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Employment is always
an urgent problem in VietnamEmployment
is currently an important problem in Vietnam. Despite high growth rate in
manufacturing sector, Employment is always an urgent
problem in Vietnam. According to Phillip model, high economic growth rate will
reduce unemployment. In Vietnam, despite high growth rate in industry sector,
the amount of additional labour hired is limited. In agricultural sector, the
situation is not better. Since land and capital is scare, the marginal
production of labour is nearly zero. There are about 10 million rural people
under-employment and more than 1.3 million people added into labour force
annually (GSO).the amount of additional labour hired is limited. In
agriculture sector, the situation is not better. That is because other key
factors of production such as land and capital are limited. There are about 10
million rural people who are semi-unemployed while more than 1.3 million workers
added into labour force annually (General Statistic Office (GSO),1998).
There is 80 percent of the population
in Vietnam living in rural areas. It is impossible to achieve sustainable
economic development if most residents do not gain from economic growth.
Improving living standards of rural population must be the first priorities of
the government. On the other hand, many economists argue that low economic
growth rates in recent years have been caused by low aggregate demand. In order
to promote growth, the government should raise the demand in rural areas.
For the above reasons, the government
has adopted measures to generate employment in rural areas. The measures include
rural industrialization, promotion of traditional industries, agricultural
diversification toward high – value crops and livestock, labour employment
expansion of farm household sector. While other measures currently contribute
little to employment generation, farm household sector has been paid a lot of
attention.
Since the promulgation of the Land
Law in 1993, commercial farms have been developing rapidly. Commercial farms
have been established in all provinces. There are many kinds of farms: annual
crops, perennial crops, livestock, and aquaculture. According to Ministry of
Agriculture and Rural Development (MARD) in 1998, there are about 113,000 farms
in Vietnam. Farm household sector plays an important role in rural economy. It
is expected that the expansion of farm size will increase the income of farmers,
create many jobs, raise the turnover of agricultural product and contribute to
agricultural growth (MARD, 1999).
Factors
affecting the amount of labour hired are still controversial among economists.
In Vietnam, although the widening of commercial farms have attracted a lot of
attention of researchers, there are a few study about labour in commercial farm.
A study of commercial farms in the South only mention about features of labour
in commercial farms (T.M.Sam, 2000). In 1999, a study of commercial farm by
Huong based on a survey of National Economic University showed that the per
capital income of commercial farmers was above the national average (N.D.Huong,
1999). However, in term of labour, the study only reveal the number of labour in
each kind of commercial farms. Another study which has been conducted by
International Food Policy Research Institute (IFPRI) in 2000 gives some
interesting results. Commercial farms can make barren land productive and
mobilize unused investment funds to increase agricultural production and
marketed surplus. On the other hand, the widening of farm size will cause
inequality in rural areas. In addition, the allocation of land in large parcels
could employ less capital than the allocation in small parcels (Minot and
Goletti, 2000). An MA thesis carried out by Canh about commercial farms in Binh
Duong provinces focuses on determinants of income and productivity of commercial
farms (L.Q.Canh, 2001). Unfortunately, the above studies have paid little
attention to farm employment. Whether the widening of commercial farms have
generate employment in rural areas has no clear answer. Therefore, the objective
of the thesis is to reveal the relation between widening of commercial farms and
employment in rural areas.
The study will focus on the central
question “What is capacity of creating employment when expanding farm size?”
Based on the relevant literatures and
data, the thesis briefly reviews theoretical models about employment in
commercial farms. Debates about the inverse relation between employment and farm
size are raised in this thesis. To see the effect of factors on employment in
commercial farms, the tabular analysis is used. In the next step, the thesis
focuses on quantitative methodology by using econometric techniques ordinary
least square (OLS). Moreover, the thesis tries to explain the results of
econometric models by basing on theoretical models and data sources.
The thesis includes 4 chapters.
Chapter 1 provides an analytical framework for farm and rural employment.
