I. INTRODUCTION - sme-gtz.org.vn Report on VC of vegetables in... · I. INTRODUCTION Đà Lạt is a famous tourist city of Vietnam and also a famous vegetable cultivation region

REPORT ON VALUE CHAIN OF VEGETABLES IN ĐÀ LẠT

I. INTRODUCTION

Đà Lạt is a famous tourist city of Vietnam and also a famous vegetable cultivation region of the country.

Its location is in tropical and monsoon zone but with influence of an altitude, Dalat has a climate of a temperate zone. Although its area is not big (42,400 ha) but favoured by nature with special temperate climate, Dalat could produce vegetables and fruits of temperate zone around the year.

The vegetable growing career in Dalat has been known for long time and developed strongly in the last period of the 30’s. The vegetables of Dalat are delicious and nutritious with specific flavour of those from temperate zone. The high grade vegetables that are spinach, salad, rose potato, cauliflower green and white, white cabbage... now have been available not only in regular meals of people living in Dalat, but also in Ho Chi Minh City and other provinces in the South and the Central and nearby countries as well.

Talking about vegetables of Dalat, it’s worth mentioning the districts of Đơn Dương, Đức Trọng and Dalat city, the total vegetable output of these 3 regions is about 250,000 tons, controlling about 30% of vegetables of the country (source 36, apdx 15). The benefit of Dalat vegetables is not only a significant source of income but it helps to produce jobs for people in Dalat and Lam Dong province, contributing to the economic growth of the province in recent 10 years. However, from1990, the vegetable growing career has been developing, most of Sourthern provinces have produced themselves fresh vegetables, influencing the unique position of vegetable of Lam Dong-Dalat. (although its quality is still advantageous). (source 37 apdx 15)

The problem posed to vegetables of Lam Dong-Dalat is to look for consuming markets, specially export markets, and to improve cultivation procedure for high quality products that could be able to meet the taste of foreign markets. In addition, local consumers shall gradually have higher demand for better products for their health. This factor raises many other problems needed to be solved, and the production of standard clean vegetables is of first concern of Dalat.

The German technology development of GTZ, Metro Việt Nam and the Ministry of Commerce want to have indepth research of the value chain of Dalat vegetables, from which they could find out the relationship and the links affecting the chain, in an effort to improve the effectiveness of Dalat vegetables and minimize difficulties for necessary support in the future.

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II. GENERAL INFORMATION ABOUT DALAT AND SITUATION OF VEGETABLES AND ROOTS.

1. The city of Dalat.

1.1. Area, population, workforce.

Dalat city belongs to Lam Dong province. It locates on the LangBian highland. So Dalat has an altitude of 1,520m above sea level. At North of Dalat is Lac Duong district, East and Southeast is Don Duong district, West and Southwest are the districts of Lam Ha and Duc Trong.

At an average altitude of 1,520 m and surrounded by high ranges of mountains, although its location is in tropical and monsoon area, the climate of Dalat has special features of highland areas. Dalat has fresh pleasant climate of temperate area with an average of 15oC lowest and 24oC highest. . Although there are two seasons: rainy season is from April to November and sunny season from December to March, but Dalat has sunshine around the year. This weather condition has permitted Dalat to produce vegetables and roots, flowers and fruits of specialty and other trees of half tropical weather. (source: No. 22, apdx 15)

According to the statistics report of Lam Dong, the total natural area of Dalat city is 39,106 ha. Because of forests and deserted hills that control large area, so the surface for cultivation in Dalat is not big, about 10,000 ha. That is divided for agriculture 5,300 ha, in-between cultivation 4,678 ha. Agricultural soil composes of two groups: the red yellow Feralit has high ratio, but, its fertile degree is from low to average, but the phosphorus quantity is easy digestible and some microelements suitable for vegetables, flowers and fruits trees. The rest is brown red feralit on bazan soil with higher fertile degree, good for roots and vegetables. The transportation condition is good enough to enlarge economic transcations with main economic regions in the south, provinces along the central coast and the west highlands. (source No. 22, apdx 15)

From 1990 until now, the population of Dalat city increases significantly. In 2004 Đà Lạt has 188,467 people of which 96% is Vietnamese. The population living in urban is 88.94%, and in the countryside 11.06%, with a density of 480 persons/km2. The level of literate capacity is raising but there’s still be a distance from those who are living in urban and the countryside. (sourse No. 22, apdx 15)

Workforce increases rapidly, specially popular farming workers (about 38,5%). Workers with specialized skills have not been officially trained due to the fact that Dalat has no big industrial zones. (source No. 22, apdx 15)

1.2. Economy

From 2000 until now, social and economic situation of Dalat continue to improve with the growth of GDP attaining an average of 12%/year. GDP per capita is 8,8 mn đồng/ year; tourism – service continue to progress and control 69.6%, the ratio of poor households is down to 1.4% ( 4.48% according to new level criterion) (source No. 11, apdx 15)

In the coming IX term of office (2005-2010), the Party Conference of Dalat city shall try to raise the annual GDP up to 15% and over, GDP per capita shall be 16 – 18 mn đồng/ year; total social investment ranges from 6,000 – 7,000 bn đồng, state budget contribution shall be1,500 bn đồng; poverty householdss shall decreases to under 2% (according to new criterion). (source No. 11, apdx 15)

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Among economic branches of Dalat, tourism service is confirmed to be a key and strong economic strength of the city in the past years and in the coming years as well. Its speed growth is maintained and proceeded annually and attained 65% in the economic structure of the regional society. Other service activities have been developing but sparsely scattering, export effort is not yet developed. (source No. 11, apdx 15)

The installation of industrial factories has been proceeding with medium and small industrial zones in farming areas. This helps to attract investment into agricultural product, processing outfits in an effort to participate in local consuming markets and step by step in export activities. The City is aiming at the investment and development of all branches of handicrafts and fine arts, and agricultural product processing.

Agriculture and forestry had been years ago important economic branches of the region. But as with the development oriented for tourism, service, industry, construction, farming and forestry, the agriculture is gradually decreased its ratio reasonably in the economic structure of the city. (to be mentioned in details in Agriculture section to follow).

1.3 Agriculture: Present situation & development direction.

The agriculture of Dalat can still employ 38.5% of the labor force. Agricultural effort in planting is being developed in respect of terrain, increasing harvests, output and product quality. Annually, Dalat agriculture contributes to consuming markets (mainly Ho Chi Minh City and the sourthern provinces) about 200,000 tons of different vegetables, over 300 milliion flowers. (source No. 9, apdx 11). Animal breeding is late developed.

The City is realizing programs of changing cultivation structure and breeding in order to diversify the variety of farming products, to meet the demand of high quality products in local markets, and gradually establishing export markets for farming products.

As for agricultural structure of Lâm Đồng- Đà Lạt, cultivation controls bigger ratio than breeding and service. The cultivation of vegetables and flowers is an advantage of the region in particular and of the country in general, with an average speedgrowth in 5 years attaining 9.1% /year in area (see graph 13) and output about 10.6%/ year (see graph 14) (source: Statistics report of Lâm Đồng 2004)

Graph 13: speedgrowth of vegetables areas of Dalat city through years.

(Source: Statistics report of Lâm Đồng 2004)

Graph 14: Speedgrowth of vegetables outputs of Dalat city through years.

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10,000

15,000

20,000

25,000

30,000

2000 2001 2002 2003 2004 Plan2005

Area: Ha

Year

432,364

505,200

554,185

616,114647,279

707,475

400,000

500,000

600,000

700,000

800,000

2000 2001 2002 2003 2004 Plan2005

Out put : ton

Year

In Dalat, there are more than 20,000 production outfits and farming households participating in cultivation of vegetables, of which 13 units have registered for certification of safe vegetables, mainly at wards 7,5,8,11, Xuân Trường, Xuân Thọ villages …(see map)

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Allocation map of vegetables farming areas at the wards and villages of Dalat city.

Main vegetables and fruits being planted in Dalat:

- Vegetables for edible leaves (cabbage, long white cabbage, salad, field cabbage, green cauliflolwer, celery, spinach…

-Vegetables for edible roots (potato, onion, amaranth, kohlrabi, carrot, white radish…)

- Vegetables for edible fruits (tomato,aubergine, french bean v.v.)

2. The formation process and development of vegetable cultivation career in Dalat.

2.1 Introduction to special vegetable growing area in Dalat.

Its altitude is over sea level of 1,000 – 1,600 m, the climate is fresh and temperate around the year, with an annual average heat of 18-22oC, rain quantity from 1,400-1,800 mm for two seasons (rainy and dry seasons), Đà Lạt has favours and advantages in respect of temterature suitable for vegetables to grow and develop. Đà Lạt and its surroundings have become famous vegetable specializing cultivation areas of Vietnam, with prosperous and diversifying species that come from many sources in the country and abroad.

Vegetable regions of Dalat, and Lam Dong in general are suitable for production of high quality vegetables, specially those vegetables for exporting to foreign markets. The quality of vegetables in fresh climate is always higher than those in hot areas, in addiion, the investment for growing high ranking vegetables in hot areas don’t give high economic value due to insects and deseases, labor costs and fees are also higher than in cool regiions.

The vegetable specializing cultivation regions in Dalat had been established since the years of 1934-1935 with traditional geographical names like: Đa Thiện, Thái Phiên, Vạn Thành, Bạch Đằng... and famous surrounding areas like: Lạc Nghiệp, Lạc Xuân, Lạc Viên, Lạc Lâm of Đơn Dương with many high ranking vegetable species that give high economic value. During the last 60 years, as compared to other cities and provinces of the country, farmers in the vegetable regions of Lam Đồng - Đà Lạt have received technical advances from many sources under many forms, such as through seminars, training courses, farming

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encouraging models, learning production experiences from domestic and foreign experts, with excellent contribution from favourable soils and experiences accumulated from many years of production. (source :16, apdx 15)

From the Liberation Day until now, the career of planting vegetables in Lâm Đồng - Đà Lạt has been maintained and developing. Lâm Đồng is now a province that produces the biggest quantity of vegetables of the country. An estimate made until 2005, the area for growing vegetables of all kinds in Lâm Đồng is about 27,315 ha, of which Đà Lạt has 7,150 ha. The area planting vegetables is increasing to form a specializing cultivation region to produce vegetables lines over big scope and high quality in the city of Đà Lạt, districts of Đức Trọng, Đơn Dương and it’s being enlarged in the district of Lạc Dương.

In Đà Lạt, each household has an average of 2,500-3,000m2. and the number of households that produce vegetables in Dalat is about 7,000 households. (source No. 6, apdx 15)

Herebelow is the production situation of vegetables in Dalat in recent years.

Table 13: The situation of vegetable production of Lâm Đồng in 2000-2005 Year 2000 2001 2002 2003 2004 Estimate

2005 Area of vegetables (ha)

18,879 22,114 23,783 25,388 26,788 27,315

Đà Lạt 6,232 6,676 6,764 7,028 7,176 7,150 Đơn Dương 321 703 807 824 10,423 10,500 Đức Trọng 3,666 4,353 4,839 5,872 6,711 7,000 Other districts 8,660 10,382 11,373 11,664 9,654 2,665 Output (ton) 432,364 505,200 554,185 616,114 647,279 677.00

Đà Lạt 158,649 170,051 170,047 180,631 182,655 185,900 Đơn Dương 171,488 207,297 236,213 238,435 246,306 262,500

Đức Trọng 88,005 100,101 118,259 161,965 181,340 182,000 Other districts 14,222 27,751 22,666 35,173 36,978 46,600

(Source: Figures of 2000-2004 according to annual statistics of Lâm Đồng, figures of 2005 accordiing to report from the Department of Agriculture & Rural Development of Lâm Đồng)

Look at table 13, we see clearly the vegetabe speedgrowth of Lâm Đồng in general and Đà Lạt in particular in recent 5 years regarding growth of area and output. In Đà Lạt, the average area growth is about 9.3%/ year and the output about 10.7%/year.

Compared to all districts, Đơn Dương district is leading with output of about 8,000 ha of vegetables of different kinds, controlliing 39% of the city, next is the urban of Đà lạt (27%) and Đức Trọng (25%) (see graph 13). The city of Đà Lạt is the supply source of 80% of vegetables for the country (of which 50% is for HCM city and the rest is for nearby cities and provinces. (source No. 13, apdx 15).

Chart 15: Areas of vegetables in districts and Đà Lạt city 2004

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(source No. 1, apdx 11)

25%

4% 2% 3%

39%

27%Da Lat city

Đơn Dương district

Duc Trong district

Lạc Dương district

Lâm Hà district

Others

2.2 The development of clean vegetables in Đà Lạt

In 1993, with guidance from the provincial People’s Committee, all concerning departments and joint ventures for producing vegetables in the regions have had developed programs for the production of clean vegetables through many general measures and application of modern technological advances. In order to implement the Decision No. 67/1998/QĐ-BNN-KHCN relating to temporary provisions for production of safe vegetables, the provincial People’s Committee has had decision No. 06/2004/QĐ-UB dated 14/01/2004 that provides for temporary production and trading of safe vegetables in the territory of Lam Đồng (source : apdx 12).

