Economic Analysis of Perennial Crop Systems in Dak Lak Province, Vietnam

Abstract

Dak Lak province, Central Highlands, Vietnam presents an interesting case in perennial crop systems, of which coffee and black pepper are the two premier commodities and contribute a large part to economic growth provincially and at the national level. In recent years, in addition to mono-cropping systems, intercropping systems for diversification have developed quickly. This paper focuses on (1) comparing the economic efficiency of mono-coffee systems (MCSes), mono-pepper systems (MPSes), and coffee and pepper intercropping (CPI) by analyzing startup cost, annual cost, and profits; and (2) identifying the main factors affecting farmers’ decisions to convert their crop systems. The study was carried out by investigating 90 perennial crop samples using the three perennial crop systems (MCSes, MPSes, and CPI) in 2017–2018. Additionally, in-depth interviews and focus group discussion (FGD) methods were applied to collect more information about the operations of each system. Another survey with 37 samples (new plantations) was carried out to compute the startup cost. The findings showed evidence that MCSes had the lowest startup and annual costs, whereas MPSes had the highest costs of the three perennial crop systems. MCSes used less manure or compost in the initial setup and overused chemical fertilizer in annual production. Similarly, MPSes had high pesticide-stimulant costs in the production process to sustain crop development. The study indicated that CPI not only had the highest economic efficiency, but also created the best family employment opportunities of the three systems. Additionally, the study found some social factors that strongly influenced farmers’ decisions to shift their cropping system: These included ethnicity, education, training, and crop failure, in addition to economic factors (profits).