DECEMBER 13, 2013
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About the Authors:
Andy McKay is Professor of Development Economics at the University of Sussex, where he has worked since 2006, and acted as department chair from 2009 to 2012. Prior to coming to Sussex, he worked at the University of Nottingham for 11 years, as well as shorter periods at the University of Bath and the Overseas Development Institute (ODI). He is a development economist who throughout his career has worked on issues relating to poverty and inequality in low-income countries, with a main focus on East and West Africa. He has worked on the distributional impact of different policies, including trade and fiscal policy. From 2000–2010, he was an active participant in the DFID (UK)-funded Chronic Poverty Research Centre, working on issues of poverty dynamics, assets, and poverty traps; he also acted as Associate Director of the Centre from 2005–2010. Additionally, he has worked on agricultural and labor issues in low-income countries. He has supervised or co-supervised many PhD students on a range of applied development topics and continues to supervise many more. He has been actively and closely involved with the African Economic Research Consortium (AERC), acting as a resource person in the trade policy group at every biannual workshop since 2005, and he also acted as co-coordinator of a collaborative AERC project on the growth-poverty nexus in Africa. He is widely published in leading journals on these themes, has a co-edited book on pro-poor growth and many book chapters. Additionally, he has extensive experience providing policy advice to developing country governments, DFID, World Bank, European Commission, and others.
Finn Tarp holds the Chair in Development Economics at the University of Copenhagen. He founded the Development Economics Research Group (DERG) in 1996, and in 2009 was appointed Director of the United Nations University World Institute for Development Economics Research (UNU-WIDER), Helsinki, Finland. In this capacity, Professor Tarp leads and manages an internationally recognized multi-disciplinary and policy-relevant development research program, and UNU-WIDER was ranked sixth International development research think tank in 2012. Finn Tarp has a total of more than 35 years of experience in academic and applied development economics, including 20 years of work experience in some 35 countries across Africa and the developing world. Finn Tarp is a leading international expert on issues of development strategy and foreign aid. Special honors include The Vietnamese Government Merit “Medal for the Cause of Science and Technology.” Also, Professor Tarp was appointed member of the Council of Eminent Persons (CEP), advising the Chief Economist of the World Bank in early 2013. For further information (including a detailed CV with publications lists), see: www.econ.ku.dk/ftarp and www.wider.unu.edu/aboutus/people/resident-researchers/en_GB/director-unu-wider
Distributional Impacts of the 2008 Global Food Price Spike
Agriculture remains a key sector in the Vietnamese economy in terms of productive activities, income generation, and national export earnings. Higher export prices should therefore in principle have a beneficial impact on rural farmers. This is based however on the assumptions that world prices are transmitted and that farmers have the capacity to respond. In addition, many poorer farm households may be net consumers.
In the analysis we focus particularly on rice, Vietnam's most important agricultural commodity, though will also consider coffee, an important cash crop in some areas. We first of all describe changes in food prices in Vietnam compared to non-food prices, and look specifically at the rice price. We then use data from the Vietnam Household Living Standard Survey (VHLSS) from 2006, 2008 and 2010 to estimate (approximately) the numbers of net producers and consumers of rice. This identification is imprecise but shows some important difference in particular between northern provinces (where there are often a majority of net producers) from southern provinces (where net consumers usually predominate). We also look at the association between net producer/consumer status and welfare; there are a large number of net producers in lower quintile groups. We then use the panel data provided by the Vietnam Access to Resources Household Survey (VARHS) 2006-12 to look at the evolution of rice production over time, the extent to which different households are selling and the prices they receive. This allows us to focus in particular on the situation in some of Vietnam's poorer agricultural provinces.
There were opportunities for many poorer farmers to benefit from higher rice prices though these have often not been realized, for instance due to failure of price transmission. In a final section of the paper we discuss some political economy issues, seeking to assess how effectively the food price increases were managed at the national level.
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