Insurance policies by mattsteinglass
March 29, 2009, 10:11 pm
Filed under: Economics, Vietnam

Back in 2004, while working on an article about whether the Vietnamese government was compensating farmers adequately for land it seized to turn into industrial parks, I had to try and figure out what farmland in northern Vietnam was worth. Trying to estimate its value based on how much rice the typical farmer could grow on an average plot produced a figure of just a few hundred dollars a year, which seemed absurdly low. The logical thing would be to check the market price, obviously, but there I came up against the odd fact that nobody knows what the market price is, because there isn’t really a market for farmland in northern Vietnam. Farmers in Vietnam mostly have private title to their land, but in most rural areas, they sell it to other farmers so rarely that one can’t really speak of an agricultural real estate market. The reason farmers so rarely sell land is in part because other farmers can’t access credit to buy land, but it’s mainly because rural farming families in Vietnam that own land are extremely reluctant to sell it: they view their land as an insurance policy for their children. If all else fails, they say, as long as they have the land, their children will always be able to eat rice.

At the time, I viewed this as a ridiculous premodern economic attitude.

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