Usually, farmers who register to cultivate safe vegetables shall be transferred the technical process of production by the Industrial and Agricultural Office, and the method of monitoring each stage of the process. Farmers after having planned for safe vegetables could announce the quality of their vegetables. This is also a way to link the cultivators’ responsibility to their vegetables and consumers. (source 37, apdx 15)

Now the technology of vegetable production in glass houses and nethouses is being developed in Dalat with present surface of about 300ha, mainly growing high ranking vegetables for supplying supermarts and for export. (source 37, apdx15). Until July 2005, the Department of Agriculture & Rural Development has issued certificates to 15 enterprises in Đà Lạt that are fully qualified for producing safe vegetables. These outfits usually procure vegetables samples after cropping for experimental checks at functioning agencies relating to chemical and physical standard and microorganism. (source 6, apdx 15)

3. Special features of Đà Lạt vegetabes

3.1 Clean vegetables in Đà Lạt Production of vegetables according to safe technical process in Đà Lạt is diversified in species. Symbolic ones are:

o Edible leaves: Cauliflower (round cabbage), long white cabbage (long cabbage), salad, cauliflower white and green, daisy sprout, spinach, salad, coron, celery….

o Edible fruits: climbing french (green) bean, tomato, cucumber, sweet chilli, etc.

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o Edible roots: potato, carrot, onion, amaranth. … Production process according to safe techniques (refer to apdx 16)

The production process of safe vegetables applies the following steps:

Preparing soil Choosing species and planting Fertilizing watering preventing desease and insects cropping.

3.2 Local markets

Many years ago, Đà Lạt has been the main place to supply vegetables, specially the temperate vegetables and high ranking ones for the southern provinces, specially Ho Chi Minh city. According to the evaluation from indepth interviews and group seminar conducted by Axis in Dalat, about 60% of total vegetable output of Dalat has been consumed in Ho Chi Minh city and southern provinces; 20% consumed in Đà Lạt and 20% exported to nearby Asian countries.

A forecast made for 2005, the output of Dalat vegetables shall amount to 185,900 tons including many kinds, most of them is vegetable for edible leaves such as: cabbage. white long cabbage, cauliflower, etc., next is vegetable for edible roots and fruits like: carrot, potato, tomato, peas and beans. Until now, the species of vegetable are becoming more various and abundant, with many species giving good taste, high nutritious value that could only be planted in Lâm Đồng – Đà Lạt, this is a specialty that has been welcomed in local markets and a high value for export, 55-60% of which is cabbage, white long cabbage, cauliflower and 20-25% is vegetables for edible roots (potato, carrot, red radish), 10-12% is vegetables for edible fruits (tomato, peas of all kinds) (source 6, apdx15)

3.3 Exportation.

Table 14 : Export situation of the province of Lâm Đồng in 2000-2004 Articles Unit price 2000 2001 2002 2003 2004

Ton - 79.7 - - 1,792.11. Region* 1,000 USD - 12 - - 2,091.1

Ton 1,186.8 1,707.1 646.1 342.2 1,328.82. Private

enterprises 1,000 USD 309.6 485.5 309.5 280.4 504.2

Ton 699.7 1,902.6 2,197 2,604.1 5,042.53. govn’t invest area 1,000 USD 1,420.4 2,836.9 3,001.7 3,314.6 5,607.7

Ton 1,886.5 3,689.4 2,843.1 2,946.3 8,163.4Total: quanty exported - value

exported 1,000 USD 1,730 3,334.4 3,311.2 3,595 8,203

(Source 6, apdx 15)

Look at table 14, we can see in recent 10 years, the export quantity of vegetable of

* Region to include individuals, small outfits in the province. Information of 2000, 2003 and 2004 for this article is not recorded according to report from source 6, apdx 15.

Lâm Đồng - Đà Lạt shows continuous increase in output and value due to the fact that Đà Lạt has resumed exportatioin of vegetables to Asian countries. The quantity exported to Japan, Taiwan, Indonesia, Hong Kong and Singapore controls over 20% of total product,

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equal to 35,000 – 40,000 tons (materal) /year. (source 6, apdx 15).of which over ½ is from state invested sector (see chart 16, next page).

Graph 16: Sectors exporting vegetables of the province of Lâm Đồng 2004

(source No.6, apdx 15)

Local22%

Private sector16%

State invested sector62%

However, the result of above exportation is still very modest compared to the capacity and potential of the vegetable cultivation in Đà Lạt because the exportation through contract in particular covers only 7-12% on total export quantity, and only 3% on total output of vegetables of 2004 of the city of Đà Lạt (source 6, apdx 15).

Anyway, this result is a confirmation that the cultivation of clean vegetables for export is a good solution, a good direction in the future. And Đà Lạt is fully qualified for increasing the productivity thanks to the following advantageous points:

• The condition of favourable weather and soil of Đà Lạt is ideal for many vegetable species to develop.

• Đà Lạt could plant and supply (export) certain temperate vegetables around the year. Inverse season vegetables have rather high export ratio and value to nearby countries.

• Price of vegetable in Đà Lạt is 8-10 times cheaper than those of countries in the region.*

• In addition, the vegetable cultivation in Đà Lạt is a long traditional career traversing nearly 50 years of experience. So, farmers have lots of cultivation experiences and special and specific farming habits.

• Đà Lạt is an areas of biggest specialized cultivation of the country, farmers in Đà Lạt have been familiar with the application of modern sciences and technologies, have been trained by domestic and foreign organizations more than other places

*Price of Chinese vegetables and roots rather high, cauliflower 8.000 đồng/kg, carrot 6.000 đồng/kg, ginger 11.000 đồng – 12.000 đồng/kg, higher than that of Việt Nam about 2.000 đồng – 3.000 đồng/kg, but favoured by many consumers because of its outlooks (source http://www.vnreview.com.vn/)

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3.4 Development orientation of vegetables in Đà Lạt to 2010

3.4.1 The development orientation of vegetables in Đà Lạt to 2010 of the office of Agriculture and Rural Development.

According to the report of the department of Agriculture and Rural Development of .Đà Lạt city dated 08 September 2004, the development orientation of vegetables in Đà Lạt to 2010 as below:

• Proceed strong production of vegetables to the direction of clean and safe vegetable

• Change nomal to new cultivation process, scientific and modern, in an effort to produce much more quality products with competitive capacity in local and foreign markets by way of planting vegetables in glass houses with good species, using microorganic fertilizer and clean water for watering, strictly limiting the use of plant protection chemical, just using those listed in categories for producing clean and safe vegetables.

• Proceed planning and groupping cultivation for o Edible leaves: cabbage, long white cabbage, salad, spinach and aromatic

plants at the wards 7, 8, 11, 12. o Edible roots: potato, carrot, amaranth, onion at the wards 7, 8 and the

villages of Xuân Thọ, and Xuân Trường etc.

• Determine main purposes for agricultural wards and villages and proceed the planning of high technological farming production (for above wards and villages).

• The city proceeds investing in a symbolic model of 2000m2 including glass houses, watering system, tree species, production chain for safe vegetables at cooperative Xuân Hương, ward 9.

• Main solution for outlet of Đà Lạt vegetables is exportation. The vegetables of Đà Lạt shall be exported according to two directions: to foreign markets and on-the-spot export, that is to supply vegetables to hotels, high ranking restaurants in Đà Lạt and HCMC.

3.4.2 Investment projects for production of clean vegetables in Đà Lạt

The Bio-organism company of Việt Nam (100% capital of Holland, specialized in studies and cultivation of vegetables for export in Đà Lạt), Asia Foods Company (Korea), Lâm Đồng Forestry and Foods Company and private enterprise Lộc Thọ are those enterprises that have invested over 7 million USD for building a freezing factory, with cool trucks, vegetable processing chain for export….with a capacity of offering vegetables from 10.000 – 15.000 ton/ year. (source: 37, apdx 15)

In 2001, 5 enterprises with foreign invested capital like Atechco (Korea), Joint Venture company Thanh sơn, Knownyou (Taiwan), Agri Pacific (Singapore) that have had penetrated into vegetable market of Đà Lạt and provided farmers with new tree species, fertilizer and farming techniques of clean vegetables which they in turn bought for export later on. (source 37, apdx 15)

In 2002, Đà Lạt jointed with the group of Mitsui (Japan) to build a freezing factory with capacity of 10.000 – 20.000 ton/ year for the benefits of Japanese markets only. (source: 37, apdx 15)

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In addition, the United Science-Production Đà Lạt, The Center for Studies of cotton trees Nha Hố (Ninh Thuận) and the University of Đà Lạt have had successfully studied and come up with insecticide* agents. (source 39, apdx 15)

Beside, after the renovation of Lien Khuong airport by the governmemt, it shall not only bring benefits to tourism of Đà Lạt, but also to farmers of this city to have more means of transportation, so that businessmen could use airlines for export of fresh vegetables and roots without being handled to Ho Chi Minh city like before. (source 37, apdx 15)

III. THE VALUE CHAIN OF VEGETABLES AND ROOTS OF ĐÀ LẠT Map 25: the value chain of vegetables and roots of Đà lạt

Hotels, restaurants,

cuisines, Đà Lạt

0.5%-1%

__ Main consumption source, --- Supplement source, %: supply percentage

General characteristics

The value chain of vegetables of Đà Lạt is the most complicated one compared to above chains in respect of number of stages and its relationship.

Right at the purchasing stage from farmers, many people participate in this deal and some of them play different roles in the value chain (such as traders or Cooperatives playing at the same time the roles of farmer, trader, processer and exporter).

In Đà Lạt, beside the various roles of each component, we could see the flexibility and activeness of traders and farmers as well in determining which vegetables to plant and participate in different ways of consumption.

*the method of using certain bees to kill bacterium seems to be effective and is also conducting the study program of the Development Center of colour vegetables of Asia. (AVRDC). **Most Cooperatives in Đà Lạt are farmer representatives to buy and sell products to traders..

*** Big Cooperatives produce vegetables for supermarkets (Cooperative Xuân Hương, Phước Thành, Anh Đào), or for export (Cooperative Hiệp Nguyên)

HTX**

Small traaders

Medium traders

Big traders (DNTN, HTX***

Công ty)

Smarkets HCM Consumers

Export

Farmers

Retailers at Đà Lạt

Wholsesaler

(prov./cities

Retailer (Tỉnh/TP khác)

consumer

15% 100%

2% 60%

95% 100% 30%

40%

20%

7%

70%

30%

85%

5% 60%25%

15% 15%

25% Hotel, restaurant, cuisine

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Most farmer households in Đà Lạt have been groupped in cooperative and that is a kind of family cooperative relationship*, and responsible for finding outlet for products of household partners.

Different from vegetables in HCMC. About 20% of fresh vegetables in Đà Lạt has been exported through many different ways, this makes income of farmers in Đà Lạt higher, and consequently makes ways for some enterprises or cooperatives to run a close business with a modern model (like Vegetable and root stock company of Lâm Đồng, Joint Venture Đồng Vàng, etc.)

In Đà Lạt there’s some outfits that have applied rather modern post cropping techniques, so, the preservation and transportation and product processing have attained certain good results.

But, the elements in the value chain of vegetables of Đà Lạt still have some limits, difficulties needed to be solved and we shall go into details in the followings:

1. Farmers (pictures 1, 2, 3, 4,5,6 apdx 16)

Chart 26 : Farmers and direct relationship

From the results of group seminars among farmer households in Đơn Dương and Đức Trọng, (the two regions having highest output and quality of vegetables in Dalat) we found that each household has an average of 0.3 – 0.5 ha of land growing vegetables,

with 3 workers and possesses some mechanical equipment for production of vegetables such as: land striking machine, pump, generator etc (source: group seminar - Axis 2005)

In general, the farmer households in these two regions are planting both vegetables with edible leaves and roots. The farmer households in Đà Lạt don’t share a ratio in planting these two caterogies, they just plant according to their experience and their ‘guess on markets and a small part on orders*. Each year, each household plants an average of 3 to 6 kinds of vegetables, alternatively on the same area, each catergory takes 1 month (for leaves) sometimes 2-3 months (for roots and fruits).

****In Đà Lạt, many households have blood relationship and group into a cooperative, famous are Xuân Hương, Hiệp Nguyên, etc.

HTX

Small traders

Medium traders

Big traders (DNTN, HTX Companies)

Farmers

Consumers

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The vegetable cropping in a year of farmers in Đà Lạt happens from 3 to 6 times/ year (depending on which vegetables).

Farmer households that produce safe vegetables in Đà Lạt – Lâm Đồng have to present to the Agriculture & Rural Development of Lâm Đồng and the Agriculture & Rural Development of Đà Lạt the production process of safe vegetables**.

In the value chain (chart 26), most vegetables have been bought by traders through medium traders (40%) and through small traders (30%). The rest through cooperatives and enterprises (20%). A small part of vegetables to be consumed in markets (retailers 5%)

1.1. Cropping. (see picture 6, apdx 16):

Croping times differ from the vegetables they plant, customers requirement and cropping procedure. (sellup, kg).

