SUSTAINABLE COFFEE PROGRAM Vietnam February 2014

Size: px

Start display at page:

Download "SUSTAINABLE COFFEE PROGRAM Vietnam February 2014"

Lesley Bradford
6 years ago
Views:

SUSTAINABLE COFFEE PROGRAM Vietnam February 2014 The SCP in Vietnam - After one year operation The Sustainable Coffee Program (SCP) has been established as a public- private cooperation involving the

The objective is to increase production, yields and export availability of certified and verified coffee in a pre- competitive manner and make coffee farmers more resilient in an ever- changing

Vietnam is one of the focus countries of the SCP, as the largest producer of Robusta coffee, it accounts for almost 15% of global coffee production.

1 SUSTAINABLE COFFEE PROGRAM Vietnam February 2014 The SCP in Vietnam - After one year operation The Sustainable Coffee Program (SCP) has been established as a public- private cooperation involving the coffee industry, trade and export partners, governments, NGOs and standard setting organizations. The objective is to increase production, yields and export availability of certified and verified coffee in a pre- competitive manner and make coffee farmers more resilient in an ever- changing market, especially in the context of global climate change and higher social disparities between rural people involved in agricultural production. Vietnam is one of the focus countries of the SCP, as the largest producer of Robusta coffee, it accounts for almost 15% of global coffee production. The SCP Vietnam was launched in Ho Chi Minh City on 17 September A wide range of coffee stakeholders were present to show their support, including representatives from the Vietnamese Ministry of Agriculture, Government officials from coffee producing provinces, associations, coffee processing, trading and roasting companies, and coffee producers. The SCP Vietnam addresses two key areas: 1. Institutional reform is needed to improve the organisation of the sector from the national level to the local level. In order to achieve this important reform, the SCP has actively supported the establishment of the national level Vietnam Coffee Coordination Board under the MARD Minister and at the provincial level, the SCP has also contributed to the establishment of the Lam Dong Coffee Producer Association now with representation from 89 coffee famers, 5 coffee production cooperatives and 4 enterprises. This intervention area is coordinated by the Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD). 2. Facilitation of field level sustainable coffee production projects (FLP) including: the development and distribution of the National Sustainable Curriculum, facilitation of the rejuvenation program and secretariat for Vietnam PPP Coffee Taskforce. This intervention area is coordinated by the Netherlands Development Organization (SNV). 1

2 The SCP Vietnam program has achieved the following key results: Vietnam Coffee Coordination Board The coffee sector in Vietnam comprises different stakeholders who have limited coordination at the national level in relation to the implementation of coffee policies and programs. Drawing on experience from other coffee producing countries, the Vietnam Coffee Board mobilizes the energies of the Vietnamese coffee sector, promoting and developing sustainable production practices. Full development of an institution of this nature will take time however, so as an intermediary step the partners that are united in the SCP have established a Coffee Coordination Board (CCB) under the Ministry of Agriculture and Rural Development (MARD). Farmer Organization The Central Highlands, the main coffee production area of Vietnam, has around 580,000 coffee growing households, which equates to approximately 2.6 million people planting coffee. Around 90% of these farmers are small plot landholders (with less than one hectare). The high number of farmers with small- scaled production leads to many problems, including: low quality coffee, weak application of advanced processing technology, as well as weak bargaining power for the coffee growers. In addition, the farmers are vulnerable to market fluctuations and have to take risks. Most of the small scale farmers work separately and there is little cooperation This leads to disconnects which make quality control difficult and can also result in the overuse of natural resources. Furthermore, small scale farmers are not represented in the policy decision making and implementation process, which can result in the development of policies difficult to implement on the ground. Therefore, the coffee farmer sub associations, firstly in Dak Lak and Lam Dong, are set up to improve the coordination and concerted action of the coffee producers to connect effectively with all levels of government and stakeholders, contributing to successful implementation of the sustainable coffee production program in Vietnam. On 4 November 2013, the People Committee of Lam Dong Province approved the establishment of Lam Dong Coffee Producer Association, with 89 founding members. Field level projects The SCP Vietnam concluded six contracts with private sector firms for the implementation of Field Level Projects (FLP), while one FLP have been approved and is in the contracting phase. The below table provides a summary of the current and upcoming contracts. # projects New hectares Table 1: SCP Current and Upcoming Contracts Approved and Contracted New output in tons farmers involved Funding in USD Private sector funding IDH funding 6 22,183 97,100 21,804 4,561,497 3,073,975 1,037,522 Approved and Under Contracting , ,813 74,776 32,037 In response to the SCP 2013 call for proposals, 10 applicants submitted concept notes for FLP. The short listed applicants were invited in September 2013 to submit their full project proposals to the Proposal Assessment Committee (PAC) for assessment. Proposals that have been accepted for co- funding were announced in November Some example activities that have been approved as part of the recent FLP are listed below: GIS Mapping: - Initiative to map individual farm locations, crop production and yield information - The technology has the potential to revolutionise coffee production traceability in Vietnam - The long term goal is to develop a web- based version of the GIS software to provide farmers access to information about their farms. 2

