Impact of Environmental Factors on the Profit Efficiency of Rice Production A Study in Vietnams Red River Delta

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1 Global Journal of HUMAN SOCIAL SCIENCE Geography & Envronmental GeoScences Volume Issue 9 Verson.0 July 0 Type: Double Blnd Peer Revewed Internatonal Research Journal Publsher: Global Journals Inc. (USA) Onlne ISSN: x & Prnt ISSN: X Impact of Envronmental Factors on the Proft Effcency of Rce Producton: A Study n Vetnam s Red Rver Delta By Long Van Hoang & Prof. Mtsuyasu Yabe Kyushu Unversty, Japan Abstract - Envronmental factors affect agrculture producton productvty and effcency n whch result n a change of proft effcency. Ths paper seeks to estmate the mpacts of envronmental factors on the proftablty of rce farmers n the Red Rver Delta of Vetnam. The dataset was compled from personal ntervews n 349 farmers. Both OLS and MLE translog proft functons were used n ths study. Fve producton nputs and four envronmental factors were ncluded n those functons. The estmaton of the stochastc proft fronter wth a two-stage approach was used to measure proftablty. The results showed that the proft effcency was about 75% on average and varous envronmental factors nfluence proft effcency sgnfcantly as well as besde farm specfc characterstcs. Plant dsease, sol fertlty, rrgaton, and water polluton were the four envronmental factors that caused proft loss n rce producton. The results of the study ndcated that farmers should reduce household sze and the quantty of farm plots, apply a row seedng technque and mprove envronmental factors to obtan hgh proft effcency. Specal consderaton should be gven to rrgaton nfrastructure and water qualty mprovement. Keywords : Tran-slog proft functon; Rce Proftablty; OLS and MLE estmatons; Proft loss; Proft neffcency GJHSS-C Classfcaton : FOR Code: Impact of Envronmental Factors on the Proft Effcency of Rce Producton A Study n Vetnams Red Rver Delta Strctly as per the complance and regulatons of: 0. Long Van Hoang & Prof. Mtsuyasu Yabe.Ths s a research/revew paper, dstrbuted under the terms of the Creatve Commons Attrbuton-Noncommercal 3.0 Unported Lcense permttng all noncommercal use, dstrbuton, and reproducton n any medum, provded the orgnal work s properly cted.

2 Impact of Envronmental Factors on the Proft Effcency of Rce Producton: A Study n Vetnam s Red Rver Delta Long Van Hoang α & Prof. Mtsuyasu Yabe σ Abstract - Envronmental factors affect agrculture producton productvty and effcency n whch result n a change of proft effcency. Ths paper seeks to estmate the mpacts of envronmental factors on the proftablty of rce farmers n the Red Rver Delta of Vetnam. The dataset was compled from personal ntervews n 349 farmers. Both OLS and MLE translog proft functons were used n ths study. Fve producton nputs and four envronmental factors were ncluded n those functons. The estmaton of the stochastc proft fronter wth a two-stage approach was used to measure proftablty. The results showed that the proft effcency was about 75% on average and varous envronmental factors nfluence proft effcency sgnfcantly as well as besde farm specfc characterstcs. Plant dsease, sol fertlty, rrgaton, and water polluton were the four envronmental factors that caused proft loss n rce producton. The results of the study ndcated that farmers should reduce household sze and the quantty of farm plots, apply a row seedng technque and mprove envronmental factors to obtan hgh proft effcency. Specal consderaton should be gven to rrgaton nfrastructure and water qualty mprovement. Keywords : Tran-slog proft functon; Rce Proftablty; OLS and MLE estmatons; Proft loss; Proft neffcency. I. Introducton V et Nam s the second hghest rce exportng country n the world. Rce producton s mportant to the Vetnamese economy n general and to ts agrcultural sector n partcular. It occupes a hgh share of the country s Gross Domestc Product (GDP), approxmately 0.4% n 006 (WB, 008). However, as a result of rapd economc expanson and ndustralzaton, land for rce producton has become smaller and less fertle. In addton, ndustral development and the development of handcraft producton are the major contrbutors causng lower water qualty that mpacts rce producton. The