CRS's Supports to Agro-Enterprise Development in Nghe An province, Vietnam. Hanoi May, 2008 Catholic Relief Services Agriculture and Rural Enterprise Development Program

Contents Rational Project management and implementation structure. Process of agro-enterprise development. Initial achievements –Strengthened ability of government agencies. –Diversified agriculture production with market orientation –Improved livelihood of the targeted communities. Created of new jobs Value added Environmental and healthy issues ensured Issues and lessons learnt –"Clean/organic products". –Continuity of supports –Project supports: capacity building or material supports or both. –Food security and cash income.

Situation of agricultural production Characteristics of Traditional agricultural production: –Primary concern in food security, therefore efforts focused on increasing production. –Oversupply in local market when production increase causes failing price and as result of this farmers’ income reducing –Farmers and their service providers/ facilitators try to find market for agriculture products –Farmers are forced to sell their products at very low price because products are not what that market desires As consequence: Economic prospects for rural communities are improving slowly

Options to improve Economic prospects for rural communities  Improving the competitiveness of their products in local, national and regional markets.  Achieving economies of scale through collective action for production and marketing  Gaining access to business development services that improves access to higher value / more competitive markets and provides employment opportunities

Implementation structure for Agro-enterprise development in Nghe An province CRS in partnership with Nghe An authority to promote territory approach to agro-enterprise development.  Ensure the project will be implemented through the Government administration structure (changing a system not a segment).  Improve skill and knowledge of government staff in promoting market oriented production (sustainability, continuity).  Promote ownership and sustainability of the project (participation & sustainability).  Looking for policy improvement for poverty alleviation through agro-enterprise development (scaling up).

Provincial People's Committee CRS Vietnam Provincial DPI District People’s committee Commune People's Committee DMB Farmer AE Group CRS ARED CIB....

Process of Agro-Enterprise development 1. Territorial selection and partnership development. 2. Market opportunities identification 3. Enterprise design and implementation. 4. Strengthening of business support services 5. Advocacy for pro-poor marketing and trade policy

Initial achievements to date  Strengthen ability of government agencies in promoting agro-enterprise development and project management. 3 Project area resource assessments – 30 advantaged products proposed 7 Rapid market analysis (RMA) – 19 market potential products identified. Participatory market opportunity identification - 18 products selected under decision of farmer producers, traders, buyers and relating people. Facilitating 51 farmer groups in group establishment, designing and implementing agro-enterprise activities. 8 products tested as market requirements. 6 products contractually supplied to the buyers. Facilitating linkages between farmer groups and markets/ traders: Metro supermarket in Hanoi, the North Nghe An Exporting and Importing Company, Huong Nam Company in Hai Phong province, Chipsgood Processing Company in Hung Yen province and big traders in Nghe An province.

Cabbage sold in the Metro supermarket

Initial achievements to date  Diversify agriculture production with market orientation 11 new varieties introduced for products met market requirements : Hot chilli: Thai met exporting standards Cabbage: Greenhelmet Japanese Green squash: F2 Thanh Long Spring onion Tomato: Thai Perfect 89, F1 Thanh Nong, American F1 VL 2500 and F1 609 Bean: F1 Indian Water melon: CS 202 and TN 46.

Improved livelihoods of target communities  Created new jobs: Project interventions introduced to improve product’s quality: packaged and processed (rotten selection, classifying, stalk removal, drying). Farmer uses their leisure time to remove stalk of chilly as buyer required Farmers clean spring onion before delivering to the buyers.  Value added Chilli with stalk removed has higher price (1,000 VND/kilo compared with unremoval). Cabbage is packaged, labelled and sold in Supermarket for 1,700 VND/kilo higher price compared with no package. Tomato is sold with 500-1,000 VND/kilo higher than price of local variety. New watermelon varieties have met market requirements on quality so the price is 1,000 VND/kilo higher than local variety

 Increased income of target farmers.  Income from cabbage sold in supermarket is 51% higher than sold in local market at the same time.  Income from watermelon sold in supermarket is 36% higher than sold in local market at the same time.  Yield of new tomato variety increased – income from tomato increased 40% compared with local variety.  Income from cabbage produced on the same landarea (500m2) is 46% higher than field cabbage.  Field cabbage produced in off-season generated 50% of income compared with produced in main crop.  Income from field cabbage is 83% higher than maize on the same landarea ( reduce half of growing time: 4 months to 2 months)  Income from spring onion is 50% higher than maize on the same landarea. Improved livelihoods of target communities

Income improved Total income from new crop formula/stru cture increased by 44% in comparison with normal crop structure. Normal crop structureNew crop structure Formula 1 Tomato5,000,000Spring onion2,400,000 Spring onion2,400,000Tomato5,000,000 Spring onion2,400,000Leafy vegetable1,000,000 Leafy vegetable1,000,000Spring onion2,400,000 Carrot3,000,000Cabbage5,000,000 Total13,800,000Total15,800,000 Formula 2 Leafy vegetable1,000,000Spring onion2,400,000 Spring onion2,400,000Water melon8,170,000 Spring onion2,400,000Spring onion2,400,000 Spring onion2,400,000Leafy vegetable1,000,000 Tomato5,000,000Cabbage5,000,000 Total13,200,000Total18,970,000

 Environmental and health issues ensured :  Use of pesticide and chemicals reduced.  Increased use of microorganic fertilizer and bio- pesticide that improve soil quality and ensure safe of products.  Quality of products supplied to supermarket are certified by authorized bodies that ensure safe for human health. Livelihood of the targeted communities improved

Issues and lessons learnt  “Clean/ organic products”. ( Production costs - producer's economic profit and consumer’s acceptance and sustainability of support ).  Continuity of supports to promote agro-enterprise development. ( Roles of actors involved in promotion agro-enterprise development esp. management office, service institution )  Focus on capacity building or material supports or both.( interests from local authorities and donors )  Food security and income.( Balance between market attention and Accessibility to food )