hassall and associates international · 2014-06-18 · extending export opportunities to small-plot...

Extending export opportunities to small-plot dragon fruit growers through Good Agricultural Practices Campbell J, Nguyen Van Hoa, Nguyen Huu Hoang, Rankin M K May 2010

A report prepared for:

Hassall and Associates International

Campbell J

Plant & Food Research, Nelson

Nguyen Van Hoa, Nguyen Huu Hoang

Southern Horticultural Research Institute, Vietnam

Rankin M K

Young Professional, CARD, Hanoi, Vietnam

SPTS No. 4008

PFR Client Report No. 25657

PFR Contract No. 22663

DISCLAIMER

Unless agreed otherwise, The New Zealand Institute for Plant & Food Research Limited does not give any prediction, warranty or assurance in relation to the accuracy of or fitness for any particular use or application of, any information or scientific or other result contained in this report. Neither Plant & Food Research nor any of its employees shall be liable for any cost (including legal costs), claim, liability, loss, damage, injury or the like, which may be suffered or incurred as a direct or indirect result of the reliance by any person on any information contained in this report.

This report has been prepared by The New Zealand Institute for Plant & Food Research Limited (Plant & Food Research), which has its Head Office at 120 Mt Albert Rd, Mt Albert, Auckland.

This report has been approved by:

John Campbell

Scientist

Date:

Louise Malone

Science Group Leader, Applied Entomology

Date:

Ministry of Agriculture & Rural Development

Project Report

0029/07/VIE

Extending export opportunities to small-plot

dragon fruit growers through Good Agricultural Practices

Expansion of Pilot Model

Milestone 6

Due November 2009

Contents

1 Institute Information 1

2 Executive Summary 2

3 Introduction & Background 2

4 Expansion of Pilot Model 6 4.1 Identification and progress in grower GAP and packhouse compliance in Binh Thuan, Tien Giang and Long An Provinces 6 4.2 Documentation of fruit volumes, market access and returns to growers for new packhouses and grower groups 14 4.3 Specific market information 15

5 Implementation & Sustainability Issues 16 5.1 Implementation 16 5.2 Sustainability 16

6 Next Critical Steps 17

7 Appendix 1 19

8 Appendix 2 MARD Certifying Body authority 20

9 Appendix 3 VietGAP Standard 21

10 Appendix 4 VietGAP Check list 22

11 Appendix 5 Email dated 30 November 2009 23

12 Appendix 6 Email to Mr Long from Dr Hoa 25

13 Appendix 7 Long An Co-op info collected from the meeting on 3 November 2009 26

14 Appendix 8 Dragon fruit farm data survey compliance GlobalGAP Standard in Chau Thanh, Long An 30

15 Appendix 9 Cost of GlobalGAP compliance certification 32

16 Appendix 10 Tien Giang outreach group information 34

17 Appendix 11 Farmer Training Status spreadsheet 37

Glossary BRC British Retailers Consortium: Global Standard – FOOD CARD Collaboration for Agriculture and Rural Development CTU Can Tho University DARD Department of Agricultural Research and Development EUREPGAP Euro-Retailer Produce Working Group; Good Agricultural

Practice GAP Good Agricultural Practice GlobalGAP GLOBAL Good Agricultural Practice HAI Hassall and Associates International HCE Hue College of Economics HCMC Ho Chi Min City LAC Lead Auditor Course MARD Ministry of Agriculture and Rural Development MRL Maximum Residue Level P&FR The New Zealand Institute for Plant & Food Research PPD Plant Protection Division SGS Société Générale de Surveillance SOFRI Southern Horticultural Research Institute (formerly Southern

Fruit Research Institute) UK United Kingdom UKAS United Kingdom Accreditation Service USA United States of America VIETGAP VIETnam Good Agricultural Practice WTO World Trade Organisation

Extending Export Opportunities to small-plot dragon fruit growers through Good Agricultural Practices Page 1

1 Institute Information

Project Name Extending export opportunities to small-plot dragon fruit growers through Good Agricultural Practices

Vietnamese Institution Southern Horticultural Research Institute (formerly Southern Fruit Research Institute)

Vietnamese Project Team Leader Nguyen Van Hoa

Australian Organisation The New Zealand Institute for Plant & Food Research

Australian Personnel John Campbell, Allan Woolf, Leonie Osborne and Marlo Rankin

Date commenced February 2008

Completion date (original) February 2010

Completion date (revised)

Reporting period Expansion of Pilot Model

Contact Officer(s) In Australia: Team Leader

Name: John Campbell Telephone: +64 3 9073602 Position: Project Leader Fax: +64 3 9073596 Organisation Plant & Food Research Email: [email protected] In Australia: Administrative contact

Name: Mrs Leonie Osborne Telephone: +64 9 925 7232 Position: Executive Assistant Fax: +64 9 925 8626 Organisation Plant & Food Research Email: [email protected] In Vietnam

Name: Dr Nguyen Minh Chau Telephone: +84 73 893 129 Position: Project Champion Fax: +84 73 893 122 Organisation Southern Horticultural Research Institute Email: [email protected]

Extending Export Opportunities to small-plot dragon fruit growers through Good Agricultural Practices

2 Executive Summary Expansion of the Binh Thuan dragon fruit project pilot model to the farmers, packers and exporter in the wider Binh Thuan, Tien Giang and Long An Provinces has made significant progress during this project (Output 1.2). Contributing factors to that progress include:

• An efficient, GlobalGAP certificated pilot of farmer, packer and exporter as the “model” for replication

• A highly proficient national team of quality practitioners to deliver the technology transfer and generic documentation to self motivated groups and to individuals and new groups wishing to develop GAP quality systems for dragon fruit and other crops

• The rapid and sustainable expansion in volume of compliant stakeholders

• The global need for “Safe, Legal and Quality” produce and the subsequent market driven compliance standards requirement to enable access to those markets

• Excellent publicity for the adoption of GAP principle’s and for the practical work being undertaken

• A trend within the Vietnam horticultural industry to get behind the GAP programme to receive the benefits of safe food, safer homes/living for the producers, through GAP implementation, accountability and environmental awareness.

SOFRI and the dragon fruit projects have built a strong foundation for the countrywide GAP initiative in a sustainable way and SOFRI and the country’s horticulture industry are responding to the wider needs of the initiative as expansion momentum grows.

The dragon fruit project expended considerable energies throughout both projects to encourage farmers and packers to adopt GAP but the decision to implement GAP lies with the individual. The project team has been resolute in its drive to implement GAP: many farmers and packers have received training, improved their operations and/or gone on to achieve GlobalGAP or VietGAP certification (Appendix 1).

The project has found great difficulty in gathering reliable data necessary to document: fruit volumes; market access; and returns to growers; for existing and new packhouses and grower groups. Some marketing information has been included in this report but it has been beyond the resources of the project to accurately determine the impact of the project.

3 Introduction & Background Producers of dragon fruit in Vietnam have seen prices for their fruit decline by about 60% since 2000, which can be attributed, in part, to their dependence on local and nearby exports. There are about 10 major exporters in Vietnam but a significant portion of the total production is sourced from many small-holder growers. During the previous dragon fruit GAP project 037/04VIE, growers were evaluated through a benchmarking


study to determine the status of the dragon fruit producers against the standards required by high value export markets. The project then proceeded to implement documented quality systems, training and mentoring in a “Pilot” of exporter, packer, and large and small-holder dragon fruit farms that met the standards of BRC Global – Food Issue 5 in the packhouse and GlobalGAP on the farms. The established “working quality model” is now testing the high value markets of the United Kingdom, Europe and the USA. This project, “Extending export opportunities to small-plot dragon fruit growers through good agricultural practices”, is attempting to complete the linkages with the high value markets, consolidate the pilot establishment to ensure sustainability, provide expansion of the pilot operation and establish new commercial dragon fruit operations in the Binh Thuan, Tien Giang and Long An provinces. Large and increasing numbers of small-plot growers will have the opportunity to access high monetary value markets for their dragon fruit. The project objectives are documented in the periodic progress reports. Project outreach delivery Pre-project vision

• Completion and maintenance of the Hoang Hau dragon fruit pilot model in Binh Thuan. GlobalGAP Certification achieved for the farmer group, packer and exporter

• To replicate the first dragon fruit project pilot process in the Tien Giang and Long An Regions

• Introduce entrepreneurial exporters to create momentum and market linkages on farmer owning crop to market/exporter on commission basis

• To return increased dragon fruit sales revenue back to farmers from high value markets

• SOFRI dragon fruit team to migrate from doing complete development of small-holder farmers; to passing the mantle to the exporter/cooperatives leadership; to providing expert support to industry; ultimately charging for services to assist SOFRI to implement the Decree 115 directive

• Build up the foundation and capability within SOFRI for consultancy and technical backstopping, based on good science, to the horticultural industry

• Utilise the stimulation of increased revenue to the farmers from certificated fruit to high value markets to provide outreach programme expansion momentum.