were some studes related to effcency measurements of rce producton such as techncal effcency [, ] and productvty [3]. However, the Author α : PhD Canddate, Laboratory of Envronmental Economcs, Department of Agrculture and Resource Economcs, Faculty of Agrculture, Kyushu Unversty, Japan. E-mal : hoanglongjp@gmal.com Author σ : Professor at Laboratory of Envronmental Economcs, Department of Agrculture and Resource Economcs, Faculty of Agrculture, Kyushu Unversty, Japan. research related to proft effcency s lmted n the lterature. Ths research ams to estmate the three dmensons of proftablty of rce producton, namely proft elastcty, proft loss and proft neffcency. In addton, the envronmental attrbutes affectng the proftablty of rce producton were determned. Envronmental degradaton s a consequence of economc and ndustral development n developng countres, especally Vet Nam. Water polluton has also been a major concern as pollutants from ndustral producton actvtes contamnate the rce felds and affect the country s overall rce producton. Omsson of varables presentng envronmental factors do not only affect techncal effcency but also the proftablty of rce [4]. Therefore, envronmental factors such as sol qualty, rrgaton management, plant dsease, and water polluton were gven specal attenton n ths study. Farmers may combat envronmentally constranng factors by allocatng more labor and addng more chemcal fertlzers to the nput bundle of ther producton [5]. These actvtes may lower the productvty and ncrease neffcency. As a result, advanced technologes lke usng machnery, new seeds, and fertlzers are major factors toward mprovng productvty. The objectves of ths research nclude the followng. Frst, to determne the effects of the envronmental factors on the proft effcency of rce producton. Second, to estmate the proft loss of rce producton due to envronmental factors. Thrd, to provde recommendatons to polcy-makers on how to sustan rce producton. Fnally, contrbute to the lterature pertanng to the methodologcal development of estmatng the mpacts of envronmental factors on rce producton. Ths paper s organzed as followng. The next secton wll revew the lterature related to the estmaton of effcency gvng specal consderaton to proft functons. The thrd secton wll descrbe the research areas and wll explan the results of the household survey. The framework for analyss and the econometrc specfcaton wll be presented n the fourth secton. The ffth secton wll be the man secton of the paper wth the results and dscussons from model estmaton ncluded. The sxth secton wll be the conclusons of the study and polcy mplcatons. 0 5 Global Journal of Human Socal Scence (D) b Volume XII Issue IX Verson I 0 Global Journals Inc. (US)

3 Impact of Envronmental Factors on the Proft Effcency of Rce Producton: A Study n Vetnam s Red Rver Delta 0 6 Global Journal of Human Socal Scence (D) b Volume XII Issue IX Verson I II. Analytcal Framework for Measurng Proft Effcency a) Analytcal Framework Economc effcency s classfed nto two categores: techncal effcency and allocatve effcency [6]. The proft functon combnes both techncal and allocatve concepts n proft relatonshps, and any errors n producton decsons are translated nto lower revenue [7], hence low proft effcency. Measurng effcency was started by Farrell [6], who explaned the ablty to produce a gven level of output ts lowest cost. Al & Flnn [8] estmated the proft effcency by comparng the OLS (Ordnary Least Squared) and MLE (Maxmum Lkelhood Estmaton) approaches to show the proftablty of rce producton n Pakstan. Rahman [9]estmated rce proft effcency by usng a translog functon and added the farmer s characterstcs to reasons for neffcency. Kolawole [0] computed the proft functon by addng a constant to proft functon n to obtan the postve values whle usng the Cobb-Douglass functon to estmate proft fronter. The standard proft functon assumes that markets for outputs and nputs are perfectly compettve. ln( + θ ) = ln f ( P, W ) + ( V U ) wθ s a constant added to the proft of each frm n order to obtan postve values [0]. The farm proft s measured n term of Gross Margn (GM) whch equals the dfference between the total Total Revenue (TR) and Total Varable Cost (TVC) GM(П) = Σ(TR-TVC)=Σ(QP-WX) The