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Economic impact of farmers-driven vertical integration: the case of safe vegetable chains in Northern Vietnam

Wang H., Moustier P., Thi Tan Loc N.. 2010. In : Actes des 4èmes journées INRA-SFER-CIRAD de recherches en sciences sociales, 9-10 décembre 2010, Rennes. Paris : SFER, 23 p.. Journées de recherches en sciences sociales. 4, 2010-12-09/2010-12-10, Rennes (France).

The paper investigates the respective profitability of contractual arrangements, direct sales and spot marketing for "safe vegetable" farmers in Northern Vietnam. This is based on a survey of 137 peri-urban vegetable farmers, with a minimum of 30 farmers in each category. Selection biases are corrected using propensity score matching methods. The results show that direct sales have a positive significant impact on income relative to contractual arrangements and spot marketing when selection biases are corrected. Contractual arrangements have no significant impact on income compared with the other two categories after correction of selection bias. This may be due to the involvement of purchasers in the production process being still limited. The paper illustrates that direct relations between farmers and consumers, often described in the literature as efficient in the development of consumer confidence as regards quality, can indeed translate into higher incomes than anonymous exchange, or than contractual arrangements with retailing companies. Some limitations of the research and policy recommendations are given in the conclusion.

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