Impacts of climate change on food security in vietnam

INSTITUTE OF SOCIAL STUDIES THE HAGUE THE NETHERLANDS UNIVERSITY OF ECONOMICS HO CHI MINH CITY VIETNAM VIETNAM- NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS IMPACTS OF CLIMATE CHANGE ON FOOD SECURITY IN VIETNAM BY HuYNH THJ NHI MASTER OF ARTS IN DEVELOPMENT ECONOMICS HO CHI MINH CITY, January 2013 INSTITUTE OF SOCIAL STUDIES THE HAGUE THE NETHERLANDS UNIVERSITY OF ECONOMICS HO CHI MINH CITY VIETNAM VIETNAM- NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS IMPACTS OF CLIMATE CHANGE ON FOOD SECURITY IN VIETNAM A thesis submitted in partial fulfilment of the requirements for the degree of MASTER OF ARTS IN DEVELOPMENT ECONOMICS By HuYNH THJ NHI Academic Supervisor Ph.D NGUYEN HUU DUNG HO CHI MINH CITY, January 2013 TABLE OF CONTENTS DECLARATION i ACKN" OWLEDGEMENT • ii ABSTRACT iii LIST OF TABLES iv LIST OF FIGURES v ACRONYMS AND ABBREVIATIONS vi Chapter INTRODUCTION 1.1 PROBLEM STATEMENT 1.2 RESEARCH OBJECTIVIVES 1.3 RESEARCH QUESTIONS 1.4 RESEARCH CONTRIBUTIONS 1.5 ORGANIZATION OF THE STUDY Chapter • LITERATURE REVIEW • • 2.1 BASIC CONCEPT AND DEFINITION 2.1.1 Greenhouse gases (GHGs) 2.1.2 Emissions 2.1.3 Climate Change 2.1.4 Climate Change Scenario 2.1.5 Sea Level Rises 10 2.1.6 Food Security 10 2.1.7 Scenario 11 2.1.8 Simulation II 2.2 THEORETICAL FRAMEWORK 11 2.2.1 Theoretical Literature II 2.2.2 Empirical Studies 17 2.2.3 Conceptual Framework 24 2.3 CHAPTER REMARKS 26 Chapter 26 CURRENT SITUATION OF FOOD DEMAND, FOOD SUPPLY AND CLIMATE CHANGE IN VIETNAM 27 3.1 CURRENT SITUATION OF FOOD DEMAND, AND FOOD SUPPLY 27 3.1.1 Paddy Production 27 1.2 Domestic Rice Consumption and Export 32 3.2 CURRENT SITUATION OF CLIMATE CHANGE 35 3.3 CHAPTER REMARKS 35 Chapter 39 METHODOLOGY AND DATA 39 4.1 METHODOLOGY 39 4.2 SOURCE OF DATA 43 4.3 CHAPTER REMARKS 44 Chapter 45 DATA ANALYSIS AND RESULTS 45 5.1 IMPACT OF CLIMATE CHANGE ON RICE YIELD IN MEKONG DELTA 45 5.2 CLIMATE CHANGE SCENARIOS AND FOOD SECURITY SCENARIOS IN VIETNAM UP TO 2030 49 5.3 CHAPTER REMARKS 58 Chapter 59 CONCLUSIONS AND RECOMMENDATIONS 59 6.1 SUMMARY OF THE STUDY AND CONCLUSIONS 59 6.2 RECOMMENDATIONS 60 6.3 LIMITATIONS AND FURTHER RESEASRCHES 61 REFERENCES 63 ~ ~ r-il ~ ~ DECLARATION I declare this is the scientific research of my own Data collection and analysis in this paper is truthful, not distorted This paper is not copied from the others In my research, I have used some data from previous studies which were studied by official organizations For these data, I have already written the sources clearly below in tables as well as in paper's Appendix and References I hereby undertake responsibility for the contents of my thesis And I certify that this study has not already been submitted for any degree and is not being currently submitted for any other degree Ho Chi Minh City, January 2013 Huynh Thi Nhi ACKNOWLEDGEMENT p Fist of all, I would like to thank my supervisor, Dr Nguyen Huu Dung for his intellectual support and his wonderful inspiration I am grateful for his support and kindness in helping me at every stage of my research His knowledge about rural development and environment issues has helped me to understand and enjoy those issues The suggestions and comments from him are significant which was improved my research Without his understanding and encouragement, I would not complete this paper Secondly, my thanks go to Dr Nguyen Van Ngai, who was given some hints for my topic as well as methodology in the first step In addition, I also would like to thank Dr Ha Thuc Vien and Dr Tran Tien Khai who taught me the deep knowledge of the economic environment as well as inspired me to environment issues Finally, my thanks go to my family and my friends who were at my side and supported to me throughout this program I would not fmished my course unless their encouragements II - ABSTRACT This paper studies how climate change impacts on national food security Econometric model is used to estimate from the secondary data as pool data of Mekong Delta in period 2001-2010 The Cobb-Douglas functional form is applied for the average yield function The result indicates that in Cobb-Douglass model, as the temperature rises by 1%, the estimated decrease the rice yield is 0.45% and the rice yield also decreases 0.15% on average when the precipitation increases 1%, holding all other factors constant The qualitative analysis and simulations with different