The Provision of Agricultural Mechanization Service and the Financial Performance of Rice Farms in Vietnam

Abstract

The aim of this study was to analyze the financial performance of agricultural mechanization service delivery for rice farms in Vietnam. From the Vietnam Household Living Standard Survey 2014 data set, data of 164 farmers who provided agricultural mechanization services for rice production were extracted to evaluate the financial performance. Results showed that the duration of farmers’ operation to provide services for rice production was about 2.8 months/year on average. The profit of mechanization service delivery for rice production was about 17 million VND/year. The average return on sales ratio was about 56.4%. Regression results indicated that Kinh households had lower financial efficiency than other ethnic groups. If the main person in charge was the household's head, it was less effective than other family members. Variables of asset depreciation, labor outsourced, agricultural credit, and rice land area reduced the financial efficiency of agricultural service providers. Meanwhile, farmers who were men with primary income from rice production had higher financial efficiency in providing agricultural services.