Farmland Acquisition and Household Livelihoods in Hanoi's Peri-Urban Areas

Abstract

While farmland loss (due to urbanisation and industrialisation) causes job losses for a huge number of farmers and threatens food security, it can bring about a wide range of new job opportunities for local people through which they can change their livelihoods and improve their welfare. The literature in Vietnam and some other countries reveals that although there has been much discussion about the mixed impacts of farmland loss on rural household livelihoods, none of these impacts has been quantified thus far. This thesis is the first study to use econometric methods for quantifying the various impacts of farmland loss on households' livelihood strategies and outcomes. Using survey data from 477 randomly sampled households in 6 communes in a peri-urban district of Hanoi, several regression models were used to examine how and to what extent farmland loss has affected rural household livelihoods in Vietnam. Specifically, three key relationships were considered and tested: (i) the relationship between farmland loss and household livelihood strategies; (ii) the relationship between farmland loss and household livelihood outcomes (income and consumption expenditure); and (iii) the relationship between farmland loss and household income shares by source. It was found that farmland loss has a positive impact on the choice of non-farm work-based strategies, notably the informal wage work-based strategy. Given the impact of farmland loss, households' income shares actually diversified into non-farm sources, especially informal wage income. Interestingly, the results indicate that farmland loss, coupled with compensation, has no negative impact on livelihood outcomes (neither income nor consumption expenditure per capita). Possibly this can be explained by the fact that a number of households used part of their compensation money for smoothing consumption. In addition, income earned from jobs outside of farming might compensate for or even exceed the loss of farm income due to the loss of farmland. This suggests that farmland loss can have an indirect positive effect on livelihood outcomes (through its positive effect on non-farm participation). This thesis makes several key contributions. Firstly, with a combination of an adapted analytical framework and appropriate econometric models, this study provides a proper approach for studies of the relationship between farmland loss and rural household livelihoods. Secondly, it provides the first econometric evidence for the links between farmland loss and household livelihood strategies and outcomes. Finally, based on the empirical results, this study proposes valuable policy recommendations for mitigating negative impacts of farmland loss on rural households and helping them achieve better livelihood outcomes.