scenarios are also applied to build on Vietnam's food security scenarios up to 2030 The findings show that Vietnam has to face the lack of rice for consuming up to 2030 in IPSL-2030 climate change scenario This country needs to add 4.2 million tons ofrice to ensure food security at the national level Meanwhile, in GISS-2030 and MORNE-2030 scenarios, Vietnam is still ensure for domestic consume, and the surplus rice for export in these two scenarios are 0.4 and 1.5 million tons, respectively Ill LIST OF TABLES Table 2.1: Summary of Empirical Studies about Impacts of Climate Change on Agriculture and Food Security 20 Table 3.1: Paddy Yield by Regions ofVietnam, 1995-2010 31 Table 3.2: Domestic Rice Consumption in Vietnam, 1995-2010 .32 Table 3.3: Rice Export Volume of Vietnam, 1995-2010 33 Table 5.1: Descriptive Statistics of Data 45 Table 5.2: Panel Unit Test Results 47 Table 5.3: Estimation Results 47 Table 5.4: Average Annual Temperature increase in Degrees by Agro-ecological Zones 49 Table 5.5: Average% Changes in Annual Precipitation by Agro-ecological Zones 50 Table 5.6: Rice Yield Change under Climate Change Scenarios 50 Table 5.7: Estimated Rice Planted Area versus Impact of Climate Change up to 2030 51 Table 5.8: Forecasted Domestic Demand of Food in Vietnam up to 2030 53 Table 5.9: Balancing Paddy Supply and Paddy Demand in Vietnam until 2030 54 Table 5.10: Food Security Scenarios up to 2030 by CAP-IPSARD 55 Table 5.11: Climate Change Scenarios and Food Security Scenarios up to 2030 56 iv LIST OF FIGURES Figure 2.1: Global Warming and Changes in the Climate System Figure 2.2: Climate Change and Food Security 15 Figure 2.3: The Linkage between Climate Change and Food Security 25 Figure 3.1: Paddy Statistic in Vietnam, 1995-2010 .27 Figure 3.2: Cultivated Paddy Area by Regions of Vietnam, 1995-2010 29 Figure 3.3: Distribution ofVietnamese Paddy Production (average 1995-2010) 30 Figure 3.4: Average Rice Consumption in Vietnam, 2000-2006 .33 Figure 3.5: The Share Rice Exports ofVietnam in World Total, 1995-2010 34 v Change in Rice Yield (%) -18.4 -6.9 -4.3 Estimate Rice yield (tons/ha) 4.34 4.95 5.09 Average Number of Crops/year 2 Rice Planted Area (million ha) 3.812 3.812 3.812 Rice Output (million tons) 33.1 37.7 38.8 Domestic Rice Consumed (million tons) 37.3 37.3 37.3 National Food Security for Rice (million tons) -4.2 0.4 1.5 Source: Estimated (Author's calculation based on MORNE' data, Nguyen, VH (ICD-MARD, 2009), Bingxin Yu et al (IFPRJ, 2010) Table 5.11 presented the climate change scenarios and food security scenarios up to 2030 Some assumptions have been applied in this situation In supply side, we used the findings of Bingxin Yu et al (IFPRI, 201 0) to display the impact of climate change on rice yield with three climate change scenarios as IPSL-2030, GISS-2030 and MORNE-2030 The rice yield is estimated as 4.34 tons/ha, 4.95 tons/ha, 5.09 tons/ha, respectively in three scenarios The number of crop per year is expected around crops per year Rice planted area is expected 3.812 million It meets the objective of Vietnamese Government which also based on historical data and estimated data about land loss by climate change, urbanization, industrialization, etc to forecast And so, rice cultivated area is estimated around 7.6 million in 2030 Thus, the total rice output up to 2030 is calculated In demand side, this paper adopted data from Nguyen, V.H (ICD-MARD, 2009) which domestic demand for rice has been estimated Finally, this part evaluates food security by comparing the rice demand and rice supply 57 As a result, up to 2030, food security is one issue of concern in Vietnam Among of three climate change scenarios, rice output in MORNE-2030 scenario is the highest output in these scenarios with accounted by 38.8 million tons In GISS-2030, the output is estimated 37.7 million tons These two scenarios could meet for domestic rice demand and for export However, in IPSL-2030 scenario, the rice output does not satisfy the requirements of rice for domestic consumption The shortage of rice in IPSL-2030 is 4.2 million in order to ensure national food security Hence, Vietnam's food security could be threatened in the future Simultaneously, world's food security will be effect as Vietnam has not rice surplus for export 5.3 CHAPTER REMARKS This chapter has set up on Vietnam's food security scenarios for up to 2030 with three climate change scenarios as GISS, IPSL and