Đề tài Improvement of export and domestic markets for Vietnamese fruit through improved post-Harvest and supply chain management - Milestone 9 Report

1 Ministry of Agriculture & Rural Development CARD Project 050/04VIE Improvement of export and domestic markets for Vietnamese fruit through improved post-harvest and supply chain management Milestone 9 Report July 2009 1 Table of Contents 1 Institute Information ............................................................................................................ 2 2 Contact Officer(s) .............................................................................................................. 3 3 Project Abstract ................................................................................................................. 4 4 Executive Summary........................................................................................................... 4 4.1 Introduction & Background ............................................................................................... 6 4.2 Implementation Highlights ................................................................................................. 7 4.3 Small holder Benefits and Capacity Building.................................................................. 14 4.4 Publicity .............................................................................................................................. 16 4.5 Project Management.......................................................................................................... 19 5 Report on Cross-Cutting Issues ........................................................................................ 19 5.1 Environment....................................................................................................................... 19 5.2 Gender and Social Issues................................................................................................... 21 6 Implementation & Sustainability Issues ............................................................................. 21 6.1 Issues and Constraints ....................................................................................................... 21 6.2 Options ................................................................................................................................ 22 6.3 Sustainability ...................................................................................................................... 23 7 Next Critical Steps ............................................................................................................. 24 8 Conclusion ........................................................................................................................ 24 2 1 Institute Information Project Name Improvement of export and domestic markets for Vietnamese fruit through improved post-harvest and supply chain management. Vietnamese Institution Southern Sub-Institute of Agricultural Engineering and Post-Harvest Technology (SIAEP) Vietnamese Project Team Leader Mr Nguyen Duy Duc, M. Eng. Australian Organisation Queensland Department of Primary Industries and Fisheries (DPI & F) Australian Personnel Mr. Robert Nissen Dr. Peter Hofman Mr Brett Tucker Mr. Roland Holmes Date commenced September 2006 Completion date (original) May 2008 Completion date (revised) December 2008 Reporting period Milestone Report 7 3 2 Contact Officer(s) In Australia: Team Leader Name: Mr. Robert Nissen Telephone: +61 07 54449631 Position: Project Leader Fax: +61 07 54412235 Organisation Queensland Department of Primary Industries and Fisheries (DPI & F) Email: bob.nissen@dpi.qld.gov.au In Australia: Administrative contact Name: Michelle Robbins Telephone: +61 07 3346 2711 Position: Senior Planning Officer (Emerging Technologies) Fax: +61 07 3346 2727 Organisation Queensland Department of Primary Industries and Fisheries (DPI & F) Email: michelle.robbins@dpi.qld.gov.au In Vietnam Name: Mr Nguyen Duy Duc, Telephone: +84 (8) 8481151 Position: Director SIAEP Fax: +84 (8) 8438842 Organisation Southern Sub-Institute of Agricultural Engineering and Post-Harvest Technology (SIAEP) Email: siaep@hcm.vnn.vn 4 3 Project Abstract 4 Executive Summary The implementation of “doi moi” and poverty reduction policies by the Vietnamese Government have made significant progress in reducing poverty. The poverty rate in the Mekong Delta is still at 13.3% with a further 20% of households living just above the poverty line. The current recession could see a change in poverty rates, with people migrating from the cities back to their families in the country due to a downturn in employment opportunities. Farmers with higher education levels appear to be able to understand production problems and apply new technologies to solve those problems, whilst farmers with lower education levels implement