The comparative advantage of coffee production in Lam Ha District, Lam Dong Province, Vietnam: A domestic resource cost approach

Tran Doc Lap *

* Correspondence: Tran Doc Lap (email: tdlap@hcmuaf.edu.vn)

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Received: 24 May 2017
Revised: 06 Jun 2017
Accepted: 06 Jun 2017
Published: 10 Jul 2017
DOI: 10.58810/vhujs.5.2.2017.5228
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How to Cite
Tran, L. D. (2017). The comparative advantage of coffee production in Lam Ha District, Lam Dong Province, Vietnam: A domestic resource cost approach. Van Hien University Journal of Science 5(2), 83-93.
Issue
Volume 5 - Issue 2 (2017)
Section
Economics

Main Article Content

Abstract

Lam Dong has its very potentials of being a strategic coffee producing region serving the domestic market and export. However, the volatility of coffee price along with intrinsic weaknesses had recently affected the competitiveness of coffee production of the province. The Domestic Resource Cost approach (DRC) was employed in this study to analyze the factors affecting the comparative advantage of coffee production in Lam Ha, Lam Dong. Key results showed that despite of the obvious dependence on the world price of coffee, Lam Ha remains highly competitive of coffee production and the competiveness is highly sensitive to domestic resource costs, foreign resource cost and the exchange rate. In particular, if the cost of domestic resources increased by 25%, DRC/SER = 0.7; or if the cost of foreign resources increased by 25%, DRC/SER = 0.641; or if the exchange rate fell 25%, DRC/SER = 0.43; or if the price of coffee exports fell 25%, DRC/SER = 0.866. The approach used in this study gains more insights about the differences in comparative advances of coffee production in Lam Ha District, Lam Dong Province; it could be, therefore, adapted and applied for coffee production in other provinces in Central Highlands or perennial plants in Vietnam.
Keywords: Domestic Resource Cost (DRC), Comparative advantage, Coffee production, Lam Ha-Lam Dong

Article Details

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