When the products have equal quality, farmers usually sell them up in whole. The purchasers (traders or cooperatives) shall to the cropping and this will be done once or many times during the day.

Or, the products with unequal quality, the whole sale price is cheap, farmers then sell them in kilogams. The farmers then do the cropping themselves and cropping times depend on the requirement of buyers.

As for cauliflowers that have been planted mostly for exportation, usually after 30-40 days farmers proceed cropping. Sometimes it depends on order requirement regarding the height and weight that farmers shall decide proper time to do the cropping.

Usually the cropping shall be performed once in the day if done by farmers. In general, the process of cropping is important because it influences the quality of vegetables. Specially, cropping of peas/ roots/ fruits, they usually try not to cause scratching, damaging and reducing the quality and outlook of roots and fruits, and also not to cause any influence to the next crop* (source: Axis – farmers seminar in Đơn Dương & Đức Trọng).

1.2 Cropping process.

Vegetable products being sold to local consumers have to go through traders and small business, have to go through a simple and rapid cropping process, specially cauliflowers (chart 27, continuous chain). While safe vegetables specially for export, the cropping stages are rather complicated (chart 27, continuous and interrupted chain)

* Beside a stable cultivation of a kind according to order, most farmers still plant vegetables according their own experiences, just like when seeing this year’s cropping of certain vegetable is high, they continue to plant it. Or if there’s so many people planting a new tree specie they follow to do the same. This will lead to unexpected result. (see section of difficulties and ways to overcome, page 16)

** See safe vegetable section and cultivation process (page 49)

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Chart : Vegetable cropping process (pictures 3-18, apdx 16)

rootingå Cut roots transport Loading on truck

Packing: paperbag, net bag, carton

Early process: Cut, trim to leave out damaged, classification...

__ Normal process, --- Cropping process of vegetables for export

1.2.1 Cut roots (see picture 6, apdx 16): as for vegetables for edible leaves (salad, spinach, cabbage etc. ) if being consumed in markets, farmers will take all roots for freshness. Otherwise, if being sold to supermarkets or for export, vegetables should go through early process and packaging, the roots then shall be cut as required.

1.2.2 Early process (see picture 7 - 10 apdx 16):

Trimming and classification (see picture 7, apdx 16):

As for vegetables for edible leaves, flowers (cauliflowers, cabbage, long white cabbage, salad, spinach) this is to reject old leaves outside, yellow and decaying leaves, damaged leaves or cut off long sprigs…. As for vegetables for roots/ fruits (potato, amaranth, onion and tomato), crop worker has to reject all damaged roots and fruits, then classify them according to sizes, weight (if any), as required by customers). This is also a fast classification of vegetables in early process before they are ready for sale. As for vegetables for export, the early process is more complicated: like cauliflowers, they have to cut short, spread lime on (picture 10) then pack them in vaccuum, or make them dry by fanning…while long white cabbage need not lime spreading, but also go through drying stage and preserving package like cauliflower (picture 12). (see details in Traders section regarding early process, packaging and preserving). Usually, loss in cutting roots and trimming in cropping stage is about 5%. This ratio may be higher for export requirement, or when being in rainfall, humidity or due to farmer’s cultivation techniques not high enough, or due to insects, the loss then shall be higher than 20-30%.

The percentage of loss from cropping through transportation to markets is about 10%.

1.3 Consumption and contracts. As vegetables in HCMC and most of other fruits of Vietnam, wholesale as it be is rather popular and covering 95%. Farmers love this procedure of wholesale because they can sell all their products even if the quality is not all the same.

The quantity of vegetable products of farmers sold through cooperatives covers about 60-70% of their total products. The rest (30-40%), farmers sell to other traders or retailers (supermarket ị Saigon Co-opmart or Metro). _______________________________________________________________________________________*Example: french bean – field pea 4-5 days/ one cropping, or tomato cropping shall be made along in one month)

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The majority of farmers do their business through verbal agreement, no written contract with buyers, except dealing with supermarkets or cooperatives for export.

The Cooperatives or big famous purchasing companies (as Cooperative Hiệp Nguyên), that sign memos relating to applicable current prices or relating to quantity with farmers =>However, this written agreement is not popular because cooperatives and purchasing companies have to depend on goods order (catergories of vegetables, quantity) required by foreign clients. So, when there’s an order they look for and buy the products with quality as required by clients. .

In case farmers sell their products directly to supermarkets, there should be a principle contract between buyers and sellers. Both parties shall be obligated by the provisions, conditions, the rights and duties regarding purchasing requisition, prices, deliveries, settlement and period of contract (source: 38, apdx 15)

For farmers, the settlement is always in cash and payment shall be made immediately after cropping. Only for small traders, farmers could let them pay late from 5-7 days. (source: indepth inverview conducted by Axis)

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1.4 Income

Underneasth is a table of accumulation of output, business turnover and average income* of some symbolic vegetables of Đà Lạt

Table 14: Output, business turnoverm, income of some symbolic vegetables of Đà Lạt

Category Average output (/ha)

Average price

(VND/ kg)

Average turnover (ha) (1.000 VND)

Average income (ha) (1,000 VND)

Round cabbage

80 tons 900 – 1,800

72,000 – 144,000 About 10,000

Long white cabbage

70 - 80 tons

800 – 1,100

56.000 – 88,000 9,500 -15,000

Tomato 80 – 100 tons

1.000 80,000 – 100,000 20,000-30,000

Onion 65 tons 2,100-2,500

136,500 – 162,500 23,000-28,000

(Source: Farmer group seminar in Đơn Dương & Đức Trọng conducted by Axis) In short: As for the vegetable cropping process of farmers in n Đà Lạt, there’s two main points worthy of notice:

First is the vegetable cropping process of farmers of Đà Lạt, this depends on sale procedure: by garden wholesale or by kilogram.

Second is the cropping process that could be going through many stages

(complicated) or few stages (simple). This depends on end-users of the products (local consumers buy products in markets, consumers from supermarkets, hotels, big restaurants, or exoprt to nearby Asian countries)

=> this is also two points that are similar to the value chain of fruits of Bình Thuận and Ninh Thuận, and different from the vegetables of HCMC, because of the fact that the vegetables of Đà Lạt being exported fresh (and processed) to nearby countries. Total loss of vegetables from the part of farmers (through stages) is less than 10% (if cropping and hauling by themselves to traders). As for safe vegetables, just like in HCMC, due to strict requirement from consumers (supermarkets, export,) the loss affected by early process is higher than 20-30%.

* as for inverse season, income is double higher, but its output equals only half, so the income value in general is unchanged for farmers in one year.

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1.5 Difficulties and support requirement for vegetable farmers in Đà Lạt

Difficulties Proposals

• Tree species: some farmers in Đà Lạt worry about no good tree species that cause deseases like swellings of fruits and roots (kohlrabi, carrot), damaged or rotten inside (cauliflower, carrot..) These have not been treated properly. Many old species have been degeneratged so that new species with high quality output have been expected.

• Clean vegetable cultivation: more cultivation of clean vegetables have not been responded by farmers due the fact that the prices of clean vegetables and normal ones are not much diffent, while cost for clean vegetables is higher.

• Outlet for products, specially for clean vegetables is the worry of farmers becaue they can not take initiative in markets (only traders and enterprises.)

• Which vegetables to plant?: for ousiders of Cooperatives, they have no concern or orientation from any farming encouragement or organizations as which vegetatbles they should plant, this sometimes leads to a situation that supply don’t meet demand => that consequently influences income of farmers.

• Techniques: Although farmers in Đà Lạt have been supported with lots of knowledge of science and technique (KHKT), but as there’s some new species that they don’t have cultivation experience or deseases treatment ect.

• Contamination degree/ from insecticides (to cultivators) is also a worry of farmers because they directly involve with it (group seminars)

The Departmant of Science & Industry and the Institute of Species are requested to support farmers with better tree species and more essesntial to appoint certain people to treat some deseases relating to trees that farmers concern (these people must be technical specialists with experience and should not be new gradduates without any experience as being)

-> It’s necessary to have support from Agriculture Office and Farming Encouragement Office in raising perception of farmers in the cultivation of clean and safe vegetables, good for farmers (anti poisonous), and for consumers as well.

-> The production and trading of vegetables now have been processing without planning, no news on market demand, no initiative for outlet for farmers, so it’s necessary to have an administrative organization to handle the coordination between buyers (traders, Cooperatives and companies) and farmers, to seek markets and clients, and organize production planning so that farmers know which vegetables and what quantity in order to proceed their cultivation. In addition, diversifying products is a good practice for production of vegetables and fruits in Đà Lạt, this helps to meet increasing and various demand of customers.

It’s necessary to have various training courses for farmers in respect of planting techniques, care and selection of species, with anti-desease character, resistant to hard weather condition and treatment of insects and deseases etc….for new species.

The use of insecticides shall be restrict as farmers follow the cultivation process of safe vegetables. That’ why the cultivation of safe vegetables must be publicly announced and encouraged in the whole region.

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2. Cooperative (HTX) (picture 15, apdx 16)

Chart 28: HTX (Cooperative and direct relationship.

Hotel, restaurant,

cuisine

Small traders

2.1 General characteristics

Compared to other provinces, the model of Cooperative in Đà Lạt is more popular. Its organization and activity is close and regular.

Most of Cooperatives have 20-60 members, some have less than 20 members and some more than 100. in a cooperative, its memebers are living in the same village. Some households that have relative relationship and form themselves a small cooperative.

Cooperative represents farmers to sign agreements with traders and purchasing companies when they sell their products and look for outlet for products of cooperative members.

However, in Đà Lạt there’s only some big cooperatives that have stable outlet and do the planning for farmers to plant the vegetables as required by customers, such as Hiệp Nguyên (it exports cabbage, long white cabbage to Taiwan), and Xuân Hương (it grows safe vegetables and supplies supermarkets in HCMC). They are two cooperatives that have rather close process from production to consumption and use certain equipment in early process.

However, most of these cooperatives still rely on the stages of purchasing, early processing and consumming, specially Hiệp Nguyên, it acts the role of a medium trader. Therefore, the analysis of this model shall be mentioned in details in the section of traders.

2.2 Working scope.

In general, the cooperatives in Đà Lạt are working on a comparatively big scope in respect of two aspects: number of members and vegetable output compared to other regions. But most of them still don’t work on a close process from planning, production, cropping, early process, transportation and consumption (except some big cooperatives just mentioned above). The role of most cooperatives in Đà Lạt is to represent farmers in the stages of negotiation and sale of products.

HTX Medium traders

Big traders) DNTN, Co.)

Farmers

Export

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2.3 Contracts.

Most of cooperatives in Đà Lạt don’t have written contracts with buyers (in case buyers are traders), except when products are sold for export or for supermarkets (Hiệp Nguyên, Xuân Hương, Anh Đào) then they shall have written contracts with buyers (see farmer section)

2.4 Clients of cooperatives.

The majortity of Cooperatives sell their products to small or average traders. The traders then sell them to wholesalers at wholesale markets in cities or provinces, supermarkets or cuisines or export to Cambodia. Some shall be exported to nearby countries by big traders. (see trader section).

However, there’s some big Cooperatives (acting like traders) suppy clean vegetables for supermarmet system in HCMC such as: the companies of Tân Trang Trại, Vinh Trang, HTX Anh Đào provides for Saigon Co-op*, or HTX Xuân Hương for Metro with safe vegetables, etc.

The role of big cooperatives is the same as of traders (while small cooperatives and groups of small farmers look alike) so we don’t go into details of cooperatives (see more on Farmers and Traders sections for post cropping stages and problems needed support.).

3. Traders.

Chart 29: Traders and direct relationship.

Retailer in Đà Lạt

Small traders

farmers HTX Medium traders supermarkets

Big traders (DNTN,

company) Export

Wholesalers (province/other

cities)

*About 5 tons of clean vegetables/ day including 80 categories, controlling 60% the output for sale daily in the whole system of Co-op Mart Due to raisisng demand, Co-op shall order an additional delivery of 2 tons or clean vegetables/ day from the gardens of Đà Lạt. At the same time, Saigon Co-op also plans to install a frozen warehouse for preserving vegetables and roots for some more days and to invest in some gardens to supply with Dalat clean vegetables. (sosurce 7, apdx 15)

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3.1 General characteristics.

Different from trader partners in HCMC value chain of vegetablers (rather identical in acitivity scope) the role of traders in Đà Lạt is rather complicated, it could be classified into levels like below:

Small traders: are low level traders, small scope of activity and simple, mainly do the purchasing and sell to wholesalers at wholesale markets in HCMC, in Mekong Delta and in the southern and easthern provinces of the South and one part sell to bigger traders. As they resell to wholesale markets in the country, small traders don’t do any early process because it’s not required by wholesalers or if any, just very simple process (trimming outside leaves, yellow leaves or rotten). So, these small traders don’t have any place for doing the early process.

Medium traders: are medium level traders who have rather stable outlet for products. These traders collect goods to sell to supermarkets (Metro,Coopmart, Big C, etc.), cuisines or for export (to Cambodia). Clients of these medium level traders have rather high demand in regard to quality of products. So they must have early processing points at their warehouses/ factories.

