The Salinization of Agricultural Hubs: Impact of and Adjustment to Intensifying Saltwater Intrusion in the Mekong Delta
Speaker: Hanh My Le (Technical University of Braunschweig)
Abstract: We study the impact of saltwater intrusion on agricultural production and resource reallocation in coastal deltas. Our studied area is the Vietnamese Mekong delta, a large rice exporter known as the ‘Rice Bowl’. Inland dispersion of saltwater is identified by combining river salinity data recorded at coastal hydro-stations and distances along the delta’s artificial canal network. Higher salinization is estimated to reduce rice production yet increase the production of salt-resistant industrial crops. Regarding re- source reallocation, salinization is shown to reduce land use and partly labor supply in agriculture. While the effects on household income and consumption are negative, our estimate signals long-term adjustment in the form of increased educational spending in response to salinity shocks. For smoothing mechanisms, we find mixed evidence on labor migration to urban centers for off-farm work and suggestive evidence on the role of local credit access in mediating income losses.
Host: Matthias Flueckiger (York)