Project delivery The most significant dragon fruit project achievements relative to this report are in the areas of human resource and infrastructure development. This, and the previous dragon fruit project, has intentionally prioritised the development of the foundation and appropriate infrastructure and skills for Vietnam’s GAP quality horticulture initiative. This should ensure it has the best chance of meeting the needs of a market driven export industry, which can improve the livelihoods of small-holder dragon fruit farmers through access to high value markets. At the commencement of the dragon fruit project, a very ambitious programme of outreach was planned, particularly for the provinces of Tien Giang and Long An. Although good and sustainable progress has been made during this period of reporting, there is a time lag between what was envisaged in the outreach programme and what has been actually achieved. During this period, the writers expected to be able to report


that farmers, packers and exporters were taking full responsibility for making the market driven GAP changes thus reducing the demand on the SOFRI dragon fruit team. However, although good progress has been achieved, GAP development still requires a considerable effort by SOFRI specialists. Progress constraints have been identified and corrective action is being implemented to allow the outreach programme to gather momentum as planned. Those constraints include:

• Project personnel time and resources committed to the upgrading of operation manuals demanded by the shift from EurepGAP to GlobalGAP and to meet compliance with the new GlobalGAP standard; also the BRC standard upgrade from Issue 3 to Issue 5. Operation Manuals compliant to the upgraded standards have now been completed

• Delays caused by farmer reluctance to progress towards GAP implementation owing to possibility of receiving resource support through provincial project funding. Provincial GAP project possible resource availability has been communicated but is not yet available. A rapid increase in the uptake of GAP by small-holder dragon fruit farmers is expected when resources become available

• A significant amount of time is taken by the professional quality practitioners to ensure GAP technology transfer targets only those operators who are serious about meeting their chosen standard requirements.

National capability and project sustainability achievements of note include

• Trained and qualified SOFRI quality practitioner personnel to lead the GAP changes:

o 1 New Zealand Organisation for Quality Trained and Certificated Internal Auditor: who subsequently, with the assistance of the project leader, presented the Internal Auditor course to SOFRI science personnel

o 35 people were trained and Certificated as Internal Auditors; also 29 received HACCP training and Certification; and 21 received Farm Safety Working and Primary Emergency Aid training and certification by SGS Vietnam to global standards. Both SOFRI and private sector personnel received training. The lists of people attending the various courses appear in the dragon fruit project Milestone 5 report (Refer to Appendix 1 in this report for Farmer training and DF team involvement)

o Two people were trained for the Certificated Lead Auditor Course (LAC) by SGS Vietnam: this requires the completion of practical application to the standard of United Kingdom Accreditation Service (UKAS) prior to full certification

o Approval by MARD for SOFRI to be a Certifying Body for the VietGAP Standard: using the two LAC operators to undertake external audits and approve certification (Refer to Appendix 2 in this report for signed Vietnam document)

o Qualified project personnel provide high quality GAP training to farmers, packers and exporters: VietGAP and GlobalGAP for farmers and GlobalGAP on-farm packing, BRC and specific market standards for packers and exporters

o Although the emphasis is on dragon fruit, several other horticultural crops are addressed in the quality initiative using the trained quality practitioners.


• Infrastructure developed by project personnel and project initiation (SOFRI): o Project personnel involved in policy decisions/making at Government

level o Project personnel taking a lead role in the development of the VietGAP

Standard (see Appendix 3, photo of standard cover, hard copy plus electronic version)

o Project personnel invited to develop VietGAP Standard and training materials for all fruit of Vietnam, includes the VietGAP auditing check list development (Appendix 4 check list)

o GAP supportive services have been developed: registered facilities for the analysis and monitoring of soils, plant material, water quality, etc. Diagnostic, applied research, problem solving, etc.

o Market linkages between farmers, packer and exporters o Centre of excellence at SOFRI to provide high quality standard technical

services and support to industry and strong working relationship with SGS Vietnam.

Linking packers with exporters

Note: SGS is a world-wide quality operation, which operates at the same level globally. SGS Vietnam is supported, mentored and monitored by SGS New Zealand, who verify all certification audits and authorise the issuance of Certificates of Compliance by SGS Vietnam. Benefits from the achievements include

• High quality training and support for the evolving GAP initiative in Vietnam at all levels. Great care is taken to ensure recipients of training are most likely to have the integrity to implement the selected quality standards, fully and honestly

• A private sector GAP capability in dragon fruit and other crops that has every chance of being sustainable in the future

• A private GAP horticulture sector which is aware of the high value market standards and the serious need to rigorously comply with the standards as a prerequisite to accessing and maintaining high value markets

• Credibility for the Southern Horticultural Research Institute for its lead role in the dragon fruit quality initiative:


o At the provincial and country level for Quality Standards implementation and development

o In the Southeast Asian Region through quality practitioner presentations at meetings and conferences

o Globally for systems and processes which ensure product compliance to access sophisticated, demanding and expanding markets, and for the fulfilment of WTO obligations

o Systematic development of GAP in Vietnam’s horticulture industry in a controlled way and prioritising sustainability.

4 Expansion of Pilot Model 4.1 Identification and progress in grower GAP and packhouse compliance in

Binh Thuan, Tien Giang and Long An Provinces

Specific project delivery for the project targeted provinces: Binh Thuan

1. The Binh Thuan dragon fruit project pilot packhouse received compliance certification for the GlobalGAP Standard (for a full account of the change of standard at the pilot packhouse please refer to the project Milestone 5 report) a. The project pilot packhouse continues to advance towards the BRC standard

under project team training, mentoring and Internal Auditing. This is preparation for the commissioning of a new, large packhouse being constructed

b. The pilot packhouse is very close to BRC compliance and has achieved approval as a registered supplier to the USA

c. There were concerns regarding the pilot packhouse management’s commitment to providing, training and retaining sufficient quality/qualified people in key areas of the packhouse operations to reach and subsequently to maintain BRC compliance. Too much reliance is being placed on one quality leader only at the packhouse. Mentoring to mitigate this constraint has been initiated and is continuing; the delay of implementing the BRC standard to the new packhouse may/should assist to mitigate the human resource constraints observed.

2. Update on the Ticay (Mr Long) on-farm packing, GlobalGAP Certificated,

packhouse facility in Binh Thuan: a. It had been planned early in 2009 for the project to assist to elevate this

packhouse from GlobalGAP compliance to become certificated to the BRC Standard

b. In spite of significant correspondence between the project and Ticay, no progress has been reported to date

c. Constraints impeding progress are being identified and mitigated. This component is only part of a wider association with Mr Li Hai Long of Ticay – Bao Thanh Co. Ltd., which is also to address development of GlobalGAP small-holder farms; on-farm compliant packing facilities and linkages with high value markets in the provinces of Tien Giang and Long An (Appendix 5 email to Long).


There is a DARD development programme in the Binh Thuan province introducing Good Agricultural Practices to small-holder dragon fruit farmers to the MARD VietGAP Standard, which was largely developed by the SOFRI dragon fruit team.

