Climate Change and Profit Loss: A Case History of Salinity Intrusion in Rice Production

Climate Change and Profit Loss: A Case History of Salinity Intrusion in Rice Production

Huynh Viet Khai
Copyright: © 2020 |Pages: 15
DOI: 10.4018/978-1-5225-9562-5.ch006
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Abstract

The chapter aims to evaluate the profit loss of rice farmers due to salinity intrusion by collecting the information of rice production in three regions with the same natural environment conditions, social characteristics (e.g., the same social and farming culture, ethnicity, type of soil), and only differed with respect to the level of salinity in Soc Trang province, one of the most salinity-affected areas in the Vietnamese Mekong Delta. The study estimated the profit loss in rice production due to saltwater intrusion by the difference in rice profit between the non-salinity and salinity regions and showed this loss was about VND 9.3-15.1 million per ha-1 a year.
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Evaluation Concept And Empirical Model

The total economic loss of rice production includes three factors. First, a reduction in crop quantity assumes that salinity decreases rice yield. Second, a reduction in rice quality, which is measured as price, assumes that the lower price of rice in a particular region could reflect reduced rice quality due to salinity. Third, an increase in input costs assumes that farms may attempt to compensate for the possible productivity losses by implementing activities that are capable of offsetting this possible loss but are costlier to implement. The expectation of the profit loss is summarized by the following formula:

978-1-5225-9562-5.ch006.m01
where πnon-salinity and πsalinity are the rice profits in the non-salinity and salinity areas. Because ΔP×ΔQ is small compared with the other parts of the equation, it can be ignored and assumed to be 0.

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