PPP Task Force Meeting Hanoi, 11 th April 2014 PPP coffee task force project REPORT OF COFFEE SEASON 2013

Aim of the program: Propose and validate a «package of innovations» with particular focus on: – improving the yield and the quality compared to farmers practice; – reducing the environmental impact Share best practices with the farmers and provide training Share knowledge and competences within the technical group (Nestlé, Syngenta, MARD, WASI, NAEC,…etc) Farmer organization in PPP coop. PPP institutionalization in CCB

Location of the demo plots ProvincesDistrictNo. of demos Dak Lak (17)Buon Me Thuot city Cu M’Gar Cu Kuin Dak Nong (27)Dak Song Dak Rlap Lam Dong (16)Bao Lam Lam Ha Di Linh Gia Lai (10)Chu Rong Iahrai 5555 Total :72 demos (15 demos) Size: ha

ICM Good farming practice (varieties, pruning, irrigation) New varieties from WASI: TR4 (7.3 tons), TR12 (4.3 tons), support 50% cost of plantlet for rejuvenation Pruning technique: Recommend to keep the height of coffee tree around 1m7, balanced tree shape for better photosynthesis Irrigation: reduce water amount up to 40% per round, irrigate based on the humidity of soil, shading tree, cover the soil using straw (monitor and follow up via farm diary)

ICM Good farming practice (nutrition, CPM and sustainability) Crop nutrition: soil analysis, balanced nutrition, adjust fertilizer formula to fit with the development of tree. Crop protection: use fungicide to avoid berry drop Sustainability – Water saving up to 40% – Carbon footprint reduce 54% – Recommend compost from coffee husk (at least 1.5 tons/ha) => reduced chemical fertilizer 0.25 – 0.5 kg/tree (equivalent to 30%) – Reduce amount of insecticide – Comply with sustainable standards, follow the recommendation of Monitoring Group etc.

Farmer’s practice and PPP program kg/ha (Macro nutrient) 100g/ha (Micro nutrients) Less N, P and K and extra soil application of Ca, MgO and TE (Urea, Ammonia) (Nitrate, Ammonia)

High rate of fertilizer applied in Control plot 17.9% 23.2% Fertilizer rate (kg/ha)

264N - 126P 2 O K 2 O - 90CaO - 25MgO - 53S +1,2 B + 0,28 Mn + 0,28 Zn Proposed Coffee nutrition program :

Greener and healthier leaves in PPP plot PPP Control Farmer Doan Van At, Lâm Hà, Lâm Đồng

Better growth in PPP plot Hộ ông Trần Văn Hiền, Đắk Song, Đắk Nông

More fruit and better yield in PPP plot PPP Control Farmer Nguyen Duy Thanh, Dak R’lap, Dak Nong

PPP program increases in average yield by 8 to 13 % Average yield of 3 provinces demos (ton of green beans/ha) Yield increase: +480 kg/ha (11.4%) Turnover: +18,252,000 vnd/ha % % % Coffee price: 38,0000đ/kg

Cost- benefit analysis of 6 demos in Lamdong (2), Daknong (2) and Gia Lai (2) * Unit area: Ha * Increased profit: USD/ha ( + 10 %) CategoryPPPControlPPP vs Control (+/-) Yield (ton/ha) Fertilizer cost (USD) 1, , Crop protection cost (USD) Total cost (USD) 3, , Cost per kg of bean Total return (USD) 9, , Profit (USD) 5, ,

Sustainability - PPP program: 55.4% less carbon emission CFP calculation for 6 demos PPP program: 304 kg N/ha 5.2 t g.b./ha Control program: 484 kg N/ha 4.8 t.g.b/ha From : Yara Research Center, Haninghof, Germany kg CO2eq/t green bean 661 1,487

