PPP – Commodities Group Update Hanoi, April 14, 2015

Objectives of PPP Commodities Group Overall objective  An increase of 30% production of corn in key regions in 3 years ( )  Up farmer’s profit to over 30% This objective is achievable through 3 priority strategies 1.Seeds  Conventional Hybrid  Biotech Trait 2.Production  Agronomic practices advancement  Post harvest services improvement 3.Increase added-value in corn trading 4.Alignment with Crop Restructure program initiated by Government

Target: 83,000 ha of rice-to-corn conversion in Mekong Delta by year 2020 TTTỉnh Diện tích ngô Diện tích chuyển đổi dự kiến Diện tích chuyển đổi dự kiến Tổng diện tích đến năm 2020 (dự kiến) 1An Giang Đồng Tháp Trà Vinh Long An Sóc Trăng Tiền Giang Hậu Giang Vĩnh Long Cần Thơ Bạc Liêu Kiên Giang Bến Tre Cà Mau Tổng số (‘000 ha) Source: MARD

Mekong Delta Corn grain supply trippled, reach 1mil. MT by year 2020 Note: MKD = Mekong Delta, CMB = Cambodia Source: GSO, trader interviews BasisGSO data tons/day (low-high season) pass through Khanh Binh, which is ~70% of imports 10% growth p.a. from Cambodia with better agronomy & seeds Converting Spring- Summer crop to 7 ton/ha Corn grain volume, ‘000 tons

Production South East : 1,313,450 MT, increase 5% per year. Feed Mill production 2013: Mil MT MT for aqual feed - corn used 40%. Corn import from Cambodia forecast 200,000 MT in year 2013 increase 10% per year. 50% of Highland production move to South East, production 2013: 1,303,700 MT Source: GSO, trader interviews South East absorb grain supply from Mekong, import reduced 1,016,000 tons from Highlands 455,000 tons import from other countries 194 kton excess 312,000 tons from Cambodia

Volume growth fill demand-supply gap, currently import from US and Brazil Source: Bunge, 2014 Harvest Period Aug-Nov Sep-Nov Jan-Jun Sep-Oct Arrival in Vietnam

Mekong Delta & South East: 39+ feed mills interested in local corn grain provinceFeed mills Feed prdn (MT, 2013) Grain Need (MT/year) Mekong Delta Long An Cargill, Japfa, Anova, Kyodo Sojitz, ANT, Thien Bang, Phuoc Thanh, Greenfeed, MB, CJ Vina, Nong Lam & Cao Phong 1,159, ,984 Tiền GiangCP, Sunjin, Chan Nuoi and Binh Minh 410,847 82,169 Vĩnh LongAnco 211,539 42,308 Cần ThơCargill, CPP, Proconco and Phan Bon 155,091 31,018 Đồng ThápGuyomarc'h, Vina, Viet Thang, VIC and New Hope 122,239 24,448 An GiangAfiex 26,300 5,260 Bến TreThanh Hung, Tan Loi and Thien An 9,3201,864 Hậu GiangViet Long 1, Cà MauGiong NN South East Bình Dương Proconco, ANT, Greenfeed, Sunjin, EH, CP, Cargill, Vina, Anco, Thanh Binh, Sao Xanh, Woosung, Gold Coin, & others 2,507, ,514 Đồng Nai Emivest, Guyomarc'h, Tien Dat, Thanh Loi, Thanh Dat, CP, Nutifarm, Ngoc Long, Ha An, Lai Thieu, De Heus & others 1,821, ,811

Achievements in Mekong Rice-to-Corn in collaboration with MARD MARD-Monsanto Conference, October 2014, Dong Thap: Biotech corn can significantly reduce cost of labor and chemical. Mechanization solution on corn is not enough and should be further developed. Sustainability and scale-up possibility to be carefully studied Province give support for post harvest: grain collector, drying service Cooperation relationship Government – Farmer – Scientist - Company to be clearly defined Required solution for side products: cob, leaf, husk, stem Required media communication: forum, TV technical show

Achievements in Mekong Rice-to-Corn in collaboration with MARD Monsanto Protocol of growing corn on rice farm in Mekong delta Land preparation, water management Density Hybrid seeds Crop protection, nutrient management and others Technology transfer to >4,000 farmers through demo farms and farmer meeting Tools for land preparation, seeding, fertilizer application Engage grain collectors (Tai Loc, Hiep Quang, Adeco, etc. ), and machinery companies for mechanization solution

Profit comparision: Rice vs. Corn Farm size 1.7ha Value in VND Corn DK6919Rice OM4900 Land preparation Seed (Corn 43 kg; Rice 260kg ) Seeding Herbicide Fertilizer Pesticide & Fungicide , Irrigation Harvesting Shelling Labor for chemical spraying Other labor Total cost (VND) Total harvest (metric ton) 20,03 8,2 Selling price (VND/ 1 ton) Revenue NET PROFIT Demo field by farmer Đinh Văn Thê, Tân Lập ward, Tân Thạnh District, Long An province, Summer Autumn 2014, farm size 1,7 ha. Sowing date 03/5/2014, harvest day 20/8/2014.

Profit comparision: GM Corn vs. Conv. Corn Monsanto internal data from field trials Cost or Value (VND/ha)GM CornConventional Corn Land preparation1,200,000 Seeding labor1,000,000 Seed2,304,0001,280,000 Herbicide320,000 Labor for weeding400,0001,800,000 Fertilizer7,000,000 Pesticide0500,000 Labor for harvesting1,200,000 Drying1,000,000 Shelling1,000,000 A. Total Cost15,424,00016,300,000 Yield (dry grain, kg)12,00010,000 Selling price (VND/kg)5,800 B. Profit54,176,00041,700,000 GM Corn vs. Conventional Corn Profit increase by 12,500,000 VND/ha (or 30%)

Plan in year Seeds  Developing conventional hybrid portfolio  GM corn seeds: commercialization of insect resistance and herbicide (glyphosate) tolerance  Study and launch socio-economic impacts of biotech corn in Vietnam (in cooperation with ISPARD) 2.Production  Activities for education and technology transfer to farmers  Engaging post harvest stakeholders 3.Increase added-value in corn trading  Feasibility study for Central 4.Alignment with Crop Restructure program initiated by Government  Rice-to-corn rotation in Mekong, Mountainous areas  Rice intensification in Red River Delta

Plan in year 2015 (details in Mekong) Continued current activities: Technology transfer though demo and farmer meeting Stake holder engagement Support VAAS in large farm demo plan in 6-8 key provinces in Mekong delta Large farm demo with GM corn in Summer/Autumn season, key provinces : Hau Giang, Vinh Long, Tra Vinh

Activities in Mekong delta Sowing corn on rice farm & fertilizer application tool

Activities in Mekong delta Conventional corn demoGM corn demo, sowing April 2015

Suggestions 1.Development of legal framework for plant variety registration 2.Simplifying/functioning registration process (i.e. Circular 20/2014) 3.PPD to fasten registration of glyphosate on herbicide tolerance corn 4.Crop restructure: Clarification of way-of-working amongst stakeholders (MARD – Local Authority – Private)

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