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Coffee task force (Production
Sub-committee under VCCB)
WEF meeting, Hanoi
April 14th, 2015
MARD
PUBLIC PRIVATE PARTNERSHIP
WASI
NAEC
Secretariat:
WHERE WE ARE WHERE WE ARE
Disseminating good farming
practices Farmer group
model NSC Value chain 51 demos in
2015/16
Consolidating PPP Coop
PPP Coop model with satellite farmer groups
3 Coops in 2015 Trading 3.000 tons of
coffee Trading 600 tons of the
input agricultural materials
Cooperation with Agri finance WG
Transaction model: Coop-bank-company
Micro finance solutions
“Make Vietnam the recognized reference of Robusta”
AGREED 2015 STRATEGY AGREED 2015 STRATEGY
Pillar I: PPP & Control demos grow by yearsPillar I: PPP & Control demos grow by years
Pillar I: Steady Higher Yield by YearsPillar I: Steady Higher Yield by Years
+5%
+11%
+11%
+13%
Average yield of 4 years: +10% higher
Pillar I: Good Practice with Better bean sizePillar I: Good Practice with Better bean size
Summary of 71 demos in 4 Provinces
Improve ripenning and bean size
Summary of 71 demos in 4 Provinces(Dak Lak, Dak Nong, Gia Lai, Lâm Đồng)
Category PPP Control Difference
Yield (ton/ha) 4.4 3.9 + 0.5 (13%)
Profit (USD) 6,621 5,813 +809 (14%)
CFP(kgCO2eq/ton green bean) 661 1,481 - 824 (- 55%)
Pillar I: Pillar I: Not only Good farming practice with Better Profitability …Not only Good farming practice with Better Profitability …
* Unit area: Ha
* Increased profit: + 809 USD/ha ( + 14 %)
…But also significant reduce the amount of chemical fertilizer usage:
PPP: 1.850 kg/ha
Control: 2,240kg/ ha
Pillar I : Reduced 55% of gas emission follow Yara fertilizer application
6 demos
PPP program: 304 kg N/ha5.2 t g.b./ha
Control program:484 kg N/ha4.8 t.g.b/ha
From : Yara Research Center, Haninghof, Germany
kg C
O2e
q/t
gree
n be
an
661
1,487
Pillar I: Demos are showing encouraging results Mr Nguyen Duy Thanh, Dak R’lap, DaknongExtensionnist
Mr Doan Van Huan, Lam Ha, LamDongFarmer leader
« less fruit drops this year »
« homegenous flowering & fruit set »
« bigger cherries »
« Expected Yield : > 4 T/ha »
« saving labour cost, no need to burry the
fertilizer»
« better fertilizer solubility »
« greener leaves, longer branches »
« expected Yield : 4,5 T/ha»
Pillar I: PPP Good farming practiceTraditional PPP PIC/Investment
Varieties Old tree, less than 3 tons/ha
TR4 (yield 7.3 tons/ha), TR12 (4.3 tons/ha)
Nestle – WASI Cooperation
Irrigation Over-irrigation (1300l/tree)
Based on the tree & farm conditions ( up to 40% water saving (439l/tree)
Sponsor by Nestle - IWMI – SDC
Organic fertilizer
Almost no compost Promote on-farm composting from coffee husk (1.5 tons/ha)
Nestle recommendationIDH/NSC curriculum
Chemical fertilizer
Unbalanced nutrition and high amounts of fertilizers
Balanced nutrition based on soil & leaf analysis and more efficient fertilizers ( -15 %)
Yara recommendation
CPM Pesticides with doubtfull quality
Using fungicide to avoid berry drop
Syngenta recommendation
Carbon footprint
Min. 1,5 T CO2 per ton green bean
Min. 0,7 T CO2 per ton green bean(- 55%)
Yara research
Yield & farmers profit(per Ha)
3.9 T5,813 USD
4.4 T ( + 13%)6,621 USD (+ 809 USD)
Nestle – Yara – Syngenta – IDH and partners
Farmer grouping
Individual farmers Farmer group, TOT training. Upgrade to Coop
Nestle – Yara – Syngenta – IDH and partners
Pillar II: Operating Model of PPP Farmer Group
Technical Group DARD/PAEC
“Extensionist”Farmer Group
Leader
Farmer
Farmer
Farmer
Farmer
Farmer
Farmer
Relationship: Management
supportRelationship: Technical support
Tech support, organization and
management support
12
Pillar II: Operating Model of PPP Coop
Input company
Farmer
Group
Farmer
Group
Farmer
Group
Farmer
Group
Farmer
Group
Farmer
Group
Coffee buying
companyManagement Board
MOU
Coop’s warehouse
Large quantity
Wholesale price
List of farmersBuy input
List of farmers Sell coffee
MOU
Large quantity
Price with premium
Wholesale model – From input to output
Payment Delivery
13
Pillar II: PPP Coop – The flower model
Sat
ellit
e g
roup
CENTRAL COOP
Satell
ite g
roup
Satellite group
Satellite groupSatell
ite g
roup
Satellite group
Satellite group
Sat
ellit
e gr
oup
- 1 Central coop for each province (legal entity)
- PPP farmer groups will playthe role of satellite mini coop
- Order for buying input, selling output will be sent to central coop => central Coop will achieve the volume target of companies to enjoy the wholesaleprice, then, share the benefit to satellite
Pillar III: Opportunity to Collaborate with Agri-Finance TF
FARMER GROUP INPUT COMPANY
Small loan Borrow small loans at certain crop stages
Marketing & Sale Sell in large quantity via bank transfer
Deposit/saving Open bank account for farmers
Overdraw/loan Input investment to get higher yield
COOP COFFEE BUYING COMPANY
Medium loan, risk management
Farmer organization in coop
Marketing & sales Participate in farmer group/coop meetings
Loan/Payment service
Buying inputs, selling coffee, improve cash flow
Risk management Pre-screen borrowing farmers
15
Pillar III: Coffee Crop Cycle and Financial Needs
Coffee farmer don’t need financing all the time. The need of money varies based on the development of coffee trees:
For 1ha coffee farm, farmer will need 5 mio VND in July and 8 mio in Sep. Around 70% coffee farmer will need small loans (350K out of 500K farmer household)
New crop
Jan March
Blossom
May
Form cherry
July Sept
Develop sizeof bean
Develop size of cherry
Dec
End of Crop
Farmer don’t need to be financed
Need to be financed 50%
Need to be financed 100%
16
Pillar III: Tri-Parties Meeting
17
- Tri- parties meeting between BIDV – IFC – Coffee Task Force on April 14
- Discuss to build a pilot finance solution for PPP farmer group, PPP coop and the link for whole value chain of 6 stakeholders (nha nuoc – nha nong – nha bang – nha doanh nghiep – nha khoa hoc – nha chung nhan) (government – farmer – bank – company – researcher – certify organization)
NEXT STEPS
• Disseminate good farming practice to boost the production of sustainable coffee: Need support and alignment from public sector (National Curriculum & NAEC)
• Pilot PPP cooperatives - Connect PPP farmer groups into central coop: Need the support of public sector (Local meeting between authorities, traders, banks, coop and companies to support PPP coop model)
• Pilot the micro financing model with Agri-finance task force
• Cooperate with Growth Asia – WEF.
Thank you