proft fronter approach s defned as: π = f ( P, Z ).exp( ξ ) π where s the normalzed proft of farm th; Pj s the normalzed nput prces measured by dvdng Z k s fxed proft and nput prces for output prces; nputs such as land and captal. Ths functon can be estmated by OLS of MLE [8] The OLS approach of proft functon s wrtten as: lnπ = α + α ln P + α L ln Z j + ξ The translog proft functon approach was used by Agner et al. []; Meeusen & Broeck []; and Al & Flnn [8]. The translog fronter form can be wrtten as follows: () () (3) (4) ln π = α + + α ln P + α ln Z ln P + ξ The paper used both forms of proft fronter to compare the coeffcents between the dfferent approaches of estmaton. Producton neffcency s measured by three components: techncal, allocatve, and scale neffcency. Error terms are Producton/Proft effcency of ndvdual farm s defned as: (7) Precludng farm and household characterstcs, other envronmental factors/constrants are used to estmate effcency ncludng rrgaton, land sutablty, nsects and pests, weed nfestaton, weather varaton (drought and storm), and poor sol fertlty [4]. In ths study, four envronmental factor varables were selected: rrgaton, plant dsease, sol fertlty, and water qualty. b) Fronter MLE and OLS stochastc proft fronter Fg. shows the dfferences n estmaton of proft effcency by MLE and OLS approaches. The OLS estmate the average of proft value whle the MLE estmate the proft fronter [8]. From the results of the MLE, the proft loss can be derved by dvdng the proft of ndvdual farms by proft effcency. Fgure : Relaton between MLE and OLS n fronter estmaton. Source : Al & Flnn [8]. α ξ = v u ( ln P) + α ln Z + α( ln Z ) PE= E[exp( u ) ξ ] = e[exp( δ L D δ W ) ξ ] 0 d d d = (5) (6) 0 Global Journals Inc. (US)

4 Impact of Envronmental Factors on the Proft Effcency of Rce Producton: A Study n Vetnam s Red Rver Delta III. research area, data and econometrc specfcaton a) Research Area and Data The Red Rver Delta s of two rce granares n Vet Nam. Although rce productvty has been gradually ncreasng n recent years due to the adopton of advanced technologes, the producton s stll challenged by constrants ncludng land fragmentaton, sol degradaton, and water polluton. One of the reasons for ths stuaton s the development of ndustral producton and handcraft producton. Many ndustral parks and producton zones have been establshed near the rce felds, and the handcraft producton vllages are also ncreasng rapdly n quantty. Recently, the total number of craft vllages has ncreased to 790 craftvllages located throughout the country, half of whch are located n the Red Rver regon. Ths development makes the surroundng envronment more polluted [3]. The problem of water polluton s at an alarmng stage wth about 90 percent of the craft-vllages volatng envronmental standards. Rce producton n the Bac Nnh provnce stll plays an mportant role n the economc development of the provnce (because of) wth some specal rce varetes that are well-known for ther flavor. The provnce has the hghest number of craft vllages (n=6) n the country. The water polluton from these craft vllages cause some many hectares of land n regons uncultvable and made farm households become havng no land for cultvaton. Ths research was conducted n Bac Nnh provnce and one part of the captal n Ha No where rce producton s stll domnated by the local economy. In addton, these areas were selected to study the effects of water polluton on rce producton n parallel wth other envronmental factors. Four communes were chosen for the survey, namely: Phong Khe, Da Ton, Phu Dong, and Nnh Hep. The Phong Khe commune s located n Bac Nnh Provnce, whle the three remanng communes were located near Ha No. The Phong Khe and Da Ton communes are located n polluted areas, whle the remanng two communes are located n non-polluted areas. Frst, Phong Khe commune s located n Bac Nnh provnce, whch s famous for ts handcraft producton. Paper recyclng s one of the major local ndustres n ths commune. Ths ndustry uses a large amount of cleanng and colorful chemcals. A sgnfcant amount of wastewater s dscharged drectly nto rver wthout treatment. Therefore, almost all paddy rce areas are contamnated. Next, Da Ton commune s located near an ndustral producton zone named Sa Dong