Big traders: usually are big Cooperatives, Private Enterprises, local and foreign companies that have export business to: Taiwan, Japan, Korea….these big traders have strict standard for selection of products and rather modern early processing chain. Most of them have long strategies for investment into high technical production chain, advance equipment, so that they could enlarge consuming markets. Example of big traders in Đà Lạt could be the agri-product stock company of Đà Lạt, Company Thanh Sơn, Private Business Khanh Cát, Cooperative Hiệp Nguyên, Xuân Hương, Phước Thành, etc.

3.2 Scope of Activity.

The scope of activity of traders/ purchasing companies differs according levels (small, medium, big):

Small traders: small traders have small workforce, about 1-2 who work full time and 3 - 5 part time in about 1-3 days, they do the collection of products in one time and transport to wholesale markets to sell to wholesalers, the quantity of products is about 6-8 tons/ time.

Medium traders: medium traders employ about 5 15 người. These traders purchase an average of 25-50 tons of different vegetables, most of them are cabbages that’s about half (1/2) of total collection. The majority of these medium traders sell their products to wholesalers, supermarkets, cuisines in the Mekong Delta provinces, the Central and for export to Campuchia.

Big traders: Symbolic examples could be mentioned below:

(1) Forestry and Agri-product stock company of Đà Lạt (picture 23, apdx 16) is a stock company that mainly provides with clean vegetables for supermarkets from Huế down to the South, controlling about 20% the total of vegetables that the company can consume. From 1982, this company has begun to export vegetables abroad: Wasabi, potato, spinach to Japan, cabbage, long white cabbage, amaranth and others to Taiwan, cassava, indian taro, soybean and other vegetalbes to Australia and America, etc. This the unique company of Vietnam that has Wasabi product with high quality and favoured in Japanese

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markets. This company also has fast frozen facilities for production and export of vegetables and fruits. The annual export value attains about 3.5 – 4 million USD, covering 80% of total vegetables of company consumption, resulting in a stable growth of 15-20%/ year. This is also one of companies in Đà Lạt that follows exact process from production to consumption according to the international standard of ISO, UACCAP, GMS, etc….and takes all responsibility with consumers in regard to safe laws and export regulations of the importing countries, it also has its trademark Agri Foods registered with these importing countries. (source 11, apdx 14)

(2) HTX Hiệp Nguyên: according to Mr. Hùng, Director of the company, Hiệp Nguyên now has 22ha of land planting vegetables, 25 members and a number of workers up to 120 persons (mostly blood relatives). Working capital is about 600 million đồng. Annual export quantity is from 5,000 – 7,000 tons. Quality check has been made frequently by Center 3 regarding insecticides content, metal, deseases etc. (other certificates not yet owned). Main export products of Hiệp Nguyên are cauliflowers and fresh long white cabbages. The export markets of HTX Hiệp Nguyên is the countries in Asean region, main market is Taiwan. Usually HTX Hiệp Nguyên export most fresh vegetables in inverse seasons (June to November, when less temperate vegetable is available in Taiwan). The annual business turnover of Hiệp Nguyên is about 15 billion đồng, with a growth of 100-200% in recent 3 years. Now, Hiệp Nguyên possesses a big early processing compound of about 1,000m2 and a small cool storage house*, it has no processing factory although it produces a small amount of pickle (kim chi) for Korean markets. The export products don’t label the name of Hiệp Nguyên but the trademark of the importing companies. .

(3) HTX Xuân Hương: (picture 24, apdx 16) is one of the first 3 units in Đà Lạt that have received certificates of Safe Vegetables issued by the Ministry of Agriculture & Rural Development (possessing close chain from production to consumption according to the standard of production of safe vegetables of the Ministry). The scope of production composes of 5 ha of high ranking vegetables (mainly 14 kinds of salads) with 03 ha glass house. Total members of Xuân Hương is about 35 people with workforce about 100 persons (mainly relatives). Working capital of Xuân Hương is about 100 million đồng. The products of Xuân Hương have been labeled with its name and consumed at the supermarkets of HCMC. Another portion of its products (not big) has been exported through another intermediary company. Now, HTX Xuân Hương is developing a program for production vegetables and flowers with high technology (organic standard production). In the future, HTX Xuân Hương shall proceed changing production industry (glass house system, modern watering system), specially the technologies for preservation and products processing after cropping, HTX Xuân Hương has also invested in advertisement and marketing for its trademark and products.

(4) Private Enterprise Khanh Cát: (picture 25, apdx 16): although full time employees of this enterprise composes of only 4 persons, but its workers go up to 100 persons. Its fixed capital (according to director) is about 10 billion đồng and circulating capital is 1 billion đồng. Now, Enterprise Khanh Cát has 1ha of glass house out of its total 10ha. Preserving storage, early process and pacing of products go up to 700m2 with one 8 ton truck as a means of transportation. Supply capacity of this enterprise is 5,000 tons of materrial/ year. The enterprise now has attained a production output of 70 -120 tons of fresh vegetables/ day, mainly cabbage and long white cabbage. Private Entẹrprise Khanh Cát has exported vegetables to Korea, Taiwan. The exportation has been vested in another company. * The Cool storage of Operative ( HTX) Hiệp Nguyên has been officially put into operation, with storage capacity up to 42 tons of vegetagbles and fruits for export, with temperature from 0 – 50 C. It’s disclosed that the cool storage of HTX Hiệp Nguyên costs 275 milliion đồng, of which Đà Lạt city People’s Commttee supported with 150 milliion đồng, in the program of rasing the value of agricultural products of Đà Lạt. (source 41, apdx 15)

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3.3 Post cropping process.

3.3.1 Cropping.

Post cropping process is usually done by traders. However, only medium and big traders have machinery processing facilities to do this job. It’s depending on scales of Cooperatives, enterprises, companies and consuming markets, either local or abroad, that the processing stages of post cropping shall be proceeded according to different levels that could be mentioned shortly as below:

Small/ medium traders: the majority of farmers do the wholesale of their garden products to small/ medium traders. So, as mentioned in farmer section, traders come to the gardens and hire laborers to do the cropping. The cropping shall be done during the time from 11hrs to 15hrs. After that, products shall go to early process, classification, packagiing, lableling (stages 1-5, chart 30). Until about 20hrs – 21hrs vegetables shall be cairried to other intermediaries (supermarkets, wholesale markets, retailers, etc. …)

Big traders: Beside some big traders buy products directly from farmers and Cooperatives (conducting post cropping process like medium and small traders), some other traders buy products from medium and small traders and don’t have to do the cropping, because they purchase products of No. 1 caterogy per kilograms. Therefore, farmers (or small traders) shall do the cropping, classify and carry to collecting points of big traders by their own means of transportation (or hiring trucks) (see more in section of farmer’s cropping).

Traders who do the export of fresh vegetables of Đà Lạt usually follow a typical process as below: (source: HTX Hiệp Nguyên, Apdx 14)

Chart 30: Post cropping process of cauliflowers for export (picture 7-18)

Rn

Sơ chế: )

)Đóng gói: Bao ) ) Early process: cut

(3)

3.3.2

Above(stage

Particmachtheref

(1

ootig

cu

Ealrly process

is an early ps 1-3) or for ex

ular for the agrinery equipmenore its early pro

(2

p

troots trim to leave out damaged, classification

transport

Wholesalers at wholesale markets

(picture 7-11, apdx 16)

rocess rather popular for cauliflowerport to Taiwan, Korea (stages1-6).

icultureal product stock company of Lt and modern vegetable fast coolingcess is more complicated. (picture 23,

(4

i vôi, m khô

)

reserving transp

giấy , chlưới, thù

Ex

s of Đà Lạt for local

âm Đồng, a big unit t system in the earlyapdx 16)

(5

o vào bao ng carton

(6

port

markets

hat owns process,

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Most big traders have early processing points comparatively of standard, and medium and small traders have small collecting points or simple early processing points. (picture 7, apdx16).

Many traders (who buy products and sell to hotels, restaurants, supermarkets in HCMC) transport products to HCMC then proceed the early process at their companies in HCMC due to the folliwng reasons: - these purchasing companies don’t have early processing facilities in Đà Lạt - the early process before transportation to HCMC could make products scratched, damaged and loss occurs during transportation. - when arrived in HCMC, these vegetable products shall be checked again for weighing and packaging before selling to consumers, so proceeding early process at Đà Lạt then again in Sài gòn shall raise the costprices of products. Loss in early processing stages depends on the categories of vegetables, roots, fruits and consuming markets, ti’s about 5-15% (local consumption), or higher (20-40%) if exported.

3.3.3 Packaging (picture 12-13, apdx 16)

Local consumption vegetables, in supermarkets, hotels and restaurants, shall not be packed (as edible leaves: salad, spinach, long white cauliflower and cabbage) or if with small quantity, packed into plastic bags with ventilation holes (edible clean leaves or tomato). Almost cauliflowers shall be loaded on trucks for transport to other provinces, other vegetables are usually carried by big baskets, plastic baskets or regular big bags. (picture 12, apdx 16)

The vegetables of Đà Lạt for export to nearby countries (cabbage and long white cabbage) must be packed according the requirement of the importing countries. For export, each cabbage shall be put into a paper bag to prevent scratching. Then they shall be put into a net bag (20 kg/ bag) or carton box (20kg/ box). (picture 13, apdx 16)

3.3.4 Lableiing (picture 14, apdx 16)

The majority of vegetable products for export from Cooperatives, enterprises, and companies have not been labeled. These products shall be labeled with the trademark of clients. A few companies have their own trademarks for export (like Agi Foods Co.), or for local consumption (cooperative Xuân Hương, Anh Đào etc. . mainly for supermarkets Metro, Coopmart). Reasons for not labeling their products are mainly due to: :

1. The requirement of importing units (they want products labeled their own trademarks)

2. Exporting units (who want to preclude complication when their products don’t meet quality and shall be claimed by clients. Etc.)

3. The exporting units don’t regconize the importance of labeling/ trademark (they only see procedural complication and costprice.)

4. Due to the long traditional habit of Vietnam, they just want to receive payment immediately and don’t have long business strategy.

5. In addition, it’s due to lack of confidence in importing units (example is the case of HTX Xuân Hương that exports vegetables for Metro in HCMC*)

* Accoring to the chairman of The Cooperative of HTX Xuân Hương, when conducting a sightseeing at Metro, he found that some products labeled with Xuân Hương trademark are not really belonging to HTX Xuân Hương, and surely don’t want bad influence on the prestige of HTX Xuân Hương, apdx 14).

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So, label and trademark is a problem to be noticed, not only for vegetables of Đà Lạt but for the fruits and vegetables of other provinces. This situation leads to loss to be suffered by both producers (they are not able to protect their trademarks), and consumers (they don’t trust products without trademark).

3.3.5 Storage and preservation (picture 15,16 apdx 16)

Presently, most traders purchase and haul fresh vegetables for consumption in the day, they don’t do the storage and preservation of vegetables and roots.

Only certain traders with large scope that have cool houses for storage like HTX Hiệp Nguyên, Agi Foods Co.

Hiệp Nguyên is possessing cool warehouse of 40 tons and vacuum apparatus at the cost of USD $3,500 with capacity of 30kg/.At Hiệp Nguyên, vacuum pack is the last stage of early process, then the pack shall be put into cool house to prevent products from de-hydration.

The Agricultural Foods Company of Lâm Đồng (Agi Foods Co.) has invested a frozen factory with 2 million USD to keep products frozen, and to do the packing of products at 0-50C.

Loss in storing and preserving in cool house comes from dehydration of vegetables (weight down) is about 5%-10% depending on the period of time of preserving and preserving temperature.

3.3.6 Transportation (see picturs 17,18, 19 apdx 16):

From farmer/ Cooperative to traders: Transportation shall be handled by buyers(traders, Cooperatives, Companies) in case farmer sells his products at wholesale. Buyers then hire laborers to do the cropping, when entering the field to do the cropping they must go on a ploughing machine in order to carry products out and load them in big baskets for hauling away by truck. If the field don’t have access, they have to carry products on shoulder to bring them out of the field for loading and hauling.

Products that are sold by kilograms, transportation shall be at farmers’ responsibility. In this case they use their own means of transport or hire a truck.

Between the two above ways of transport, the first one is most popular, - traders do the hauling.

From traders to clients: The majority of small/ medium traders carry vegetables to wholesale markets/ supermarkets and cuisines by regular trucks (no cool truck). The transportation shall be done at night, late until early morning (when weather is fresh and ready for morning markets).

For small/ medium traders who have clients as wholesalers at wholesale markets/ cuisines/ supermarkets, their products shall be loaded in big baskets and carried by trucks to clients. For big traders who export goods to foreign countries, their products shall be carried by cool containers.

Loss in transportation depends on how products have been transported and packed.: usually from farmers to early processing points the loss is (about 0.5-1%), but the loss from traders to provinces is rather high about 3%-10% up to kinds of products.

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3.4 Contacting procedure and contract.

