This paper explores the effects of labour movement into nonfarm activities on household production choices in rural Vietnam. It finds that agricultural production declines and there are negative effects on farm revenue. However, these conclusions are limited in the North. Households in the North readjust their production structure by investing in livestock and other crops that require less labour. Rice farmers in the South have managed to keep their rice production unaffected by hiring more labour, and investing more capital to switch to less labour-intensive farming. Evidence of relaxing liquidity constraints is found, at least in the short run. While the decline in agricultural revenue in the north suggests some level of substitution between farming and nonfarm activities, the stability in rice production at the national level brings good news to policy makers and for food security despite rapid structural change over the past decades.