The Binh Thuan DARD GAP programme’s status includes: • Stated target for 3000 small-holder dragon fruit farms operating at, and

certificated to, the VietGAP Standard, enabling access to the Chinese markets • A target of some 125 groups, cooperatives and individual farms • Approximately 350 farms are Certificated to VietGAP Standard • Most training presented by the Binh Thuan DARD • Auditing and Certificating also done by a separate section of the Binh Thuan

DARD (reported that auditors are separated from trainers) • In the future, external auditing and certification will be undertaken by approved

Certifying Bodies such as SOFRI who have been involved in improvement of this situation

• Some technical transfer has been provided by SOFRI staff. Tien Giang Background In Cho Gao, district of Tien Giang province, a dragon fruit cooperative with ~20 members was set up in 2006 but there have been low levels of commitment. Dr Vo Mai (Vinafruit) was originally involved in establishing the cooperative. In order to achieve the objective of getting new farmers GlobalGAP certified, Mr Hoang made many visits to the area and held discussion groups to ensure that all farmers were aware of the commitment involved if they decided to pursue certification as a group. From this process, 14 farmers in this area (~10 ha) were identified; 8 were members of the old cooperative and 6 were non-members. It was anticipated that the group could receive GloblalGAP certification by the end of 2009. However, the group has since decided that they want all farmers in the cooperative (and new farmers to join) so the group has expanded to 23 farmers with approximately 15 ha. Mr Hoang has put in significant effort with this group with mixed returns. The main inhibiting factor for obtaining GlobalGAP certification for the entire group appears to be the lack of commitment from the cooperative leader. This has been further complicated by the introduction of a provincial project in June 2008 that aims to get 100 ha of dragon fruit GlobalGAP certified. The provincial project will make interest-free loans available to farmers and this has prevented some members from making their own investments in the necessary toilets and chemical storage facilities as they are waiting for these loans to become available. Progress made at Farmer level

• The Cho Gao group have received training in IPM, ICM, farm safety & First Aid by SOFRI specialists

• Two internal audits have been conducted by SOFRI Quality Practitioners • Chemical storage and toilets have been built for 17 out of the 23 members • All farms have been cleaned • All members have limited the use of pesticides; they are familiar with the

requirements for with-holding periods and record keeping and have made good progress in these areas.


Dragon fruit healthy; snail infestation; snail damage blossom rot;

Packhouse level At the time that the project expansion phase began, the plan was for the SOFRI team to work with Mr Long of Ticay Ltd to help to build a relationship with farmers in Long An and Tien Giang provinces to secure certified fruit for export. Mr Long has his own certified farm and packhouse operations in Binh Thuan and was looking to expand. An initial meeting with Mr Long and the project team was held on 1 April 2009 at HCMC in the Ticay office. Follow-up emails were exchanged shortly after this and the CARD team were informed on 7 May 2009 of Ticay receiving certification for the Tesco’s Nature’s Choice approved supplier scheme. On 3 June 2009, an email was sent by SOFRI (Dr Hoa) to Mr Long to provide him with some information about the Long An and Tien Giang provincial projects to certify 30 ha and 100 ha of dragon fruit, respectively. The SOFRI team provided options to Mr Long as how he could become involved (See Appendix 6 email from Dr Hoa to Mr Long). Unfortunately in spite of further informal discussions, nothing concrete has come out of this relationship and it appears that Mr Long is taking a “wait and see” approach to these activities rather than committing to work with producers and SOFRI at the ground level. For this reason, while Mr Long has not been excluded from the project, other options for relationships with commercial packers/exporters have been explored. Given the internal problems associated with the Cho Gao group and the lack of commitment from Mr Long, the project has thus far been unable to identify a suitable existing packer/exporter to partner the Cho Gao farmer group. In addition, the role of the provincial government in agribusiness activities in this province appears to be strong. Rather than encouraging private sector investment, the provincial government has informed farmers that they intend to fund the development of an export packhouse. The packhouse will be managed by the province and they aim to compete with existing collectors/packers to secure supply from the 100 ha of certified fruit from the provincial project that SOFRI is supporting. While the details of this packhouse project remain unclear at this stage, it is without doubt that a state-owned and managed export packhouse will find it challenging to compete against already established export packhouses with strong customer bases such as those of Mr Hiep and Mr Long in Binh Thuan. It is also unlikely that they would be able to achieve certification for internationally recognised quality standards without significant outside help.


Additional information about the Cho Gao Cooperative and the attitudes of their members can be found in Appendix 7 (notes from field work dated 3 November 2009 and notes from the project leader visit). Long An Background SOFRI was requested to provide technical support (as a consultancy) for a provincial project in Long An in February 2009. Dr Hoa negotiated the terms of the project so that rather than general agronomic support for dragon fruit farmers, SOFRI would focus on providing technical support towards the achievement of GlobalGAP standards. Suggestions were presented to the Provincial Project Committee and were accepted. Project duration is April 2009–June 2011. The aim is for 30 ha to be GlobalGAP certified (~60 smallholders). The provincial government has also requested a 1.8-ha ‘tourist farm’ to be set up that demonstrates GAP practices and can be used for recreation. This decision to extend the dragon fruit pilot model developed in Binh Thuan in conjunction with a provincial project in Long An means that farmers involved in this project at the outset could get access to some small amounts of funding for necessities like construction of toilet facilities and chemical stores that the CARD project could not fund. It also means that stronger ties between SOFRI and provincial governments are beginning to be built as SOFRI presents itself as a service provider for quality management in accordance with its implementation plan developed under the Twinning Project. By working in conjunction with a provincial project, greater sustainability is also anticipated post-CARD project completion (February 2010), as SOFRI has committed to working with dragon fruit farmers and DARD in this province to ensure that GlobalGAP certification is achieved. Progress made at Farmer level Two groups of farmers were identified and selected for participation in the Long An Provincial project/expansion phase of the dragon fruit pilot model. The Dong Xuan Hoi Cooperative had 37 dragon fruit farmers with a combined total of 38.25 ha, and the An Luc Long had nine members with 9.55 ha in total. A baseline farm survey was conducted with all members to assess their current level of compliance with GlobalGAP standards. The results from this survey can be found in Appendix 8. Some key findings from the survey were:

• Both groups are made up of relatively experienced dragon fruit farmers with over 75% of all members having grown dragon fruit for 5 years or more

• All farmers had a good level of basic education (reading, writing) and all had access to a telephone. Interesting to note that 16% of cooperative members also had access to internet/email

• Only 14% of farmers in the Duong Xuan Hoi Cooperative sell directly to an exporter, with all other farmers in both groups selling directly to collectors. However, over 75% of farmers in each group believe that their fruit is ultimately sold to an exporter

• Over 60% of farmers in each group had already built a toilet and hand-washing facilities for workers on the farm

• Over 45% of farmers in both groups already had separate storage facilities for fertilisers and pesticides


• Basic protective gear (e.g. mask, gloves) were worn by the majority of farmers in each group when spraying chemicals

• Record-keeping by all farmers is generally poor. In relation to yield records, cooperative members had a better idea, with 43% claiming that they keep complete records compared with only 22% of farmers in the An Luc Long group. In relation to pesticide record keeping, both groups performed poorly, with 16% of cooperative members and 22% of the An Luc Long group claiming to keep complete records.

The findings from this survey were presented back to these two groups and discussion was held about the potential for combining the two groups to reduce the cost of certification (i.e. 47.8 ha of dragon fruit to be certified as a group). Appendix 9 shows the cost of GlobalGAP compliance data.

Compliant agrichemical and fertiliser store, First Aid and toilet facilities

In addition to informal visits made by the project team to identify suitable farmers and conduct the baseline survey, the following formal training activities/discussion sessions have been conducted by SOFRI project staff:

1. Merged the GAP group, An Luc Long Group to Duong Xuan Hoi Cooperative (October 2009)

• Findings from the baseline survey were reported back to farmers and farmers in An Luc Long group asked if they would be prepared to join as members of the Duong Xuan Hoi Cooperative to attain GlobalGAP certification as one group. Members of the An Luc Long group agreed

• Divided the Cooperative in to five GAP units (4 units in Duong Xuan Hoi and one unit in An Luc Long). Each group has 9–10 members. Each group has two leaders, one head and one deputy head. This small-group quality management model has proven successful in other projects in this area (e.g. Tien Giang VietGAP Pineapple project) as it encourages farmer ownership of the GAP


implementation process through farmer-to-farmer training and group regulation to ensure consistent implementation of GAP requirements.

2. Trained the merged group of farmers at Duong Xuan Hoi on pest and diseases on dragon fruit and their management and Dragon Fruit cultivation (6/11/2009)

• Dragon fruit cultivation conducted by Mr. Nguyen Huu Hoang • Dragon fruit pests and their management conducted by Dr. Nguyen

Van Hoa • Dragon fruit diseases and their management conducted by Mr.