MORNE The results showed that in GISS and MORNE scenarios, Vietnam meets the rice output to ensure food security at the national level and be surplus to export, but it will be shortages in IPSL scenario These findings of this study conflict with other previous researches According to CAP-IPSARD (2011), Vietnam has still enough rice to ensure food security up to 2030 However, our study indicates Vietnam has to face with the shortages of food under the impact of climate change 58 Chapter CONCLUSIONS AND RECOMMENDATIONS 6.1 SUMMARY OF THE STUDY AND CONCLUSIONS In fact, there are the relationships between climate change and food security Climate change will be reduced productivity, increased land erosion and land loss They are more serious in the future due to more emissions into the environment Some climate variables as temperature, precipitation, sea level rises, etc have impacted rice production in reality Therefore, they have affected food supply side and threatened food security as a consequences However, the change in rice yield under climate change is different in Vietnam's agro-ecological zones Up to 2030, food security in Vietnam will be threatened due to climate change Of which, rice supply may be not respond to rice demand First, this study has developed a quantitative estimation of the impacts of weather conditions on the rice yield in Mekong Delta in period 2001-2010 The findings of our research indicate the temperature and the precipitation negatively relate on rice yield It presents that the paddy yield will be decline when the temperature and precipitation rise In Cobb-Douglass model, as the temperature rises by 1%, the estimated decrease the rice yield is 0.45% on average, and the rice yield also decreases 0.15% on average when the precipitation increases 1% holding all other factors constant In addition, this paper has analyzed and compared some climate and food security scenarios which were studied by previous researches and the objectives of Vietnamese Government But our paper evaluates food security scenarios up to 2030 by Center for Agricultural Policy as well as the goals of Government will not perform in reality under impacting of climate change Then, this paper has built on Vietnam's food security scenarios for up to 2030 In GISS-2030 and MORNE-2030 scenarios, Vietnam not only meets the 59 rice output to ensure food security at the national level but also is surplus to export In MORNE-2030 scenario, the surplus rice output is 1.5 million tons to export In GISS2030, the surplus rice output to export is 0.4 million tons However, in IPSL-2030, Vietnam needs to add 4.2 million tons of rice to ensure food security at the national level In conclusion, Vietnam's food security will be more pressured in the future due to impact of climate change on food production Therefore, the Vietnamese policy makers should note in the policy and fmd out appropriate solutions to adapt to climate change as well as ensuring national food security 6.2 RECOMMENDATIONS In this study, we estimate the food security based on the balance rice demand and rice supply The findings showed that Vietnam will be lack of the rice for consumption under the impact of climate change Therefore, in order to adapt climate change and ensure national food security, we suggest some solutions which are carried out at the same time as follows: In supply side: Firstly, realizes the paddy land to follow Vietnamese Government Planning: At the moment, Decision No 124/2012/QD-TTg approving master plan of production development of Agriculture to 2020 and a vision toward 2030 has been promulgated and effective Therefore, departments and local authorities need to coordinate and resolutely implement an effective plan It means that not use paddy land to build industrial parks or golf Instead, we should use infertile sandy soil, or land used for aquaculture less effective for these purposes Simultaneously, need to perform the policies which met for rice farmers achieved 30% profit on the direction and enriched by serving rice as they will be motivated to keep rice land Secondly, increases the number of crops per year: in order to that, we have to change the structural rice varieties and crop structure Specifically, the short-term hybrid rice will be promoted instead of the long-term pure rice as the current 60 Thirdly, reduces the post-harvest losses of rice: use the combined-machinery in harvesting rice, build