Technical efficiency of rice production in the delta of the Vu Gia Thu Bon river basin, Central Vietnam

In recent decades, Vietnam has experienced an incredible increase of total factor productivity (TFP) in rice production. This has allowed the country to rise to become one of the largest rice producers worldwide. Nevertheless, despite these achievements, there are strong signs of a TFP slowdown in Vietnam in recent years, raising concerns about the future development of rice production and appropriate policy measures. We have analyzed the technical efficiency of rice production in the delta of the Vu Gia Thu Bon river basin in Central Vietnam, considering the different rice seasons and the spatial distribution of efficiency scores. We applied stochastic frontier analyses with a simultaneous (one-step) estimation of the parameters of exogenous effects on technical efficiency (TE). We have shown that TE in this region is basically impacted by the scale of production, by fragmentation of the farm and also by the exposition to salinity intrusion risks. The latter factor has never been explicitly included in former technical efficiency studies of rice production in Vietnam. There is a pertinent need for policies targeting farm fragmentation and enlargement of the scale of rice production. The spatial distribution of TE shows that salinity intrusion and the inherent irrigation management problems caused to farmers is a serious negative impacting factor. Adaptation measures on water management in the basin, as well as related to the introduction of salinity resistant rice varieties should be addressed urgently in the region to increase efficiency in rice production.