where pollutants from electronc companes are dscharged to the nearby rver that flows to the rrgaton canals of the farmers. Thrdly, Phu Dong commune s located at the end of the downstream of a branch n the Red Rver. Water Polluton n ths commune s relatvely low. The source of the polluton n the water s manly from household wastes, whch do not affect rce producton sgnfcantly. Fnally, Nnh Hep commune s less polluted because t s not near any producton areas and the rrgaton s used from a larger rver, namely the Red Rver. Surveys wth rce farmers were conducted n four communes of two provnces n the Red Rver Delta namely Ha No captal and Bac Nnh provnce. A total 369 rce farmers were ntervewed usng a questonnare. The survey was gven durng n the month of August 00 by a group of enumerators after recevng bref tranng on the questonnare. A pre-test was made to revse the questonnare before the formal survey. Whch n 369 rce farmng households n the sample, 0 households were deleted from the sample due to mnus values of proft n producton. Fnally, the sample used for proft functon estmaton s 349 households. The dataset uses of varables ncludng rce output (kg), rce yeld (kg/sao), land (sao), the prce of fertlzer ( 000VND/kg), pestcde ( 000VND/00ml), labor wage (000VND/workng day per man), land nput (sao per farm), and captal ( 000VND/farm). All value of these varalbes were converted to annual value nstead of the value for each crop. Only 5 producton nputs were used for the model estmaton. The envronmental factors measured were sol qualty, rrgaton, dsease, and water polluton. Manageral varables are age, gender, educaton, and famly labor rato. Futhermore, rce plot, monocroppng, and adoptng of row seedng technology are consdered. Fnally, access to loans from the banks was ncluded. 0 7 Global Journal of Human Socal Scence (D) b Volume XII Issue IX Verson I 0 Global Journals Inc. (US)

5 Impact of Envronmental Factors on the Proft Effcency of Rce Producton: A Study n Vetnam s Red Rver Delta Table : Descrpton of Varables. 0 8 Global Journal of Human Socal Scence (D) b Volume XII Issue IX Verson I Descrptons Measure Mean Standard Mnmum Maxmum Devaton Output and nputs Rce output kg per year per farm Rce Yeld kg per sao per annum Fertlzer prce 000VND per kg Pestcde prce 000VND per 00ml Labor wage 000VND per workng day Land cultvated Sao (Sao=360m ) Captal (Rental cost for land 000VND per farm per annum preparaton, harvestng, and transportaton servces) Envronmental factors: Sol qualty Dummy (= good; 0= bad) Irrgaton Dummy (0= N; = Y) Dseases Dummy (0= N; = Y) Water Polluton Dummy (0= N; = Y) Manageral varables Age s Male household head Dummy (= Male; 0=otherwse) HH sze Number of HH members Educaton Completed years of schoolng Experence n rce farmng s of rce growng Famly Labor Rato Rate of No. of Famly Labor and HH Sze Rce plots Number of plots of rce felds that HH cultvate Mono-croppng Dummy (0= N; = Y) Row-Seedng Dummy(=Row-seedng; 0=Broadcastng and others) Credt Dummy (=borrow loan for rce producton; 0=not borrow) Total number of observatons 349 USD equvalent to 0,000 VND n 00. where Ps, Pf, Po, Pp, Ph, Pw, Zl, Zt are prce of b) Econometrc Specfcaton seed, prce of fertlzer, prce of organc fertlzer, prce of To estmate the mpacts of envronmental pestcde, prce of herbcde, labor wage, land area, and factors on proft effcency, frst the stochastc proft captal of each farm, respectvely. functon must be defned as: π = f ( P, Z ).exp( ζ ) (8) where π s normalzed proft of the th farmer s defned as gross revenue less varable cost, dvded by farm output prce; P s the vector of varable nput prces faced by the th farmer dvded by output prce; Z s the vector of the fxed factor of th farmer. s an error term; and I =,,n s the number of farms n the sample. The model was fst development by [4] and appled by [9] and [5]. lnπ = α + + l= l 0 l j= β ln Z + ln P + j lt l= t= j= k= τ ln P ln + ϕ ln Z ln Z + v u l jk t j k j= k= ζ φ ln P ln Z jl j l (9) n u = δ 0 + δ dwd + ω d = (0) where W s the varable representng socoeconomc characterstcs and envronmental factors of the farm to explan neffcency: () Age of household head; () Male household head; (3) Educaton (number of completed years of schoolng); (4) Household sze; (5) Famly labor rato; (6) Rce plots (the number of plots that households use to cultvate rce); (7) Monocroppng (Dummy for household s to cultvate one crop per year; (8) Row seedng technque; (9) Household who take loans for rce producton; (0) Dummy for sol qualty; () Dummy for dseases; () Dummy for rrgaton use (3) Dummy for water polluton. 0 Global Journals Inc. (US)