Nguyen Thanh Hieu • Discussed the steps for GlobalGAP implementation in Long An

(chaired by Dr. Hoa). As an outcome of this discussion, an MOU was established between SOFRI, Chau Thanh DARD, Packer and the Cooperative Management Board outlining the responsibilities and commitments of each stakeholder group. An MOU was also established between the Cooperative Management Board and the members

• Total farmers attended training course: 40 farmers.

3. Trained the merged group of farmers at Duong Xuan Hoi on GlobalGAP, Agrichemicals safety management, Fruit harvest and Handling (20 November 2009)

• GlobalGAP standards training course: General Regulations, Farm base, Crops base, Vegetable and Fruit base, more emphasis on Dragon Fruit crop, by Dr. Hoa

• Safe Agrichemical uses by Mr. Hieu • Guidelines for diary recording by Mr. Hieu (production diary,

chemical use diary, chemical purchasing diary, fertiliser purchasing diary, fertiliser use diary, fruit selling diary and the diary for labour use)

• Fruit Harvest and handling, by Mr. Nguyen Thanh Tung (SOFRI Post-harvest Department)

• Total farmers attended training course: 40 farmers

Although the formal training for the Long An GlobalGAP farmer group has only recently been conducted, a high level of commitment by these farmers and good awareness of the basic principles of GAP have been observed by the project team. Given these factors, it is anticipated that from this point forward, progress will be rapid. Additional information about the Duong Xuan Hoi Cooperative and the attitudes of their members can be found in Appendix 10 titled “Tien Giang outreach group information”. A very promising relationship with a commercial packer in Long An has also been identified which appears likely to be sustained well after project completion. Packhouse level At the time that the Long An project began, the plan was for the SOFRI team to work with Mr Long (Ticay) to encourage him to work with farmers to secure the output of the 30 ha of certified fruit for export. Although Mr Long currently has no packhouse facilities in Long An, from meetings held earlier in 2009 and emails exchanged, it appeared that he would be prepared to invest in this area provided he could secure enough fruit. However, as discussed above, his willingness to commit to the project at


this stage has been limited. The SOFRI project team are certain that once the Long An group is certified, Mr Long will be interested in purchasing their fruit; however, he has not demonstrated a willingness to provide any practical support to farmers at this stage. For this reason, the project team has been on the lookout for an alternative packer who would be more willing to work directly with the farmer group even at this early stage. Mrs Nguyen Thi Thanh Mai was recently identified as a potential commercial partner for the Long An farmer group. She is an established dragon fruit packer who packs a minimum of 20 tonnes per day (maximum of 60 tonnes) to sell to wholesalers in China and wholesalers and exporters in Binh Thuan. Average price received for Class 1 fruit (>460 g) is 8,000VND/kg and for Class 2 (<460–300 g) is 6,000VND/kg. Highest price received is 15–16,000VND/kg during off-season or during special occasions (Tet). This price includes the cost of the transport fee from Long An to HCMC, packaging and labour. At this stage she has no formal quality systems in place and packs only to meet the requirements of her wholesalers, which are considered to be minimal (i.e. packs to grade standards). She was previously the Marketing Manager of the Duong Xuan Hoi Cooperative and remains a member. She has a very good relationship with cooperative members and is willing to provide support to farmers for fertiliser or small seasonal finance loans if they will commit to selling fruit to her in the future. Mrs Mai has recently purchased land next door to her packhouse (6,000 m2) and has expressed a willingness to invest in the construction of a packhouse that would meet GlobalGAP/BRC standards.

Land for Mrs Mai’s packhouse development

The SOFRI team have already begun to provide support to make this a reality. Dr Phong has designed the plans for this packhouse, which have been presented to Mrs Mai. Her son-in-law Quach Tinh (Mr. Tinh) will be responsible for the management of the new packhouse. They do not currently have any export customers requiring GlobalGAP certified fruit but she believes that the demand is there, particularly for the European market. Although she is worried about the risks of becoming a direct exporter (e.g. non-payment for received goods), she is prepared to invest in order to further develop her business. At one stage there was some suggestion of cooperation with Mr Long but she has had no further contact from him on this issue. They have not done any financial planning for the new packhouse and do not have a good estimate of how much it will cost to establish nor how long they should expect before they get a return on their investment. They have requested support from SOFRI to help them estimate costs and given SOFRI’s involvement in the CARD funded PFR Twinning Project and current project to develop a business plan for the fresh-cut processing plant, they will have the


capacity to help Mrs Mai to develop a packhouse development business plan in the future.

Mrs Mai’s existing packhouse development planning

CARD project support for SOFRI Counterpart in Agribusiness skill development In June 2009, the selected SOFRI counterpart (Mr Lap) attended the final project workshop for the CARD Agribiz project at Hue College of Economics (HCE) and he also participated as an observer in the project completion impact evaluation. He later received all of the training materials that were provided for extension officers in this project. There are three main training modules and they cover Agribusiness Planning, Farm Analysis and Marketing and Supply Chains. Support was offered by the CARD team to help him work through these modules if he required assistance and he was introduced to and provided the contact details of Dr Xuan (Dean of Faculty of Economics) at HCE in case he wanted to follow up with HCE for further assistance or training opportunities in the future. Although Mr Lap has not requested additional assistance from the CARD team, he has begun to extend his agribusiness skills on his own. He has been in contact with a university lecturer at Can Tho University (CTU) who teaches a short-course on value chains and he has begun to develop some presentations for farmers to introduce them to the value chain concept. He is currently working on an ADB project that focuses on three crops in three provinces (Longan in Tien Giang, Rambutan in Ben Tre and Pomelo in Vinh Long) with the objective of improving fruit competitiveness and market linkages. Given the limited time frame of the CARD dragon fruit project and the main focus on GlobalGAP certification for farmers, there has been insufficient time for training farmers in farm business planning and analysis skills. While it is acknowledged that these skills still remain critical to help farmers gain a better understanding of how to maintain and grow their farm businesses, it is hoped that by exposure to the training material from HCE and CTU, Mr Lap will develop the skills and confidence to support farmers in these aspects. He will work in conjunction with other key SOFRI staff such as Mr Hieu who teaches farmers the importance of good record keeping for quality management. A register of GAP progression in dragon fruit and other crops is provided in Appendix 11 Farmer Training Status spreadsheet.


4.2 Documentation of fruit volumes, market access and returns to growers for new packhouses and grower groups

Fruit volumes and values It has been difficult for the dragon fruit project to clearly define and get accurate data for dragon fruit volumes and values presented and sold in the different markets of pre-certification and post-certification. Some of the causes include:

• The packer, grower or group feel it is commercially sensitive information

• Quoted prices paid to dragon fruit farmers for their fruit are very unreliable for comparing between buyers, and between markets; owing to:

o Fruit sold direct to the market; sold on the plant; sold through a collector; sold to the packhouse; freight paid; etc.

o Seasonal fluctuations in price

o Fruit quality and pre-sorting prior to packing requirements or acceptance at the next stage in the process

• Project requests for official production data are unfulfilled. It was expected to access the following information from official sources:

o Local market — retail at the local village level; retail in city supermarkets; value at the farm gate over time

o Pre-GAP volumes and values for exported dragon fruit Asian countries except China China United Kingdom and Europe United States of America Japan/Korea

o Volumes and values for dragon fruit exported from GlobalGAP Certificated producers

Asian countries except China China United Kingdom and Europe United States of America Japan/Korea

From the project leadership perspective, undertaking the comparison at this time between the non-project intervention dragon fruit value chain and resulting returns to the small-holder farmer and the project delivered full GAP compliant value chain is premature and unrealistic. Significant components of the CARD dragon fruit project delivery that have yet to be realised include:

• Extended postharvest storage life of dragon fruit leading to lower cost sea freight transport options; longer shelf life at retail; buyer confidence in the product — Project initiated SOFRI postharvest storage trials indicate storage life of dragon fruit can be greatly extended

• Control of postharvest diseases: waste reduction in the market place (currently significant quantities of fruit are disposed of in the market place. Such fruit have


incurred full production, postharvest, freight, documentation control costs for no return/also incurring penalties for disposal costs); reducing postharvest diseases also elevates the quality of all fruit thus improving value, market demand; customer allegiance; buyer confidence — Project initiated SOFRI postharvest trials indicate storage diseases of dragon fruit can be controlled

• The ability of a certified GAP dragon fruit operation to systematically improve using linkages with science is just being realised and implemented. Improved product returns, customer satisfaction and waste reduction will provide a major lift to industry revenue/viability

• Current small quantities of GAP compliant dragon fruit and fragmented selling operations are not conducive to obtaining full potential returns. Product branding, coordinated selling, standards compliance and good marketing will greatly increase product value and returns to farmers.

