The Thai Nguyen province is well-known for its high quality tea in Vietnam. In order to improve the quality of tea products that satisfy health requirement standards, a recent movement from conventional tea production to organic tea production has occurred. To analyze gains and losses from this conversion, impacts to the environment should be evaluated and analyzed to determine both short term and long term effects on tea growers in particular and on society as a whole.;Surveys are used to collect panel data from 4 representative tea producing villages involving 180 tea producing households in the Thai Nguyen province in 2007. Soil, water and tea samples were collected on a monthly basis during the research period in order to analyze pesticide residues and agro-chemicals in the soil, water and tea products. The Stochastic Production Frontier (SPF) model was used to analyze production and profit efficiency. A probit model was employed to determine factors affecting the adoption of organic tea and Monte Carlo simulation was used to analyze risk and uncertainty involved in the conversion to organic tea production in the Thai Nguyen province. A Cost Benefit Analysis (CBA) was carried out to determine and compare net present value (NPV) of both private and social benefits for different tea production methods. The results show that organic tea production has high production efficiency (0.998), profit efficiency (0.836), and NPV of social benefit. Organic tea production also contributes substantially to the reduction of chemical residues in the soil, water and tea products (residues of chemicals and pesticides were not found in water and tea samples taken at the end of the tea production season for the first year converted organic tea farm). However, organic tea production has a lower NPV of private benefits during the transition period (five years). External support, such as government subsidies has a significant contribution to farmers' decision of whether or not to switch to organic tea production. The adoption rate for organic tea production would equal to zero if the premium price and outside support were removed.
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