Chapter 2 introduces an overview of farm size and rural employment in
Vietnam. Chapter 3 provides empirical results and analysis of
determinants of labour input in commercial farms. Finally, chapter 4 is
devoted to some main findings and discussions on policy implications and
limitations of the thesis as well.
Chapter 1.
Theoretical
framework for farm and rural employment
There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural
area. It is impossible to achieve an economic development if most residents in
rural area do not gain from economic growth. Improving living standard of rural
area must be the first priority of the government. On the other hand, many
economics argue that low economic growth rate in recent years has been caused by
low aggregate demand. In order to promote the economy, the government should
raise the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
Since the promulgation of the Land law in 1993, farm
household sector has developed rapidly. Farm household sector exits in all
provinces in Vietnam. There are many kinds of farms: annual crops, perennial
crops, livestock, and fishery. Farm household sector plays an important role in
rural sector. According GSO, there are about 130,000 farms in Vietnam. It is
expected that the expansion of farm size will increase the income of farmers,
create many new jobs, raise turnover of agricultural product, and contribute to
agricultural sector growth. There is 80% of the population living in rural area.
It is impossible to achieve an economic development if most residents in rural
area do not gain from economic growth. Improving living standard of rural area
must be the first priority of the government. On the other hand, many economics
argue that low economic growth rate in recent years has been caused by low
aggregate demand. In order to promote the economy, the government should raise
the demand in rural areas.
For the above reasons, the government has some
measures to solve employment in rural area, promotion of traditional occupation,
labour export and expansion of farm household sector. Of which, the farm
household sector has been paid a lot of attention.
High under-employment in rural area may cause bad
consequences. The average growth rate of per capital income of rural residents
is much lower than that of urban citizen. The widening of income gap between
urban and rural area leads to a huge migration from rural to urban area. In
addition, semi-unemployment and unemployment may cause social stability. Social
evil such as drug addiction, prostitution, gambling, robbery… may increase. High
under-employment in rural area may cause bad consequences. The average growth
rate of per capital income of rural residents is much lower than that of urban
citizen. The widening of income gap between urban and rural area leads to a huge
migration from rural to urban area. In addition, semi-unemployment and
unemployment may cause social stability. Social evil such as drug addiction,
prostitution, gambling, robbery… may increase. High under-employment in rural
area may cause bad consequences. The average growth rate of per capital income
of rural residents is much lower than that of urban citizen. The widening of
income gap between urban and rural area leads to a huge migration from rural to
urban area. In addition, semi-unemployment and unemployment may cause social
stability. Social evil such as drug addiction, prostitution, gambling, robbery…
may increase. High under-employment in rural area may cause bad consequences.
The average growth rate of per capital income of rural residents is much lower
than that of urban citizen. The widening of income gap between urban and rural
area leads to a huge migration from rural to urban area. In addition,
semi-unemployment and unemployment may cause social stability. Social evil such
as drug addiction, prostitution, gambling, robbery… may increase. High
under-employment in rural area may cause bad consequences. The average growth
rate of per capital income of rural residents is much lower than that of urban
citizen. The widening of income gap between urban and rural area leads to a huge
migration from rural to urban area. In addition, semi-unemployment and
unemployment may cause social stability. Social evil such as drug addiction,
prostitution, gambling, robbery… may increase. High under-employment in rural
area may cause bad consequences. The average growth rate of per capital income
of rural residents is much lower than that of urban citizen. The widening of
income gap between urban and rural area leads to a huge migration from rural to
urban area. In addition, semi-unemployment and unemployment may cause social
stability. Social evil such as drug addiction, prostitution, gambling, robbery…
may increase. High under-employment in rural area may cause bad consequences.
