Strategy for Distribution of Improved Seed by Research Centre for Forest Tree Improvement (RCFTI), Vietnam

22/08/2007 Ministry of Agriculture & Rural Development Strategy for Distribution of Improved Seed by Research Centre for Forest Tree Improvement (RCFTI), Vietnam Prepared January 2007 Output from CARD Project No. 058/04VIE Strengthening Capacity in Forest Tree Seed Technologies Serving Research and Development Activities and ex-situ Conservation Disclaimer: The contents and opinions contained in this conceptual framework have been provided in good faith and on the basis that endeavour has been made to be accurate and not misleading and to exercise reasonable care, skill and judgment in providing such opinions. Neither Ensis nor any of its employees, contractors, agents or other persons acting on its behalf or under its control accept any responsibility or liability in respect of use or exploitation of this conceptual framework by any person. 1. Executive Summary and Recommendations The Research Centre for Forest Tree Improvement (RCFTI) currently produces 100 kg of genetically improved tree seed from over 40 seed producing stands (seed orchards or seed production areas). The seed represents 15 species which are regarded as key species for commercial and social application in Vietnam and other similar international environments. Over the next five years RCFTI will become a self supporting research organisation and so the seed production is predicted excess of 300 kg of improved seed which can make a significant contribution to the timber industry in Vietnam. In order to achieve this, RCFTI has to develop its market capability and diffusion capability to distribute the seed and other germplasm sources it produces together with its range of services. As part of CARD Project 058/04VIE ‘Strengthening Capacity in Forest Tree Seed Technologies serving Research and Development activities and ex-situ Conservation’, there is a requirement to produce two related strategies, one dealing with commercialisation of RCFTI’s seed sale activities and this document dealing with strategies for distribution of seed. This document should therefore be read and contents developed in conjunction with the business strategy titled ‘Concept Paper covering development of a Business Plan for Tree Seed Supply & Technical Services by the Research Centre for Forest Tree Improvement, Vietnam’. The successful distribution of better adapted and genetically improved seed by RCFTI relates to four problem areas. These are: a) lack of awareness and confidence by growers (credibility) of the benefits of improved seed from RCFTI, b) how to get access to the improved seed, c) the relatively small quantities of seed produced by RCFTI compared with total demand, and d) the relatively high cost of RCFTI seed compared with seed from other national sources. Companies in Vietnam who appreciate the benefit of improved tree seed, often prefer to purchase seed from international sources with a proven reputation. This is in spite of the fact that the RCFTI seed may be better adapted and of superior genetic quality, and significantly cheaper than international sources. By contrast, farmers are after the cheapest possible seed or seedlings and have to rely on access from local sources. Given RCFTI’s limited distribution network and higher pricing structure, the centre has not been able to sell direct to farmers. In order to overcome these challenges and be able to effectively market and distribute its seed, RCFTI needs to implement a number of initiatives designed to target niche markets where seed 2 quality is important. The following is a summary of recommendations. More detailed information is provided in Section 6. Summary of recommendations It is appreciated that marketing in to the Vietnam tree seed sector is difficult given the lack of appreciation for genetically improved tree seed in the market place and comparatively limited amount of seed RCFTI has available making it a minor player in the seed sector. By contrast RCFTI has been effective in marketing its seed and other products on the international market where the quality of its products is better understood and valued. In order to enhance the adoption of genetically improved seed and planting material at the national level there is a need to: • Get certificates and registration for genetic seed source (seedling seed orchards, clone seed orchards and seed production areas), approval of advanced genetically germplasms and sufficiency for ability of genetic germplasm production and business. • understand market needs - customers, competition etc.; • raise the awareness of the value of improved material; • quantify the value of improved seed; • determine the demand and supply of major species used in the planting programs, and • identify the best routes for deployment. In order to achieve these requirements, RCFTI needs to: o Speed up getting the certificate and registrations of advanced genetically germplasms o Carry out a customer analysis to provide a profile on customer needs and what goods and services RCFTI can provide. RCFTI needs to develop its brand name so that it is recognised as the preferred supplier of quality seed. Foster good relations with existing stakeholders and at the same time develop new business opportunities. o Gather market intelligence relating to market demand such as species and seed requirements and how RCFTI’s goods and services are differentiated from competitors. Develop pricing strategy based on costs, competitor prices and what the market is prepared to pay. o Develop promotional material and interaction with clients. This will vary according to customer base from personal contact with key stakeholders to field demonstrations for farmers and a wide range of stakeholders. 3 o Develop closer collaboration / partnerships with stakeholders particularly within MARD. This has the potential to increase market exposure and influence the use of genetically improved seed as part of a government strategy. o Continue to develop new improved strains of species and hybrids to meet market demand. This work should be carried out in parallel with market intelligence. All new ‘improved seed’ must be vigorously tested against other improved seedlots and industry standards. 