La daoquyetthang sum

1 INTRODUCTION Subjects and scope of the dissertation 3.1 Subjects of this dissertation Determinants of the development investment in agricultural production under GAP standard 3.2 Scope of this dissertation Content of this dissertation: Focusing on the affecting level of determinants of investment decision, scale and efficiency of development investment in agricultural production under GAP standard of farmer households, especially who specialize in grape and apple Location: Ninh Thuan Duration: 2013-2017 Contribution of this study Necessity of the study The agricultural development under GAP standard is the trend in this modern era and not only satisfies both the international and domestic demand but also prevents the health of producers from the harmful fertilizer and protects the environment Ninh Thuan is the agricultural province with the traditional advantage in growing grape and apple As the general trend, the farmer households have step by step applied the GAP standard in production, but have faced many difficulties, such as the lack of knowledge of GAP criteria, small consuming market, small investment which prevents farmers from the largescale production In order to extend the production activity with the GAP standard, it is necessary for farmers to pay attention to the development investment in the agricultural production under GAP standard Although there has been many studies about the agricultural production under GAP standard in Vietnam as well as in the world, there is no study which systematically presents the development investment, including household investment, in agricultural production under GAP standard To encourage the development investment in agriculture under GAP standard at the farmer households, the author chose “Studying the determinants of the development investment in the agricultural production under GAP standard at the farmer households: a case study in Ninh Thuan province” as the topic of my dissertation Objective of the dissertation The main objective of this study is to investigate factors affecting the development investment in agricultural production under GAP standard To reach that main purpose, the study will: - To clarify the theories and lessons from experience of the investment and determinants of development investment in agricultural production under the GAP standard - To analyse the reality of investment and determinants of development investment in agricultural production under GAP standard in Ninh Thuan - To propose some policies to encourage the development investment in agricultural production under GAP standard The new contribution of this study The dissertation considers agricultural investment in agricultural production in accordance witth GAP standards At the same time, both aspects of investment (investment of farmer households in all aspects of production process) and the purpose of the investment (to ensure that GAP standards meet market requirements and sustainable development) This is a new understanding in research that allows the link between investment and the outcome of investment This dissertation also builds the model and quantifies the effect of determinants to development investment in agricultural production under GAP standard regarding to threes different aspects of the investment circle: investment decision, investment scale, investment efficiency In detail: - There are total of seven determinants of investment in GAP standard, including: age of household, experience, knowledge of the household head about GAP, market demand, price of product, average profit, subsidy of government The most influential factors are market demand, price of product, subsidy of government and knowledge of the household head about GAP - There are total of 15 determinants of the capital investment scale in GAP program of the farmer household, including weather, infrastructure, area, age of household head, experience of household head, labor, knowledge of the household head about GAP, the linkage among farmer households, market demand, product price, average profit, support from enterprises, subsidy of government, the importance of subsidy from the government, appropriation of subsidy from government In particular, the most influential factors are the average profit, knowledge of the household head about GAP, subsidy of government and support from enterprises - There are six determinants affecting the efficiency of development investment in agricultural production of farmer household, consisting of weather, labor, area, investment capital, average profit, investment decision under GAP In particular, investment decisions under GAP have a positive impact on the investment efficiency of the household In conclusion, the basically theoretical contribution of the thesis is that the model quantifies the level of influence of the factors on development investment in agricultural production of GAP farmers in three dimensions CHAPTER 1: OVERALL VIEW OF THE STUDY RELATED TO THE DISSERTATION AND METHODOLOGY The contribution