The average growth rate of per capital income of rural residents is much lower
than that of urban citizen. The widening of income gap between urban and rural
area leads to a huge migration from rural to urban area. In addition,
semi-unemployment and unemployment may cause social stability. Social evil such
as drug addiction, prostitution, gambling, robbery… may increase. High
under-employment in rural area may cause bad consequences. The average growth
rate of per capital income of rural residents is much lower than that of urban
citizen. The widening of income gap between urban and rural area leads to a huge
migration from rural to urban area. In addition, semi-unemployment and
unemployment may cause social stability. Social evil such as drug addiction,
prostitution, gambling, robbery… may increase. High under-employment in rural
area may cause bad consequences. The average growth rate of per capital income
of rural residents is much lower than that of urban citizen. The widening of
income gap between urban and rural area leads to a huge migration from rural to
urban area. In addition, semi-unemployment and unemployment may cause social
stability. Social evil such as drug addiction, prostitution, gambling, robbery…
may increase.
1. Concept of commercial farm
All farms in the world can be
classified based on the degree of commercialization. Commercial farms are
usually referred to farms having the rate of output sold over 50 percent.
Commercial farms can be divided into two groups: family farms and non-family
farms. Family farms are the farms having the proportion of family labour higher
than 50 percent. Otherwise, it is a non-family farm (Nakajima, 1965).
Family farms can be described more
specifically. There are two levels of family farms. First, purely family farms
are the farms having the proportion of family labour to total labour input over
95 percent. Second, intermediate family farms are the farms where the family
provides from 50 percent to 95 percent of total labour input. In addition,
non-family farms are one in which the family accounts for less than 50 percent
of the total labour input (Hill,1993).
2. Concept
of farm size and scale
There is confusion between farm size
and farm scale. The problem is more serious when the concept of farm size is not
homogeneous. In fact, there are two broad definitions of farm size.
On the one hand, farm size is defined
as the area size of farm. It is the physical quantity of land available for
production. On the other hand, farm size is defined as economic size of a farm.
It is the total volume of resources used in production measured by gross farm
output or by the quantity of capital (both fixed and working).
In this thesis, the term "farm size"
is used to refer only to the area size of farm. The term "farm scale" is used to
describe the overall economic size of farm. Therefore, an increase in farm size
is an increase in the area size of farm. An increase in farm scale is an
increase in all resources in farm.
Two terms
relating to the concepts of farm size and farm scale is intensive and extensive
cultivation. The most common use of these terms is to refer to the quantity of
other resources that are combined with a given amount of land. A small ratio of
area size of farm to quantities of other resources is defined as intensive
cultivation. Meanwhile, if this ratio is large enough, it is defined as
extensive cultivation. For example, two commercial farms have equivalent farm
scale but different farm sizes. The commercial farms which have a smaller size
and a larger amount of other inputs of production is considered to conduct
intensive cultivation. Other farm is of extensive cultivation.
3. Basic theory of determinant of labour input in commercial farm
Nakajima (1965) has set up a model
about commercial farm. His simple model is the model of the pure commercial
family farm with competitive labour market. The model bases on two main
assumptions: (1) output is marketable and all output is sold; (2); labour is
also marketable: a part of farm labour can be hired in, and a part of the family
labour can be hired out.
The equation for the family farm
income will be:
M = P F(L, LA) + W (LF
- L) (1)
Where
L : labour input of the
farm, whether it comes from the family itself or from outside the family.
LF : the amount
of family labour utilized whether family labour work for the farm or not.
W : a given wage rate
LA : farm
size (the area size of farm)
F(L,LA) : production
function of the farm with two factors: labour and land
P : price of output.
M : money income from the
family.
The objective of family farm is to
maximize its utility U. Factors affecting family's utility are the amount of
family labours LF and the money income of family M.
U = U (LF,
M) (2)
Nakajima assumed that the higher the
amount of family labour LF, the less leisure time the family had and
therefore the lower the utility: U LF =
¶U/¶
LF < 0, the higher the amount of income M, the higher the utility: UM
= ¶U/¶M
> 0.
Family farms maximize utility
function U (2) subject to equation (1):
¶F
P = W (3)
¶
L
- ULF
= W (4)
UM
¶F
- ULF
 
P = (5)
¶
L UM
The equilibrium is depicted in Figure
1.a, 1. b, 1. c and 1.d. Condition (3) is satisfied at point at which the
production possibility curve L1 touches a point Q at which the
production possibility curve touches the wage line CQR in figure 1.a and 1.b.
