Coffee task force
(Production
Sub-committee
under VCCB)
WEF meeting,
Hanoi
April 14th, 2015
PUBLIC
PRIVATE
MARD
WASI
NAEC
Secretariat:
PARTNERSHIP
WHERE WE ARE
• Aligned the PPP strategy and set up a plan to conduct pilot projects
Oct Nov
2010
Jan Apr
2011
Jul Dec 2011
Dec
2014
April
2015
• Approval of MARD on pilot projects
• Build technical model, farmer group model, multi-stakeholders approach
• Scale up strategy: Program “Extensionist attach to demo plot”
• Approval of MARD on the first scale up 50 demo plots/farmer groups
• Result of 71 demo pilots, develop 2 COOPs.
• Upgrade to Production Subcommittee under VCCB
• Set up 51 demo pilots & 3 COOPs.
• Linking farmers/COOPs/coffee value chain with financing institutions by collaborating with
Agri-Finance Working Group
AGREED 2015 STRATEGY
“Make Vietnam the recognized
reference of Robusta”
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
Pillar I: PPP & Control demos grow by years
Pillar I: Steady Higher Yield by Years
Average yield of 4 years: +10% higher
Pillar I: Good Practice with Better bean size
Improve ripenning and
bean size
Summary of 71 demos in 4 Provinces
Pillar I: Not only Good farming practice with Better Profitability …
Summary of 71 demos in 4 Provinces
(Dak Lak, Dak Nong, Gia Lai, Lâm Đồng)
Category
PPP
Yield (ton/ha)
CFP
(kgCO2eq/ton green bean)
Difference
3.9
+ 0.5 (13%)
6,621
5,813
+809 (14%)
661
1,481
- 824 (- 55%)
4.4
Profit (USD)
Control
* 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
1,487
kg CO2eq/t green bean
6 demos
661
Control program:
484 kg N/ha
4.8 t.g.b/ha
PPP program:
304 kg N/ha
5.2 t g.b./ha
From : Yara Research
Center, Haninghof, Germany
Pillar I: Demos are showing encouraging results
Mr Nguyen Duy Thanh, Dak R’lap,
Daknong
Extensionnist
« saving labour cost, no need to burry the
fertilizer»
« better fertilizer solubility »
« greener leaves, longer branches »
« expected Yield : 4,5 T/ha»
Mr Doan Van Huan, Lam Ha, LamDong
Farmer leader
« less fruit drops this year »
« homegenous flowering & fruit set »
« bigger cherries »
« Expected Yield : > 4 T/ha »
Pillar I: PPP Good farming practice
Traditional
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 recommendation
IDH/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 T
5,813 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
Relationship:
Technical support
DARD/PAEC
“Extensionist”
Farmer Group Leader
Relationship:
Management
support
Tech support,
organization and
management
support
Farmer
Farmer
Farmer
Farmer
Farmer
Farmer
12
Pillar II: Operating Model of PPP Coop
Input
company
List of farmers
Sell coffee
List of farmers
Buy input
Management Board
MOU
MOU
Coffee
buying
company
Coop’s warehouse
Payment
Farmer
Group
Farmer
Group
Farmer
Group
Delivery
Farmer
Group
Farmer
Group
Farmer
Group
Wholesale model – From input to output
13
Pillar II: PPP Coop – The flower model
- 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
CENTRAL
COOP
Satellite group
Satellite group
Satellite group
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 Farmer organization in
management
coop
Marketing & sales
Participate in farmer
group/coop meetings
Loan/Payment
service
Risk management
Pre-screen borrowing
farmers
Buying inputs, selling
coffee, improve cash
flow
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:
Jan
New crop
March
May
Blossom
Form
cherry
Farmer don’t need
to be financed

July
Develop size
of cherry
Need to be
financed 50%
Sept
Develop size
of bean
Dec
End of
Crop
Need to be
financed 100%
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)
16
Pillar III: Tri-Parties Meeting
- 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)
17
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