in reality Based on analyzing the reality, the dissertation proposed different groups of solutions to improve the production conditions, characteristics of the farmer households, market and the linkage in production They are: (1) planning safety and appropriate production areas in each locality This solution aims to create the environment, conditions and direction for the farmer households to invest in agricultural production under GAP standard; (2) improving the knowledge and skill for farmers; (3) developing the consumption market for the outputs under GAP standard; (4) creating the network among the subjects The development investment in agricultural production under GAP standard could not be practiced without the tight linkage between the farmers, enterprises, scientists and government managers Four solutions should be combined together, in which the linkage between the subjects is the most important solution which allows the GAP application to reach the optimal purpose Conclusion of the disseration This dissertation consists of five chapters 1.1 Overall view of the study related to the dissertation 1.1.1 Studies related to the farmer households and development of agricultural production under GAP standard of farmer households The role of farmer households is confirmed in many studies (Le Dinh Thang, 1993) At the same time, GAP production also plays an important role in (1) maintaining the confidence of consumers in food quality and safety; (2) the production process ensures the safety; (3) minimize the negative impact on the environment (Wannamolee, 2008; ) However, the weakness of agricultural sector has a significant influence on the development investment in agricultural production of farmer households and causes negative effects in developing agricultural production under GAP (Janvry and Sadoulet, 2000, WB, Ellis, 1992; Bienabe et al., 2004; Mai Thi Thanh Xuan and Dang Thi Thu Hien, 2013; Stevens and Jabasa, 1988; ) 1.1.2 Research projects related to development investment in agricultural production under GAP standard of farmer households Studies focused on the theoretical models for farm investment (Weitz, 1971; Mendola, 2007; Velazco & Zepeda, 2001) The application of GAP increases the competitiveness in agricultural production The studies of Wannamolee (2008), Mushobozi (2010), Jiao et al (2010), Henson& Northen (1998) show that elements in the production chain play an important role in appying the food security criteria and GAP is one of them 1.1.3 Studies related to the determinants of development investment in agriculture production under GAP standard of the farmer households Nguyen Duc Thanh (2008) used the meta-analysis and showed that the determinants of the agriculture investment including general investment, local characteristics and household characters The elements of production condition like area, location, infrastructure, climate, are also illustrated having impact on the investment in GAP standard of farmer households Nguyen Thi Hong Trang (2016); Manjunatha et al (2013), Nguyen Van Hung et al (2016) Many studies used the quantitative method to evaluate the effect of character of farmer households on investment in agriculture, such as: effect of education level (Foster& Rosenzweig (1996); Pitt& Sumodiningrat (1991); Yang (2004)); number of labors in household (abdulai& CroleRees, (2001); Yang (2004)); awareness of profit, competitive capacity and reputation in applying GAP (Nguyen Thi Hong Trang, 2016); age of household head (Nguyen Van Hung et al (2016); the asset diversity and difference (Janvry& Sadoulet, 2000)… Some of studies focus on analyzing the effect of market on GAP application, including requirement of GAP products from the customers, especially from households, supermarket, retail stores, processing factories (Nguyen Thi Hong Trang, 2016) In terms of market access, there are seven major issues making market in the agricultural sector less developed Griffon et al (2008), Nguyen Duc Thanh (2008) The farmer households are lack of both resources for production and in difficult conditions in the goods transportation (Bienabe et al., 2004) The impact of government support on the investment in GAP is mentioned in a number of studies, such as Deng et al.(2010), Nguyen Van Hung (2015); Nguyen Thi Hong Trang (2016) The role of support from enterprises and credit institutions in agricultural investment of households is estimated in previous studies The large enterprises assert themselves and gradually replace the smallholder farmers in Uganda (Kleih et al., 2007) The tendency to exclude the small-scale production for food industry standards has been well documented in the structure of production and market share (Dirven, 1999; Dolan and Humphrey, 2000) In addition, a number of small farmers joined together to create a standardized agricultural organization with the high standard in Zimbabwe (Henson et al., 2005) and in Madagascar (Minton et al., 2007), or the linkage between the small farmers and enterprises as some EurepGAP projects in Zambia (Graffham and MacGregor, 2007) 1.1.4 Overview of researching approaches and methods For approaches, most of studies use the systematic approach (Mushobozi, 2010; ), practical overview approach (Asfaw, 2007; Graffham, 2006; ), qualitative approach (Reardon et al., 1996 ), historial view (Weitz, 1971; Todaro and Micheal, 1998; ), investment models (Mendola, 2007; Dasgupta,1993; ), institutional approach and behavior (Morduch, 1994, 1995; Duflo, 2003; ) For research methods most of studies use the qualitative method and others use the quantitative method Sriwichailamphan et al., (2008), Nguyen Van Hung& Nguyen Minh Ha, (2016); Nguyen Thi Hong Trang (2016) 1.1.5 Summarization of the overall result and reach gap 1.1.5.1 Summarization of the results of research about determinants of development investment in agricultural production of the farmer household A combination of studies from overview studies can be divided into five groups of factors affecting the development investment in agricultural production under GAP (1) factors of production conditions, (2) characters of farmer households (3) factors of market, (4) factors of enterprises’ investment and (5) factor groups of government’s support 1.1.5.2 The research gap Up to now, there is no research fully investigating the impact of groups of factors on the three main components of development investment in agricultural production under GAP standard: investment decision, investment size and effectiveness At the same time, there are no studies that adequately assess the five groups of factors affecting the development investment in agricultural production under GAP standard (1) factors of production conditions, (2) characters of farmer households (3) factors of market characters (4) factors of enterprise’s investment (5) factors of state’s support In addition, there is no empirical study in Vietnam examining the impact of these five groups of factors on three components of development investment in agricultural production under GAP standard Therefore, studying about the determinants of development investment in agricultural production under GAP standard: a case study of Ninh Thuan province is either not repeated or a significant contribution in theory and practice 1.2 Research Method The subject uses the systematic approach, based on analyzing the linkage the value chain and market for the poor - tools for analyzing the value chain from the viewpoint of farmer General model: Y = f (X1; X2; X3; X4; X5) where (Y) is the development investment in agricultural production under GAP standards, including investment decision (GAP ), investment size (VDT) and investment efficiency (total economic efficiency - TE, change in total productivity - TFPCH); (X1) production conditions including weather (TT), infrastructure (CSHT), area (DT); (X2) farmer characteristics comprising of age of household head (T), experience of household head (KN), number of employees (LD), knowledge of GAP of household (HBGAP), linkage between farmer households (LUND); (X3) market characters including market demand (NCTT), price (P), average profit (LNBQ); (X4) enterprise’s investment including business linkage (LKDN), support from enterprises (DNHT); (X5) state’s support including state’s support (HTNN), importance of state’s support (QTNNHT), appropriate level of state’s support (PHNNHT) The specific model:
Model evaluating the impacts of determinants on the investment decision in agricultural production under GAP standard of the farmer households: GAP = β0 + β1*T + β2*KN + β3*HBGAP + β4*NCTT + β5*P + β6*LNBQ + β7*NNHT + ei
Model evaluating the impact of determinants on the investment scale in agricultural production under GAP standard of the farmer household: VDT = β0 + β1*TT + β2*CSHT + β3*DT + β4*T + β5*KN – β6*LD + β7*HBGAP + β8*LKND + β9*NCTT + β10*P + β11*LNBQ + β12*DNHT + β13*NNHT + β14*QTHTNN + β15*PHHTNN + ei
Model evaluating the impact of determinants on the total economic efficiency in agricultural production: TE = β0 + β1*TT + β2*LD + β3*DT + β4*VĐT + β5*LNBQ + β6*GAP + ei
Model evaluating the impact of determinants on the changing level of total productivity in agricultural production of the farmer households: TFPCH = β0 + β1*CSHT + β2*HBGAP + β3*KN + β4*LD + β5*DT + β6*VDT + β7*LNBQ + β8*GAP + ei The author combines the qualitative and quantitative methods to answer the research questions of the dissertation In detail, the method includes of conducting the deep interviews with 10 individuals, making the survey with questionaire on 250 respondents in both GAP and non-GAP participation (there are 50 questionaires missing information and the rest is 200 respondents) The author uses the descriptive statistical methods, group comparisons, DID comparisons to assess the reality of investments and factors affecting the development investment in agriculture production; the DEA method is adopted to calculate the efficiency of development investment in agricultural production of the farmer households including total economic efficiency and the change in total