Project on Market-Oriented Agro-forestry to

Reduce Poverty in Quang Nam Province,

Vietnam

“Improving gardens and support systems

to reduce poverty”

Presentation during the “International Symposium on Sustainable Land Use and Rural Development in Mountainous Regions of Southeast Asia” on 21-23 July 2010,

Hanoi, Viet Nam

The Sites in Central Viet Nam

Six communes in two districts, Quang Nam Province

Tien Phuoc Dist• Tien Ha, Tien Cam• Tien Son • Tien Phong• Tien Tho

Phu Ninh Dist

•Tam Lọc

The Players

• Donor: Italian Government

• Executing Agency: FAO

• Implementing Agency: – Department of Agriculture and Rural Development (DARD)

of Quang Nam Province

• Local officials in 6 communes and in 2 districts:– Tien Phuoc District (Tien Ha, Tien Cam, Tien Son, Tien Tho,

Tien Phong)

– Phu Ninh District (Tam Loc)

Objectives

Development objectives (vision)1. Contribute to Quang Nam’s efforts to reduce

poverty2. Help conserve natural resources by supporting

sustainable and high quality Market-Oriented Agro-Forestry (MOAF) systems

Specific objectivesWith 6 communes:Improve and/or develop 1,500 ha of market-driven

gardensStrengthen enterprise-oriented coops and groupsPilot viable micro-finance with village groups

With province and 2 districts:• Strengthen extension delivery system• Develop market research information system

PROVINCE OF QUANG NAM

The process of translating innovative practices into reality and leaving a legacy of lessons and models

for scaling up and replication

DISTRICTS

OTHER COMMUNES

COMMUNES

OTHER FARMERS IN 6

COMMUNES

FARMERS IN 6

COMMUNES

Baseline diagnostics from PRA, consultations, and field visits

Marginal soils - sandy to sandy loam, low organic content, acidic, easily drained soils

Typhoon-prone area

Ave annual rainfall of 2,200-3,500 mm; rainy months during Sept-Dec

Small farm size holdings – Ave of 0.5-1.4 ha

Home gardens crowded with 10-15 species/ha

“A little of everything “from harvests of crops and sale of livestock

No on-site product consolidation before marketing

Limited processing of farm products

Layers of middlemen from farms to markets

Monopsonistic market for pulpwood

Low prices of pulpwood, cinnamon bark

Baseline diagnostics from PRA, consultations, and field visits

Unmanaged home gardens -60 to70% –overcrowding with low market value species

Low-value species planted in high value farms

No thinning in most densely-planted forest farms

Diseases of black pepper, citrus, ginger & turmeric

Proliferation of inefficient mini-sawmills

Limited capacity in delivering client- & market-oriented extension services

Fragmented market information systems

Limited local supply of high value planting materials

Limited access to financing

Too focused on subsidized loans instead of savings promotion

23% -70% belong to poor HHs

Limited HH labor

HH Income- Major Sources

HH Income

sources

% of HH

Income

from

rice

% of HH

income

from

fruits

% of HH

income

from

livestock

% of HH

income

from

black

pepper

% of HH

income

from

other

crops

% of HH

income

from pulp-

wood

% of HH

income

from saw-

timber

Gardens

=62% 0.13 0.12 0.25 0.01 0.03 0.05 0.03

Off-

farm=38%

Basic information on land resources, population, and income (2007)

Parameter Tien

Cam

Tien Ha Tien

Son

Tien

Phong

Tien Tho Tam Son Tam

Loc

1. Total land area (ha) 1,710 3,784 2,324 2,070 2,580 5,402 3,440

1.1 Agricultural land (ha) 961 1,257 826.1 480 923 1,544 1,384.8

1.2 Forestland (ha) 665.3 1,920 519.7 1,011 488 3,090 753

1.3. Unused land 597 501 800.0 523 533 768 1,206.8

1.3.1 Potential for forest

production (ha)

487 300 650.0 400 530 714 1,167.3

1.3.2 Potential for agriculture 109 201 150 123 3 54 39.55

1.4. Others 106 178.2 56 637 - 95.2

2. No. of households (HH) 668 879 906 995 1,448 1,104 1,804

3. Ave. agri land/HH ( in ha) 1.4 1.4 0.9 0.5 0.6 1.4 0.8

4. Ave. annual income per capita

(mil dong)

2.80 2.80 3.0 3.05 3.54 2.650 4.44

5. Ave. annual income/

capita poor HH (mil. dong)

2.18 2.15 2.0 1.94 1.92 1.80 1.40

6. No. poor households 152

(23 %)

328

(37 %)

589

(65 %)

694

(70%)

868 (60%) 523 (47%) 413

(23%)

Can Market-Oriented Agro-forestry Demonstrate How Households can get out of POVERTY?

Subsistence farming

Self-sufficiency

Increased HH income

Agro-forestry

Poverty Threshold Line = VND 1.7 m/capita

HH Income in VND

Time

Will Collaborative Implementation Work?

1,500 ha gardens

Rural enterprises

Microfinance Model

Strengthened extension delivery

system

Market research information system

developed

Garden owners,

entrepreneurs

PROJECT with

6 communes, 2 Districts,

Provincial DARD

Ass

ist

OUTPUTS

Will Single Message in all Activities Sink in?

Tag Line: “Improving gardens and support systems to reduce poverty”

Meaning:

“Improving the market-orientation of agro-forestry enterprises combined with responsive support systems will increase household incomes, increase household asset values, and reduce poverty in Quang Nam”.

