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Abstract
Although there has been much discussion in the literature about the impacts of farmland loss (due to urbanization) on household livelihoods, no econometric evidence of these effects has been provided thus far. This paper, hence, is the first to quantify the effects of farmland loss on household livelihood outcomes in peri-urban areas of Hanoi, Vietnam. Our study found no econometric evidence for negative effects of farmland loss on either income or expenditure per adult equivalent. In addition, the results show that farmland loss has an indirect positive impact on household welfare, via its positive impact on the choice of nonfarm-based livelihoods.
Notes
1. According to the current Land Law of Vietnam, the compulsory acquisition of land by the State is applied to projects that are served for national or public projects, for projects with 100% contributed by foreign funds (including FDI (foreign direct investment) and ODA (official development assistance)) for the implementation of projects with special economic investment such as building infrastructure for industrial and services zones, hi-tech parks, urban and residential areas (WB Citation2011).
2. According to the surveyed data, about 60% of land-losing households used the compensation for daily living expenses, and about a quarter of them purchased furniture and appliances, while a similar proportion of land-losing households spent this money in repairing or building houses. By contrast, only 4% among them used this resource for investing in non-farm production.
3. The prices of đất dịch vụ in some communes of Hoai Duc District ranged from 17,000,000 VND to 35,000,000 VND (Vietnam Dong) per m2 in 2011, depending on the location of đất dịch vụ (Minh Tuan Citation2011) (1 USD equated to about 20,000 VND in 2011). Note that farmers have already received the certificates, which confirm that đất dịch vụ will be granted to them but they have not yet received đất dịch vụ. However, these certificates have been widely purchased (Thuy Duong Citation2011).
4. More details for sampling frame, questionnaire and study site, see Tuyen (Citation2013).
5. A prime location is defined as: the location of a house or of a plot of residential land that is situated on the main roads of a village or at the crossroads or very close to local markets or to industrial zones, and to a highway or new urban areas. Such locations enable households to use their houses or residential land plots for opening a shop, a workshop or for renting.
6. According to Wooldridge (Citation2013), an exogenous event is often a change in the State's policy that affects the environment in which individuals and households operate.
7. The proportion of farmland acquired by the State is calculated by dividing the area of acquired farmland of households by their owned farmland before losing land.
8. The correlation coefficient between the amount of compensation in 2008 and the level of land loss in 2008 is 0.86. The corresponding figure for the case of compensation in 2009 and the level of land loss in 2009 is 0.89.
9. Following Haughton and Haughton (Citation2011), income and consumption expenditure per adult equivalent were calculated using the OECD equivalent scale (given by 1 + 0.7 (Na − 1) + 0.5 Nc), where Na is the number of adults and Nc the number of children in a household. This formula assigns a value of 1 for the first adult (aged 15 and older), of 0.7 for each additional adult and of 0.5 for each child (less than 15 years old).
10. Productive assets include all production tools and equipment (e.g., tractor ploughs, rice milling machines, threshing machines), livestock (e.g., bulls, buffaloes and breeding pigs), transport means (e.g., trucks, motorcycles, bicycles and trailers) and other production facilities (e.g., stores and workshops) (see more in Tuyen Citation[2013], p. 173). The values of productive assets were estimated at the current values at the time of the interview by the surveyed households.
11. According to the survey data, on average, annual crop income per one sào (360 m2) was estimated at around 3.7 million VND ( 1 USD equated to about 18,000 VND in 2009). The corresponding figures for income from rice cultivation were extremely low, just around 1.5 million VND.
12. As reported by surveyed households, on average a manual labourer earned about 2.1 million VND per month. Accordingly, suppose one family member moves out of farming activities to engage as a wage earner in the informal sector in six months, he or she would earn 12.6 million VND – a greater amount than the annual crop income from three sào of agricultural land.
13. According to the survey, 46% of households said that one of the purposes of borrowing informal loans was for consumption; around 30% reported that one of the informal loan's purposes was for building or repairing houses and about 42% answered that one of the informal loan's purposes was for production. Conversely, about 55% of surveyed households reported that one of their formal loans’ purposes was for production, and only around 10% and 8% among them said that one of the purposes of borrowing formal loans was for consumption and building or repairing their houses, respectively.
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Notes on contributors
Tran Quang Tuyen
Dr Tran Quang Tuyen is a lecturer in economics at VNU University of Economics and Business, Vietnam National University, Hanoi. His research interests cover land, rural livelihoods, poverty, inequality and household welfare. His papers have been accepted for publication in international journals. Besides, he has several publications in national journals.
Steven Lim
Dr Steven Lim teaches economics at the Waikato Management School, New Zealand, and Senshu University, Tokyo. His research interests in business economics include the relationship between HIV/AIDS and poverty, the social and community health impacts of trade liberalization, the economics of landmine clearing and economic growth and the environment.
Michael P. Cameron
Dr Michael P. Cameron is a senior lecturer in economics at University of Waikato, and a research fellow in the National Institute of Demographic and Economic Analysis (NIDEA). His current research interests include population, health and development issues, population modelling and stochastic modelling, financial literacy and economics education.
Vu Van Huong
Vu Van Huong is a lecturer in economics and econometrics at Academy of Finance, Vietnam and currently is a PhD candidate at University of Waikato, New Zealand. His research interests include international economics, development economics and applied econometrics. His recent papers have been published in the Economics Bulletin.