traditional farming practices and hope the problems that they face will be solved by someone else. About 40 per cent of the Mekong Delta is affected by acid sulphate soils (ASS). Disturbance of ASS through land clearance, drainage, tillage and mounding can cause acid runoffs into the aquatic and marine environment, either killing fish or increasing the incidence of disease in the marine population. Saline soils also present further constraints to agricultural development and are located primarily in the coastal zone. Development of new, and re-establishment of existing orchards, will require soil to be either moved or disturbed, and a management plan will be needed to eliminate the runoff of acid or nutrients in the environment. Overuse and use of incorrect chemicals will have a significant impact on obtaining GAP and quality assurance for mango and pomelo in the Mekong Delta for both domestic and export markets. Environmental issues identified during consultation with farmers during this CARD Project participatory action learning workshops were: • contamination of irrigation water (salt and grey water) The fruit industry in Vietnam has a great potential and plays an important role in agricultural production. In 2003, Vietnam exported US$43 million of high value fruit to high-income countries and imported US$14 million of fruit and vegetables. Vietnam is experiencing difficulties in competing with other Asian nations in export markets and its own domestic market, especially with China and Thailand. This suggests that Vietnam’s horticultural industries require substantial development to be globally competitive. Vietnamese consumers are demanding safer and higher quality fruit. This project has identified key pre-and post-harvest technology gaps that reduce product quality, safety and consistency. Targeted training programs are focusing on the total supply chain and are providing benefits by helping to implement quality management systems and GAP systems at the village level providing greater employment for the farming community. This project embraces the five CARD strategies for rural development; and in particular; strategies to increase production and competitiveness of agricultural systems; reduce poverty and vulnerability, and increase stakeholder participation whilst ensuring sustainability. 5 • disposal of grey water and by product contamination of waterways • agricultural spray application methodology and practices • type and amount of fertiliser, their application methods to reduce environmental contamination • mixed farming methodology and cultural practices (mixed plant and animal farming practices) In Vietnam, there is a significant need to develop small and medium sized agricultural enterprises. Areas of significant need for developing small and medium agricultural enterprises are: 1. Marketing and trade development • Training on understanding supply/value chains:- They need to understand all the participants and the roles they play in a supply/value chain (domestic and export) • Training on how to develop and establish a supply/value chains:- Understand the supply/value chain development process, then build their own supply/value chain to create improved value for all the chain members. • Market analysis and development:- Understand their market; segment their market; adjust their product to their target market segment; develop new products. 2. Technology areas including plant and equipment • Information on new technologies • Implementation of new technologies • Access to new technological equipment to create added value • Efficiencies in use of equipment (reduction in idle time) 3. Business development • Establishment of associations:- Codes of conduct, rules and membership etc. • Development of the business model:- Setting up the business; Structuring the business:-Business plan, including marketing plan and financial plan etc. • Training and development of entrepreneurial skills For mango, farmers who still use the traditional supply/value chain system receive a net return of about 6,514 VND (A$0.45) per kg of fruit. Farmers who implemented new GAP systems and develop new markets achieve net returns of about 15,423 VND (A$1.07) per kg of fruit. Farmers who joined a cooperative and implemented GAP and best practice, plus develop new markets achieve net returns of about 21,793 VND (A$1.51) per kg of fruit. By being in a cooperative, farmers can substantially reduced costs of implementing GAP systems and developing new markets in HCMC. Comparison of mango to rice farming in the Mekong Delta indicates that horticultural crops provide significantly higher returns. For example:- rice farmers in the Mekong Delta grown on average two rice crops per year. The average yield is about 4.8 tonnes per hectare with a net income of 3,652 VND per kg of rice (Berg 2002, pp.100 and 102). Therefore, farmers of