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Farmers' risk preferences and sustainable land management practices adoption decision in upland areas of Vietnam
Dissertation Abstract:
This study investigates how the determinants including risk preference affect farmers' decision to adopt SLM practices in upland areas of Vietnam. Empirical data collected through in-depth interviews with 200 farmers in Na Ri district, Bac Kan province were used. The land degradation in Na Ri district and Bac Kan province is serious resulting from deforestation, soil erosion, and degradation in biodiversity indicators under intensive cultivation in the sloping areas with non SLM practices. Although SLM practices were recommended to farmers, the adoption of those practices remained low. The practices commonly adopted are agroforestry, crop rotation with legume and manure use, but others are rarely adopted. There exist differences between the adopter group and non-adopter group in terms of risk management and various characteristics.
Farmers' risk preferences in Na Ri were elicited by the experimental game based on multiple price list method. The majority of respondents are risk-averse, 12% are risk-neutral and 7.5% are risk-loving. Socio-demographic factors such as non-farm income, farm income, sex, and age affect relative risk aversion. The estimated regression indicated that there is a set of factors affecting SLM adoption, namely, relative risk aversion, farming experience, farm size, knowledge of SLM, membership in farmers' organization, number of labor, and slope of farm land. Specifically, relative risk aversion had a negative effect on SLM practices adoption. The farmers who are less risk averse are more likely to adopt more SLM practices. This implies that reducing farmer' risk exposure could promote SLM practices. For particular practices adopted, risk preference significantly affect agroforestry and crop rotation with legume, but not manure use.
The policies in the uplands of Vietnam must consider the following: (1) reduce the risk to the farmers by increasing their farm and non-farm income, investing on farmers ' education and training; and (2) increase SLM practices adoption through better training, increasing the cultivated farm land, farm clustering, encouraging farmers to join farmers' organization, introducing and subsidizing labor-saving technologies, making credit accessible, improving insurance market, and demonstration plots for SLM practices. Adaptive Land Management (ALM) is an approach to Sustainable Land Management (SLM), in which the farmers monitor the changes in the condition of land and make the necessary changes along the way. Therefore, instead of simply just SLM, the government should introduce ALM, which is more effective and better form of SLM.