productivity; the exploratory factor analysis (EFA) is used to investigate the new factors; running regression of the logistics model is to evaluate the impact of factors on household GAP investment decisions, OLS regression is used to assess the impact of factors on the investment size in GAP application of households and efficiency of development investment in agricultural production of farmer household CHAPTER 2: THEORY OF INVESTMENT AND DETERMINANTS OF DEVELOPMENT INVESTMENT IN AGRICULTURAL PRODUCTION UNDER GAP STANDARD OF THE FARMER HOUSEHOLD 2.1 Farmer households and development investment in agricultural production under GAP standard of farmer households 2.1.1 Farmers and the role of farmer households in agricultural production Farmer household is an economic unit having land, means of production belonging to the household, using the labor force for producing, and taking selfresponsibility for the results of production activities Farmers are either an input or an output affecting the economic growth of the economy, especially in the agricultural sector Farmer households are the main labor force and the owner of the individual economy The farmer households are the primary market for not only the agriculture but also many other sectors 2.1.2 Development investment in agricultural production under GAP standard of farmer households EurepGAP is the initial standard which is established in the late 1990s to meet the needs of the consumers By 2007, the name was changed to GlobalGAP, since then, GAP standards of regions and countries have been born VietGAP was also launched in 2008 to meet production and consumption requirements in Vietnam, a set of criteria issued by the organization, country It guides producers to ensure the quality, food safety, traceability, protection of the environment and health, the social security for workers (Ministry of Agriculture and Rural Development, 2012) It can be seen that the development investment in the agricultural production under GAP standard plays a very important role in extending the production scale, creating the infrastructure system and ensuring the food safety The development investment in agricultural production under GAP standard is the investment in all production factors to produce the high-quality products, satisfying the market demand and the sustainable development The purpose of the development investment in agricultural production under GAP standard is to create the modern agriculture, industrialization and modernization of the rural areas It consists of five characteristics: staying close to the market demand; systematically invest in all inputs of production conditions from raw 10 materials, technical facilities to human resources; investment process must adhere to the GAP standards; in depth in large investment from the state and enterprises; investment with the highest risk, especially in the first period Therefore, to achieve the success of the development investment in agricultural production under GAP standard, it is necessary to change farmer's thinking, especially to change the outdated characteristics which inhibits the current development and replace it by the new production investment habits in order to meet the investment requirement under GAP standard for the farmer households The investment capital in the agricultural production under GAP is formed mainly from different sources, such as capital accumulated from the agricultural sector, supporting capital from agricultural enterprises, the capital from the intermediary financial institution (commercial banks) and foreign assistance to farmers GAP production by farmers requires a uniform investment of all elements of the production process including investment in human resources, investment in infrastructure, agricultural materials investment and application of scientific and technological progress To develop the agricultural production under GAP, it is very important to evaluate the results and effectiveness of agricultural production and trading of agricultural production The indicators used for the assessment include the total investment capital, average yield, average productivity, average profit, average profit/total investment, total economic efficiency and change level in the total productivity 2.2 Determinants of the development investment in agricultural production under GAP standard in farmer households 2.2.1 Production conditions The production conditions have the huge effect on the investment capacity in agriculture under GAP standard The production conditions comprise of the natural conditions (location, terrain, soil, climate, water source, hydrology…) and the socioeconomic conditions (areas, infrastructure, the distance to the city center…) 2.2.2 Characters of the farmer households Farmer households play a very important role in agricultural production in Vietnam To successfully build a model of investment in agricultural production under GAP standards, it is necessary to carefully study the characteristics of farm households Household