Excerpt from Production Capacity and Supply Response in Vietnam's Agriculture: An Application of an Economic Research Service Production-Distribution Model for Vietnam

The model solutions that are presented in this report do not begin to exhaust the possible useful runs that could be made. Countless additional variables could be evaluated, and almost infinite variations of the runs that are reported here-could be completed. A major thrust of this particular study involved an evaluation of the potential impact of various categories of land resources that might be added over the planning period. These resource sit uations could have been combined in many different ways. Solutions would have differed with different combinations. But the combinations used served the purpose of indicating relative differences, within a framework emphasizing broad directions and_impacts. At some point, however, Government of Vietnam (gyn) will need to focus on particular development strategies. At such time, the particular combination of resources to be employed could be defined and numerous useful evaluations could be made regarding particular enterprises, particular prices, particular processing plants in specific locations, particular capital limitations, specific improvements in transportation, or other variables as desired. It would also be possible, of course, to evaluate the impact on the agricultural economy of superimposing other categories of resources, not con sidered in this study, simply by defining the resources and incorporating the appropriate date into the model. Another useful modification would be the ih corporation of infrastructure costs related to changes in resource use. The model is highly flexible. Variables and coefficients can be added, deleted, or changed at will. Effects of changes are determined simply by making additional runs.

The model provides a vehicle or framework for evaluating economic alter natives. It could be used for this purpose in the future. It should not be used blindly, however. For extensive and continued use into the future, many improvements would be needed in terms of data refinement, and in terms of devel oping information on enterprises and resources not included in this study. The data and relationships included in the model have withstood the test of reason ableness in the many runs made to this point. It must be remembered, however, that when this work was started, the data base was virtually nonexistent It is possible for experienced analysts to work successfully with less than ideal data, particularly if they are intimately familiar with the data and details of the model. Occasionally, for example, a particular run simply will not be made because of the knowledge that the data are not adequate for the specific evalu ation. Data quality becomes much more critical, however, with less experienced analysts farther removed from data and model development, and for the more detailed evaluations needed for focusing on some types of highly specific questions. With the framework developed, it would now be possible to refine and supplement the data set quickly and relatively easily. This should be done if the model is to used extensively in the future. There would always be a need to keep data current, of course.

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