prices are optimal, and that individuals who are more risk averse tend to live in
households which not only demand less credit, but which also have lower levels of
credit access. We also found that respondents with the least potential credit access
have higher discount rates, and in general, discount rates among smallholders are
above 70 %, giving them little incentive to invest in activities which generate an
income in future years, such as soil conservation and agroforestry. Increased access
to formal credit (i.e., investment capital), savings and insurance might help improve
households’ risk coping capacities, which would, in turn, advance maize production
and promote income diversification.
For Yen Chau district in northern Vietnam, 8 % of the population was found to
be poor in 2007 and 2010, and in general, the poor in northern Vietnam have less
access to public services, especially with respect to credit and irrigation. Subsidized
credit from the Vietnam Bank for Social Policies (VBSP), which is targeted at the
poor, has a dismal record in providing credit access to this section of the population,
and our research showed that the method used by the VBSP to identify pro-poor
beneficiaries has a high level of under-coverage and leakage, and in fact seems to
discriminate against the poor. Not only are the poor often less aware of the
existence of subsidized loans, housing subsidies and monetary assistance, they
are also less involved in the community-wide decision-making process in terms
of who should be a beneficiary of such targeted programs. More objective poverty
assessment methods, such as the one presented here, could contribute to a reduction
in leakage and under-coverage. In the case of credit, it appears that an elimination
of the interest rate subsidy applied by the VBSP for its loans, coupled with
improved targeting of the poor, could sustainably improve credit access levels.
Overall, we have found that the process of agricultural intensification in the
uplands has led to rising farm productivity and farm incomes; however, in areas
where it has happened through mono-cropping or under fragile agro-ecological
conditions, such as on steep mountain slopes, the gains from intensification and
commercialization appear to be unsustainable in the long-term. An example of this
is the Yen Chau district, with its maize monoculture on the hillsides. While poverty
rates have declined substantially in the district, the sustainable elimination of
poverty will require the introduction of further pro-poor market reforms and
infrastructure policies, as well as agricultural extension and environmental
regulations related to improved agricultural practices and forest protection, and
the provision of assistance – targeted in particular at the chronically poor in the
areas of health, housing, nutrition, social assistance, political participation, infrastructure provision and education.
Acknowledgments We gratefully acknowledge the funding provided for the Uplands Program
(SFB 564) by the Deutsche Forschungsgemeinschaft (DFG) and the Ministry of Science and
Technology in Vietnam, and also thank Volker Hoffmann and Oliver Fro ¨r for their constructive
comments, Gary Morrison for editorial work, and Peter Elstner for helping with the layout.
Open Access. This chapter is distributed under the terms of the Creative Commons Attribution
Non-commercial License, which permits any noncommercial use, distribution, and reproduction in
any medium, provided the original author(s) and source are credited.
488
M. Zeller et al.
households which not only demand less credit, but which also have lower levels of
credit access. We also found that respondents with the least potential credit access
have higher discount rates, and in general, discount rates among smallholders are
above 70 %, giving them little incentive to invest in activities which generate an
income in future years, such as soil conservation and agroforestry. Increased access
to formal credit (i.e., investment capital), savings and insurance might help improve
households’ risk coping capacities, which would, in turn, advance maize production
and promote income diversification.
For Yen Chau district in northern Vietnam, 8 % of the population was found to
be poor in 2007 and 2010, and in general, the poor in northern Vietnam have less
access to public services, especially with respect to credit and irrigation. Subsidized
credit from the Vietnam Bank for Social Policies (VBSP), which is targeted at the
poor, has a dismal record in providing credit access to this section of the population,
and our research showed that the method used by the VBSP to identify pro-poor
beneficiaries has a high level of under-coverage and leakage, and in fact seems to
discriminate against the poor. Not only are the poor often less aware of the
existence of subsidized loans, housing subsidies and monetary assistance, they
are also less involved in the community-wide decision-making process in terms
of who should be a beneficiary of such targeted programs. More objective poverty
assessment methods, such as the one presented here, could contribute to a reduction
in leakage and under-coverage. In the case of credit, it appears that an elimination
of the interest rate subsidy applied by the VBSP for its loans, coupled with
improved targeting of the poor, could sustainably improve credit access levels.
Overall, we have found that the process of agricultural intensification in the
uplands has led to rising farm productivity and farm incomes; however, in areas
where it has happened through mono-cropping or under fragile agro-ecological
conditions, such as on steep mountain slopes, the gains from intensification and
commercialization appear to be unsustainable in the long-term. An example of this
is the Yen Chau district, with its maize monoculture on the hillsides. While poverty
rates have declined substantially in the district, the sustainable elimination of
poverty will require the introduction of further pro-poor market reforms and
infrastructure policies, as well as agricultural extension and environmental
regulations related to improved agricultural practices and forest protection, and
the provision of assistance – targeted in particular at the chronically poor in the
areas of health, housing, nutrition, social assistance, political participation, infrastructure provision and education.
Acknowledgments We gratefully acknowledge the funding provided for the Uplands Program
(SFB 564) by the Deutsche Forschungsgemeinschaft (DFG) and the Ministry of Science and
Technology in Vietnam, and also thank Volker Hoffmann and Oliver Fro ¨r for their constructive
comments, Gary Morrison for editorial work, and Peter Elstner for helping with the layout.
Open Access. This chapter is distributed under the terms of the Creative Commons Attribution
Non-commercial License, which permits any noncommercial use, distribution, and reproduction in
any medium, provided the original author(s) and source are credited.
488
M. Zeller et al.