6 Impact of Envronmental Factors on the Proft Effcency of Rce Producton: A Study n Vetnam s Red Rver Delta IV. Results and Dcussons a) Proft effcency Comparng the result of OLS and MLE demonstrates the small change n coeffcents when usng dfferent methods to estmate proft fronter. In addton, the OLS estmaton results shows that 69% of the dependent varable (proft) can be explaned by the ndependent varable (producton nput). Ths ndcates that producton proft s close to the proft fronter. Fertlzer prce show a postve effect on proft. The reason s that the chemcal fertlzers are mxed. Therefore the prce s estmated by the average prce of all fertlzers per kg. Ths shows that a hgher prce of fertlzer means that farmers use hgher qualtes of fertlzer. Therefore, t s ratonal to obtan a hgher proft. The land area s postvely related to the proft. Ths means that the margn profts ncrease when the area of Table : Model Estmaton for Proft Functon. land cultvated s ncreased. Also, ths ndcates economcs of scale n rce producton. Land area domnates the proft share (share of proft?). Increasng the land area by %,wll ncrease the proft by.%. If the prce of rce ncreases %, the proft wll ncrease 0.7%. If the prce of fertlzer ncreases %, the proft wll ncrease 0.07%. If the prce of pestcde ncreases %, the proft wll decrease 0.08%. If the labor wage ncreases %, the proft wll ncrease 0.9%. If captal ncreases %, the proft wll decrease 0.09%. In ths study, the ncrease n the prce of fertlzer means that the farmers wll use hgher qualtes of fertlzer and yeld wll be ndrectly ncreased. An ncrease n cost of labor would mean the farmers use more hred labor than home labor whch would ncrease the yeld. The captal lowers the proft because captal s consder as nput and t s better f farmers can rent captal. Varables OLS Estmaton MLE (Fronter Estmaton) Parameters Coeffcents t-rato Coeffcents z-value Proft functon Constant α *** *** 8.4 lnp F α lnp P α lnp W α ½ lnp F x lnp F α ** *** -.88 ½ lnp P x lnp P α ½ lnp W x lnp W α ** ***.44 lnp F x lnp P α lnp F x lnp W α lnp P x lnp W α lnc α ½ lnc x lnc α -0.08* lnp F x lnc α ** -.3 lnp P x lnc α lnp W x lnc α lnp F x lnl α lnp P x lnl α lnp W x lnl α lnl α ** ½ lnl x lnl α *** *** 7.58 R-squared No. of Observatons Varance para. ln σv ln σu σ = σu + σv σ 0.70 λ = σu /σv λ 3.33 *** sgnfcant at percent level (p<0.0), ** sgnfcant at 5 percent level (p<0.05), * sgnfcant at 0 percent level (p<0.0). 0 Global Journals Inc. (US) 0 9 Global Journal of Human Socal Scence (D) b Volume XII Issue IX Verson I

7 Impact of Envronmental Factors on the Proft Effcency of Rce Producton: A Study n Vetnam s Red Rver Delta 0 0 Global Journal of Human Socal Scence (D b ) Volume XII Issue IX Verson I b) Proft Ineffcency and Proft-loss Farm households can maxmze proft effcency by mnmzng proft neffcences. The factors that contrbute postvely to neffcences are household sze, land plots and water polluton. On the other hand, factors that contrbute negatvely to neffcences are male household head, plant dseases, and rrgaton. The dsease and rrgaton varables are not well defned n the data. The reason s the percentage of sample that was attacked by dsease s 95% and rrgaton apply s 99% (Table ). The reason for ncludng these varables s to gve evdence that almost all the farmers had Table 3 : Estmaton for Proft Ineffcency. dsease attacks and rrgaton servce use n rce producton. Age of household head ncreases proft neffcency. A young farm household head can work more effectvely than an older one. Household sze ncreases proft neffcency because the households wth more members cannot use the home labor as well households wth fewer members. Large households are composed manly of dependents such as elders and chldren. They do not contrbute substantally to the labor force for farmng actvtes. Varables Para. Coeffcents Standard Errors t-rato Constant β *** Age β Male HH