Let the value of L in equilibrium be denoted by L0. The income of
family farm is:
Figure
1:
Quantity of labour
It is clear that a point of the most
designable combination of A and M will be on the line CQR in figure 1.a and 1.b.
That is the point of equilibrium with respect to the amount of family labour
utilized. A is the point at which the family income curve CQR in Figure 1.a or
CRQ in Figure 1.b touches an indifference curve U
According to this model, the amount
of labour input L and family labour LF is affected by various
factors. Nakajima developed his model by examining the behavior of family farm
under the following conditions: (a) increasing price for farm output; (b)
changing in farm size; (c) changing in family size; (d) rising in wage rate; (e)
increasing in capital (f) the use of purchased input, say fertilizer; (g)
multi-product enterprises. If there is a change in one factor, it is assumed
that other factors hold constant.
The results are summarized as follow:
Table
1:
Summary of Results of model
|
|
|
Consequential variation in |
|
Given |
Autonomous variation |
LF |
L |
L- LF |
M |
|
LA, K, N, W |
P increases |
? |
+ |
? |
+ |
|
K, N, W, P |
LA increases |
? |
+ |
? |
+ |
|
LA , K, P, W |
N increases |
+ |
Cons |
- |
+ |
|
LA , K, N, P |
W increases |
? |
- |
? |
? |
|
LA , K, N, P |
K increases |
? |
? |
? |
? |
Where:
LA Land
area Cons : Constant
K: Capital
+ : Increases
N: Number of family
members - : Decreases
P:
Prices
? : Uncertain
According to empirical evidence, factors affecting labour
input are Regionality, cropping intensity and cropping pattern.
4. Relationship between farm size and labour input
per acre
Since land is limited, the common
concern is that what the relationship between farm size and labour input per
acre is. In rural area of developing countries, the fact is labour market is not
perfect. In addition, the quality of labour is not the same.
Most theoretical and empirical
studies reveal that farm size affects labour per acre. Other things hold
constant, the higher the farm size, the less labour per acre. There are many
explanations for the inverse relation. In all cases, it is admitted that the
higher the farm size, the higher proportion of hired labour to total labour.
Therefore, most of the explanations based on the differences between hired
labour and family labour. This explanation consists of the following
proportions.
Proposition
1
Family labour is worth more than
hired labour. The inverse relationship results from the fact that small farms
are characterized by high proportion of family labour and therefore, small farms
have better quality labour input than the large farm. Since the quality of
labour of small farm is better, they have an advantage of labour productivity.
This is hypothesis in term of qualitative factor difference, which relates to
incentive structure.
Proposition
2
Small farmers confront different factor prices from larger
farmers due to imperfection in factor markets (Bardhan, 1973; Griffin, 1974).
The explanation of different wage rates mostly
bases on labour market dualism advanced by Sen. Dualism emphasizes the way
labour enters production in family labour versus hired labour farms.
Some economists suspect about the explanation of the
inverse relationship between farm size and labour input per acre based on the
differences between hired labour and family labour. Some analyses about the
relationship between labour use and proportion of hired labour have been
conducted. The result is that labour input per farm, labour input per acre and
output per acre show no meaningful pattern against the proportion of hired
labour to total labour. Statistic test of labour input per acre against the
proportion of family labour in hired farms implies no significant variation in
labour input per acre across type of farm. Indeed, labour input per farm and
output per acre are both less for the pure family based farm than pure hired
labour based farm. Thus there is no systematic dependence of labour input per
acre or output per acre on labour composition, and therefore average output per
labour does not vary across labour composition (Pudze and Bandapadhyaya 1973).
Chapter 2.
Farm and rural employment in Vietnam
1. Overview of agricultural sector
In rural areas, the role of
agriculture is more important. Despite the rapid growth of industry and service
in recent years, agriculture is still the main source of income for most people
in rural areas. The farm sector absorbs 77 percent of total labour force in
rural areas and the rest of rural labourers works in non-farm sector. There are
about 30 million labourers working in farm sector (Ministry of Labour, Invalid
and Social Affair (MOLISA),2000). It is obvious that the growth of agricultural
sector will benefit immediately the huge amount of labourers and their families
who live on farm.