The CARD dragon fruit projects, through SOFRI, have established the foundation for the systematic development of a quality driven dragon fruit industry in Vietnam. National personnel and developing infrastructure has the skills and capability for this industry to reach its full potential and to transfer the benefits across to other horticultural crops.

4.3 Specific market information Market access Market access requirements by country and individual customer companies continually change and producers must respond and comply with the ever changing standards. Currently, the dragon fruit project training programme respects the following general country requirements and responds to the more stringent demands of some dragon fruit customer companies as needed:

• Asian countries except China GAP standards not currently a requirement but there is a shift towards

safe, legal and quality production, handling and exporting for all horticultural product

Traceability of product and agrichemical residues (MRLs) are primary concerns.

• China GAP standards, particularly for traceability, MRL compliance, safety and

registration are now a pre-requisite for all exports to China, particularly for the high value market

The VietGAP Standard developed by SOFRI meets all the current Chinese market requirements.

• United Kingdom and Europe Compliance with the GlobalGAP Standard is the minimum requirement

for fruit entering the UK/Europe market The British Retail Consortium (BRC) Standard Certification can

facilitate direct access to higher value markets with specific presentation and packaging

Specific markets, such as: BioGro, Tesco’s, Marks and Spencer, etc. also demand their additional and special (Brand) standards prior to product acceptance. In most cases, the increased returns justify the effort to meet these elevated standards. For example, product with BioGro Certification


can return between 30% and 100% more than conventional product in high value markets.

• United States of America Dragon fruit must be produced to a high standard; certification to

GlobalGAP is an acceptable standard All packing facilities must comply with the USA market protocol and be

registered as an approved facility All fruit must be disinfested using irradiation to disinfest fruit fly eggs

and larvae The irradiation facility must meet the USA Standards and be

continuously monitored and fruit inspected. • Japan/Korea

Dragon fruit must be produced to the GlobalGAP standard All fruit must be disinfested using the hot moist air system to kill fruit fly

eggs and larvae The disinfestation equipment must be Japan approved for equipment and

operation Rigorous inspection of the treated dragon fruit and processes is

undertaken by the Japan Ministry of Agriculture and Fisheries.

5 Implementation & Sustainability Issues 5.1 Implementation

Implementation of the dragon fruit project outreach will continue. Constraints to project outreach delivery have been experienced and noted but there are, and always will be, constraints to implementing change and the introduction of GAP quality systems to the dragon fruit industry is no exception. The practical learning experiences of the SOFRI project team during the first dragon fruit project and subsequently this project has equipped them with the skills to mitigate constraints to delivery progress.

5.2 Sustainability

Every effort has been made during implementation of both CARD dragon fruit projects to implement the GAP initiative in the dragon fruit industry in a sustainable way. Critical aspects that contribute to sustainability of the CARD dragon fruit projects have included:

• National capability developed in the practical skills for understanding, maintaining, monitoring, improving horticultural quality systems at the market driven standards

• Uniting the private and public sectors for the common goal of developing a quality GAP dragon fruit industry

• Being market driven in all aspects of horticulture production, postharvest, services and support

• Mentoring the development of infrastructure to support the quality horticulture industry

• Mentoring the importance of the “Quality” culture when delivering the GAP initiative.


6 Next Critical Steps Continue with the dragon fruit project outreach programme initiative in a sustainable way following project completion.


Signed for the Australian Institution by a duly

authorised officer in the presence of witness

Signature of Witness

Louise Malone Science Group Leader, Applied Entomology

Leonie Osborne Executive Assistant

Signed for the Vietnamese Institution by a duly authorised officer in the presence of witness

Signature of Witness

Insert Name and Title

Insert Name and Title


7 Appendix 1 Farmer training and dragon fruit team involvement There are two categories of farmer and packer training:

Table: 1 On-farm training direct by SOFRI personnel directly involved in the dragon fruit project This training is very targeted and of a practical and applied nature

Table: 2 SOFRI conducts regular training sessions on campus for farmers in the classroom situation and involves many specific subjects/components of GAP. The table identifies those courses which have a component that has either been presented by project enhanced people or have a direct application in the preparation of people, facilities and systems for GAP to the International market driven standards for any crop.

Table: 1 On-farm training Date Province Group Number Subject matter Level Delivered by 16-18/03/09 Packers/farmers 35 Internal Auditing Compliance DF team 21-22/03/09 Packers/farmers 29 HACCP Compliance DF team 14-15/04/09 Farmer 21 Farm Safety and Primary Emergency Aid DF team 25/11/2009 Long An Cooperative 40 of 47 GAP and marketing Starting GAP Mr Hieu/JC

25/11/2009 Tien Giang Cho Gao Coop group 2 of 23 GlobalGAP compliance completion and management issues Close to compliance Mr Hieu/JC

BT Packhouse 3 Quality manual upgrade Installation DF team BT Packhouse 4 Internal Audit Pre-Certification Mr Hoang

19/08/2009 LA Packhouse 3 Packhouse design/quality systems Preparation Dr Phong 19/08/2009 LA Co-op 1 GlobalGAP Re-start Dr Phong/ Mr Hieu

Table: 2 SOFRI training

Tra Vinh Farmers 300 GAP: correct use of agrichemicals Advanced Mr Hieu

Sept Dong Thap Staff of provincial ext 20 Quality & management in vegetable postharvest stage Dr Phong

17-18/08/09 BT Farmers 18 IPM of dragon fruit; Farm Safety and Primary Emergency Aid Entry Extension/PPD


8 Appendix 2 MARD Certifying Body authority


9 Appendix 3 VietGAP Standard


10 Appendix 4 VietGAP Check list


11 Appendix 5 Email dated 30 November 2009 Dear William

I hope this email gets through, it may do as it is a reply to an existing channel.

Thank you for your prompt response and I am delighted to read of your intentions. There is no doubt that both parties are very busy but this is in a good way especially for the SOFRI team as they have been building their skills and delivering to the GAP initiative in Vietnam. There is no doubt that it will take some time before individual roles are defined and this will come together gradually.

Personally I wish to see a start made to have lots more small-holder dragon fruit farmers improve to market driven GAP standards to enable them to access high value markets. I also wish to see the responsibility for the farmer development, which is now with the SOFRI dragon fruit team, to shift to become completely commercial, and supported with research and technology by SOFRI.

I cannot be on hand in Vietnam to mentor but as always, please let me know if I can assist to make this happen!

Kind regards John

From: Ticay [mailto:[email protected]] Sent: Monday, 30 November 2009 7:02 p.m. To: 'Hoang Nguyen Huu' Cc: 'HOA NGUYEN VAN'; John Campbell; 'cindylebt' Subject: RE: mail chuyen tiep tu ong John 301109

Dear Mr. John , Mr. Hoa , Mr. Hoang ,

Thank you for your e-mail .

I really understood this situation but SOFRI team was very busy during last period .

At my side , we always need everything is clear with detail schedule in this cooperation . It will support us to arrange a right schedule to SOFRI team in working at right position under dragon fruit supply chain system .

I always cooperate and support with all projects relating to dragon fruit in Vietnam , Japan , EU and USA . We will take care of export markets with GlobalGAP and VietGAP certificates from dragon fruit farmers or dragon fruit groups ( Cooperative ) .

So please do not be worry to our cooperation and let me know how many hectares of dragon fruit and famers that we will work together from their thoughts and wishes to this project . We should start from the basic things that farmers ‘s wishes and try to satisfy them step by step , it will make a close relationship from farmers to us for long term cooperation .

OK , please let me know the next steps that we have to join in this project and we always try our best for this .

Looking forward to hearing your reply soon.

Note : my cell phone in Rotterdam : + 31 619 773 591

With regards ,

William

From: Hoang Nguyen Huu [mailto:[email protected]] Sent: Monday, 30 November, 2009 11:26 To: Ticay Subject: mail chuyen tiep tu ong John

Anh Long,

Ong John mail cho anh khongduoc, bi tra lai, nen ong nho em chuyen mail nay cho anh, anh vui long mo file kem

Dear Mr Long Thank you for taking time to talk to me by phone today Friday 27 November 2009.