head β -0.06** Educaton β HH sze β ** Famly labor rato β ** Rce plots β ** Mono-croppng β Row-seedng technque β ** Credt β Env. Factors Sol qualty δ Dseases δ ** Irrgaton δ -0.39** Water Polluton δ ** Total number of observatons 349 *** sgnfcant at percent level (p<0.0), ** sgnfcant at 5 percent level (p<0.05), * sgnfcant at 0 percent level (p<0.0). Wth the famly labor rato varalbe. Households Table 4 : Estmaton of Proft Elastctes. wth more members of workng age wll decrease the Prces and fxed nputs Proft elastcty proft effcency because they use more of ther home Rce prce labor n rce producton rather than rental labor force. Fertlzer prce 0.07 The fragmentaton of land s measured by the Pestcde prce quantty of farm plots. The hgher number of land plots Labor wage may ncrease the producton cost of rce [6] or reduce Land area.57 the producton proft as a result. Ths s a crtcal ssue n Captal the Northern regon of Vetnam as dscussed n the Source : Authors estmaton. prevously stated lterature [7]. In ths study, the number of plots show an ncrease n proft neffcency or decrease n the proft of rce producton. Ths ndcates that the number of plots Mono producton n rce farmng means that a farm household cultvates only one type of crop per year. Ths strongly ncreases proft neffcency. The reason for ths s that rce producton s not proftable or can ncrease producton cost for rce producer that one can fnd other opportuntes to earn ncome households. than producng rce. 0 Global Journals Inc. (US)

8 Impact of Envronmental Factors on the Proft Effcency of Rce Producton: A Study n Vetnam s Red Rver Delta Applng the Row-seedng technque n rce producton can decrease cost and ncrease productvty of rce producton. Ths s the technque that farm households n the Red Rver s Delta should use when not usng machnery for seedng. The household wth crop dseases wll have decreased proft effcency. The dseases n rce producton are common now n Vet Nam n general and n the Red Rver s Delta n partcular. However, f farmers use enough pestcde and they can combat the dseases. Farmers are very famlar about these dseases and they can prepare well to stop them. Water polluton s a serous problem currently n rce producton. The sources of polluton are ndustres and handcraft producton where they dscharge ther waste water wthout any treatments. In ths study, the rce producers n polluted regons have less profts because they have to spend more on labor and other nput costs to abate polluton from chemcal fertlzers, organc fertlzers, pestcdes, etc. Table 5 : Proft-loss by the Key Constrants. Farm-specfc Characterstcs N Actual proft per ha Estmated Proft-loss Proft effcency per ha a Proft-loss by household sze Small household sze Large household sze t-rato.4460* -.949**.9908*** Proft-loss by famly labor rato Low famly labor rato Hgh famly labor rato t-rato *** -.34** -.78*** Proft-loss by farm plots Some farm plots Many farm plots t-rato ***.3577** Proft-loss by mono croppng Not Mono croppng Mono croppng t-rato 3.560*** ** Proft-loss by row seedng technque Not use row seedng technque Use row seedng technque t-rato -3.5***.643* *** Envronmental factor effects Farm has plant dsease Farm has no plant dsease t-rato **.4883* Proft-loss by sol qualty Not Sol fertlty Sol fertlty t-rato *** *** Proft-loss by rrgaton Farm wthout rrgaton Farm wth rrgaton t-rato ***.9369** *** Proft-loss by water polluton Farm wthout water polluton Farm wth water polluton t-rato 4.979*** *** 0 Global Journal of Human Socal Scence (D) b Volume XII Issue IX Verson I All farms a Proft loss s computed from the maxmum proft (for?) gven prces and fxed factor endowments. Maxmum proft per hectare s computed by dvdng the actual proft per hectare of ndvdual farms by ts effcency score. *Sgnfcant at 0% (p<0.0); **Sgnfcant at 5% (p<0.05); ***Sgnfcant at % (p<0.0). 0 Global Journals Inc. (US)