"Doi moi" process initiated in
1986 remarked a turning point on the development of Vietnam's economy. In this
process, a lot of innovations were carried out. In agricultural sector alone,
innovation steps are: the promulgation of Resolution No 10 of the Polibureau
(April 1988) about innovation of agricultural economic management; the
Resolution No 22 of Polibureau (November 1989) and Decision No 72 of the
government about the socio-economic development of mountainous areas (March
1990), socio-economic development strategy 1991-2000, Land Law (1993), Labour
Code (1994) and other legal documents. Major features of the reform in
agriculture are:
·
To recognize farming
households as basis economic units in rural areas.
·
To give right of labour
and long-term right of land usage to farm households.
·
To establish input and
factor markets and to allow farmers to buy inputs
·
To transform
agriculture from subsistence to commercial production.
·
To remove trade
barriers in domestic market
The above institutional innovation
has met the need of the vast majority of rural households. It created a huge
incentive for agriculture and rural economy to develop in the past decade.
However, the agricultural sector in
Vietnam is still backward. High levels of rural poverty and food insecurity
persist, particularly in remote upland areas. Indeed, it is striking that 90
percent of the families classified as living below the poverty line live in
rural area. (UN, 1998)
2. Characteristics of rural labour
The annual growth rate of labour
force is about 3.4 percent. That means there is about additional 1 million
labourers joining into labour force every year. In 1999, the number of labourers
is 38.64 million (MOLISA 2000).
Meanwhile,
the production factors are limited. Like other developing countries, Vietnam is
lack of capital. Although most of population lives in farm, the total
cultivation land area in 2000 is only 9345 thousand ha. Land area per head is
only 0.158 ha/person, far less than the sustainable level (MARD, 2001).
It is hard to state that high
quantity of labour is an incentive for agriculture development. Although the
literacy rate is fair, the quality of labour is very low. Most of labour is
unskilled. The proportion of skilled labour in rural areas in 2000 is only 12
percent. Low quality of labour, in turn, has created barrier to an increase in
demand for labour.
The high
increase in labour force and low increase in demand for labour are the main
reasons for labour surplus. According to MOLISA, the unemployment and
underemployment is very high in the whole country and rural areas. It is
estimated that the proportion of working time in the total time available for
work in rural areas is only 70-75 percent.
One of the most concern of the
government is the labour productivity in rural areas. The productivity of rural
labourers who live in farm is much less than the productivity of labourers who
work in industry and service sector (Table 2). Low productivity in rural areas
is a characteristic of a developing country.
Reasons for low productivity are
following.
Firstly, low productivity is caused
by high amount of labour concentrated in rural areas. As above mentioned, most
of them work in farm sector. The paradox is that while labour input is
increasing, other factors of production such as land and capital are limited.
Despite high quantity of labour, the output remains low.
Secondly,
the labour market is less developed. The quantity of labour input is not
determined by the wage rate. In other word, the wage rate is not an opportunity
cost of using labour. In the area where there is a high unemployment and
underemployment, it is not easy to find a full time job. For employers,
asymmetric information is the main problem. They do not know exactly whether
their workers satisfy with their requirement or not. In addition, the government
legal regulation may cause a barrier to hire labour. Therefore, a best strategy
is to work in their farm. An addition labour will reduce the average income of
all farm labour.
Table
2:
Employment and Labour Productivity, 1997-2000
|
|
1997 |
1998 |
1999 |
2000 |
|
Agriculture |
|
|
|
|
|
Output(a) |
55895 |
57866 |
60895 |
63353 |
|
Employment(b) |
22589380 |
23017634 |
22863056 |
22669907 |
|
Labour productivity(c) |
2474 |
2514 |
2663 |
2795 |
|
Industry |
|
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