2. Background Since 1993, large-scale tree planting programs have been carried out in Vietnam. More recently, the government has initiated a program aimed at establishing an additional 5 million ha of forest development over the period 1998-2010 through rehabilitation of natural forests and new plantations. The forest sector including RCFTI through its tree breeding program and seed supply plays a very important role in these massive planting programs. Key stakeholders include the Ministry of Agriculture and Rural Development (MARD) through its various departments and sub-departments at the central and provincial level, forest industries, farmers and donor agencies. The average annual planting rate is reported to be 360 000 ha. At least 50% of the planted forests will utilise exotic species, the majority of which will be acacias and eucalypts, the species that RCFTI have been focussing on. It is estimated that 470-750 million seedlings will be planted annually for which 245-370 tonnes of seeds are needed each year to propagate the required seedlings (MARD 1998). According to the decision No of 89/2005/QĐ-BNN issued by MARD in December, 2005, certificate of seed sources must be registered. For using the seed source, all seedling seed orchards have to be certificated by MARD while seed production areas have to be certificated by Provincial Department of Agriculture and Rural Development. Therefore, the need to to initiate, establish seed production sources of good genetic quality and certificate the seed sources to support the national reforestation programs has been emphasised by MARD. Government agencies including the Central Forest Seed Company (CFSC), RCFTI and some provincial research centres are all involved in development of seed production sources (seed production areas and seed orchards). CFSC has a seed production network of major plantation 4 species totalling 3000 ha. Under Program 327, state forest enterprises in some provenances were assigned to establish seed production areas of selected species. RCFTI presently has 73.8 ha of seed stands comprising 31 seed production areas and seed orchards across15 species (Appendix I). There are a number of issues that need to be addressed by the industry and which affect RCFTI’s ability to be an effective distributor of seed. • Collaboration between tree seed stakeholders in Vietnam is generally lacking. There is a need for a clear division of tasks particularly at the government level (MARD) to minimise the duplication and competition among stakeholders. • The genetic and physiological quality of seed and seedlings used in the tree planting programs is often not satisfactory. There appears to be limited awareness of the real value of genetically improved seed among seed users, seed producers and decision-makers. Often good germination is the only attribute considered. • The price of seed (e.g. seed orchard seeds) and planting material (e.g. acacia hybrid cuttings) from good sources is much more expensive than that of routine seed. In order to fulfil the planting target within the available budget, project managers opt to use seed and planting material from cheap sources. 3. Current tree seed stakeholders in Vietnam There are many stakeholders involved in the production, supply or use of seed. These stakeholders can be divided into four main groups: 1) Government agencies under the umbrella of MARD, 2) Forest industries, 3) Farmers, and 4) Donor projects. MARD and its key forestry departments, institutions and representations at the central, provincial and district levels are major stakeholders and as such all play a very important role. In addition, forest industries, farmers, international donors and NGOs are also involved in one role or another in this sector. The role or responsibility of these stakeholders related to the 5 production, supply and use of seed and planting material. The following information on the various stakeholders is an update of Pinyopusarerk et al (1999). MARD As the ministry in charge of all tree planting programs in Vietnam, MARD is responsible for development of policy, strategies, guidelines and regulations related to production of seed and planting material, and to control and monitor their production and utilisation. MARD Headquarters is located in Hanoi. MARD’s Department of Forestry (DoF) is the executive office for the 5-million ha Program and in charge of policy, strategy issues and organising and guiding on: • Establishment of seed stands and nurseries • Production and utilisation of seedlings to ensure stable and sufficient supply of quality seedlings • Developing appropriate composition of forest plantation, regeneration, enrichment and thinning • Export and import of seed and seedlings under government regulations Another important department of MARD involved in the 5 million ha Program is the National Centre of Agriculture and Forestry Extension (NCAFE). NCAFE operation extends to provincial, district and commune levels, and is represented by Agriculture and Forestry Extension Centre in every province and city. About 70% of the districts have established an extension station. The main functions of extension are: • to introduce new agroforestry techniques • to assist farmers to design and set up demonstration models • to facilitate exchange of ideas between farmers • to produce extension material (nursery propagation) Central Forest Seed Company The Central Forest Seed Company (CFSC) falls within MARD, and has been the main agency responsible for production and supply of seed and planting material in Vietnam. CFSC has a nation-wide mandate and operates through its seven regional seed enterprises which are located in seven provinces/cities of Hanoi, Lang Son, Vinh Phuc, Quang Binh, Lam Dong, Quy Nhon and Ho Chi Minh City. Currently 3000 ha of seed sources are registered with CFSC with an 6 estimated production capacity of 400 tonne/year. Most recently CFSC has drafted a national plan for the production and supply of forest seeds for the 5-million ha Program. CFSC has several roles as a stakeholder in the seed network: • Planning of seed demand and supply • Supply of seed and planting material (seedlings, cuttings, tissue-culture plants) • Procurement, processing, storage and testing of seed • Establishment of seed orchards and seed stands (conversion from selected plantations) • Import and export of seed • Research, testing and development of new techniques • Information and extension service Provincial Departments of Agriculture and Rural Development In each province or city MARD is represented by a Department of Agriculture and Rural Development (DARD) which implements