 Effective rainfall is circa 113 mm from January to April.  Under the condition of no soil water stress, the required irrigation to meet the deficit CWU is about 347 mm, i.e. 1,050 liter/tree/round (cf. penmann Montheith)  However, crop phenological factors require induced water stress during January to April. Sustainability - Water Results ItemData seriesSurvey Sample size (N)664 (2005 – 2009)300 (2011) Plant density (tree / ha)1,094 ± ± 86 Productivity (kg / ha)2,420 ± 1,010 (max. 3,458)2,872 ± 906 (max. 3,119) Net Income (usd / ha)1,664 ± 9881,213 ± 956 Irrigation (liter/tree/round)470 ± 2241,391 ± 854 # of Irrigation rounds33

Sustainability – Pruning, Compost Pruning technique: – Recommend to keep the height of coffee tree around 1m7 – Balanced tree shape for better photosynthesis – Reduce the berry drop (34 – 40 berries per bunch) – Reduced the disease Provide training for making compost from coffee husk: – Coffee husk for each hectare is 2.5 – 3 tons/ha – Making compost from coffee husk, leaves after pruning, rubbish etc.) will deliver 2.5 – 3 kg compost/tree – Reduced chemical fertilizer 0.25 – 0.5 kg/tree (equivalent to 30%) – Monitor the compost process via farm diary book – Comply with sustainable standards

PPP Coop Structure Technical Working Group (province) Farmer Group Farmer Group Farmer Group Farmer Group Local collector/retailer Cooperative Management Board Companies, PAECs, local authorities Companies

PPP Coop vs. old style coop PPP CoopOld Coop StructureBuild on the base of farmer groups. Build on the base of farmers ContributionMinimal contribution to operate the services to farmer Contribution in cash and in kind to form charter capital Benefit sharingBenefit sharing at farmer group level Share profit among the coop based on capital contribution TrainingAt farmer group levelAt coop level SupportersAll companies in the value chain via “wholesales” mechanism Support by gov. stakeholders and PAEC network Support by research institutes and NGO Donor/company, mainly via administration and management support Support by gov. stakeholders N/A

Piloting: COOP Nam Hà – Lâm Đ ồ ng Overall: farmers - Follow 4C program from Total coffee area: ha. Challenges : - Weal training activities. - Low profit business operation (looking for a stable output) COOP Nam Hà strategy: - Provide sustainable agricultural material for famers. - Each company in PPP will sign an MOU with this coop to support the coop across the value chain (April 2014)

PILOTING COOP Đ ạ t Lý (Đ ắ k L ắ k) Overall: - 60 farmers – 8 farmer groups - Follow 4C program from Total coffee area: ha. Challenges : - Lack of capital & management skill - Business operation is not effective (looking for a stable output) COOP Đạt Lý strategy: - PPP support on technical information and training, give discount on selling input material - Each company in PPP will sign an MOU with this coop to support the coop across the value chain (April 2014)

CCB Organization (by IPSARD) Coffee Coordinating Board Production Sub-com Co-chairs: Nestle - CPD Permanent Office Processing Sub-com Co-chairs: Vinacafe – Agro Processing Dept. Trade & access to finance Sub-com Co-chairs: Trung Nguyen - MOIT Strategy & Sustainability Sub-com Co-chairs: IPSARD - IDH PPP Coffee Task Force

CCB Update Eliminated the co-chair mechanism of PPP: Public sector hold the chair position, private sector hold the vice chair position in each committee Removed the Processing Sub-committee of CCB. Only 3 sub- committees: Production, Trading and Sustainable – Strategy CCB is revising the charter based on the comment of Vietnamese companies PPP Coffee Task Force is pending for decision of CCB Chairman to upgrade to Production Committee

Conclusion Cooperation between NAEC and private sectors are contributing to update and improve our knowledge on better coffee management PPP program increases the yield by 10.8 % and profitability by 14 % Sustainability: Carbon emission by 55.4%, water reduction by 40%, making compost to reduce chemical fertilizer by 30%, smaller amount of CPM Piloting 2 PPP Cooperatives with 58 demos Need to review the role of private sector in CCB

Thank you