characteristics include age of head of household, sex of household head, experience of head of household, ethnicity, education level of household head, household size, number of laborers in household, household size 2.2.3 Characters of market According to Vu Thi Minh (2004), "the market is the most important factor affecting the decisive influence on all fruit-producing and trading activities There are two types of market: the output market and input market Talking about the output market is to talk about the social requirements for the agricultural products, the market will determine the life cycle of products where the safe products are gradually replacing the normal products The input market refers to the supply of raw materials and inputs to agricultural production, the inputs that directly affect the supply of fruit and the effectiveness of production and business of the fruit trees 2.2.4 Enterprise’s investment Investment of the enterprise can give support to farmers in the missing areas which is the necessary symbiosis to improve the effectiveness of agricultural production under the GAP standards Thus, it can be said that the investment of enterprises is positively correlated with the decision of investment in GAP application of the households 2.2.5 Supports from government The role of the state in promoting GAP standard in agricultural production is reflected by the roles of management and supporting In detail, they are planning producing areas with the GAP, developing the comprehensive infrastructure for agricultural production, developing the human resource, creating the markets for clean products with the GAP standards 2.3 Determinants of development investment in agricultural production under GAP standard- experience from some of countries in the world and the lesson for Vietnam This study presents the experience of Japan, Thailand and Malaysia which have the homogenous natural conditions and development levels in agricultural production under GAP standard They also have some similar limitations as Vietnam Based on analyzing the achievements, weakness, solutions that three countries experienced, the authors will draw the lessons for Vietnam and Binh Thuan to enhance the positive impacts and reduce the negative effects of the determinants to the development investment in the agricultural production under GAP standard 11 12 CHAPTER 3: REALITY OF INVESTMENT AND DETERMINANTS OF DEVELOPMENT INVESTMENT IN AGRICULTURAL PRODUCTION UNDER GAP STANDARD OF FARMER HOUSEHOLDS IN NINH THUAN Fig 3.1: Scale of investment capital in development investment in agricultural production under GAP stadard of farmer household in Ninh Thuan Ninh Thuan stands at the third out of 63 province in Vietnam in investment production under GAP standard It also concentrates the common difficulties affecting the success of the development investment in agricultural production under GAP standard Therefore, selecting Ninh Thuan as the typical case to investigate the application and answer the reseach question is appropriate 3.1 Characteristics of natural, economic, social condition of Ninh Thuan Ninh Thuan is a province in the Southeast Central Part of Vietnam with the severe natural conditions, more than 63% of the area is hills and mountainous, two clear climate seasons (rain and dry) with the average temperature 26-270C The socioeconomic condition is disadvantage; 24% of population is the ethnic minority who works mainly in agriculture From this point of view, it is observable that Ninh Thuan has the convenient conditions in producing grape and apple under GAP standard However, Ninh Thuan is quite far from the big city which is one of barriers in delivering the products to market 3.2 The reality of development investment development under GAP standard in Ninh Thuan in agricultural 3.2.1 General view about the development of agricultural production under GAP standard in Ninh Thuan For grape: Production under GAP standard is not adequate to it’s potential Up to 2015, Ninh Thuan achieved 110 VietGap certificates for 1.197 farmer households with the total of 280 The total quantity every year is around 14 158 ton, the products under GAP standard makes up 1.4% For apple: up to 2015, there is total of 47.3 applied GAP standard, including 75 household, the GAP product accounted for 5.2% in total quantity 3.2.2 Capital and capital source for the development investment in agricultural production under GAP standard of farmer households Source: Calculation from the results of survey with the SPSS 22.0 software It can be seen from the Fig 3.1, the scale of investment capital fluctuates from 2012 to 2016 with the highest point in 2016 and 2013 for both GAP and non-GAP households The capital scale in GAP households is higher than in the non-GAP household, which is resulted from the fact that the to larger area The capital for development investment in agricultural production of the farmer households is mainly from the profit of the previous period, loan from the bank and other merchants 3.2.3 The content of development