MARD’s policy under the authority of the People’s Committee of the province. The main role of DARD in the seed sector is: • Development, approval and control of Program 327 and 5-million ha Program within province • Control of state forest enterprises (all provinces) • Control of provincial seed enterprises (some provinces only) • Control of provincial forest experimental stations/centres and technical sections of DARD (some provinces only) • Extension services Out of the total 61 provinces and cities, 42 are engaged in the production and supply of tree seed and planting material. District Agriculture and Forestry Section At the district level DARD is represented by Agriculture and Forestry Section which implements MARD’s policy under the authority of the People’s Committee in the district. AFS manages Program 327 and 5-million ha Program within the district in cooperation with people’s committee in communes. Their main roles are: • User of seed and seedlings • Nursery propagation 7 State Forest Enterprises (SFEs) SFEs are a major arm of DARD in the plantation forestry development within provinces. There are currently more than 400 SFEs, with one in most districts. They manage forests totalling more than 4.5 million ha or 41% of the forest area. The average size of a SFE is 10,000 ha. Current role of SFEs in the seed sector is: • Seed production from own seed sources • Seed supplier • Production of seedlings and cuttings • User of seed and seedlings • Extension service Forest Research Institutions MARD’s Department of Science and Technology advises the ministry on research matters and direct research through the Forest Science Institute of Vietnam (FSIV). FSIV operates through three research centres and seven divisions based in Hanoi, one sub-institute in Ho Chi Minh City and eight regional research and production centres located in the provinces of Phu Tho, Son La, Lam Dong, Vinh Phuc, Dong Nai, Gia Lai, Quang Tri and Ca Mau. FSIV’s Research Centre for Forest Tree Improvement is a leader in tree improvement research with a long contact with CSIRO and SAREC through regular exchanges of people, seed, training and equipment. Another prominent research institution is the Phu Ninh Forest Research Centre of Paper Corporation of Vietnam. This Centre has conducted research on species/provenance selection and established seedling and clonal seed orchards of many commercially important species. Forest Industries Forest industries involved in the seed sector are limited to those which invest in plantations for production of raw material. Most are state-owned or joint ventures. Vietnam Forest Corporation (Vinafor) Paper Corporation of Vietnam (formerly Bai Bang Pulp and Paper Mill) Wood processing association 8 International companies and donors (such as Oji Paper Company, Vijachip/Nissho Iwai, Stora Enso) Farmers With the current government policy to involve active participation of local communities in forest protection and reforestation, local farmers are now one of the most important players in the seed supply network. In some communes up to 80% of the people are involved in forestry activities. Farmers play a very important role in the seed sector today as seed suppliers, collectors and growers. 9 Table 1. Main functions of stakeholders involved in the seed supply and management network in Vietnam. Stakeholder Function MARD Policy issues See import Seed production Seed supply Nursery Technology transfer User s Central departments x x Central Forest Seed Company x x x x x Provincial DARD x x x x District Agri. & Forestry Section x x State Forest Enterprises x x x x x Forest research institutions x x x x x Forest Industries x x x x Farmers x x x Donor projects x x x x 10 4. Issues associated with diffusion of genetically improved seed The successful distribution of genetically improved seed and other germplasm relates mainly to three problem areas. These are: a) availability of improved germplasm supported by plausible data; b) access to seed by growers; and c) adoption rate and use. a. Availability of better-adapted and genetically improved planting material RCFTI is the key national body in Vietnam for the development of authenticated genetically improved seed. However, the 100 kg produced currently and anticipated yield of 300 kg by 2010 is an insignificant amount when it is predicted that Vietnam requires 245-370 tonnes of tree seed per year to meet requirement. However, this should not prevent RCFTI from establishing niche markets for customers who appreciate the benefits of RCFTI seed. In agriculture, proven genetically improved seed is well recognised by farmers and there are grower networks to produce seed of the required strains to meet demand. In forestry, growers are generally unaware of the benefits of improved seed and the industry is accepting of unimproved seed of unknown source. Species choice may be the only demand. It is only with time and field demonstrations that particular clones or strains are recognised as in the case of the A. mangium x A. auriculiformis hybrids developed by RCFTI which now has national and international fame. b) Access to genetically improved seed and planting stock For agricultural crops, seed supply systems are well advanced and growers are well aware of the merits of improved strains as a result of their own experiences and from word of mouth reports. However, such supply systems for tree seed are not developed and there is a lack of appreciation of the real value of improved tree seed. This is in part because of the difficulty of providing convincing evidence to growers compared with agricultural crops. Growers often obtain planting stock rather than seed from various sources. The growers have little control over the seed source and may in fact not be aware of genetic differences and their potential impact on yield. Trees being perennial provide a virtually inexhaustible supply of readily available local cheap seed. This situation is quite unlike that experienced in agriculture where technically it should be easier to introduce germplasm of new annual crop varieties and quickly replace older ones. 11 The temptation for nurseries to collect and use any available seed to meet planting deadlines and customer needs is very real. Several years may pass before the adverse effects become apparent. c) Adoption and use of better-adapted and improved plant material Because of RCFTI’s limited capacity to influence the tree seed sector in Vietnam, only a v