Cat Hoa Loc Mango receive a seven fold increase in net returns compared to rice farmers in the Mekong Delta of Vietnam. Mango fruit bagging, increased fruit quality, decreased losses due to pests and diseases and increased the farm gate returns. The increased benefit farmers receive by fruit bagging a 10 year old mango trees was 645,000 VND/tree for the secondary crop. 6 Pruning and training (Canopy management) of Cat Hoa Loc mango trees increased yield, obtained better commercial quality fruit and reduced input costs such as chemicals, spray application and labour costs. In the off season, pruned orchards benefited by 10,420,016 VND/1,000m2 or 3.4 times more profitable compared with traditional orchard canopy management methods. Organic fertilising use in Nam Roi pomelo production achieved higher yields, better quality fruit and saved on fertiliser costs. Tree health improved and the production life of the tree also increased. Farmers using organic methods benefited by 2,390,000 VND / 1,000m2 or 1.7 times more profitable compared to inorganic methods. The retail scene, especially in Ho Chi Minh City, is undergoing a great deal of change that is beginning to benefit the end consumer. Retailers of Ho Chi Minh City reported that consumers are becoming more fastidious on choosing fruit. Supermarkets and department stores have grown in number, and many are modernising their services and products to boost sales and their competitiveness. Both vertical and horizontal integration of a supply chains has to occur if chains are to be effective and efficient. Whilst all participants involved in these strategic supply chain development processes find it easy to analyses their existing chains and develop new chains, the underlying principles of developing high levels of trust, open effective communication and information flows are very difficult to achieve due to the business culture operating in these transitional economies. 4.1 Introduction & Background Ford et al., (2003) analysed the competitiveness of fruit industries in Vietnam and identified: • poor unstable product quality • no quality standards • poor post harvest technologies • poor pre-harvest practices • lack of group co-operative marketing structures • little information about supply chains, prices and customers needs. Stakeholder/beneficiary analysis of fruit crops in the Mekong delta showed that both mango and pomelo (with plantings of 33 000 ha and 9 000 ha, respectively) are very important fruit crops in Southern Vietnam. The objectives of this CARD project 05/04 VIE are to: • Improved pre-harvest technologies to produce high quality mango (integrated pest management, integrated crop management, fruit fly control, maturity indices, reduced pesticide residues, better environmental and human health etc) • Improve mango and pomelo post-harvest technologies (eg, cool chain management, packaging, post-harvest dipping, ethylene ripening, waxing, washing and wetting agents, quality assurance) • Improve quality standards and quality assurance programs for mango and pomelo. The approach and methodologies developed for these crops through this project will be applied to other fruits and vegetables. 7 • Map current supply chains to domestic and selected export markets, with particular emphasis on determining consumer preferences and needs, and reporting results back to farmers. • Provide a better understanding and possible improvements of the supply chain by Vietnamese fruit industries for mango and pomelo. This CARD project fills capacity gaps and reduces major weaknesses in pre-and post-harvest technologies affecting product quality consistency and supply chain management and planning. Highly specialised targeted training programs and research appropriate for institutions and industry stakeholders was provided to complete CARD Project 050/04 VIE Milestone 7. CARD Project Milestone 9:- Improve supply chains operational for selected fruits. The deliverables for Milestone 9 are: • Documentation of improved quality, quantity and value obtained by cluster groups, including documentation of reduction in post-harvest losses. • Analysis of socioeconomic benefits and sustainability of project outcomes, including revenue streams, use of appropriate packaging and village employment. 4.2 Implementation Highlights To complete the requirements of Milestone 9 above by documenting fruit quality, quantity and value obtained by cluster group’s surveys were conducted on the mango and pomelo supply chains operating in the Mekong Delta of Vietnam and analysis of the economic and socioeconomic benefits carried out. These results are presented in the ten reports listed below. 1. Report on Investigations into Mango Supply Chains in the Mekong Delta Vietnam 2005- 2007. 2. Investigation into the Pomelo Supply Chain in the Mekong Delta in Vietnam. 