investment in agricultural production under GAP standard of farmer households in Ninh Thuan Along with actively studying the production technique under GAP through the social media, farmers are trained in skills and experience through the supports from government’s programs Total investment capital of the household for infrastructure is around 330.41 million VND/ ha, including the investment in five main items: border pillars (74,57 million VND/ha); steel (20,12 million VND/ha); seed (27,01 million VND/ha); labor wage (VND18.69 million/ha); other infrastructure to ensure the GAP standard (190,02 VND million/ha) Total investment capital for the agricultural materials in the basic period (9 months- year) is 251.29 million VND/ha, including 216.98 million VND for fertilizer and pesticide; 37.31 million VND/ha for muck The investment capital in this period is 18.41 million VND/ha lower than the investment in non-GAP 13 14 Farmers only invest in areas for the production and treatment of microorganisms such as composting areas, storage areas to serve the agricultural production This is one of the areas where there are many constraints in farm investment 3.2.4 Evaluating the reality of development investment in agricultural production under GAP standard of farmer household in Ninh Thuan From the reality, it can be seen that the investment in agricultural production under GAP standard will increase the total of initial investment capital (14.826 million VND/sao (1000m2)) and the yearly investment capital (1, 245 million VND/sao (1000m2)) and yearly average production cost (4,767 million VND/sao (1000m2)/year) but it could give the higher productivity and profit (0,615 ton/sao (1000m2)/year and 13,546 million VND/sao (1000m2)/year) compared to the rest Therefore, from the viewpoint of the investor, if the farmer households have the convenient production condition and finance source, he should invest in production under GAP standard because he could gain the higher profit than the production under non-GAP In term of the evaluation of the average profit/ total investment capital, it is showed that investment under GAP has higher ratio of average profit per one investing coin, specifically 0,097 higher than the rest According to the economic efficiency index with the DEA model, the GAP group achieved 0.94% less average efficiency (reaching 86.1%) but the number of households reached Absolute productivity is higher than households (13 households) This suggests that GAP investments can achieve higher returns but are subject to greater risk At the same time, the results also show that neither group had an increase in aggregate productivity at present compared to the time before GAP However, compared to non-GAP investments, the GAP investment group achieved a change in aggregate productivity higher than 11.95% Limitation and causes of limitation First of all, the ratio of farmer households apply GAP program in the agricultural production is very limited Secondly, although the scale and area of GAP application increase, the this increase is not significant which is resulted from main reasons: the spontaneous production under GAP in Binh Thuan; the lack of knowledge of GAP program of the farmers; the spontaneous market of outputs; lack of the tight linkage between the government, farmers, enterprises and scientists 3.3 Analyzing the determinants of development investment in agricultural production under GAP of farmer households 3.3.1 Factors of the production conditions The quantitative analysis for the impact of climate on the agricultural production under GAP (C11, appendix 2) The factors of production condition, including the area, climate, infrastructure, are evaluated According to the survey, it can be seen that the appropriate average score for the climate and infrastructure is above the average score In detail, the farmers investing in GAP standard give score to the climate and infrastructure with 3.9 and 4.4 respectively, which is higher than the other result with 3.7 and 4.0 The average area of the GAP group is 3.0 (1000m2), higher than the non-GAP with 0.8 (1000m2) The method of DID and method of average comparison between two groups also give the same conclusion In detail, the conclusion from DID method shows that the production under GAP standard affects the improvement in infrastructure of production and creates the change of 0.59 The results from the average comparison illustrate that the GAP households often have the larger areas than the non-GAP households with the average 0.8417 (1000m2) and 0.23 score for the convenience of the climate 3.3.2 Characters of farmer households The results of the qualitative analysis show that the characters of households significantly affect the development investment in the agricultural production under GAP standard The traditional thought negatively affects and slows down the development of agriculture, especially the green agriculture under GAP standard Most of the GAP households have the connection with the other households (accounting