the planning irrigation system must be synchronized with the development of inland transportation system, associated with rural roads to facilitate for moving machinery, open the training courses about technology and equipment of post-harvest for farmers In demand side: Firstly, diversifies the components of daily diet to reduce per-capita rice consumption: reduce the quantity of rice in diet and use the others such as com, cassava Moreover, Vietnamese consumers should to add consuming vegetables, fish, meat, egg, fruit, etc to ensure the nutrient instead of rice for mainly consuming in daily diet Secondly, reduces the rice for animals by using the others for feed: need to use the other food as com, cassava and vegetables These solutions above focused on food supply and demand to ensure food security Besides that, we suggest some solutions to adapt climate change as follows: build and upgrade sea dikes system, salinity sewers system and construction of dikes closed to protect agricultural areas; plant and protect the forest to prevent deforestation, contribute to flood protection, soil erosion, etc; limit the use of fossil fuels and find alternative energy sources for those to reduce emission which caused greenhouse gases; invest in agricultural research and development; cooperate with international organizations on climate change 6.3 LIMITATIONS AND FURTHER RESEARCHES In this study, we used econometric method to estimate the impact of climate change on rice yield in region-level The results of regression in Cobb-Douglas model are quite well Specifically, the signs and the coefficients of temperature and precipitation variables indicate the negative relationship with rice yield These are suitable for Mekong Delta region in reality However, the value of R-square and adjusted R- 61 - - square are low for the model Therefore, the relevance of the model is still low As mentioned in Chapter 4, the technological progress variable is omitted due to lack of correct information Thus, we ignored this variable and estimated the model without it Because technological progress is also important variable, so our results may not fully reflect the impacts of all variables on rice yield In addition, this study separated the analysis into two parts The first part is for Mekong Delta region with historical data in period 2001-2010 The second part is for Vietnam with simulation up to 2030 However, we not linkage these parts together due to the results of the first ones is not good to simulate These lead to the connection between the parts is inconsistent for the research Furthermore, this paper used some data from previous researches and legal document to calculate and estimate food security in both sides such as rice yield, rice planted area, average rice consumed per capita, population, etc Thus, the result of my paper is depended on previous researches which are special organizations about climate change and food security In addition, food were known with many items such as corn, paddy rice, cassava, sweet potato, maize, meat, vegetable, egg, milk, etc but this study only focus on rice item For these reasons, this study suggests that further researches should dig into the model that fully reflected the variables impacting on rice yield as well as rice production On the other hand, researches in the future need to present food security which consist other food items 62 , REFERENCES Bingxin Yu, Tingju Zhu, Clemens Breisinger & Nguyen Manh Hai 2010 "Impacts of Climate Change on Agriculture and Policy Options for Adaptation: The Case of Vietnam" IFPRI Discussion Paper 01015, August 2010 CAP-IPSARD, 2011 "Kjch ban v~ an 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24,963.70 - 36.90 1996 7,003.80 3.52 26,396.70 5.74 37.69 2.14 1997 7,099.70 1.37 27,523.90 4.27 38.77 2.86 1998 7,362.70 3.70 29,145.50 5.89 39.59 2.11 1999 7,653.60 3.95 31,393.80 7.71 41.02 3.62 2000 7,666.30 0.17 32,529.50 3.62 42.43 3.45 2001 7,492.70 -2.26 32,108.40 -1.29 42.85 0.99 2002 7,504.30 0.15 34,447.20 7.28 45.90 7.12 2003 7,452.20 -0.69 34,568.80 0.35 46.39 1.05 2004 7,445.30 -0.09 36,148.90 4.57 48.55 4.67 2005 7,329.20 -1.56 35,832.90 -0.87 48.89 0.70 2006 7,324.80 -0.06 35,849.50 0.05 48.94 0.11 2007 7,207.40 -1.60 35,942.70 0.26 49.87 1.89 2008 7,400.20 2.68 38,729.80 7.75 52.34 4.95 2009 7,437.20 0.50 38,950.20 0.57 52.37 0.07 2010 Average ( 1995-2000) Average (2001-201 0) Average (1995-2010) 7,513.70 1.03 39,988.90 2.67 53.22 1.62 7,258.62 2.12 28,658.85 4.54 39.4 2.36 7,410.70 -0.19 36,256.73 2.13 48.93 2.32 7,353.67 0.69 33,407.53 3.04 45.36 2.33 Year • _ -~_yerag Output Appendix Pool Unit root test- Rice yield variable • • Pool unit root test: Summary Series: YIELD_lA, YIELD_DT, YIELD_AG, YIELD_TG, YIELD_VL, YIELD_BT, YIELD_KG, YIELD_CT, YIELD_HG, YIELD_TV, YIELD_ST, YIELD_BL, YIELD_CM 69 Date: 09/28/12 Time: 22:35 Sample: 2001 2010 Exogenous variables: Individual effects Automatic selection of maximum lags Automatic selection of lags based on SIC: to Newey-West bandwidth selection using Bartlett kernel Prob.