Description

SANREM CRSP researchers Dang Thanh Ha of Vietnam’s Nong Lam University and Gerald Shively of Purdue University examined small farmers’ responses to the boom and bust in Vietnam’s coffee economy. Using data from 1999 and 2003 surveys of coffee farms, the researchers analyzed responses to falling prices. They took into account the role of ethnicity, the importance of access to irrigation, and households’ subjective outlook on future coffee prices. The data identified four patterns of farmer response to plummeting prices:

– no response – changes in irrigation and fertilization input – changes in land use, or – finding other income, either by borrowing money, seeking off-farm employment, or selling livestock.

They conclude that a range of policies may be needed to help small farmers survive price swings, including: stabilizing prices, expanding rural livelihood opportunities, and encouraging crop diversification where land area allows.