Applying Policy Analysis Matrix (PAM) in Agricultural Policy an Empirical Study of Tuong-Mango in The Southern Vietnam

Abstract

The aim of the study is to apply policy analysis matrix (PAM) to identify macroeconomic policy efficiency, and establish policy scenarios. The study investigated 849 sampling observation of eight main actors in chain. The results prove that the export channels 1, 2, and 3 have comparative and competitive advantages (PRC, DRC less than one and SBC more than one), and the domestic channel 4 is competitive advantage (PRC less than one). In addition, channels 1, 2 and 3 are supported the production and business by the output protection policy (NPCO <1). In particular, channel 1 is supported by added value increase policy form government (EPC 0.14 and SRP -0.17). The channel 4 is subsidized tradable input price (NPCI <1) compared to the channels 1, 2 and 3. Overall, macroeconomic policies influence remarkably on economic efficiency and competitiveness of the export channels (protection of output price, exchange rate, and subsidization of domestic cost). Channel 1 adapts well to change of macroeconomic policies, and it still maintains economic efficiency and international competitiveness in all scenarios. The FOB price policy's specifications have a significant influence on Channel 2. One may postulate that the economic feasibility or competitive edge of the product may be compromised in the event that the DRC surpasses a threshold of 1, resulting in a reduction of 20% in FOB pricing of the product. Channel 3 exhibits a significant degree of responsiveness when faced with a 20% surge in tradable cost. Indicators of this phenomenon include inefficiency, a high exchange rate (EPC, and DRC > 1), and responsiveness. Moreover, this phenomenon of sensitivity becomes evident when there is a rise in the currency rate, leading to a subsequent reduction in export attempts. A frequently used approach involves augmenting the FOB price while simultaneously reducing the exchange rate by 20% (SRP <0).