3. Fruit Quality Comparisons of Three Cat Hoa Loc Mango Supply Chains in Southern Vietnam. 4. Maintaining Fruit Quality and Increasing Shelf Life of Pomelo in the Mekong Delta of Southern Vietnam. 5. Study on economics and socioeconomics of small scale mango farming and cooperatives in the Mekong River Delta, Vietnam. 6. Efficiency Evaluation of Pruning and Training in Cat Hoa Loc Mango Production. 7. Economic Evaluation of Fruit Bagging for Cat Hoa Loc Mango Production. 8. Economic Evaluation of Organic Fertiliser in Nam Roi Pomelo Production. 9. Mango Strategic Plan Development by Project Participants in the Mekong Delta of Vietnam. 10. Pomelo Strategic Plan Developed by Project Participants in the Mekong Delta of Vietnam. Reports 1, 2, 9 and 10 provide an assessment and overview of the mango and pomelo supply/value chains operating in Southern Vietnam. Reports 3 and 4 are the results of the reduction in postharvest losses and increases achieved in fruit quality. Report 5 are studies conducted on the socioeconomic and economic benefits of the cluster group marketing Cat Hoa 8 Loc mango in the Mekong Delta of Vietnam by implementing pre-harvest and postharvest systems. Reports 6, 7 and 8 evaluate the economics of changing pre-harvest aspects to increase fruit quality, quantity and value obtained by farmers in the Mekong Delta of Vietnam. Investigations into Mango Supply Chains The retail scene, especially in Ho Chi Minh City, is undergoing a great deal of change that is beginning to benefit the end consumer. Retailers of Ho Chi Minh City reported that consumers are becoming more fastidious on choosing fruit. Supermarkets and department stores have grown in number, and many are modernising their services and products to boost sales and their competitiveness. The mango variety ‘Cat Hoa Loc’ was the most popular variety and it could be purchased anywhere in Ho Chi Minh City at any time for reasonable prices, even for the poor. Survey data indicated that prices did not fluctuate widely over the seasons for the years 2005 to 2006. Most consumers select fruit on colour and appearance with uneven ripening and fruit quality being the greatest concerns for consumers. Consumers indicated that they would prefer a mango fruit that is sweeter, has a smaller seed, is more fragrant, and has a longer shelf life. Retailers sold the mango variety ‘Cat Hoa Loc’ during the main season for 50% more than the purchase price and for 140% more than the purchase price during the off season. Terms of trade and verbal agreements with collectors and farmers need to be quickly overhauled and a new system put in place that protects the wholesaler, collector and farmer. Even though this supply chain appears to be a model of efficiency, the inability of wholesalers and exporters further down the chain to meet price and quality demands points to a significant problem. Also risks faced by supply chain participants are significant. For example one collector/wholesaler/exporter is owed a significant amount of money, some 49,000,000 VND after exporting mango fruit. Their options are extremely limited in options to receive payment for fruit all ready supplied. Many collectors, wholesalers, traders, transporters and middlemen act in an opportunistic way in order to minimise the risk of opportunism, resulting in less-than-desirable supply chains. Weaknesses in the Vietnamese legal system fail to address oblivious and dubious transactions, adding to less than desirable supply chains operating in Southern Vietnam. Fruit losses along the supply chain can be high, due to farmers not applying any post-harvest practices such as culling damaged fruit. Fruit are continually graded as they move along the supply chain, significantly reducing the effectiveness and efficiency of a supply chain. This also impacts heavily upon the cost to supply quality fruit to the consumer. Artificial ripening of mango using Calcium Carbide can be hazardous to human health. Excessive use of calcium carbide can result in direct contact with fruit, causing contamination. Calcium carbide can produce carcinogenic compounds and may contain other compounds such as arsenic or produce phosphorus hydrides, causing serious health issues. Ethrel is a considerably safer chemical and ethylene released is highly effective in ripening mangoes. 9 Prior to developing supply chain maps for mango and polmelo farmers in the Mekong Delta in southern Vietnam, many chain participants felt that they had an excellent product, but data collected from supply chain sampling revealed losses of up to 40% for mango and 30% for pomelo. This mapping revealed that losses were due to incorrect handling procedures, no cool chain, poor packaging, inadequate transport and stacking systems employed. This indicated a lack of infrastructure, knowledge and skills along the supply chain. Both vertical and horizontal integration of a supply chains has to occur