In general, when purchasing from Cooperatives or farmers, traders only have verbal agreement with sellers according to each deal. At outlet, if traders sell products to wholesalers at wholesale markets, usually both parties don’t have contract. Their business relationship relies on confidence and long good will cooperation.

If traders who are at the same time cooperative usually supply goods to supermarkets, as mentioned above, principle contract valid for one year shall be signed by both parties.

Big traders like Hiệp Nguyên, Agri foods company of Lâm Đồng and those companies and enterprise that frequently export products to Asian countries shall have contracts sighed for each deal. However, with the busines culture of Asia, in particular instance, both parites could proceed their business through telephone calls without contracts being signed. In these cases, the risks (if any) shall be suffered by sellers (because as long as products have been exported, they may not be accepted in respect of specification, quality …. and late payment etc. ). Content of contract signed by both parites usually composes of the following articles: 1. Supplier follows exactly the provision regarding hygiene, safety, quality. 2. Indication of specification for packaging and categories 3. Means of transportation and procedure as provided. 4. Delivery time as fixed by order bills 5. Valid period of contract (usually 6 months – 1 year & and the right to terminate contract) 6. Prices agreed upon at the the time placing an order and to be shown on order bills. 7. Certificates and delivery invoices. 8. Period for settlement from 5 – 7 days* Specific purchasing procedure and contracts of big traders could be clarified as below: For cooperative members, there’s many ways for signing contracts:

Business contract according to current prices and/ or business contract according quantity. But these are not popular, just for big enterprises.

Benefits shall be conveyed to those members who have stockshares (applicable mostly in cooperatives).

For foreign partners, contracts shall be signed on annual basis and amended according each business deal (negociation for order bills and prices mainly through telephone conversations). Settlement shall be made through banks (Hiệp Nguyên, Khanh Cát).

The Agri Foods Company of Lâm Đồng is now running a close production process including species selection, training, organization, administration and also a tracking system control regarding cultivation techniques and vegetable quality of all members, so the purchasing procedure applied for “it’s” farmers and partners are very strict.

3.5 Clients

3.5.1 Clients of small/ medium traders: as mentioned above, they mainly sell products to wholesalers at wholesal markets in HCMC, Mekong Delta provinces and the Central and for export to Campuchia. Beside, these traders also have certain clients as cuisines and supermarkets etc. .. but the consumption quantity of these clients are not high. tuy số lượng tiêu thụ của các đối tượng này không cao

* All contracts don’t provide for regular business and product quantity, just the order bill that prevails. No order bill no delivery.

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3.5.2 Clients of big traders: Almost products of big traders have been reserved for export fresh or processed for Asian countries (Japan, Taiwan, Korea, Australia…..) However, the product quantity for export, after having been through early process/ processing, remains only about 40-50% the total quantity of initial goods cropped and purchased. So the loss of these big traders are rather high about 50-60%.

3.6. Income.

The difference between buy and sale price (local) for 1 kg of vegetables/ roots of traders is about 500 đồng. From where we could give a total estimate of income of a trader in one business deal as below: Table 15: Total average income of trader/ business deal

(Source: Indepth accumulation done by Axis)

Trader (A)

Average buy/ sale quantity

(1,000kg)

(B=A*3,000 đồng)

Average business turnover

(3,000 đồng/ kg)

(‘000.000 VND)

(C)

Difference between buy/ sale prices per

kg

(VND)

(D)

Average fee estimate for cropping, early process, transport and loss.

(VND /kg)

E=(C-D)*A

Income after minus costs in column (D) (‘000,000 VND)

(F=E/B)

% income/ business turnover

Small 6-8* 18-24 500 300 1,2- 1,6 7-10%

Medium 25-50(*) 75-150 400 200 5 -10 7-10%

Big 5,000(**) 15,000 5,300 3,200 3,000-5,000 10-15%

(*) Average buy/ sale quantity of a business deal (2-3 days/ time)

(**) Average buy/ sale quantity of one year. 3.7 Advantages, difficulties and support requirement.

In general, traders (including cooperative acting as a trader) have some advantages as below:

The source of goods supplied by farmers is abundant, the cultivation techniques of farmers are rather good, the quality of products are comparatively stable. (but sometimes due to the influence of weather, traders could not get enough quantity and quality of products as required and the price shall be then raised higher accordingly).

Some big traders who have conducted training course, monitoring and controlling certain species techniques, caring and maintaining specification standard for farmers, could then control the quality of purchasing products.

Most medium and big traders have their own means of transporation. Some big traders (Cooperatives, companies) have invested in warehouse freezing system to preserve and store products for export.

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However, compared to advantages, traders encounter lots of difficulties:

Diificulties Proposal for support

Capital: when purchasing goods from farmers, most traders immediately pay them in cash. But when they sell the products again to supermarkets, wholesalers, wholesale markets or export to foreign countries, they almost don’t receive payment until 5-7 days after delivery.

Investment fees: Big traders acting the role of cultivator (25% total products), purchaser (75% total products) and at the same time conducting early process, packing, transporting…. Have to bear a rather high investment fees (glass houses, earth improvement, machines and tools, cool houses etc.) & operational fees (electricity, water).

Factories, production chain, preserving technology and post cropping process.

Most concern of big traders now (HTX Hiệp Nguyên, Xuân Hương, Agi Foods Co. etc.) is that they want to invest into factories, modern machines and equipment in order to obtain standard requirement by clients and freezing machine to preserve products for 1 month (now only 3-5 days) so that they could further their markets to the countries of Europe and America.

Treatment for sub-products due to rather high loss percentage of Cooperatives and companies exporting products to Asian countries,(about 40%), the treatment of sub-product is a difficult problem for these cooperatives and companies. The total sub-product after early processing stages has been now using for green fertilizer, this quantity is very big amounting to thousands of tons. It’s supposed that this sub-product shall be kept in preservation for continuous processing, the cost for storing it is higher than what it could return => this is a very difficult problem for the vegetables of Đà Lạt

Transportation. In general, all traders have complained about transportation regarding obligatory times for truck circulation set by the

capital loans from banks with well treated interest rate.

This difficulty relates closely with traders’ demand relating to outlet for their products. If it’s well done with support for product outlets, the capacity of machine and equipment could then be fully developed and in turn given more capital for investment and fees for operation.

See more on HCMC vegetable section.

according Cooperatives and companies, there’s been absolutely no solution for this problem. Sub-products could be processed by many ways: for man or for breeding animals (drying or salting, etc.). But more importance is to look for outlets for these processed products and techiniques for processing => in order to solve this problem, it’s necessary to have support from processing enterprises, chamber of commerce to proceed looking for clients; the deparment of Agriculture and foreign organizations support with scientific processing and proper methods.

This is a difficult problem for traders. But, government policy is for the benefits of all the society.

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governemt; drawback transportation also causes difficulties in hauling products and raising fees.

Market information: Big traders acting exporters are still short of information of market requirement, specially exporting markets with much more strict and different standards than local markets. If they don’t have enough and correct market information, exporters could suffer loss in their business.

The professional characters of farmers: Now, the cultivation methods of farmers are mainly on experience. Sometimes farmers don’t follow strictly the regulations of Cooperative regarding cultivation process and attedance etc., that influences the product quality. Moreover, they often don’t carry out their committment (per contract) in case of short of products and high prices.

Building a trademark.

It’s a worry of some big traders. They are short of information and don’t know how to proceed, only prestigeous enterprises could help to build a trademark, it’s worth mentioned the protection of trademark from the side of the government and a support program as well (including capital).

Competition and consumption:

Traders in Đà Lạt are competing hardly with vegetables and roots imported from China (mostly carrots and cauliflowers), they are good looking and eyes noticed and preserved longer with little loss. While vegetables and roots of Đà Lạt must be cleaned carefully, shorter time of preservation, not good looking outside. Therefore, the quantity of vegetables of Đà Lạt delivered by traders to wholesale markets in HCMC lessens and lessens, although the price of Chinese vegetables is higher than that of Đà Lạt *

Trade proceeding office could be a bridge for exporters get in touch with export markets (see more on HCMC vegetables.)

this expresses the fact that farmers don’t know the importance of reliable conficence in business tht should be accompanied by contract obligations. (see more on above chapters.)

=> there’ should be a topic briefing to introduce to traders and farmers as well to see the benefits of trademark in the coming incarnation, and the support of local and foreign organizations in this matter.

=> raise the quality and shape of vegetables and roots of Đà Lạt, develop advantages of prices compared to vegetables and roots of China. At the same time reduce the source imported from China..

* Mrs. Hoàng Thị Kim, owner of a vegetables wholesale shop, she used to send everyday to HCMC an amount of 5-7 tons of carrots, now only one ton a day. Owners of wholesale shops of Dalat vegetables in Cầu Muối market HCMC) told traders of vegetables of Đà Lạt that “the people of Sài Gòn now only “love” carrots of China since they overflew to Việt Nam, and have “ignored” carrots of Đà Lạti”. Before that many people in Hà Nội have also said “no” to carrots of Đà Lạt, although they have had long before considered the carrots from the Southern highland “the best” in VN. Not only so, 20 traders who did the exportation of vegetables to Campuchia for more than ten years now have to say ‘bye’ because the wholesale shops over ther also have chosen carrots of China instead of Đà Lạt (source: 7, apdx 14)

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4. Wholesaler. (pricture 21, apdx 16)

Chart 31: Wholesaler and direct relationship.

Wholesale

One special feature of Đà Lạt is that there’s no wholesale market in Đà Lạt but maintly vegetables of rau Đà Lạt have been sold to wholesalers in HCMC, Hà Nội and nearby provinces through regional traders/ companies. We could see that the function of wholesalaers in Đà Lạt as small traders with not big supply quantity.

Wholesalers in HCMC dealing with vegetables of Đà Lạt mostly center around wholesale markets (Tam Bình, Tân Xuân, Chợ Lớn…), they get vegetables from main source traders in Đà Lạt, then distribute products to smaller wholesalers at other markets in the territory of HCMC.

In big cities like HCMC, wholesalers dealing vegetables and roots of Đà Lạt at wholesale markets get their products from many different sources, because they sell many different vegetables and roots. In HCMC, among total product lines, the vegetables and roots of Đà lạt cover more than 80%, the rest comes from Bình Chánh, Hóc Môn, Củ Chi and nearly provinces. (source: Axis –indepth inverview)

4.1. Early process.

At shops of wholesale markets, vegetables and roots bought from Đà lạt shall go through another early process. They proceed early process at their shops, usually from midnight to 4 AM. With edible leaves like daisy sprouts, cabbage, salad etc.., need more careful process and loss is also higher than roots due to that fact that they are easy damaged during transportation.

The early process is also simple depending on vegetables and roots before going into packaging/ transportation, they are:

1. Vegetables: shake for earth to fall -> then trim and put off all yellow and dry leaves. 2. Roots: (carrot, white long cabbage …): cut more bases -> then clean with water

the loss at this stage is rather high, an average estimate is 20-30%, specially salad, when rain falls, the damage may go up to 50%*.

4.2. Packing and labeling.

Big wholesalers (owner of wholesale shop): the packaging vegetables and roots is usually done by owners of wholesale shops in HCMC. They keep vegetables and roots in big baskets or metal baskets to deliver to smaller wholesalers.

* example: wholesaler buys from shop 120 kg of salad, after early procerss, 15% damaged shall be put away, 35% considered ‘OKt’ for rice inns or retailers, about 50% best quality shall be delivered to restaurants, familiar customers, friends (source: indepth inverview by :Axis.)

Traders Smaller wholesaler Retailer

Consumers

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Small wholesalers: after picking up vegetables from shop (stall), small traders shall do again early process and pack them before delivering to retailers. After early process, edible leaves shall be tied into bundles with rubber strings and put into big plastic bags to deliver to retailers. For easily damaged roots like tomato, when loading into bags/baskets for packing, some straws, papers banana leaves shall be put in between tomatos to prevent damages and loss.

Most products of vegetables and roots of Đà lạt have not been labeled with trademark because they don’t worry about this problem. They just rely on the prestige of wholesalers and personal experience in order to distinguish the vegetables and roots of Đà lạt or of local sources. Also their retailers at markets don’t even have request for label and trademark.

4.3. Storing and preserving.

Big traders usually have big stock of vegetables and roots because the quantity of products got from traders rather big, sometimes they could not deliver in one day to small wholesalers and retailers’.

Their method of preserving vegetables and roots is manual and depending on their own long experience.

- For easily damaged vegetables (daisy sprout, watercress…) are usually put into plastic bags and loaded in foam box with some pieces of ice to keep freshness, vegetables could then be kept longer for 2-3 days. For carrot and potato, no cool preservatiion is required, but kept in airy plastic bags. Certain vegetables like salad, daily sprout, coriander, fennel, basill , even they have been preserved but fast rotten and caused big loss and not for use again. This damaged quantity may go up to 5-10%

4.4. Transportation:

Wholesalers usually take care of transportation from purchasing points to their shops. (see retailer section). However, for small wholesalers (no shops in wholesale market)) usually deliver goods to retailers in the city. Their means of transportation is motorcycles, three-wheel cart… this also causes damage (not much) when hauling under bad rainfall or bad roads. Transportation in city don’t take long so the ratio of damage is not much, about 1-2%.

