the flooding season, resulting in potentially higher damage than low-dike areas that are able to crop flood-based alternatives. The observed growth in income is a likely explanation for the reluctance to change in the studied period. Our analysis also shows that rice income growth is unequally distributed in high-dike areas, with lower incomes being associated with new high-dike systems and slower growth of incomes of smallholder rice farmers compared to large-scale farms. This makes smallholder rice farmers in high-dike areas especially vulnerable to changing conditions, and thus a priority target group for policy makers promoting flood-based alternatives. Recent commune level yield data show that the past productivity growth has stalled, increasing the prospects for alternative flood-based agriculture. This transition can be facilitated, by enhancing the economic viability of flood-based crops and, particularly for smallholder farmers, by improving their financial and technical capabilities through supportive policies.