for 96%), the rest is spontaneous household, lacking the connection to others in agricultural production The average comparison between GAP and non-GAP households shows that the age of household head is not different between two groups while the GAP households has 2.44 experience years lower, 0.4 more in labor and 1.644 score/5 score for the knowledge of GAP 3.3.3 Market factors The qualitative analysis from the market factors shows that there are many strong factors influencing the development investment in the agricultural production under GAP standard The market demand for GAP products is highly appreciated with the score of 4.9, while the average score for non-GAP products is only 3.5 Price of GAP 15 products is higher than other groups with 18.9 million dong/ ton However, the input materials are also highly required, leading to the increase in production cost, the average cost is around 42.5 million dong/ (1000m2)/nam, 6.1 million dong/sao (1000m2)/ nam higher than other groups The participation in GAP created the gap in the market demand of 1.41 score, resulting in the increase by 1.43 million dong/ton in the general average price for the GAP group In term of the average profit, participation in GAP program allows the farmer households to earn 13 546 million dong/sao (1000m2)/year higher than the non-GAP participants with the significance of 99% 3.3.4 The factors of enterprises’ investment The qualitative analysis shows that the linkage between the farmer households and enterprises is the sustainable connection in market, in which the farmer households are in charge of production, but this connection is not sustainable Similar to the connection among farmer households, most of the GAP farmer households have the linkage with the enterprises, the non- production households have less linkage with the enterprises, accounting less than 2% Only the GAP household received the supports from the enterprises and the rest is not However, the supporting level is quite low and mainly support in technique (DNHTKTs =3,3/5 score) 0.1 higher than capital support (DNHTVs= 3.2 score), this creates the average score of the enterprises‘ support (DNHT) reaching at 3.3 score 3.3.5 Factors of the government’s support The survey shows that there is a gap in evaluation of government’s support between two groups, in which the GAP households give the higher score, including the 4.0 score for the technique support (0.6 higher score) and 3.3 for capital support (0.5 higher score) The figures show that the government focuses on technique rather than capital support The GAP households also give the higher score than the average score, with the average score for the evaluation is 3.8 and 3.7, respectively The result of the DID method shows that the GAP participation helps the farmer household receive the better support from the government in both the technique and capital with 0.76 and 0.49 score gap Along with the quantitative method, the result from the qualiative also shows that the support from government plays an important role in the sucess of the development investment in agricultural production under GAP standard, but it is not the long term support 16 CHAPTER 4: ANALYSING THE DETERMINANTS OF DEVELOPMENT INVESTMENT IN AGRICULTURAL PRODUCTION UNDER GAP STANDARD IN FARMER HOUSEHOLDS 4.1 Analysing the effect of factors on the investment decision in GAP of the farmer households The regression model showing the impact of seven independent variables representing main groups: character of farmer households, market demand and support from government on the ability of participation on agricultural production The reason why we have not added the variables of the production conditions and the enterprises‘ support in the model is that the difference in the production condition between GAP and non-GAP households is not significant and there is not the infrastructure for the GAP production in Ninh Thuan This alllows every household can participate in production under GAP standard In term of the enterprises‘ support, the number of the enterprises investing in the GAP standard is very rare, beside that the enterprises only support in capital and technique for the GAP groups and not for the rest After give the weight rate for GAP households with 12.72 and 50.88 for the non-GAP households to increase the appropriation and liability for the model, we run logistics regression and get the result: Model 1: GAP = -71,423 + 0,134(***)*T – 0,183(***)*KN + 0,421(**)*HBGAP + (***) 2,938 *NCTT + 1,968(***)*P + 0,336(***)*LNBQ + 1,313(***)*NNHT + ei (Source: Result from the data survey by using the SPSS 22.0 sorfware) Therefore, the result shows that factors: market demand, average price, support from government, knowledge of Gap, average profit and age of household head have the positive impact on the ability of participation in GAP of the farmer households In which, market demand, average price and government’s support have a strong impact on GAP participation which indicates that the farmer households supply produces