4.5. Clients.

Customers of wholesalers are mainly retailers and some consumers and inns (rice inns, noodle inns...). When retailers buy vegetables and roots they choose carefully because the quantity is not big and they sell them in the same day. (see retailer secrtion.).

4.6. Payment method and contract.

Payment method between wholesalers and cultomers is usually in cash, as vegetables and roots that should be sold in the same day, therefore the payment shall also be settled in the same day.

As customers don’t always buy from one wholesaler; it’s depending on daily quality of vegetables and roots that no contract is required, even verbal agreement.

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4.7. Income.

According to wholesalers, the net income of a wholesaler of Đà Lạt vegetables and roots in HCMC is from 500 -1000 VNĐ/ kg (after minus loss, hauling fees and others).

For wholesaler, the income is about 20-25%. Average sale quantity in one day is about 500-600kg that shall give an income of 100.000 đồng /day for fresh vegetables and 200.000 đồng for roots and fruits.

4.8. Main difficulties and how to overcome.

Difficulties Direction to overcome

In general, wholesalers and owners of stalls and small wholesalers have limited knowledge in early process, packing, storing and preserving, mainly depending on personal experience an as there’s no requirement from buyers.

- There’s no difference of prices between vegetables “clean” and “not clean”.

For small wholesalers of vegetables of Đà Lạt in HCMC, the products of vegetables and roots mostly depend on weather, therefore products shall not be always fresh. If small wholesalers who want to have fresh vegetables must depart very early in order to have fresh products from owners of stalls, as the quantity of vegetables and roots are not stable.

As there’s more sellers there’s much more competition, owners of stalls sometimes force the prices. (if bargaining takes about ½ an hour owners of the stalls shall raise the price).

Market information has not been promptly notified and there’s no concern about trademark for vegetables and roots.

Supply, announce and train technical methods of early process and preservation of vegetables and roots for better guaranty of product quality.

Update and provide with market information so that wholesalers could promptly adjust their business.

5. Retailers (picture 22, apdx 15)

Chart 32: Retailers and direct relationship.

Wholesale Retailer

Smaller wholesale

Consumer

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Retailers in Đà lạt usually buy vegetables and roots from small traders and sometimes they produce and consume their own products (farmer). They center around small markets or at vegetable shops.

Retailers at shops or at the market of Đà Lạt run small business and employ 1-2 workers, a family type business. They sell vegetables and roots specifically of Đà lạt (cabbage, salad, cauliflower, green and fresh cabbage, kohlrabi, carrot, potato….) with an average quantity sold out from 5 - 20 kg for each category. The business turnover of retailers in Đà Lạt is from 50,000-500,000 đồng depending on the categories of vegetables and roots sold in the day (source: Axis – indepth interview)

In general the quality of vegetables and roots of retailers are good because they have chosen carefully from traders (see early process section). Customers of retailers in Đà Lạt are mainly local consumers.

As mentioned above, vegetables and roots of Đà Lạt have been sold out not only in the region but also to other regions, therefore there’s a great number of retailers also sell the products of Đà lạt, mostly in HCMC.

The difference between retailers in Đà Lạt and those who sell vegetables of Đà Lạt at other regions is that while retailers in Dalat sell only vegetables grown in Đà Lạt, those retailers at other regions sell vegetables of Đà lạt (70%) and some other vegetables and roots from other sources (not vegetables of Đà Lạt) at wholesale markets of their regions.

5.1. Early process.

It depends on clients that retailers do the early process, simply or carefully. When they sell to consumers or small retailers the degree of early process is simpler than to ‘big’ markets like (Bến Thành market...), and the price is therefore in direct proportion with the product quality after having been processed.

For certain vegetables (daisy sprout, sweet cabbage, etcl …) retailers keep fresh vegetables and sell directly to consumers, loss is not big. Some others like salad that has to be put off the outside leaves, the loss is higher (see early process section of trader}. According retailers, in these stages the loss shall depend on each kind of vegetables from 3-5% (prior early process has been made by traders/ wholesalers.) and is lower for vegetables and roots compared to edible leaves (1-3%).

5.2 Packing, labeling and certification.

Excluding surpermarkets like Coop, Maximart, Citymart etc., and depending on certain kinds of vegetables (sweet cabbage, long white cauliflower, tomato, young corn, celery, green onion etc. ), the rest shall not be packed by retailers in HCMC and specially in Đà Lạt, and also labeling is not required because they think that “the quantity of vegetables and roots to be sold in the day is not much and shall be fast consumed, so trademark labeling is not important.” (source: Axis- indepth interview). Beside, consumers don’t have yet requirement to know the source of products; poisoneous incidents from vegetables and roots have not been confirmed like from fish, meat, and consumers still evaluate products through outside look, freshness, and prices rather than trademark. This don’t make retailers concern about trademark or certification of products that they sell, particularly for the vegetables of Đà Lạt. (see more on consumers section)

5.3 Storing and preserving.

The retailers of vegetables and roots in Đà lạt and also in HCMC don’t keep products in stock. The quantity of vegetables and roots that they bought shall usually be sold in the

32

same day. Therefore, the preservation don’t require modern facilities, us based on their own experience. Specially for vegetables and roots that are easily de-hydrated, they spray water to keep products always fresh, so the loss in this stage not worth mentioned. Only when the products could not be sold in the same day due to weather and other reasons, they have to be kept for another day, preservation then shall be kept in cool temperature (mainly vegetables and carrot…), in foam box, with roots underneath and vegetables above…Some products could stay in normal temperature without any preservation. So, the products in preserving process could result in loss about 3-5% (source: Axis – indepth inverview.)

5.4 Transportation.

Transport products to retailers: this step is flexbible, sometimes, wholesalers deliver the products, sometimes retailers come and pick up products from collecting points, thing is to guarantee delivery time and quality. Means of transportation is various with bycicles, three-wheel cylos, cart, motorcycles and pickup trucks.

Delivery time is 5-6 hrs in the morning, but not fixed, it depends on quantity of products to be sold: if out of products delivery time shall be changed as required.

Transport products from retailers to customers: customers of retailers are mostly consumers. They come and buy at retailers’, and no need of transportation.

5.5 Customers.

Customers of retailers are consumers. The vegetables of Đà Lạt have been estimed by consumers in HCMC due to its variety for selection, good looking (see more on consumers section). For consumers at other areas, they also love vegetables of Đà lạt, they would rather choose vegetables and roots of Đà lạt than those from other places, specially salad and fresh edible kinds.

In business, retailers usually complain that consumers damage vegetables in the process of choosing.

5.6 Procedural contact and contract.

Popular procedural contact between retailers and wholesalers is verbally made. The payment shall be made right after the deal as not much money involves in retail. In some instances of good acquaintance in business, when retailer could not pay at once, wholesaler accept an overlapping debt (based on long acquaintance and confidence.).

For consumers the quantity sold out is very small, payment shall be made when immediately.

5.7 Income.

Income of retailers depends on business location. Shops near down town have higher income than those in small markets because of higher sale prices, customers are also of higher class. Average income of retailers is about 10-15 %/ total/ day. (source: Aixs-indepth interview.)

According to retailers, the income of 2005 suffers a decrease compared to that of 2003, 2004. Main cause is that material prices increase day after day, standard of living also higher but income don’t raise much. The price of vegetables could not be increased thereof, income is consequently decreases.

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5.8 Difficulties and direction to overcome.

Difficulties Direction to overcome

Difficulties regarding weather cause the quantity of vegetables sale not stable, the quality of products is also not equal.

There’re many retailers so the competition is high.

Knowledge: in general, most retailers don’t have knowledge relating to the following: :

+ early process, preserving, packing, product trademark.

+ market information (2 ways, from wholesalers and from consumers)

+ customer administration and enlargement of business capability.

-> See sections mentioned above.

-> Supply/ announcement/ training courses in regard to safe vegetables in order to do metter marketing of products for higher competition capacity.

-> See above sections about requirement of early processing techniques, preserving products in fresh condition at shops to keep quality of products longer.

-> Update, publicize market information for retailers, so that they could understand and take their responsibility in returning informatioin from consumers to functional agencies. .

6. Consumers (end-users)

Vegetables and roots of Đà Lạt have been consumed all over the provinces/ cities of the country, so the number of end-users is big. The vegetables and roots of Đà lạt specially favoured are cabbage, long white cabbage, potato, carrot, cauliflower, green chilli… because they are typical temperate products, good quality, reasonable prices.

Regional consumers usually buy products from retailers at market/ shops.

Retailers in cities and provinces (HCMC) buy products from retailers, shops along the roads, they also buy a lots of vegetables and roots of Đà Lạt at supermarkets: Coop Mart, Maximart, Big C, Cora, Metro… , Metro has consumed biggest quantity of vegetables of Đà Lạt. (see more on consumer section at Chapter 3, the value chain in HCMC. .

So, the value chain of vegetables, roots and fruits of Đà Lạt is in general rather complicated, that composes of many elements and the role of each element has not been clarified and is lacked of close control. Total loss from cultivators to consumers has been rather high (due to transport distance from Đà Lạt to big cities), it’s estimated to amount to 35-40%, bigger loss is from traders to wholesalers, specially in export transactions (may be up to 60%) because early process causes biggest loss, specially in the processing for freezing (up to 40-50%). Loss caused by transportation in- country is higher than that for export due to the packing stage and means of transportation that have not been well guaranteed. (about 10-15%)

7. The role of Organizations.

In general, the organizations of inter-branches in Đà Lạt have played an important role in forming the most famous region of vegetables of the country and in proceeding the lines of vegetables, roots and fruits of Đà Lạt to best result like now. It’s worth mentioned the roles of main units like the People’s Committee of the city, the Agriculture & Rural Development of Lâm Đồng province, the Department of Commerce (directly under the Office of Tourism

34

and Commerce of the province of Lâm Đồng), the Department of Science and Industry, the Encouragement Center, the Atomic Institute of Đà Lạt city, etc. Compared to HCMC and other provinces (mentioned in above chapters), the roles of these organizations are not much different. However, as vegetables, roots and fruits are the specialties of Đà Lạt so that the People’s Committee has given concern and priority to combine them to the advertisement of tourism as a whole of the city, therefdore the operational activities of each organization and of the whole city have had somewhat different features.

For proceeding of commerce, Đà Lạt has been prompt and sensible in guiding foreign businessmen to come and work in this city, the fruitful effort has been confirmed by memos signed for exporting cooperation with the countries of Singapore, Taiwan, Korea…during the last 3 years. Now, the city Commerce office is proceeding the first stage of building a common trademark Đà Lạt for flowers, vegetables, roots and fruits of Đà Lạt along with monthly bulletin publication that shall be distributed free to visitors at the airport of Đà Lạt and some place in the city. (source: Axis- indepth interview.)

In order to push strongly the activities of information and advertisement, the Farming Encouragement Center of the city has cooperated with the Voice and Television Station of Lâm Đồng and districts functioning offices to transfer to farmers information and reallistic details of farming encouragment, such as: farming encouragement programs on Radio or TV to answer mails from listeners, producing video clips on technical farming demonstration for airing on TV, writing news about farming encouragement for publication on regional and central (mass media) agencies of newspapers, stations, magazines for farmers. (source: Axis- indepth interview.)

In Đà Lạt, beside the names above, we should also mention a significant contribution from the Atomic Institute of the city of Đà Lạt. This is the unique agency in the city that is capable of doing analysis and test of vegetable quality in order to support promptly the enterprises that want to claim their product quality in markets (instead of going to Center 3, in HCMC like other provinces in the Central and the South.).

Beside state organizations, Đà Lạt has recently received various concerns from international organizations in supporting capital source for the study of new species, tree desease treatment, technologies of post cropping. Etc.

However, in order to push much more strongly the export capacity and the development of products processed from vegetables and roots and fruits, Đà Lạt is badly in need of investment from local and foreign processing enterprises into Đà Lạt, also from foreign organizations that help with the treatment of earth, excess water, tree species, tree deseases, nethouses, early process complex, cool storage and specially the re-establishment of much more effective system of value chain of vegetables and fruits for Đà Lạt, in order to increase export value in the coming time.

IV. ANALYSIS OF STRONG AND WEAK POINTS, OPPORTUNITIES AND CHALLENGES FOR VEGETABLES AND FRUITS OF ĐÀ LẠT

The analysis of the value chain of vetetables, roots and fruits of Đà Lạt shows that Đà lạt has lots of competitive advanges and high potential in local and foreign markets. But, Đà Lạt still has problems needed to be solved properly, specially when the market of Việt Nam opens to the incarnation of the world as Việt Nam becomes a member of WTO.