Improved training manuals: - Features different training modules, covering key sustainability topics relevant to the Vietnamese coffee sector, including: pruning and irrigation techniques, water and

3 Improved training manuals: - Features different training modules, covering key sustainability topics relevant to the Vietnamese coffee sector, including: pruning and irrigation techniques, water and soil management, fertiliser and pesticide usage, harvesting and post- harvesting practices, OH&S and first aid information. - In addition to the Farmer log book provided to farmers to keep record of yield and production information. Increasing the supply of quality plantlets near the main coffee growing region: - Provides farmers with easy access to quality coffee plantlets to facilitate plantation rejuvenation. National Sustainability Curriculum In response to national strategies, SNV and the Western Highlands Agriculture & Forestry Science Institute (WASI), with the support of the Crop Production Department of MARD, have invited experts from the coffee sector to develop a National Sustainability Curriculum (NSC) for Vietnam. Currently many training materials are available from different coffee sustainability initiatives and certification programs. However, the training materials vary widely in content which can be confusing for farmers, especially if they are involved with more than one program. There is a need for development of a NSC. The overall objective of the NSC is to provide training on the fundamentals of sustainability with in the Vietnamese coffee sector. The NSC will address core sustainability issues common to all regions in Vietnam and will provide a sound platform for farmers to undertake further specific sustainability programs or certification training. The NSC will comprise basic training modules that cover the common coffee certification standards, while considering cost- effectiveness of production and additional sustainability issues in the Vietnam coffee sector. The NSC modules will be practical and easy to adopt and will provide farmers with a sound foundation of knowledge across all areas of sustainability. 3

Vietnam Coffee Sustainability Forum The 3rd annual Vietnam Sustainable Coffee Forum was held in Ho Chi Minh City on 4 th December 2013.

4 Vietnam Coffee Sustainability Forum The 3rd annual Vietnam Sustainable Coffee Forum was held in Ho Chi Minh City on 4 th December The title of this year s forum was: Sustainable Coffee Production through Public- Private Cooperation in Vietnam: Current Status and Future Outlook. The forum was jointly organized by the Coffee Coordinating Board of the Ministry of Agriculture & Rural Development (MARD) in collaboration with SNV Netherlands Development Organisation, 4C Association and powered by IDH (the Sustainable Coffee Program). The event attracted 154 delegates from a broad spectrum, including: ministries, the Vietnam Coffee and Cocoa Association, research institutes, national & international coffee companies, NGOs, standards organizations, but importantly also auditors and local farmers. Discussions focused on how to better connect coffee farmers, domestic enterprises and international actors, as well as how to develop action plans for addressing outstanding sustainability issues including gender and youth inclusion. The forum also reviewed the progress that has been made in sustainable coffee sector since the last meeting in December Participants worked in groups to discuss key issues in sustainable coffee development, including: chemical use management; water use management; farmer group formation and organization; access to services such as credit, agricultural extension services, and training. The participants worked together on identifying causes of these issues and suggested solutions to addressing them. The outcomes of the forum provided useful inputs for the refinement and completion of the National Master Plan for Sustainable Coffee Development of Vietnam. In his opening speech, Mr. Pham Dong Quang, Deputy Director of MARD s Department of Crop Production and Deputy Director of Vietnam Coffee Sector Coordinating Board, remarked: To date, Vietnam s coffee sector has made outstanding progress. However, it faces many sustainability challenges. These include hot development of cultivation area, exhausted soil, abuse of fertilizer, inefficient water use which leads to exhausted water sources in the context of the global climate change, quality and food safety control, outdated technologies, adding value to export products, and particularly benefit sharing mechanisms between coffee farmers and companies to ensure long- term business relationships. Sustainable Water Useage in the Central Highlands Irrigation water is crucial for coffee production in the Central Highlands (CH) of Vietnam, which accounts for more than 95% of Vietnam s total coffee production. The CHs region is subject to a long dry season of approximately five to six months. Rivers and lakes provide only 40% of the water required for coffee irrigation, with the remaining 60% coming from groundwater sources. The coffee production area in the CHs is continuing to expand placing increasing pressure on the region s water resources, particularly groundwater. Water resources are proving to be a big challenge for the Vietnam coffee industry. Sustainable coffee certification programs in Vietnam are working to address the water resource issue by incorporating irrigation modules into their farmer training programs. These programs help educate farmers on sustainable irrigation techniques and raise their awareness of the water resource issue. However, developing a long term solution to the water resource issue in the CHs is still a major challenge. The following are key actions, identified by IPSARD, necessary to address the water resource issue: 4

