Cooperatives and irrigation in Vietnam

Charles Forest Nicholson

ISU General Staff Papers from Iowa State University, Department of Economics

Abstract: Cooperative agricultural activity has existed in Vietnam in various forms for many decades. Under central planning, cooperative institutions provided a means for the government to extract surplus from agriculture for the development of the industrial sector. Now, under policies promoting market liberalization in agriculture, household farming units are no longer obliged to transact with the cooperative. The focus of this dissertation is on the interaction between autonomous household production units and cooperative institutions;Collective action around irrigation represents one economic motive for coop participation. Recent developments in club theory provide a conceptual framework within which analysis can be conducted. The (partially) non-rival and excludable characteristics of irrigation satisfy the requirement of the model while the presence of agricultural cooperatives suggests a possible means for organizing household production units for efficient utilization of irrigation. A household production model is employed to address the external effects of irrigation among households. The conditions of Pareto optimality for the hybrid model, which combines club theory and household production theory, are derived and compared with the corresponding conditions of conventional club models. The comparative statics of the model are exploited to derive labor market consequences of a shared partially non-rival good;An empirical analysis is conducted using data from The Living Standards Measurement Survey--an elaborate household and community questionnaire which contains substantial data on household use of irrigation and participation in cooperatives. Evidence is reported for model predictions regarding coop formation, coop participation and labor market effects. The appropriateness of the model confirmed the viability of state cooperatives in a liberalized economy and confirmed the gains in labor productivity due to irrigation infrastructure.

Date: 1996-01-01
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