Sustainable farming techniques and farm size for rice smallholders in the Vietnamese Mekong Delta: A slack-based technical efficiency approach

Abstract

Small farm size and fragmented land are considered constraining agricultural development. This study uses the Vietnam Household Living Standard Survey 2016 (VHLSS 2016) dataset to measure the technical efficiency of rice smallholders and its determinants, including farm size, in the Mekong Delta. Data envelopment analysis was employed to examine efficiency scores in the first stage based on data of 506 paddy farms. The overall efficiency calculated through slack-based measure was low at 0.59 and the input slacks were quite large. This indicated that local farmers have not been using their resources efficiently in producing paddy. Further, farms smaller than 2 ha faced low overall efficiency at 54% and higher slacks in terms of all input types. The second-stage Tobit result showed that all types of efficiency could be improved if farmers expanded their farm size and reduced the over-use of inputs. Thus, enabling small farms to achieve economies of scale through collective farming in the Large Field Model (LFM) will be critical for upgrading production efficiency and reducing slacks as labor costs rise and natural resources are constrained. It is recommended that farmers should follow strictly eco-friendly farming packages in order to reduce their current excessive usage of seed cost by 28 USD/ha, pesticides by 61 USD/ha, and fertilizers by 155 kg/ha to reach efficient production frontier. The government needs to take measures to replicate and closely monitor climate smart agriculture programs in large-scale production to improve the overall efficiency of paddy sector, in addition to the important goal of protecting the environment and natural resources of the region.