I would like to reconfirm our discussion regarding the implementation of the intent of the meeting between yourself; the SOFRI dragon fruit team; Dr Marlo Rankin, and myself during one of my earlier project visits this year whereby you confirmed you and your company would work with the SOFRI dragon fruit team to:

• Assist with linking the Tien Giang and Long An dragon fruit farmers with high value markets during transition towards GlobalGAP certification and when Certificated

• Provide training assistance to those farmers to ensure they produce dragon fruit that is compliant with the GlobalGAP Standard (or other specific standards), and can manage their small businesses in a sustainable way

• Receive assistance to elevate your Binh Thuan packhouse from on-farm packing GlobalGAP compliance to the BRC Standard

• Link Binh Thuan small-holder GlobalGAP dragon fruit farmers with high value markets As I indicated during our discussion I am very disappointed that little or no progress has been made for your company to link with the SOFRI dragon fruit project team since our discussions. There is so much that could be gained for the small-holder dragon fruit farmer as the contracted supplier and for you as the exporter through the implementation of the meeting discussions. I must note that working with SOFRI for this project and to develop a long term association would have significant benefits for your company in the future in the area of technical support to any sustainable horticultural enterprise you may be involved in. It appears to me that both parties have been waiting for each other to make the approach and neither has! I would like to point out that the rapidly expanding global trend is for safe, legal and quality fruit, to standards such as GlobalGAP, and it is very important that Vietnam horticulture, particularly dragon fruit, rapidly comply with the trend to enable it to gain an early advantage and be competitive and to attain strong preferred supplier, exporter, and customer relationships. You indicated that the SOFRI team should send some information to you to initiate the way forward but I feel this has already been done to the level necessary and to continue this would only delay implementation. May I suggest both parties talk to each other and arrange to meet and plan the way forward with the emphasis on delivery from all sides. The SOFRI team is extremely busy, especially at this time of the year, as I am sure you are also, so neither party can afford to waste unproductive time. May I plead with you to be sincere with facilitating, in conjunction with the SOFRI team, the implementation of our earlier discussions to improve the livelihood of the small-holder dragon fruit farmers of Binh Thuan, Tien Giang and Long An. I am very happy to assist via email or phone where needed to make this happen and am planning to make my final visit for the dragon fruit project in March or April 2010. I am very proud of the SOFRI dragon fruit team for their qualifications and achievements in implementing appropriate GAP Standards at any level, for their preparing of the VietGAP Standard, for representing Vietnam on the global horticultural quality arena, for their practical skills in implementing GAP quality systems in the field, for their technical and science capability in establishing the Vietnam horticulture quality infrastructure and industry support. You are very fortunate to have such close access to this quality resource. I wish you a safe and successful trip to Rotterdam. With best regards John


12 Appendix 6 Email to Mr Long from Dr Hoa Re: Dragon fruit GAP project 080708 HOA NGUYEN VAN [[email protected]] Wed 3/06/2009 11:40 AM [email protected]; [email protected]; [email protected]; [email protected]; [email protected] Dear Anh Long. Today we (Marlo, Hoa and Hoang) discuss about Dragon Fruit Project implementation, especially about how to run the project and the role of each stakeholder. Some information we would like to inform you and get your involvement if it is possible. For Long an Project, we have completed the project document and sent for final approval for about 30 ha of Dragon Fruit in Chau Thanh district, especially in An Luc Long, Duong Xuan Hoi and Tam vu. I will be taking charge for this project (for consultancy), Mrs. Dam (Chau Thanh agri leader) will be the leader for the implementing agency. The project will be implemented within June, 2009. The fund for the project will be from Department of Science and Technology of Long An, which will be covered the cost for implementing, some support to farmers and consultancy. Last two weeks we went to TamVu to meet with the Packer (Năm Thôn) there, he commits to buy more land and build the packhouse (he also said that one day before your men have come and committed somethings to them?). I think it will be good if they can build up the packhouse there, we will help them to establish and build up the packhouse to meet the GlobalGAP standards. For Tien Giang project: the Tien Giang DARD has invited SOFRI for consultancy to establish and implement the groups of farmers of about 100 ha to meet the GlobalGAP standards in late of this year to early of next year. Mr. Hoang will be in charge. However, this project will be different. Mr. Hoa (Tien Giang DARD) will be the project leader, he also has another project to build the packhouse by themselves (everything they can invest) and let the cooperatives' leaders to decide where and whom the product will be sold, the competition will help the price of the product increasing. So for the Longan project, we (project team and your people) can discuss more to see what your Company will be involved and the chance for expand the areas is there if you could make some investment. For Tien Giang project, some companies would like to buy their product too, it means the competition is there. If you want your company involve and buy their products, we can help in making the appointment with Mr. Hoa (Tien Giang DARD) to discuss about how your company's involve and see any requirement from them. We will be appreciated if you can inform us your opinion about this. Looking forward to hearing from you. Best Regards. Nguyen Van Hoa


13 Appendix 7 Long An Co-op information collected from the meeting on 3 November 2009

On 3/11/09 a meeting was held with the chairman of the Duong Xuan Hoi Cooperative (Mr Tai), the leader of the An Luc Long group (Mr Trung) and some farmer members. The purpose of this meeting was to assess farmer attitudes towards the implementation of GlobalGAP and progress made to date towards achieving GlobalGap standards.

Duong Xuan packhouse

Mr Trung (Leader An Luc Long Group)

• He hopes for the group to be certified by 2010 • There are two main reasons why the farmers in his group have chosen to implement GlobalGAP:

o They believe it will help them to meet the demand of the market o They know that ensuring the safety of the product they produce is important for themselves

and for their farms • They know already that they must implement good hygiene practices on their farm such as building a

toilet and separate pesticide storage. They also know that record keeping is important but they do not have much experience in this yet.

• When asked about the price they expected to receive for certified fruit, he replied that the price is not so high now, but they heard through many information channels about the need for food safety and know that it is the way to meet the demand for the future

• They expect that after certification the price they will receive for fruit will be higher because the costs of implementing GlobalGAP are also higher

• They do not know how much %increase in price they will need in order to cover the costs of certification but they hope to get a packer to invest some money in the farmers to help with this process

• They have already received IPM training and informal discussions about GAP requirements but not GlobalGAP training received yet.

• All members of the An Luc Long Group have agreed to join the Duong Xuan Hoi Cooperative (must purchase 1 share each worth 1million VND)

Mr Tai (Chairman Duong Xuan Hoi Cooperative) • The cooperative was formed in 2004 with 62 members • Membership costs 1000 000VND per share • Not all of these members grow dragon fruit but approximately 90% of members hope to be certified • The main objective of the co-op is to sell safe products that will comply with customer standards

(GlobalGAP) • The cooperative also runs a chemical store that sources products directly from suppliers so that they

can ensure the quality of the products and also sell to farmers at a lower price. • Non-members can also buy from the store at the same price but members have priority access to any

technical training and additional support that may be offered to the cooperative under provincial projects etc.

• Members can also borrow money from the bank


• Each year 25% of cooperative profit goes to the management board as salary • 75% is paid back to members in the form of dividends (unaware of free rider issues, horizon issues etc

associated with traditional co-op structure) • In general, members sell dragon fruit to three wholesalers — one is a packer who wants to work with

the group as she is also a member and has a packhouse facility nearby (Mrs Mai). • Main season price 2–5000VND/kg, off season price 7000VND/kg (prices in Long An are lower than in

Tien Giang, input costs appear to be lower) • Estimated cost of pest and fertiliser application: 1.5million VND/1000m2 during main season; 3

million VND/1000m2 during off-season. • Combined estimated cost of fertilizer, labour and electricity for two seasons: 15 million VND • All fruit is harvested and sold ungraded but collectors will come and look at the orchard and if the farm

has a higher % of large fruit then they will increase the price they offer by up to 1000VND/kg • The Chairman of the cooperative says he would prefer to sell graded fruit as he knows 70% of his fruit

would be classified as Class 1 • Estimated income received: 25–30 million VND for 4year old trees • So far, the cooperative has completed the baseline survey with SOFRI and small groups have been set

for implementation. The groups are made up of 9–10 members who live nearby and who can work together. The leaders for each group have the responsibility to ensure that all farmers implement the GlobalGAP practices.

