UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES HO CHI MINH CITY THE HAGUE VIETNAM THE NETHERLANDS VIETNAM-NETHERLANDS PROJECT FOR M.A ON DEVELOPMENT ECONOMICS FARMERS' EDUCATION AND FARM PRODUCTIVITY IN ANGIANG PROVINCE BY PHAN TRUNG KY A Thesis Submitted in A Partial Fulfillment Of The Requirements for The Degree of Master Of Arts in Development Economics SUPERVISOR: TRAN THI BEN HO CHI MINH CITY MAY2002 TR~lb'tiG D~) li;9C 1\!r.!!i-;f'l THAiil"l PliO HO Cli f ;. SJ\V-b~HttOC TrmvtiN. CERTIFICATION " I certify that the substance of this dissertation has not already been submitted for any degree and is not being currently submitted for any other degrees, and I certify that to the best of my knowledge any help received in preparing this dissertation, and all sources used, have been acknowledge in this dissertation" Date 30 January, 2002 PHANTRUNGKY ACKNOWLEDGEMENTS First and foremost, I would like to give all my thanks to all teaching staff, professors, and lecturers of the Vietnam-Netherlands M. Project on Development Economics.
Thanks to them, my knowledge and interest in economic issues are better off. I would like to express my thanks to my academic supervisor- Mrs. Tran Thi Ben, who has advised me many good points and given me helpful encouragement in the process of writing this thesis. I am really indebted to my classmates, close friends with whom I had a really interesting time discussing our topics.
I am also grateful to all farmers and local authorities in Angiang, who facilitated my field survey. Last but not least, I would like to express my gratitude to all members of my family, my parents, who give me all their love and encouragement through the time writing this thesis. Date 30 January, 2002 PHAN TRUNG KY ii CONTENTS CERTIFICATION ACKNOWLEDGEMENTS ii CONTENTS iii LIST OFT ABLES VI TABLE OF FIGURES vii LIST OF ABBREVIATIONS Vlll CHAPTER 1: INTRODUCTION 1.2 Objectives of Study 2 1.5 Study Design 3 CHAPTER 2: LITERATURE REVIEW 2.1 Definition and types of education 4 2.2 Empirical Evidence on the relationship between Education and Farm Productivity 5 2. 2 Evidence from developing world 5 2.3 The role of education in agricultural production 10 2.
Economic Efficiency and Technical Change 10 2. Technical and Allocative Efficiency 11 2. Education in case oftechnological change 12 2. Frontier and non-frontier approach 12 2.
Frontier Production Function Approach 13 2. Non-frontier Production Function Approach 14 2. How Much Education is needed? 14 2. Whose Education in the household affects farm productivity? 15 CHAPTER 3: EDUCATION AND AGRICULTURAL PRODUCTION IN ANGIANG PROVINCE 3.
I Introduction about Angiang province 16 3.3 Angiang's education 23 CHAPTER 4: RELATIONSHIP BETWEEN FARMERS' EDUCATION AND FARM PRODUCTIVITY IN ANGIANG PROVINCE 4. I General information about the winter-spring and summer-autumn .1 Variable to be the dependent variable 27 4. 3 Model to apply 29 4. 5 The survey and sample design 32 4.3 Estimation of the results 33 4.I Testing the representative of the sample 33 4.2 Comments and diagnostic tests 37 4.1 Normality test of residuals 37 4.4 Economic meaning of the results 39 CHAPTER 5: CONCLUSIONS AND SUGGESTIONS 5.2 Suggestions 46 v LIST OF TABLES Table 2.1: Estimated effects of education on agricultural productivity .1 A: Supplementary information on studies of education and.2: Summary of empirical estimates of technical inefficiency .1: The share of GDP in Angiang and Vietnam in I998 17 Table 3.2: The share of GDP ofAngiang province, period I990-I999.3: The agricultural structure ofAngiang, I996-2000 18 Table 3.4: The Value Added ofAgriculture, I996-2000 19 Table 3.5: Cultivated areas and output of cultivation, period I975-2000 19 Table 3.6: The structure of value of cultivation ofAngiang province 20 Table 3.
7: Productivity of some agricultural products (Quintal/hectare) 21 Table 3.8: The number and output of some main livestock ofAngiang province 21 Table 3.9: Fishery Culture Area and Fishery Output, period I990-2000 22 Table 3.10: Angiang' education 24 Table 4.1 : Sown areas, Output of II districts in Angiang, 2000 32 Table 4.2: Descriptive Statistics of Output-Input Variables 34 Table 4.3: Descriptive Statistics of Output-Input Variables (Logarithm) 34 Table 4.4: Descriptive Statistics of Age and Education Variables 35 Table 4.5: Regression results 35 Table 4.6: Regression results 36 Table 4.7: R-squared ofRegression among independent variables 38 Table 4.8: Implications ofthe regression results for the economic.9: Implications of the regression results for the economic. 44 vi TABLE OF FIGURES Figure 1: Production vis-a-vis the Production Frontier 11 Figure 2: Frontier and Average Production Function 13 Figure 3: Structure of Education of Angiang province, 1976-2000 24 Figure 4: Normality distribution of residual 37 vii LIST OF ABBREVIATIONS ADB : Asian Development Bank AFTA : ASEAN Free Trade Agreement GOP : Gross Domestic Product GNP :Gross National Product LDCs : Less Developed Countries UNDP :United Nations Development Funds VLSS : Vietnam Living Standard Survey WB :World Bank CHAPTER! INTRODUCTION 1.1 Problem Statement Many recent studies have shown that education is one of the main factors of human capital which contribute to the productivity of workers and to modern economic growth (Schultz, 1995). Nowadays, in the agriculture, advanced technologies are applied largely and the traditional agriculture is step by step replaced by the modern agriculture. In most developing countries, agricultural production is a very important sector.
