PPP Coffee Taskforce (Production Sub-committee under VCCB) PPP
Taskforce Meeting, HCMC, Sep 22 nd, 2015 Slide 2 MARD
PUBLICPRIVATEPARTNERSHIP WASI NAEC Make Vietnam the recognized
reference of Robusta Slide 3 WHERE WE ARE Slide 4 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 EXPAND THE PPP MODEL, TEST FARMERS FINANCING SOLUTIONS,
MONITORING GROUP and COFFEE COORDINATING BOARD Make Vietnam the
recognized reference of Robusta AGREED 2015 STRATEGY Slide 5
Technical tours: 04 (4 Provinces) Technical meetings: 01 ToT for
farmer leaders: 01 (55 farmer leaders representative for 8304
farmer in 4 provinces) PPP Coffee Taskforce meetings:01 2015
Activity Report: Technical activities Slide 6 Pillar I: Steady
Higher Yield by Years +5% +11% +13% Keep sustainable Average yield
of 4 years: +10% higher In crop 2015/16, PPP Demos farms vegetative
and cherry is growing better than Control demos Slide 7 7 Update:
Coffee PPP & Control demo in Jul 2015: Control demo: Lack of
Micro nutrients symptom on leaves PPP demos: Green leaves, more
fruits, long branches reserve for next crop Slide 8 Pillar I: Good
Practice with Better bean size Summary of 71 demos in 4 Provinces
Improve ripenning and bean size Slide 9 Pillar I : Maintain crop
program to continue reducing 55% of gas emission: 6 demos PPP
program: 304 kg N/ha 5.2 t g.b./ha Control program: 484 kg N/ha 4.8
t.g.b/ha From : Yara Research Center, Haninghof, Germany kg CO2eq/t
green bean 661 1,487 Slide 10 2014/15: Summary of 71 demos in 4
Provinces CategoryPPPControlDifference Yield (ton/ha) 4.4 3.9 + 0.5
(13%) Profit (USD) 6,6215,813 +809 (14%) Pillar I: Not only Good
farming practice with Better Profitability * Unit area: Ha AT JAN
2015: with coffee price 1800 usd/ton, PPP demo increased profit: +
809 USD/ha ( + 14 %) UPDATE: For now, Aug Average Price of coffee
is 1668$/ton, PPP still produce higher profit: 742$/ton AT JAN
2015: with coffee price 1800 usd/ton, PPP demo increased profit: +
809 USD/ha ( + 14 %) UPDATE: For now, Aug Average Price of coffee
is 1668$/ton, PPP still produce higher profit: 742$/ton But also
significant reduce the amount of chemical fertilizer usage: PPP:
1.850 kg/ha Control: 2,240kg/ ha Slide 11 11 Update: Sustainable
coffee outreach: PPP coffee documentary film program on Dak Lak TV
Slide 12 NEXT STEPS Now that benefits are proven, how to increase
the scale? Getting the right economy of scale PPP practice to be
aligned and included in coffee certification processes
Institutionalization issues and alignment of stakeholders (SCP,
NSC, rejuvenation plan): PPP results to be recommended from
gov/local authorities to coffee farmers Increase linkages &
alignment Build trust with partners & farmers through
cobranding Input alliances: Cost cutting Input alliances: Cost
cutting Farmer groups/ Coops: Whole sale Collectors/ Buyers: Large
scale business Collectors/ Buyers: Large scale business Certified
input materials & fertilizer Certified coffee of farmers
Certified coffee of buyers Gov. partners/ build credit Input cost
& benefit analysis Input cost & benefit analysis Gov
agencies voicing Slide 13 Pillar II: Operating Model of PPP Farmer
Group Technical Group DARD/PAEC Extensionist Farmer Group Leader
Farmer Relationship: Management support Relationship: Technical
support Tech support, organization and management support 13 Slide
14 Pillar II: Operating Model of PPP Coop Input company Farmer
Group Coffee buying company Management Board MOU Coops warehouse
Large quantity Wholesale price List of farmers Buy input List of
farmers Sell coffee MOU Large quantity Price with premium Wholesale
model From input to output Payment Delivery 14 Slide 15 Pillar II:
PPP Coop The flower model Satellite group CENTRAL COOP Satellite
group -1 Central coop for each province (legal entity) -PPP farmer
groups will play the 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
wholesale price, then, share the benefit to satellite Slide 16
Pillar III: Coffee Crop Cycle and Financial Needs Coffee farmer
dont need financing all the time. The need of money varies based on
the development of coffee trees: For 1ha coffee farm, farmer will
need 6 mio VND in July and 10 mio in Sep. Around 70% coffee farmer
will need small loans (350K out of 500K farmer households) New crop
Jan March Blossom May Form cherry July Sept Develop size of bean
Develop size of cherry Dec End of Crop Farmer dont need to be
financed Need to be financed 50% Need to be financed 100% 16 Slide
17 Pillar III: Short term loan via credit card 1. Coffee company
inform the bank a list of farmer who sell coffee sustainably for 5
years 2. Bank consider to issue a credit card/credit book to
farmers in the list 3. Farmer using credit card/credit book to buy
fertilizer from coop from July to September 4. Farmer payback
principal and interest to the bank on December 17 Slide 18 Pillar
III: Flow of credit and fertilizer Coffee Company Bank Farmer
Cooperative Fertilizer Company Credit card Payment (December)
Payment (July Nov) Slide 19 Current discussion with Agribank
Agribank already grant loan to farmer groups. The loan based on
value chain has a good potential. Fertilizer companies welcome the
initiative and may consider to partly support interest rate via
bank for farmer who buy their product. Farmer/cooperative: Welcome
the initiative. This will be an attractive point for farmer to join
cooperative. Agribank is considering to participate to a pilot
project with 2 coops (500 farmers) in 2015 2016 and will scale up
after the pilot. 19 Slide 20 Thank you