1. Outline of Strong and Weak Points. Strong points Weak points

L a Land and weather of Đà Lạt Cool weather combined with some other

35

fresh around the year is a favorable condition for development vegetables and fruits of the temperate and tropical zones. There’s been projects for planning specializing farming region, switching of tree farming structure to explore the strong advantages of vegetables and fruits of Đà lạt city and Lâm Đồng province in general.

elements such as species, unproper carre etc…, is a condition for some vegetable deseases to develop, that decreases productivity and output (Example is cabbage root swelling in Đà Lạt in May 2005 that caused big loss to farmers). Building a specific planning that helps to indicate for farmers what kinds of vegetables to plan and quantity as well, with a standard to meet the demand of markets, this is now still in a restricted arera. Farmers still do their cultivation at will and at random.

Spec

ies The species of vetetables

and roots of Đà lạt are various and long famous. The potential of planting new species is very good in Đà Lạt.S

A certain species have been deteriorated due to time, and don’t meet even the local requirement of product quality.

Prod

uct q

ualit

y

Thanks to the natural condition of weather and soils that the quality of vegetables of Đà Lạt (in respect of perception, sizes, weight) has usually be evaluated higher than those planted in other areas.

Recently, farmers in Đà Lạt have captured the demand of markets, specially the taste of some main export markets, therefore the cultivation of vegetables of Đà Lạt have been switching more to safe vegetables., for better product quality.

Farmers in Đà Lạt and other regions have the habit of using chemical fertilizer and vegetable protection solution at high dosage, caring process is not scientific that influence at lot to earth, water and friendly insects, causing the quality of many products not guaranteed. (low foods safety degree to health.)

The program of safe vegetables have been developed in Đà Lạt over 10 years, but in reality, there’s only about 15 members who have officially registered to produce standard safe vegetables and proclaim the quality of their products (they are the Coperatives HTX, enterprises that export vegetables to Asian countries and due to demand of importers). This shows that the program for safe vegetables has just been known to cultivators only and not publicly announced to every people.*.

*As for cultivators of vegetables, they still don’t understand well, so the above number is too small compared to over 7000 farmer households planting vegetables in Đà Lạt => This has been mentioned in details in the section of safe vegêtables in HCMC.

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Pric

es As Đà Lạt is a specializing region

for cultivation of vegetables with high production outlet, so the costprice (and saleprice) of vegetables, roots and fruits of Đà Lạt are comparatively cheap. Thanks to exportation that the income for farmers and specially for exporters is rather high.

- But some households who plant vegetables in the city, have not been kept informed of market information, often meet with a situation that the suppy and demand don’t meet, that causes the price not stable, that’s the reason why farmers ‘have good crop but bad income’, unsold vegetables shall be used for green fertilizer. (source: apdx 14) - The vegetables of Đà lạt have been maintly supplied to far away provinces/ cities so fees for transport are rather high that raises the costprice.

Prod

uctio

n ou

tput

& e

xpor

t - The supply capacity of

vegetables, roots and fruits of Đà Lạt is very big with more than 7000 household producers, total production output of 2005 is nearly 200 tons. - Fresh vegetables and fruits of Đà Lạt have been exported to Asian markets. A small quantity of frozen vegetables have also been exported to America, Australia and Europe.

- The most concerned problem now is consuming sources. Although Đà lạt has exported to many countries but the quantity still small compared to its capability, it has to be exported under the trademark of clients .=> partially because the quality has not been perfectly guaranteed as international standard, no trademark has been well established, partly because not being aware of laws and legal contract, lack of information of export cooperation, and other reasons regarding management and coordination.

Post

cro

ppin

g te

chno

logi

es

Some Cooperatives (HTX) , enterprises in Đà Lạt have had applied foreign technologies in vegetable cultivation process (Agri Foods Co, Private company Khanh Cát, HTX Hiệp Nguyên, etc.), and have gradually raised the quality of vegetables and roots, to meet the demand of safe vegetables in local foreign markets.

Now, the vegetables of farmers in Đà Lạt have been sold without being packed or labeled.

The fact is that full exploitation of famous potential of vegetables in Đà Lạt has not been deployed in the establishment of trademark for vegetables, roots and fruits of Đà Lạt and labels as well for products not only consumed in the country but also for most export products of Đà Lạt

Being weak in the technology of preserving and processing of vegetables and fruits has caused the export of vegetables of Đà Lạt monotoneous and difficult to reach the markets of America and EU.

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Rel

atio

nshi

p in

the

valu

e ch

ain

- The farmers in Đà lạt have long experience in planting vegetables, with techniques to raise productivity of certain vegetables. - Traders, enterprises, specially exporters of Đà lạt have been very sensible and flexible in the exportation of vegetables, roots and fruits (expressed through many roles in one link in the the value chain.) - Some typical symbols which have capacity in applying fast and effective the modern techniques, and the close model of cultivation and consumption orf vegetables (Agri Foods, DNTN Khanh Cát, Xuân Hương v.v.)

The weak points of each link and direction to overcome have been mentioned in details in the above sections. See above).

The

conc

ern

of o

rgan

izat

ions

- The role of certain organizations in Đà Lạt has attained good results in proceeding business along with programs to build up effective sources (specie technique, earth, machinery chain, nethouse, glass house, cool house….) for farmers, and planning certain specializing vegetables and fruits regions.

The support of functioning agencies have not been synchronical and flexible in approving certain supports (regarding modern scientific and technical knowledge, investment for equipment of machinery chain, warehouse, modern cool house…) in order to encourage farmers, Cooperative HTX, enterprises, companies .. to have their products that, either for consumption in or out of the country, attain a standard of safe and hygienic foods.

The role of forecast and direction of the government in approching markets, potential sosurces of support for enterprises in Đà lạt are still the points to overcome.

2. Opportunities & Challenges for vegetables of Đà Lạt Opportunities Challenges

Prod

uct d

evel

opm

ent

The weather and soils condition of Đà Lạt is comparatively moderate, so the development of various vegetable products (tropical and temperate) is rather favourable. In addition, the support of studies institutes and international organizations that help to diversify products of vegetables with the transfer of techniques and modern models of cultivation and processing, are good opportunities for vegetables and roots of Đà Lạt to raise the quality for better value of export.

The factor of human is still biggest challenge in carrying out the cultivation process of safe vegetables to obtain international certificates as well as the strict demand regarding the exportation of vegetables, otherwise the development of products just has ‘quantity’ and not ‘quality’. Outlet for vegetables, specially for export, is not high, the harmonization of supply and demand is still weak that influences the income of farmers.

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Mar

ket d

eman

d &

exp

ort

Vegetable is a product line that meets the essential demand of local market and an advantage for export of Đà Lạt. The approval of the government for increasing the area and product output of vegetable and root in 2010 (sq area: 550,000 ha, product output: 11 million tons) (source: : www.sggp.org.vn) in Lâm đồng and Đà Lạt in particular shall be a tremendeous opportunity for this largest vegetable area of the country. Until now our country has had exported vegetables and fruits to over 50 nations and territories, of which 80% exported to Asian countries (China, Japan, Taiwan, Kores, Hong Kong, Cambodia and Laos). Export opportunity is still open, specially temperate vegetables to Asia, and tropical ones to other continents.

Export quantity is still low, specially those exported through contracts (only 3% on total output). While the vegetable quality is not the same, (due to scattering production, not the same species and for seasonal requirement, cropping and preserving in post cropping is still limited) it’s a big challenge for the area of vegetable export of Vietnam in general and for Đà Lạt in particular, and also for the increase of product output and quality for exportatuib to have better economic value.

Trad

emar

k

The government, organizations and enterprises have been concerning with proceeding the establishment of trademark for vegetables of Đà Lạt

See same section in chapter HCMC

Com

petit

ion Vegetable has an export potential and a

strong competitive capacity over the world if our advangtageous conditions could be properly profited weather, soils, sources, costprices…) plus the effort to improve the cultivation process to the international standard..

the vegetables of Việt Nam and particular Đà lạt is sufferring a strict competition from foreign owned enterprises. Vegetables of Việt Nam for export is being competed unequally in market of China. * The affiliation into AFTA, specially WTO shall make the competition very hard for vegetable products in home markets and in international markets.

* 50-60% vegetable export value of Việt nam coming from China and Thailand. . The vegetables of Thailand enjoy 0% to go into china, while the vegetables of Việt Nam have to pay tax from 12 to 24,5)(source: www. angiang.gov.vn)

**According to Mr. Nguyễn Hữu Dũng, chief of planning office of the city of Đà Lạt, “It has been long time ago, farmers here are only “loyal” to cauliflowers, long white cabbages, potatos, and carrots without knowing that the green gardens surrounding the city of HCM could also grow most of these products” (souce 40, apdx 14).

**** The vegetables of Đà Lạt should indicate the where’s their miain markets (HCMC, provinces in the South, export markets) so that production could be aimed to (what vegetables, how to grow and how much) in order to meet each markets. để đáp ứng nhu cầu của từng thị trường.

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V. PROPOSAL FOR SOLUTION

1. Organization

• To reorganize the production region of vegetables, maintain and multiply the models of Cooperatives in Đà Lạt. However, this organization shall not only take charge of a representative for farmers in respect of prices agreement, trading with traders but also in charge of planning and administering farmer households who shall produce to the demand of clients, it means that the business cooperation shall be made according to structural conditions, linking production to exportation => the Department of Agriculture & Rural Development, the Center for Farming Encourgement, Cooperatives and farmers shall coordinate with the representatives of GTZ & Metro in order to control the result of this program

• Reorganize the distributiion network of vegetables of state owned and private companies. To conduct an investigation and verify the organizational quantity and quality in order to classify and categorize them into a system under the administration of the Commerce Office of the city and directly oriented by the People’s Committee.

• Organize and help with fees for Cooperatives and groups producing safe vegetables in ‘obligatory’ labeling trademark of their products and waging a boycott to vegetables without mentioning of their sources, and conduct a wide explaination of how the unsafe vegetables could affect on our health. => it’s necessary to have participation from mass media, like television, radio and press agencies for advertisement and propaganda regarding the support of Metro in organing training course (see more below),and functional agencies in controlling results.

• Before organizing ‘obligatory programs for production of safe vegetables and proper punishment measures for not following strictly the production chain, it’s vital to know for sure the outlet for export and a distribution network should be set up for those vegetables, so that farmers feel confident to do the planting => The Ministry of Commerce, GTZ & Metro and other foreign organizations also participate.

• In addition, it’s still very important to reform an experimental department for vegetables and roots, develop advanced technologies for production of vegetables, administer vegetable quality and other problems as well:

=> Degenerate species is a matter worth mentioninh, the Department of Agriculture and Farming Encouragement Center should be responsible for the experiment and propose proper solution..

=> For farming land, The People’s Committee of the province and of the city should have land planning program consistant with the develoment practice of vegetables and make it a key profitable branch of the province.

• Organize propaganda activities regarding products that could be processed, specially factories for treating sub-products to save lots of discarded vegetables. In addition, the practice of preservation by cool warehouse and packaging for local and foreign markets is also very important, that needs to be supported by GTZ, VNCI, Ausaid, Sida etc (from information relating to processed products to the

40

techniques of production) coordinating with the Post Cropping Institute and the Sourthern Vegetable study Institute.

• It’s necessary to appeal various state organizations, production services and banks to share certain partial benefits and loss as well with farmers, guarantee vegetable prices, set up special tax and financial policies for vegetable products etc. GTZ should coordinate with the People’s Committee of the province and city, Agriculture department, legal agencies, banks and other concerning organizations.

2. Training courses.

• With farmers it’s necessary to have programs for o Train public community to undertand the benefits of planting safe

vegetables (cultivation techniques, use proper insecticides….) o Regular training courses for insects and deseases treatment and inverse

vegetables and roots as well. o Introduction of new tree species suitable with weather and soils for high

productivity and consuming markets. o Training programs for communication with agencies and organizations as

necessary. o Regular announcement of market information, introduction of effective

sources of information regarding prices, tree species, tools, machine etc. (via internet and web pages)

=> the role of management agencies is very important, with technical assistance from experts of GTZ to coordinate with other international organizations.

For partners from farmers to traders (including Cooperatives, Enterprises,

Companies), retailers (supermarkets, big shops) and clients (restaurants, hotels etc.) it’s necessary to organize training courses for them to understand the importance of a written contract, basic contents (articles, conditions and legal provisions), signing a contract and solving violation when executing a contact => this requires the participation from laws offices, banks and ‘symbolic representatives’ of real entities including Metro, supermarkets and concerning partners.

Basic training courses for post cropping technologies are important for businessmen

and foods processors to include:

Cropping, transporting, early processing, preserving, packing and storing as specified, specially important are the methods of preserving vegetables in different conditions for vegetables fresh longer for export (up to 1 month).

Training courses for processed products and methods of processing for each kind of vegetables of Đà lạt as cabbages, long white cabbages, potato* etc., specially for those vegetables that could be executed rapidly and simply with lowest cost suitable with small farmer households and for products of mass producction.

=> GTZ and international organizations could easily performed this role – acting

as introducers to announce information and techniques used for processed products and as liaisons to look for local and foreign consumers, website and organizaations could also help with information for foods processsors, etc.