It is widely accepted that an increase in agricultural productivity requires more complex technology, and to adapt to such environment farmers must have better education. With modern agricultural practices, farmers' education becomes more important. Mellor (1976) considers education in rural areas is the main factor to improve agricultural productivity in any strategy. In Vietnam nearly 70 per cent of population still get income from agricultural activity (Que, 1998:2) and agriculture is considered as 'the backbone of the Vietnamese economy' (as a report of ADB).
In the Mekong Delta, Angiang province has the highest agricultural output, with 2.35 million tons of paddy in the year 2000. The share of the agricultural sector in GDP is 44.5 per cent in the year 2000 (the Sixth Angiang Communist Party Conference Report 2001). Still heavily relying on agricultural production, an increase in farm productivity plays a very important role in economic development in Angiang province. The reason to improve the productivity of agriculture is, as a report of the Ministry of Agriculture and Rural Development presented in March 29- Hanoi, most of agricultural products of Vietnam are less competitive than the those of our neighboring countries like Thailand, China, Indonesia,.
all are due to the low productivity of agriculture sector and it leads to high costs. The situation will be worsened as Vietnam joining the A SEAN Free Trade Agreement [AFTA] in 2006. 2 A question arises is how to improve agricultural productivity. Lying in the region which has the lowest level of education (Tuoi Tre, 2001 ), the Angiang authorities meet many difficulties in applying the new method of farming for all farmers and in diversifying the crops.
In exploring for the factors affecting the agricultural productivity, this paper will examine the relationship between farmer education and farm productivity in Angiang province.2 Objectives of the Study To make clear the relationship between farmers' education and farm productivity, this paper will try to answer the following questions: a) Do additional years of schooling have significant positive effects on farm productivity? b) Do the first five years of schooling have stronger effects on farm productivity than additional years? c) Does farm productivity depends on the education of the household head? d) Does non-formal education have significant positive effects on farm productivity? 1.3 Data The data for the present study comes from a sample survey of 113 rural households in three districts of Angiang province in the year 2000 by the author. Two crops, the winter- spring crop and the summer-autumn crop, were chosen. The following data was collected from each household: crop production; education and the age of the household head and other household members; various direct inputs for grain production, including sown areas, number of plots, amount of farm labor in the household, chemical fertilizer, pesticides; capital stocks owned by households, the attitude of farmers to farm- encouragement program on: TV, radio, farmer groups, and neighbor. In the thesis, secondary data are also used.
The data are derived from Angiang Statistical Yearbooks, Vietnam Statistical Yearbooks, and reports of local authorities. This kind of information will make clear the problem and give out the general picture of Angiang province.4 Methodology Quantitative methods are applied in the thesis. To answer the above research questions, the method of econometric model formulation is used. The software MFIT 386 and Stata 6.0 are used to run ordinary least squares (OLS) regression.
Moreover, statistical and tabular methods are employed to identify the appropriate form of the model and to review the distribution of variables.5 Study Design The thesis has five chapters and it is organized as follows. Chapter 1: Introduction The first chapter will be mentioned the reasons to choose this topic. This chapter also includes objectives of the studies, study design, data and methodology. Chapter 2: Literature Review This is one of the main chapters of the thesis.
The chapter will present the theoretical issues and evidence concerning the relationship between farmer education and farm productivity. This chapter is mainly based on the researches of Weir (1999), Nguyen and Cheng (1999), Hussain and Byerlee (1995), and some other authors. Chapter 3: Education and Agricultural Production in Angiang This chapter is review of the situation of education and agricultural production in Angiang province. Chapter 4: Relationship between Education and Farm Productivity in Angiang Province This is the main part of the thesis.
This chapter will explain and analyze the relationship between farmer education and farm productivity in Angiang province based on the 113-household-survey in 3 districts. Chapter 5: Conclusion and Suggestions The final chapter will draw some conclusions and suggest some solutions. 4 CHAPTER2 LITERATURE REVIEW The chapter will present the theoretical issues and evidence concerning the relationship between farmer education and farm productivity. First of all, it will introduce some basic concepts relevant to education.
Because the available materials for study are limited this chapter is mainly based on the researches of Weir (1999), Nguyen and Cheng (1999), Hussain and Byerlee (1995), and some other authors.1 Definition and types of education Gillis at al (1996) defined "education broadly as all forms of human learning or more narrowly as the process that occurs in specialized institutions called "schools". Cotlear (1990) classified education into three types: formal, non-formal, and informal. Formal education takes place in schools and usually involves young people who have not yet begun their working lives. Formal education may equip farmers with specific or general knowledge, which increases farm productivity.
Non-formal education can be thought of as organized programs of learning that takes place outside schools. Often the participants are adults. Programs are usually shorter, more narrowly focused and more concerned with applied knowledge than programs of formal education. It may be used to impart information about innovations or sound practices.
Informal education is learning that takes place outside any institutional framework or organized program. People learn many important things at home, on the job, and in the community. Informal education may serve mainly to form attitudes, beliefs and habits. All three types of education are very important in the diffusion of innovations in agricultural production.
Formally educated farmers may take the initiative in the adoption of innovations. Other farmers may observe the practices of formally or non-formally educated farmers and copy them.2 Empirical Evidence on the relationship between Education and Farm Productivity 2.1 Vietnamese evidence Till now, few empirical studies were available to explain the effects of education in Vietnamese agriculture. Much of the recent research may be criticized on the grounds of poor measurement of education variables and small sample size. However, they have provided some insight into the relationship between education and farm productivity.
Lien, et al (Nhon, 2001:26) built a model in the Cobb-Douglas production form, showing the responses of rice output to changes in their chosen variables.