Abstract
This paper aims to clarify factors in the expansion of farm size in Vietnam's Mekong River Delta through an analysis of the inverse relationship between farm size and land productivity. The Agricultural Censuses of 1994 and 2001 show that both the number of landless persons and the number of medium or large-size farmers (operating over 3 ha) grew steadily after the implementation of the land law in 1993. Using these data, I confirmed the inverse relationship between farm size and land productivity in the mid-1990s, showing that the labour input of large-size farmers was lower than that of small-size farmers due to labour constraints and the cost of monitoring hired labour.
Based on a survey of recent controversies over the inverse relationship, I then analyzed contributing factors using the household panel data of the Vietnam Living Standards Survey and found that labour market imperfection seemed to contribute more strongly to the inverse relationship than land fertility. The reason farmers had been able to expand the size of operated lands, despite the inverse relationship, was the development of the agricultural labour market and agricultural mechanization. Large farmers could practice double cropping using labour made plentiful through landlessness and by reducing the effective cost of hired labour through mechanization.
I also confirmed that the inverse relationship was sustained in 2001; however, it was merely a “spurious inverse relationship” caused by differences in cropping patterns and behavior between large and small farmers. The high intensity of land utilization through the practice of double cropping has alleviated the disadvantage of large-size farmers. Therefore, the change in agricultural structure behind the increase in farm size is not inefficient.
