Impact of market access infrastructure on smallholder rice commercialization in Vietnam

Abstract

This paper quantifies the impacts of market access infrastructure on rice commercialization among smallholder farm households using data from the Vietnam Household Living Standards Survey from 2010 to 2020. Rice commercialization is conceptualized as a two-stage process consisting of market participation and commercialization intensity.

The results indicate that rice commercialization among Vietnamese households remains limited, with average marketed shares ranging from 25 to 28 percent over the study period. Market access and the quality of transport connectivity, including, the presence of local markets, and road connectivity, play a decisive role in households’ decisions to participate in rice markets. Conditional on participation, however, commercialization intensity is driven mainly by household characteristics such as land size, household size, and income, while infrastructure effects are less consistent. The results also indicate heterogeneous effects of market distance across ethnic groups. Policies should combine targeted investments in market access infrastructure with measures that enhance households’ productive capacity in order to increase marketed surplus. Using nationally representative data and a two-stage framework, this study provides new insights into the mechanisms underlying rice commercialization in Vietnam.