9 Impact of Envronmental Factors on the Proft Effcency of Rce Producton: A Study n Vetnam s Red Rver Delta 0 Global Journal of Human Socal Scence (D) b Volume XII Issue IX Verson I V. Conclusons and Polcy Implcatons The estmaton results show smlar coeffcents between OLS and MLE approaches. The ncluson of envronmental factors show sgnfcant effects on proft effcency. In specfc, the envronment changes the proft effcency of rce producton. Farmers receve approxmately $50 of proft per hectare f they can control the producton constrants. Therefore, n order to maxmze proft, rce farm households need to overcome the obstacles such as labor and household sze. However, there are some ssues related to polcy that the government should be nvolved n to support the farmers so that they can maxmze ther profts. These nclude land consoldaton to mnmze the number of farm plots, ncreasng farm sze, technology, and water qualty control. Advanced technology such as row seed tools and machne should be appled and promoted n rce farmng. These are the polces that the government should consder to help sustan rce producton n the Red Rver Delta and for the entre country as well. VI. Acknowledgments The authors are very grateful to the Fuj Xerox Setsutaro Kobayash Memoral Fund for provdng fnancal support for ths research ncludng data collecton. Wthout ths support, the research would have faced more dffcultes and may have not been possble. The authors would also lke to thank the Laboratory of Envronment Management of the Ha No Unversty of Agrculture (HUA) for conductng water qualty experments n the research areas, especally to Dr. Trnh Quang Huy, the chef of the Envronmental Research laboratory, who gave advce and suggestons regardng a locaton sutable for data collecton. Specal thanks as well to the leaders and the staff of the Rce Research Insttute of the Ha No Unversty of Agrculture who asssted wth admnstraton support and data collecton. Ther contrbutons are greatly apprecated. Lastly, the earler verson of ths paper was edted by Mr, Joseph Arbol and Mss. Ncole Mare, for whch the authors are very thankful. References Références Referencas. Vu, L.H., Essays on the economcs of food producton and consumpton n Vetnam, P.W. Glewwe, Edtor 008, Appled Economcs: Unted States -- Mnnesota.. Kha, H.V. and M. Yabe, Techncal Effcency Analyss of Rce Producton n Vetnam. Journal of ISSAAS, 0. 7(): p Hoang, L.V. and M. Yabe, The Impact of Envronmental Factors on the Productvty and Effcency of Rce Producton: A Study n Vetnams Red Rver Delta. European Journal of Socal Scences, 0. 6(): p Rahman, S. and M.K. Hasan, Envronmental constrants and proftablty relatonshps n agrculture: a case study of wheat farmng n Bangladesh. Journal of the Asa Pacfc Economy, 0. 6(4): p Sherlund, S.M., C.B. Barrett, and A.A. Adesna, Smallholder techncal effcency controllng for envronmental producton condtons. Journal of Development Economcs, (): p Farrell, M.J., The Measurement of Productve Effcency. Journal of the Royal Statstcal Socety. Seres A (General), (3): p Al, F., A. Parkh, and M. Shah, Measurement of proft effcency usng behavoural and stochastc fronter approaches. Appled Economcs, (): p Al, M. and J.C. Flnn, Proft Effcency Among Basmat Rce Producers n Pakstan Punjab. Amercan Journal of Agrcultural Economcs, (): p Rahman, S., Proft effcency among Bangladesh rce farmers. Food Polcy, (5-6): p Kolawole, O., Determnants of Proft Effcency among Small Scale Rce Farmers n Ngera: A Proft Functon Approach. Research Journal of Appled Scences, 006. (): p Agner, D., C.A.K. Lovell, and P. Schmdt, Formulaton and estmaton of stochastc fronter producton functon models. Journal of Econometrcs, (): p Meeusen, W. and J.v.D. Broeck, Effcency Estmaton from Cobb-Douglas Producton Functons wth Composed Error. Internatonal Economc Revew, (): p Quynh, N.K., T.V. The, and L.V. Luu, Assessng Partcpatory Rural Envronmental Management n the Craft Vllages, n Report submtted to FAO003, Vet Nam Agrculture Scences Insttute (VASS). 4. Sdhu, S.S. and C.A. Baanante, Estmatng Farm- Level Input Demand and Wheat Supply n the Indan Punjab Usng a Translog Proft Functon. Amercan Journal of Agrcultural Economcs, (): p Hyuha, T., et al., Analyss of proft neffcency n rce producton n Eastern and Northern Uganda. Afrcan Crop Scence Journal, (4): p Tan, S., et al., Impact of land fragmentaton on rce producers techncal effcency n South-East Chna. NJAS - Wagenngen Journal of Lfe Scences, (): p Hung, P.V., T.G. MacAulay, and S.P. Marsh, The economcs of land fragmentaton n the north of Vetnam. Australan Journal of Agrcultural and Resource Economcs, (): p Global Journals Inc. (US)