5 Survey and assessment of current water use and availability, along with demand forecasting Improvements to ecological systems in watershed areas to protect water resources from degradation and contamination Enhancement of forest protection and reforestation as well as forest development in the watershed areas Improvement of the management and use of water resources, including the development of a master plan for the sustainable use of ground water resources and the control of unregistered water exploitation. News from the PPP Coffee Taskforce The Public Private Partnership (PPP) project on coffee development is a joint venture between foreign and domestic investors, including international associations such as the World Economic Forum, 4C Association, Rainforest Alliance, Utz Certified, and local institutions such as farmers associations, the Ministry of Agriculture and Rural Development, WASI, VICOFA, local authorities, and processing companies. The goals of the PPP Coffee Taskforce are to build a public private partnership model supporting farmers across the value chain, engaging 20,000 Vietnamese coffee farmer households (5% of national total) within five years. The project has scaled pilots from 2 to 75 PPP demo plots in four provinces to engage 3,000 farmers and train them in good agricultural practices (GAP), in relation to fertiliser and pesticide application, water usage, and soil management. Government of Vietnam and Sustainable Coffee Production Extension Program for Sustainable Coffee Production in Vietnam Established and approved by MARD in October 2013, the Agricultural Extension Program in coffee producing provinces focuses on implementing the national program for coffee rejuvenation including: technical training for coffee growers in replanting and rejuvenation; and pest management in coffee plantations. Program for Coffee Rejuvenation Varieties for rejuvenation including TR4 TR13 have been trialed and selected by WASI. Several priorities have been identified in terms of high yield 4-7 tons per hectare, good quality and resistance to leaf rust disease. The introduction of new varieties in coffee rejuvenation will improve competitiveness of the Vietnamese coffee. The Crop Department of MARD has requested the provincial departments of agriculture and rural development and extension centers to follow a standard guideline for coffee rejuvenation which addresses: i) Land preparation and root treatment; and ii) crop rotation in coffee gardens, etc. Seedling support for coffee growers. Credit support with favorable interest rate for farmers. The State Bank of Vietnam has set aside more than 10,000 billion VND for the coffee rejuvenation program in the coming years with an interest rate of %/year. The Vietnam Bank for Agriculture and Rural Development (Agribank) will administer the distribution of these loans in the coffee producing provinces. Additionally, in Lam Dong province Agribank has set aside 3,000 billion VND for loans to the coffee rejuvenation program. Program for Restructure of Agriculture and Rural Development Sector The Ministry of Agriculture focus program in Vietnam located mainly in the Central Highlands, South- East, Central Coast and North- West Region, plans to implement a rejuvenation program for 150 thousand hectares of low quality and low yield coffee plantations. This is in line with their ambition to keep production at a constant 500 thousand hectares. 5

6 New Rural Development Program The national targeted program on the new rural development period was approved by the Prime Minister, this national targeted focusses on the major following issues: Planning, constructing and improving rural infrastructure for socio- economic development of rural region including road, irrigation system for coffee production in central high land provinces Enhancing extension services to apply technological achievement Introducing agricultural mechanization to reduce post- harvest losses. Setting up the Coffee Development Fund The Government Office has agreed to assign the Ministry of Finance to coordinate to the Ministry of Industry and Trade and the Ministry of Agriculture and Rural Development to set up of the Coffee Development Fund. This is an ongoing process and has not yet achieved an official result. How to Join SCP Field Level Projects IDH/SNV is looking for new concept notes and/or investment ideas from coffee producing and exporting companies. Interested companies can approach IDH/SNV to obtain criteria for co- funding, monitoring of KPIs and Concept Note form. The project approval/appraisal process is as follows: Concept Note: ü SNV works with qualifying applicants to develop concept notes that fit with SCP objectives. IDH will only co- fund precompetitive activities (e.g. farmer training) ü Qualifying applicants should complete the SCP Concept Note Forms ü Concept notes are reviewed for completeness by IDH and SNV ü An independent expert Project Assessment Committee (PAC) reviews and assesses concept notes and makes recommendations to the Steering Committee (SC) on short- listed concept notes/applicants Final application: ü Short- listed applicants will submit a final draft application ü Final applications are reviewed by IDH/SNV and sent to the second PAC review and SC approval ü Selected applicants will be notified. Once approved, SNV will sign a contract with the applicants for implementation. The contract will specify co- funding requirements, financial audit, performance tracking, reporting requirements, M&E plan and a schedule of milestones. The IDH contribution will be disbursed through SNV. Performance assessment reports are reviewed regularly by the PAC and Steering Committee. 6

Who can apply? Coffee roasters, traders, processing and exporting companies, who intend to invest in sustainable coffee production and are interested in the IDH co- funding scheme.

7 Who can apply? Coffee roasters, traders, processing and exporting companies, who intend to invest in sustainable coffee production and are interested in the IDH co- funding scheme. The percentage of companies and IDH co- funding for project implementation should be 70% and 30% respectively. For further information, please contact: Sustainable Coffee Program /Vietnam National Project Coordination Office Address: 6th floor, Building B, La Thanh hotel 218 Doi Can Street, Ba Dinh, Ha Noi, Vietnam Tel , Fax nguyentrung@snvworld.org Information Centre for Agriculture and Rural Development Institute of Policy and Strategy for Agriculture and Rural Development Address: 16 Thuy Khue, Tay Ho, Ha Noi, Vietnam Tel: , Fax: quynhchiipsard@gmail.com 7

IDH Programs in Vietnam

IDH Programs in Vietnam IDH, The Sustainable Trade Initiative accelerates and up scales sustainable trade by building impact oriented coalitions of front running companies, civil society organizations, governments and other stakeholders.