**1. Introduction**

Vietnam is a country with a long agricultural tradition in which highly-skilled farmers make up 68% of the population. Annually, Vietnam has been exporting a lot of agricultural prod‐ ucts, which contributes a large amount of foreign currency to the governmental budget. Re‐ cently, Vietnam has become the second largest exporter of rice after Thailand, of cashew after Indonesia and of coffee after Brazil. Moreover, Vietnam is one of the top-leading ex‐ porters for rubber, and black pepper.

Although the contribution of farmers is very important for agriculture as well as for the economy of Vietnam, farmers' earnings are much lower than the rest of the population. This fact has created an income gap between rural and urban people. To solve this problem, the government has applied a variety of policies to increase the farmers' income, for instance, policies related to import, export, agricultural outputs and inputs etc. However, studies on the effectiveness and impacts of such policies are still limited. How have the policies under‐ taken by the government had an impact on farmers? Are farmers receiving any benefits from policies provided by the government? These are the questions that the study partly seeks to answer. In this study, the method of policy analysis matrix (PAM) was used to ana‐ lyze the effect of policies on soybean production in Vietnam. Moreover, the analysis of PAM also answers whether the development of soybean production has potential in Vietnam, in other words, whether soybean cultivation has a comparative advantage in Vietnam com‐ pared to the other soybean producers in the world. The results of the study are useful to pol‐ icy-makers, and also help us better understand the effects of the current policies undertaken by the government.

The first section of the study discusses data collection, the theoretical framework and some use‐ ful policy parameters of PAM. The second section reviews the current situation of soybean pro‐

© 2013 Viet Khai and Yabe; licensee InTech. This is an open access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. © 2013 Viet Khai and Yabe; licensee InTech. This is a paper distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

duction in the study area by doing the cost - benefit analysis (CBA) of soybean production. The third section presents the establishment of, results of, some sensitivity analyses of PAM, and policy simulations to help determine likely changes on PAM's parameters. This will be fol‐ lowed with some conclusions.