Mr Khanh (Member of Duong Xuan Hoi Cooperative)

• Q:What do you know about GlobalGAP and what changes have you already made to your farm? • He knows that GlobalGAP is about safe production • He has begun to limit the pesticide applications and to use organic manure. He is aware of the holding

periods for pesticides and has been trained in plant protection (IPM) • In his opinion, the cost of implementing GlobalGAP (preparing for certification) is around 6–7

millionVND. This is not too much money for farmers who have 5000m2 or more than this, however below this it is too expensive for farmers.

• Q: Do you think record keeping will be difficult for the members to manage? • Not so hard for him as he believes record keeping is very important as you need to know the time for

flowering and spraying and the time for holding periods for fruit. • Members in this area have good education background and hope to implement GlobalGAP within one

year. • For the small groups they meet one time per month and 60–65% already have a toilet on the farm. For

the chemical storage, many members try to keep chemicals stored separately (e.g. away from house, from where fruit is harvested) but they do it in different ways.

• Hieu (SOFRI) believes that one of the main difficulties for the Long An group will be record keeping at the cooperative level. He said he can teach the farmers to keep records but keeping the documents at a cooperative level can be difficult. They will need to train the committee members on how to do this. They will work with the Agricultural Centre in the district (part of DARD) who has one woman that SOFRI will train to help support farmers in record keeping. She is one of the project managers for the Long An project.

Long An project presentation Facilitator Ms Dam, DARD, 25 November 2009 pm Meeting purpose was training for a Cooperative of 47 members who are just starting to implement GlobalGAP. 40 members attended the meeting. A joint presentation by Ong Hieu and John Campbell was given where the following notes were elaborated on. The presentation was followed by a short PowerPoint presentation by JC incorporating NZ Kiwiberry production, harvesting, grading, packing, market presentation and access and customer driven quality standards. Demand for dragon fruit Exotic fruit in the export markets which has appeal for its appearance, colour, flavour and health benefits Countries of high value markets where there is strong demand for dragon fruit include:


UK Europe USA – has seasonal production Japan Asia – near neighbours Australia/New Zealand To access any of these high value markets, dragon fruit must be produced, packed and exported to meet minimum standards to ensure the fruit is safe, legal and of the quality demanded of the market. Standards demanded by high value markets include:

• GlobalGAP – the basic requirement for any high value market. It is applied at the farmer level and can also be applied to on-farm packing

• BRC – Applied to the packhouse/exporter and all fruit being supplied to a BRC compliant/certificated packhouse must be produced to the GlobalGAP or similar standard

• Other high value markets require higher or specific standards or postharvest treatments which can be determined by the customer’s requirements or market access for phytosanitory reasons and include:

o Japan market: fruit must be treated with hot moist air to kill fruit fly eggs and larvae (irradiated fruit is not acceptable to the Japan market)

o USA market: fruit must be treated using irradiation to sterilise/kill any fruit fly eggs and larvae (heat treatment is not acceptable for this market)

o Some specific high value markets may require elevated standards in areas for environmental, ethical, Fair Trade, etc. These high value markets can and do reach back through the value chain to the producer to ensure compliance is met in every aspect so they can have confidence that the product being supplied to them is safe, legal and quality.

The dragon fruit project: In 2005, an AusAID CARD dragon fruit GAP project was developed to provide the capability within Vietnam to enable farmers, packers and exporters to access high value export markets. The key drivers for the project included:

• Dragon fruit is an exotic fruit with high value in the export market place • Dragon fruit can be produced year round • Dragon fruit is relatively free of pest and disease problems • Production of dragon fruit is increasing rapidly with prices dropping on the domestic market and

product becoming increasingly more difficult to sell SOFRI SOFRI is the dragon fruit project implementing agency. During the project SOFRI has developed considerable capability to support the quality (GAP) dragon fruit industry being developed in Vietnam. The SOFRI capability includes:

• Farmer training for all aspects of GAP application • VietGAP expertise • VietGAP Certifying Body facility • GlobalGAP and VietGAP External and Internal Auditor services • BRC and specific industry standards installation, training and development • Technical support in horticultural quality requirements • Technical support in pest and disease control and agrichemical safe use • Technical support in postharvest processes and research • Industry problem solving

How does this affect you the dragon fruit farmer of Long An?

• You have access to the knowledge and support to improve your dragon fruit production to the standards required by export high value markets

• It has been indicated that there is a large relatively untapped market for quality dragon fruit that meets or exceeds the high value export market requirements

• The ability of Vietnam to produce dragon fruit all year round means it has a competitive advantage over almost all other global producers of dragon fruit


GlobalGAP Certification comments:

• GlobalGAP facilitates access to high value markets and compliant fruit is sought after by exporters for their high value markets

• There is a significant cost to achieving and maintaining GlobalGAP Certification • Encourage larger groups of producers so that certification costs are spread across many farmers and

high volumes of fruit (forget your individual differences and work together to produce uniform fruit and to keep costs manageable and to take advantage of size strength)

• GAP applied on your farm has the additional benefit of making your farm a safer place for your family to live

• You can implement VietGAP as a stepping stone to becoming GlobalGAP compliant – the two standards have many compatible components.”

A PowerPoint presentation followed the discussions: Kiwiberry growing highlights covered production, harvesting, grading, packing, presentation, and exporter and export market.


14 Appendix 8 Dragon fruit farm data survey compliance GlobalGAP Standard in Chau Thanh, Long An

Sr.No Farmer survey Data analysis

Dương Xuân Hội

Co-op

An Lục Long

Group 1 Total Area (ha) 38.25 9.55 2. % of farmer growing dragon fruit by - Plant supporting post 8.11 - Cement 91.89 100 2 Total members 37 09 3 Percentage of gender - Male (%) 94.60 100 - Female (%) 5.40 0 4 Percentage of ages of dragon fruit farmers - Below 30 year old 5.40 0 - From 30 to 45 year old 40.54 33.33 - From 46 to 60 year old 45.95 66.67 - Above 60 year old 8.11 0 5 Percentage of family have member working 27.03 22.22 6 Average of offspring working in family (member/family) 0.33 0 7 Dragon fruit growing experience - From 1 to 5 yrs 29.73 11.11 - Above 5 to 10 yrs 37.84 0 - Above 10 to 20 yrs 24.32 88.89 - Up to 20 yrs 8.11 0 8 Education level Listening, Reading, Speaking, Writing Good Good 9 Means of communication % - Mobile phone, landline phone/ Di động, DT bàn 100 100 - Fax 5.41 0 - Internet, email/ Máy tính, email 16.22 0 10 Dragon fruit growing area (%) - Less than 5.000 m2 21.62 0 - From 5000 to less than 10.000m2 43.24 66.67 - From 10.000 to less than 20.000m2 29.73 33.33 - Up to 20.000m2 5.41 0 11 Livestock activities percentage - Domestic fowls (chicken, duck,…) 10.81 0 - Livestock (cow, pig, goat,..) 5.41 44.44 12 Mode of selling fruit - Collector 86.49 100 - Exporter 13.51 - Local market 0 13 Who are responsible for fruit harvesting - Owner 91.89 100 - Collector 2.7 - Exporter 5.41 14 Where is your dragon fruit sold (according to farmer idea) - Domestic market 27.03 37.50 - Exporting 73.38 75.0 - Unknown 21.62 25 15 Yield record keeping


- Never 21.62 55.56 - Sometimes 18.92 11.11 - Incomplete 16.22 11.11 - Complete 43.24 22.22 16 Waste collection - Never 27.03 11.11 - Carton/ basket 2.7 0 - Wood/bamboo basket 16.22 44.44 - Plastic basket 40.54 11.11 - Metal basket 2.7 0 - Other 10.81 33.33 17 Percentage of farmers have built toilet and hand washing facilities on

their farm

- Personal hygiene at farm - Old model toilet - New model toilet 62.16 66.67 - Traditional toilet (fish toilet) 38.84 33.33 18 Fertilizer storage - No storage 48.65 22.22 - Separate space 48.65 44.44 - Storage along with other tools 8.11 - Storage along with pesticides 8.11 44.44 - Keep in their house 2.7 22.22 19 Percentage of farmers who have pesticides storage - Yes 45.95 44.44 - No 54.05 55.56 20 Pesticide Record keeping - No 54.05 44.44 - Keep some records but little 16.22 22.22 - General records 13.51 11.11 - Complete records 16.22 22.22 21 Farmers wear safety clothing while spraying pesticides - Boot 32.43 44.44 - Gloves 40.54 44.44 - Safety clothing 16.22 22.22 - Mask 78.38 55.56 - Hat 37.84 77.78 - No 2.70 0 22 Harvesting interval - Less than 5 days 35.14 0 - From 5 to 10 days 59.46 100 - More than 10 days 5.40 0

Extending Export Opportunities to small-plot dragon fruit growers through Good Agricultural Prac

15 Appendix 9 Cost of GlobalGAP compliance certification Compliance costs are significant and the project has encouraged each outreach unit being developed to generate as much production area as possible to ensure the cost per tonne of fruit remains manageable. The following table provides a comparison of compliance costs per tonne for different grower number; production area; and yield.

