the observed outcomes. According to the authors, a lack of clarity regarding the law
and its poor match with local conditions has left considerable room for local
interpretations, and has resulted in highly variable outcomes between provinces.
The policy does not create the incentives needed to promote sustainable land use
practices in northern Vietnam.
5.3.4 Poverty, Resilience and Risk Attitudes
Economic life in the rural areas of developing countries and in mountainous areas in
particular, is subject to a high level of risk, and the insurance mechanisms used to deal
with this risk are often incomplete. Risk is widely acknowledged as a challenge to
agricultural development, and the different types of risk include weather-related
risks, diseases that adversely affect crop and livestock production, health risks that
affect households’ on- and off-farm incomes, and institutional risks that affect
households’ access to credit, input and output markets. Increasing climate variability
and the greater integration of global markets, as reflected in increasing price volatility
and new trans-boundary crop and livestock diseases, are likely to further constrain
farmers’ abilities to increase agricultural productivity and improve their livelihoods
in the future. Farmers’ level of resilience
6 in relation to these shocks and their ability
to cope with risky situations has important implications for their capacity to make
long-term decisions, such as investing in natural resource conservation. This section
investigates the linkages to be found between farmers’ level of wealth and their
resilience against economic shocks.
7 In addition, we investigate, using experimental
data collected in 2010, the relationship between wealth and attitudes towards risk,
hypothesizing that poor households’ level of resilience at this time was particularly
low due to a poor asset base and a low coping capacity. This situation can be expected
to lead to a higher level of risk aversion among the poor.
5.3.4.1 Risk Exposure and Resilience
The most common shocks experienced by farmers during the period 2005–2011
were drought (23 % of shocks cited À85 % of responses referred to the year 2010),
animal deaths (23 %), floods (17 %), illness (14 % – with 8 % represented by
working people and 6 % by dependents), and low yields due to pests or disease
6 Resilience is defined as the ability of a household to resist a downward movement in welfare
caused by a shock (Ellis 1998: 14; Scoones 1998: 6).
7 A shock is defined as an event that leads to a substantial reduction in a household’s asset
holdings, income or consumption. Since households aim to smooth consumption (Morduch
1995), a household is resilient if, due to a sufficient coping capacity, a decline in asset holding
or income levels does not translate into lower levels of consumption. Hence, we assess resilience
based on whether or not a given shock led to a reduction in household consumption levels.
5 Linkages Between Agriculture, Poverty and Natural Resource Use. . .
185
and its poor match with local conditions has left considerable room for local
interpretations, and has resulted in highly variable outcomes between provinces.
The policy does not create the incentives needed to promote sustainable land use
practices in northern Vietnam.
5.3.4 Poverty, Resilience and Risk Attitudes
Economic life in the rural areas of developing countries and in mountainous areas in
particular, is subject to a high level of risk, and the insurance mechanisms used to deal
with this risk are often incomplete. Risk is widely acknowledged as a challenge to
agricultural development, and the different types of risk include weather-related
risks, diseases that adversely affect crop and livestock production, health risks that
affect households’ on- and off-farm incomes, and institutional risks that affect
households’ access to credit, input and output markets. Increasing climate variability
and the greater integration of global markets, as reflected in increasing price volatility
and new trans-boundary crop and livestock diseases, are likely to further constrain
farmers’ abilities to increase agricultural productivity and improve their livelihoods
in the future. Farmers’ level of resilience
6 in relation to these shocks and their ability
to cope with risky situations has important implications for their capacity to make
long-term decisions, such as investing in natural resource conservation. This section
investigates the linkages to be found between farmers’ level of wealth and their
resilience against economic shocks.
7 In addition, we investigate, using experimental
data collected in 2010, the relationship between wealth and attitudes towards risk,
hypothesizing that poor households’ level of resilience at this time was particularly
low due to a poor asset base and a low coping capacity. This situation can be expected
to lead to a higher level of risk aversion among the poor.
5.3.4.1 Risk Exposure and Resilience
The most common shocks experienced by farmers during the period 2005–2011
were drought (23 % of shocks cited À85 % of responses referred to the year 2010),
animal deaths (23 %), floods (17 %), illness (14 % – with 8 % represented by
working people and 6 % by dependents), and low yields due to pests or disease
6 Resilience is defined as the ability of a household to resist a downward movement in welfare
caused by a shock (Ellis 1998: 14; Scoones 1998: 6).
7 A shock is defined as an event that leads to a substantial reduction in a household’s asset
holdings, income or consumption. Since households aim to smooth consumption (Morduch
1995), a household is resilient if, due to a sufficient coping capacity, a decline in asset holding
or income levels does not translate into lower levels of consumption. Hence, we assess resilience
based on whether or not a given shock led to a reduction in household consumption levels.
5 Linkages Between Agriculture, Poverty and Natural Resource Use. . .
185