based on the market demand and market price If the market demand of the GAP products is high, the price of products would increase In addition, the farmers was supported by the government, the farmers will change into GAP production The result shows that the experience of household head has the negative impact on the GAP participation, which could be explained by the fact that the farmer households did not change their mind in participation eventhough they have gained more experiences This can be concluded that the experience of farmer households has 17 18 a strong impact on the production decision and they found difficulty in accessing to the new technology when they have long experience 4.2 Analysing the impact of the determinants of the investment size of the farmer households 4.2.1 Explore Factor Analysis From the result of Explore Factor Analysis, it is showed that there is eight components with 26 variables representing the determinants of development investment in agricultural production under GAP standard They are QTHTNN ( the role of government’s support) with variables; PHHTNN ( the appropriation of government’s support) with variables; variables of HBGAP (Knowledge of GAP of the farmer households); variables of the enterprises‘ support (DNHT); variables of government’s supports for the GAP farmer households; variable of the appropriation of weather; variable of market demand (NCTT) and variable of infrastructure (CSHT) 4.2.2 Analysing the impact of determinants of the investment size of the GAP farmer household The result of OLS regression in evaluating the impact of 15 variables of factor groups on the investment size in agricultural production of the farmer households under GAP standard is as follow: Model 2: LnVDT = -0,233(***)*TT + 0,158(***)*CSHT – 0,083(*)*LnDT – (*) 0,103 *LnT + 0,316(***)*LnKN – 0,164(***)*LnLD + 0,333(***)*HBGAP + 0,228(***)*LKND + 0,152(***)*NCTT + 0,143(***)*LnP + 0,384(***)*LnLNBQ + 0,288(***) *DNHT +0,294(***)*NNHT + 0,138(**)*QTHTNN + 0,212(***) *PHHTNN + ei (Source: Result from the data survey by using the SPSS 22.0 sorfware) The result shows that there are 11 factors positively impact on the size of the development investment per (1000m2) the agricultural production under GAP standard of the farmer househols, including (1) average profit – as an increase in 1% of the average profit will lead to the increase of 0.384% in the investment capital in GAP; (2) knowledge of GAP- when the knowledge of GAP increases by point, the capital for GAP will increase by 0.333% (β7=0,333); (3) Experience of household head – an increase of 1% in the experience of household head, the investment capital for GAP will increase by 0.316% (β5=0,316), (4) government’s support- an increase of point of government’s support will lead to the increase by 0.294% in the investment capital (β13=0,294); (5) the enterprise’s support-an increase by point will increase the investment capital by 0,288% (β12=0,288); (6) the linkage of the farmer households- when change from “no” into “yes”, the investment capital will increase by 0.228% (β8=0,228), (7) the appropriation of the government’s support – an increase by point in the government’s support will increase the investment capital in GAP by 0.212% (β15=0,212); (8) infrastructure – an increase by point in the investment capital will increase the investment capital in GAP by 0.152% (β9=0,152), (10) price – when the price increases by 1%, the investment capital in GAP will increase by 0.143% (β10=0,143), (11) the importance of government’s support- an increase by point in the government support will increase the investment capital in GAP by 0.138% (β14=0,138) In addition, there are four factors having the negative effect on the investment capital size, including (1) weather – and increase of point in the convenient weather will decrease the size of investment capital in GAP by 0.233% (β1= 0,233), (2) the number of labors in household- when the number of household increases by 1%, the investment capital in GAP will decrease by 0.164% (β6= 0,164), (3) the area of land – a 1% increase in the land area will decrease the size of investment capital by 0.083% (β3= -0,083) and the age of household head- when the age of household head increases by 1%, the size of investment capital will decrease by 0.103% (β4= -0,103) Auditing the correlation between the data surveyed and published To ensure the liability of data surveyed, the author conducts correlation hypothesis test between the data surveyed and data published from the statistical yearbook of Ninh Thuan, the author used the average productivity/sao (1000m2)/year of the household raising the grape and apple to calculate Fig 4.1: Correlation between the data surveyed and the real data 19 20 Source: Calculation from the data surveyed and real data in the yearly statistics in Ninh Thuan in 2016 by using the Excel The result from the calculation shows that there is the correlation between the real data and surveyed data with the correlation Pearson coefficient is 0.984 (sig=0.000