Indicative figures only:

Production:

Certification Unit - Individual or Group

Number to be audited

CB cost - US$ Grower No's. Hectares Crop volume - tonnes

Compliance cost US$ per tonne

Individual grower 1 2000 1 30 480 4.17 Small group of growers 4 2300 16 12 192 11.98 Large group of small volume growers 10 2500 100 75 1200 2.08 Small group of large volume growers 2 3000 4 400 9600 0.31

Comments: Square root of the total number of growers covered by the Certificate are externally audited

Approximate cost for the Certifying Body to undertake verification and certification

Based on: 40 tonnes per hectare and: 40% packout for small-holders = 16 tonnes per ha: 60% packout for large producers = 24 tonnes per ha


16 Appendix 10 Tien Giang outreach group information Meeting conducted on the farm of Mr Hai and Mr Dang – both members of the Cho Gao Co-op

• Cooperative info: • The cooperative was registered in 2006. Share price 2million VND/share • They do not have a chemical shop but they help members to buy chemicals direct from suppliers. Last

year no dividends were paid on shares because they had to pay a land fee for the packing house • The cooperative has an area for packing fruit that they used to pack for members in 2008; however,

they had a disagreement with one company that they were supplying so they stopped packing in 2009. They have since decided to focus on getting Global GAP certification

• There are 23 members who will try to get GlobalGAP certification as a group. Average farm size of a member is 6000 m2.

• Mr Hai’s farm 9000 m2 and Mr Dang has 1.7 ha • It is anticipated that Mr Hai will become the Deputy Chairman of the cooperative but it is not official

yet • Farmers have received training in GAP and finance training from a Canadian project and from SOFRI

they have received training in IPM, ICM and farm safety • Practices already implemented towards GlobalGAP:

o Chemical storage and toilet built for 17 out of the 23 members o All farms have been cleaned o All members have limited the use of pesticides – they are familiar with the requirements for

holding periods and record keeping and have made good progress in these areas o For Mr Hai, the cost of building the chemical storage and toilet was 10 million VND but more

basic facilities can be built at a lower cost o The group is hoping to be certified by the end of 2009 (lunar year). They have had two

internal audits already conducted by Mr Hoang. The last audit was Oct 27th, 2009. • On farm input costs and income:

o Input costs per 1000m2: 3 million VND during main season, 6 million VND during off season o Yield during main season is 2 tonnes/1000m2 and 1.5tonnes during off season (3.5t/1000m2

per year) o Fruit sold to collectors in 2 classes:

o Class 1 (300g+): 5000VND/kg main season; 8000VND/kg off-season (60% higher price) o Class 2 (<300g): 1000VND/kg main season; 1500VND/kg off season (50% higher)

o Income: 10 million VND/1000m2 during main season (income would only be 10 million if all fruit during main season was Class 1 fruit i.e. 2t (2,000kg) x 5,000VND = 10 million VND/1,000m2 (this seems unlikely). 12 million VND/1000m2 during off season. What is reasonable for good dragon fruit farmer: 70% grade 1, 30% grade 2? Then we can estimate income and profit more accurately

• Farmers are expecting that price after GlobalGAP certification will be up to 50% higher (e.g. from 8000VND/kg to 12 000VND/kg). This is probably unrealistic but this is what the members interviewed were hoping for

• Infrastructure costs: 10 million VND for toilet and chemical store; 1 million VND/1000m2 for drip irrigation

Mr Hai: Irrigation and light induced flowering


• Potential markets: some companies have already come to visit the cooperative to enquire about certified fruit (Taiwanese company, San son in HCMC also)

• Key inhibitors to obtaining GlobalGAP certification: o As individuals they cannot be certified therefore need for all members to be ready for

certification. Some members still have not built the chemical store and toilet as they are waiting for support from a government project

o They have some internal management problems within the cooperative that is preventing progress. Leadership has been poor and lacks commitment – they keep requesting for further support yet have not demonstrated that they are committed to obtaining and maintaining certification outside of project support. All members have good knowledge of what needs to be done to obtain certification, however they lack the leadership and shared vision as a group to make it happen

o They want to try and wait for all members to get up to standard prior to external audit so they will do one more internal audit and give the remaining non-compliant farmers one last opportunity to meet the standards. If they do not comply, the farmers who are prepared will apply for certification as a group.

Cho Gao Cooperative visit notes; Tien Giang Visited 25 November 2009 — Ong Hieu and John Campbell met with Mr Hai and Mr Dang; both Deputy Leaders of the cooperative. There are currently 23 members (previously 28) and 18 hectares of dragon fruit production within the Cho Gao Cooperative. Currently most sell to collectors but some fruit is packed in the group’s packhouse when orders are received. Cooperative shares were 2 million dong per member as a one off payment (approx 50 million dong in total) – some members are in arrears. Suspected about 15 million dong left after expenditure on land rental, facilities development, packhouse, etc. Concerns over the business management. It was felt that the Cooperative members were about 90% compliant with the physical component of the standard but the operation manual has not been started. The main issues concerning the cooperative include:

• Resource constraints to build facilities that are compliant with the GlobalGAP Standard • Variability between members in their progress towards GlobalGAP compliance: some close to

compliance while some are at the basic level • Cooperative hoping for Provincial assistance and maybe holding back progress in anticipation of that

assistance • Leadership concerns slowing progress and undermining confidence in current and future management

where volumes of money are involved. Current leadership talk was not being followed up with action; most importantly on the leader’s own farm

• Packhouse is small and lacks resources to bring it to the GlobalGAP on-farm Standard.


The SOFRI dragon fruit team has strongly supported the Cho Gao Cooperative and has been disappointed with the lack of progress of the group towards Certification against the GlobalGAP Standard. During the discussion it was reinforced to the two Deputy Directors that:

• The importance of the cooperative having all members reaching compliance simultaneously • The group needs to work together and assist each other as greater numbers of compliant members

means the GlobalGAP Certification costs are spread over greater volumes of fruit • The Cooperative deliver on the SOFRI training that is being provided!

There was considerable discussion regarding the management of the Cooperative to take members into GlobalGAP Certification and maintenance. External mentoring was offered. The two Deputy Directors felt it was an internal Cooperative responsibility and they would let the members decide. Areas suggested for consideration included:

• Rapid progress towards compliance is a priority • Leadership issues need to be resolved quickly • People with business and management skills and motivation are available within the Cooperative • The options for leadership appeared to be: the status quo; team work/assistance for the leader; change

the leader to the most capable — it’s the members’ choice • There needs to written terms of reference for the Cooperative leadership which are appropriate for the

changes resulting from GlobalGAP Standards installation and maintenance on members farms and in the group’s packhouse.

The following general programme was suggested:

1. continue to produce and sell to collectors 2. work towards resolving management issues 3. work together to build a strong Cooperative 4. progress towards GlobalGAP on-farm and for on-farm packing 5. training assistance and Internal Auditing services provided by the SOFRI team 6. SOFRI establish high value market linkages 7. when compliance for the group has been confirmed through Internal Auditing SOFRI/Coop

initiate Certifying Body External Audit and Certification 8. commence exporting to high value markets under contract with reputable exporters


17 Appendix 11 Farmer Training Status spreadsheet

hassall and associates international · 2014-06-18 · extending export opportunities to small-plot...

Documents