** Method Statistic Null: Unit root (assumes common unit root process) 0.0023 Levin, Lin & Chu t* -2.83649 Null: Unit root (assumes individual lm, Pesaran and Shin W-stat ADF-FisherChi-square PP- Fisher Chi-square unit root process) 0.90502 0.8173 16.4184 0.0086 28.6848 0.0064 Crosssections Obs 13 110 13 13 13 110 110 114 ** Probabilities for Fisher tests are computed using an asymptotic Chi -square distribution All other tests assume asymptotic normality Appendix Pool Unit root test- Temperature variable Pool unit root test: Summary Series: TEMPERATURE_LA, TEMPERATURE_DT, TEMPERATURE_AG, TEMPERATURE_TG, TEMPERATURE_VL, TEMPERATURE_BT, TEMPERATURE_KG,TEMPERATURE_CT,TEMPERATURE_HG, TEMPERATURE_TV, TEMPERATURE_ST, TEMPERATURE_BL, TEMPERATURE_CM Date: 09/28/12 Time: 22:39 Sample: 2001 2010 Exogenous variables: Individual effects Automatic selection of maximum lags Automatic selection of lags based on SIC: to Newey-West bandwidth selection using Bartlett kernel Method Statistic Prob.** Null: Unit root (assumes common unit root process) Levin, Lin & Chu t* -7.06100 0.0000 Null: Unit root (assumes individual lm,PesaranandShinW-stat ADF-FisherChi-square PP-FisherChi-square unit root process) -3.11962 0.0009 52.7875 0.0000 56.8587 0.0000 Crosssections Obs 13 113 13 13 13 113 113 117 ** Probabilities for Fisher tests are computed using an asymptotic Chi -square distribution All other tests assume asymptotic normality Appendix Pool Unit root test - Precipitation variable • Pool unit root test: Summary Series: PRECIPITATION_LA, PRECIPITATION_DT, PRECIPITATION_AG, PRECIPITATION_TG, PRECIPITATION_VL, PRECIPITATION_BT, 70 PRECIPITATION_KG, PRECIPITATION_CT, PRECIPITATION_HG, PRECIPITATION_TV, PRECIPITATION_ST PRECIPITATION_BL, PRECIPITATION_CM Date: 09/28/12 Time: 22:42 Sample: 2001 2010 Exogenous variables: Individual effects Automatic selection of maximum lags Automatic selection of lags based on SIC: to Newey-West bandwidth selection using Bartlett kernel Method Statistic Prob.** Null: Unit root (assumes common unit root process) Levin,Lin&Chut* -6.80714 0.0000 Null: Unit root (assumes individual lm, Pesaran and Shin W-stat ADF- Fisher Chi-square PP-FisherChi-square Crosssections Obs 13 115 13 13 13 115 115 117 unit root process) -3.50518 0.0002 57.3555 0.0000 63.1813 0.0000 ** Probabilities for Fisher tests are computed using an asymptotic Chi -square distribution All other tests assume asymptotic normality Appendix Regression Results output with Cobb-Douglas Model Dependent Variable: LOG(YIELD?) Method: Pooled Least Squares Date: 09/28/12 Time: 23:02 Sample: 2001 2010 Included observations: 10 Cross-sections included: 13 Total pool (unbalanced) observations: 127 Variable Coefficient Std Error t-Statistic Pro b c LOG(TEMPERATURE?) LOG(PRECIPITATION?) 6.487824 -0.454398 -0.152676 3.324282 1.003285 0.050938 1.951646 -0.452910 -2.997294 0.0532 0.6514 0.0033 R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood F-statistic Prob(F-statistic) 0.269715 0.254711 0.145227 2.615257 66.35417 4.646260 0.011329 Mean dependent var S.D dependentvar Akaike info criterion Schwarz criterion Hannan-Quinn criter Durbin-Watson stat 3.852158 0.149370 -0.997704 -0.930518 -0.970407 0.209576 71 ... from grain fed livestock products • Shift in proportion of locally produced foods in the diet • Increase in consumption of new food items • Reduction in consumption of wild foods • Reduction in quantities... food • Consuming food -+ Change in Components of Food Security • • • • Food availability Food accessibility Food utilization Food system stability I t Possible Changes in Food Consumption Patterns... Non-farm livelihood assets • Food preparation assets Possibility of Migration and Conflict Change in Food System Activities • Producing food • Storing and processing of food • Distributing food