Where do we start?Enterprises Products – goods & services Buyers & consumers

1. Home gardensFruits, spices, livestock, timber, essential oil, grains, leaves, bark

Tien Ky, Tam Ky, Hoi An, Danang

2. Forest gardensPulpwood, saw timber,

non-timber sp

Traders, sawmills (27 in Tien Phuoc, 17 in Phu Ninh)

3. Nurseries Planting materials of high value spp - fruits, spices, timber, ornamentals

Garden owners

4. Savings & Relending

Relending, advisory, and training services

Members of savings groups

5. Agri- & forestry rural enterprises

Processed agro-forestry products; inputs for gardens

Consumers of incense products, farmers

A. What Garden Technologies willImprove Market Orientation?

Enterprises Specific Strategies

1. Home gardens

Planting high value short-, medium-, and long-term agro-forestry species and eliminating low-value species

Reducing number of species from 10-15 per ha to 4-5 per ha

Improving management of high value local crops such as black pepper

2. Forest gardens

Timber-oriented thinning and pruning densely-planted forest farms combined with 50% labor subsidy

Enriching forest farms with long-term high value species such as Khaya, Hopea and Acquilaria spp (source of agar)

B. What Enterprises will Support and Improve Value Chains?

Enterprises Strategies

3. Nurseries

Contracts with local cooperators for raising high value planting materials to pump prime enterprises

Technical training, cross visits, and linkages with established nurseries and sources of seeds, cuttings, and suckers

4. Savings & Relending

Support for savings and relending from % of per diem and labor subsidy with matching fund & repayments from enterprise loans

5. Agri & forestry enterprises

Training on technical operations, business planning, pre-operations;

Enterprise loans for buying equipment & initial working capital. Repayments to savings and relending groups.

C. What Incentives and tools will facilitate adoption of market-oriented practices?

Assistance in commune-led planning and implementation

Full funding for approved commune agro-forestry plans

One on-site technician per commune

Regular feedbacks and updates

Subsidized inputs and support for equipment, working capital and pre-operations of enterprises

Contracts to pump prime nursery enterprises

Training, cross visits, study tours

Expertise for analysis, design, prototyping, and evaluation

Are the Interventions Working?

Enterprises Status after more than a year

1. Home gardens

1,770 HHs improved 314 ha of home gardens, each HH planting 20 high value seedlings.

Banana (51% of seedlings) as the high value short-term crops

Mangosteen (16%) as the long-term species

Citrus – pomelo & mandarin (11%) as the medium-term crop

Agreement on an approach for reviving Tien Phuocblack pepper after assessment

Seedling survival of 74% based on sampling

2. Forest gardens

752 HHs improved 107 ha of forest gardens with species enrichment using Khaya senegalenses and replanting keo after the typhoon in September

Are the Interventions Working?

Enterprises Status after more than a year

3. Nurseries

Trained 18 potential nursery cooperators on plant propagation, nursery mgt, and business planning; BUT …

Only 7 committed to raise high value planting materials with initial business contracts to prime up the initial nursery enterprises

4. Savings & Relending

Formed 40 village savings & credit groups with a total savings of more than VND 50 million

Repayments of 5 enterprise loan contracts amounting to VND 172 million to be part of savings & credit group accounts

Commune relending policies finalized for approval

5. Agri & forestry enterprises

Trained entrepreneurs on the technical aspects and business planning of incense making, making pre-mixed fertilizer, and trading of feedmeals and fertilizer

Enterprise loan agreements with 5 entrepreneurs in 3 communes

Has Client-Responsiveness of Extension Services Improved?

• More active commune technicians in partnership with project staff in assisting garden farmers adopt market-oriented practices

• Limited participation of district and province technicians

• Mixed responses on serious training needs assessments with follow-on institutional commitments

• “What’s in it for me” attitudes prevail

Lessons Learned

• Assessment and analysis may help refine interventions, and

figure out innovative, effective, & efficient entry points

• A cost center approach in fully funding commune-led planning

and implementation may trigger active participation and counterpart commitments from local leaders and farmer participants

• Incentives that support farmer’s self-interests could facilitate

adoption – subsidized inputs for improving home gardens, matching funds

for savings, partial subsidy for wage labor for improving forest gardens.

• A savings-oriented microfinance with matching fund can link and integrate various project interventions such as training,

subsidies, production contracts, and enterprise loans.

Lessons Learned

• Supporting local interests may give rise to acceptable

combinations of short-, medium-, and long-term agro-forestry species (e.g. bananas and durian, bananas and mangosteen, Khaya and Hopea as long-term forest species, reviving black pepper)

• Improving market orientation and client-responsiveness are changing mind-sets which does not

happen overnight.

• Right combinations of local cross visits, study tours, and village training ignite adoptions. “To see is to believe” -

coffee and black pepper in central highlands, nurseries in the south, banana- and citrus-based home gardens, farmer-owned khaya and hopeafarms, etc)

Emerging Models

• Commune-level extension services is more effective in changing farmer’s behaviors & facilitating technology transfer among garden owners.

• Integrating job generation, training, and enterprise loans with savings-focused microfinance program at the commune level

• Supporting self-interested local entrepreneurs withtraining, priming up contracts, and/or working capital loans: Enterprise-oriented village nurseries for raising high value

planting materials

Local processing or manufacturing based on competitive advantages in raw materials and access to markets

Mixing, repacking, and direct trading of inputs for home and garden forest improvements

Remaining Challenges

• Institutionalizing emerging models and best practices in:

– microfinance,

– enterprise-oriented village nurseries, and

– commune-led extension delivery system

• Determining initial subsidy for improved home and forest gardens in marginal lands that may yield at least 40% environmental benefits

XIN CAM ON!

Thank you !XIN CAM ON