Private land ownership has contributed to this growth process—in part by allowing land to be reallocated to more efficient farmers who thereby increase aggregate output. In his early research on the reform, Hayami (1994) saw the new legal framework on land as a trigger to more efficient agriculture without fear that an inequitable agrarian structure would emerge (Hayami 1994; Ravallion and van de Walle 2006). This expectation was confirmed some 10 years later: an emerging, active land market contributed to more rapid poverty reduction, redirected land into the hands of the most efficient producers, and fostered agricultural diversification.
Major components of this growth, which led to reduced rural poverty, are attributable to higher per hectare yields in rice and other crops. These yield increases went hand in hand with the diversification into new or intensified non-crop endeavors, such as aquaculture, livestock breeding, and nonfarm activities. The sharply different growth rates in the acreage of annual crops (1.7 percent) compared to perennial crops (6.3 percent) (Nguyen 2008) indicate the impact that strengthened incentives such as secured land-use rights for tree and shrub cultivation have had on long-term investments in land. With 43 percent intensification, improved irrigation and an increased application of fertilizer contributed