*Beside kim chi (pickle) and pickled green leaves, pickled egg-plants, tomatos sauce etc., more information is required relating to processed products that could be exported as instant salad tubes for fast foods, various tomato sauces or those processed with other vegetable and roots, canned whole tomato fruit, salted mushroom etc., and sub-product foods for livestock

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For enterprises, traders and exporters, beside being kept up with reliable information

of new markets relating to products, prices and import taxes, etc., it’s necessary to conduct basic and special training courses for market studies in regard to local and foreign vegetable markets (target users, market demand, habits of users and their evaluation pertinent to the vegetables of Vietnam and of other countries, along with factors affectingthe uses, vegetables importâtion, market tastes etc.) => GTZ could coordinate with Việtrade and certain enterprises that have had experience in these matters in each market with support from chambers of commerce, embassies and other international organizations (such as to coordinate with Metro & Eurocharm in studying the markets of Germany, Jetro – Japan, etc. ). For local markets, coordination could be made with local market research companies for organization of training courses for traders, enterprises and concerning agencies..

3. Support.

As the loss of vegetables now is very big, mostly at the outfits of traders, enterprises, companies and export companies that really need support involving loans at low interest rate so that they could invest in machinery chain and equipment that help to perform early process and preserve vegetables to minimize this loss.

The People’s Committee and banks should have proper measures to do the

supporting. Beside, the province should give priority to enterprises investing in processising vegetable products and sub-products in the area of the city of Đà Lạt

Metro & GTZ should help to look for foreign consuming sources for the goods lines processed from sub-products.

Beside continuous supporting programs for farmers such as buying nethouses, glass houses, insecticide spraying machines, etc., certain Cooperatives and traders should be assisted in purchasing cool houses to preserve vegetables and fruits and financing certain groups to make a sightseeing tour over some countries…the value chain of vegetables of Đà Lạt needs big assistance from international organizations such as GTZ, VNCI etc., that is to bring in experts to participate in making this value chain more effective from the stages programing, training, executing the plans and training courses to the stages controlling and receiving results.

Once more we see that it’s really short of a prestigeous unit with finance to improve the value chain for the vegetables of Đà Lạt according to a cooperative procedural manner, close process of planting safe vegetables, realistic planning for each region and season in respect of the allocation for planting which categories, how much and specification to meet the demand of each market. This is an important link that coordinates effectively the operation of the whole production factory and the consumption of vegetables, roots and fruits of Đà Lạt.

Therefore, the planning should be realized by a prestigeous organization that shall administer all links of this value chain, specially traders who are the most important liaison of cropping and consuming vegetables of Đà Lạt and vegetaables, roots and fruits of Việt Nam in general, it affects strongly on the prices of products, quality and even the balance between suppy and demand of markets.

In order to do this, GTZ has to work closely with the Departments of Agriculture,

Industry, Commerce, Science & Industry of the city of Đà Lạt with the participation of all link of the value chain, “benefactors” and concerning agencies

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Appendix 15: Đà Lạt City – Document for reference Stt Names Report/ magazine/ web page

Date 1 Annual Statistics of Lâm Đồng 2004 Statistics Office of Lâm Đồng 2004 2 Report contents of seminar of

Industry and Agriculture Department of the city of .Đà lạt

People’s committee of Dalat - Industry and Agriculture Department

8/2005

3 Projects for investment and purchasing of artichoke and certain categories of safe vegetables.

People’s committee of Dalat - Industry and Agriculture Department

1/2003

4 Report of development situation of vegetables, roots and fruits, flowers and bonsai on the territory of the city of .Đà lạt

People’s committee of Dalat - Industry and Agriculture Department

8/09/2004

5 Production chain of safe vegetables Registration document for production of safe vegetables from Mr. Lê Ngọc Hoàng

22/04/2004

6 Report of vegetable situation of the province of lâm Đồng in 2000-2005 and development direction for the period of 2006 -2010

The Deparment of Agriculture & Rural Development of Lâm Đồng Province.

8/2005

7 Coop Mart looking for more source of safe vegetables of Đà Lạt

http://www.tuoitre.com.vn 26/5/2005

8 The vegetables of Rau Đà Lạt price falls.

http://www.thanhnien.com.vn 12/07/2005

9 Vegetables and flowers of Đà Lạt: looking for way to …Europe.

http://www.agroviet.gov.vn 24/10/2005

10 Thousands of tons of vegetables shall be sold away?

http://www.tuoitre.com.vn 19/07/2004

11 Building Đà Lạt a modern, civilized and polite tourist center.

http://www.cpv.org.vn 26/9/2005

12 Certain difficulties & measures for changing planting structure and animal breeding.

http://www.dalat.gov.vn

13 Đà Lạt supplies 50% vegetable demand of HCMC annually.

http://www.vneconomy.com. 01/03/2004

14 The situation of high agriculture development in Việt Nam

http://www.vnast.gov.vn

15 Building Đà Lạt a worthy tourist center.

http://vietnamnet.vn 06/12/2003

16 Renovation in vegetable production of Đà Lạt

http://www.lamdong.gov.vn

17 Characteristics of certain potential fruit trees at 3 southern districts of Lâm Đồng province.

Bulletin of Science and Industry of Lâm Đồng, No. 2/2001

18 Đà Lạt is the trademark of the vegetables of Đà Lạt

http://vietnamnet.vn 27/11/2003

19 Stuties on cultivation techniques. http://www.lamdong.gov.vn 20 Processing agricultural products in

Lâm Đồng http://www.dalat.gov.vn

21 Cultivation http://www.dalat.gov.vn 22 Overview on Đà lạt http://www.dalat.gov.vn

23 Đà Lạt in the 21st century http://www.dalat.gov.vn 24 Đức Trọng, opportunities for

investment and development. http://www.dalat.gov.vn/

25 Lâm Ðồng http://www.vietnamtourism.com/ 26 Lâm Đồng: proceeding export of

flowers and fresh vegetables of Việt Nam

http://www.agroviet.gov.vn 07/09/2005

27 Production and market http://www.agroviet.gov.vn /2005 28 Direction for construction and

development of Đà Lạt until 2010 http://www.dalat.gov.vn

29 Potential - Strong position http://www.dalat.gov.vn 30 Commercial News http://www.lamdong.gov.vn 31 Agriculture of Đà lạt after the year of

75 http://www.lamdong.gov.vn

"SUPPORT" for safe vegetables to go to …..Europe.

Agritulture magazine 13/10/2005

32 Lâm Đồng has to build trademark rapidly.

The Economic Time of Việt Nam

09/08/2005

33 "Mr. Councillor" becomes rich from safe vegetables.

Thanh N iên Newspaper 30/10/2004

34 Lâm Đồng when there be a trademark for green vegetables.

Agriculture magazine of Việt Nam

01/11/2004

35 The city of bio-industry Thanh Niên Newspaper 15/07/200336 Soluctions for vegetable regions of

Đà Lạt http://www.lamdong.gov.vn

37 Cleaner vegatables of Đà Lạt The Economic Time of Sài Gòn 2002 38 Export proxy contract. Private company Khoanh Cát 39 Clean vegetables for export – new

prospect of Đà Lạt The Economic Time of Sài Gòn

40 Vegetable tree becoming a conference topic again.

The Economic Time of Sài Gòn

41 Lâm Đồng: A Cooperative “buys” cool house to preserve fresh vegetables and fruits.

www.agroviet.gov.vn 2005

42 Vegetables and Roots of China overcome the markets of HCMC. s

http://vietnamnet.vn 14/7/2005

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Appendix 16: Đà lạt City – Cultivation process of vegetables and roots of Đà lạt

Cultivation 1. Garden preparation

2. Seedlings

3. chemical spraying

Cropping 1. watering

2. nethouse

3. vegetable crop (pull, cut root)

Early process/ classification

4. Early process (cut roots) at trader’s stall

5. early (carrots) at trader’s house

6. Classification of product quality

7. early process of cabbage (lime spread, vaccuum)

8. early process of long white cabbage

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Packing labeliing

9. Packing (big basket)

13. Packing (net bag) 14 Labeling

Storage, preservation

15.storage at trader’s stall

16.Preserve vegetable in fridges

Transport 17 Transport from farmers to traders

18. loading on truck

19. Hauling from traders to clients (pickup truck)

Collecting points

20. collecting point (traders)

21. Wholesale points

22. Retail at market

Cooperative/ processing companies

23. Foods stock Co. of Lâm Đồng

24. Logo HTX Xuân Hương

25. HTX Khanh Cát

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Appendix 17: Decisions promultion relating to production and trading of safe vegetables.

THE PEOPLE’S COMMITTEE SOCIALIST REPUBLIC OF VIỆT NAM LÂM ĐỒNG PROVINCE Independence – Freedom – Happiness ............................................... No. 06/2004/QĐ-UB Đàlạt, January 14, 2004

DECISION OF THE PEOPLE’S COMMITTEE OF LÂM ĐỒNG “Subj.: Promulgation of temporary provisions for production and trading of safe vegetables’

_______________ THE PEOPLE’S COMMITTEE OF THE PROVINCE OF LÂM ĐỒNG

- Based on the law for organization of the People’s council (HĐND and the People’s Committee (UBND) (amended) dated June 21, 1994

- Based on Decree law about quality of goods No. 18/1999/PL-UBTVQH10 dated 24/12/1999 of the permanent committee of the Congress.

- Based on decision N. 67/1998/QĐ-BNN-PTNT dated 28/4/1998 of the Minister of Agriculture & Rural Development about the promulgation of temporary provisions relating to production of safe vegetables.

- Based on decision No. 2425/2000/QĐ-BKHCN-MT dated 12/12/2000 of the Minister of Science & Environment about temporary provisions regarding proclamation of the standard of product quality.

- According to the request of the Department of Science and Industry – the Department of Agriculture and Rural Development.

DECISION Article 1: To promulgate along with this decision the temporary provisions about production and trading safe vegetables in the territory of Llâm Đồng. Article 2: This decision shall be effective 15 days after the signing date. Article 3: Chief office of HĐND and UBND of the province, directors of the departments of Agriculture and Rural Development, Science and Industry, Tourism and Commerce, Health, chiefs of offices, branches concerned. Chairmen of People’s Committees of districts, chief towns, cities and individual production and trading units of safe vegetables in Lâm Đồng have to carry out this decision. .

Distribution: - TTTU, TT HĐND of provinces For UBND LÂM ĐỒNG PROVINCE - CT, and PCT CHAIRMAN - As in article 3 - LĐVP - file VP/VX/SX/KTTH Phan Thiên

THE PEOPLE’S COMMITTEE SOCIALIST REPUBLIC OF VIỆT NAM LÂM ĐỒNG PROVINCE Independence – Freedom – Happiness ...............................................

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TEMPORARY PROVISIONS ON PRODUCTION AND TRADING OF SAFE

VEGETABLES IN THE TERRITORY OF LÂM ĐỒNG PROVINCE (To promulgate along with decision No. 06/2004/QĐ-UB

dated 14 January 2004 of the People’s Committee of Lâm Đồng) _______________

Part I GENERAL PROVISION

Article 1: The safe vegetables according to this provision is that vegetables must be fresh (including all those for edible roots, straws, leaves, flowers and fruits) that have the same quality of their species characteristics, that have the contents of poisoneous substances and microorganism infection under tolerated standard in order to give safe warranty to consumers and environment. Article 2: This provision shall be applied for outfits (organizations and individuals) producing and trading safe vegetables in the territory of the province of Lâm Đồng. Article 3: The state grants favorable conditions and encouragement for all organizations and individuals to produce and do trading safe vegetables.

Part II QUALITY REQUIREMENT AND CONDITION FOR

PRODUCTION OF SAFE VEGETABLES

Article 4: quality requirement for safe vegetables: 1/ Quality standard: the criterion of product quality of each caterory of vegetable must be near the grade of Vietnam standard. While Vietnam has not officially announced the standard relating to this area, the standard application shall be made according to those of international organizations such as FAO/WHO or of certain advanced countries : Russia, USA…(see apdx 1,2,3,4). The quality criterion compose of: a) Remnant amount of plant protection chemical. b) Content of Nitrate (NO3) c) Content of certain metals mainly Cu, Pb, Hg, Cd, As…. d) Degree infected by microorganism (Ecoli, Samonella…) intestine parasite (eggs of worms - Ascaris….). 2/ Norms for form: product must be cropped on time, as required by each kind of vegetable, (proper trading and technical mature), no damaged, rotten, no impurities and deseases and must be packed properly. Aritlce 5: Condition for production of safe vegetables. 1/Land: Land for production of safe vegetables shall not directly influenced by various excess water from industry, communication, community, hospital, graveyard, and not infected by harmful substance for human and environment. 2/Fertilizer: use only organic fertilizer that has been kept rotten, no fishmeal and organic fertilizer still fresh. Proper use of equal inorganic and organic fertilizer. Amount of fertilizer bases on realistic standard provided for each kind of vegetable, specially for edible leaves, one must stop using fertilizer 15-20 days before cropping. Supplement leave fertilizer could be used (specified in listing usable in Việt Nam) according to indication. Restriction should be applied for stimulant and moderation of growth for trees. 3/Water: use only water from well. Water from river, stream, basin for professioinal use… should not be infected with harmful substances. Don’t use excess water from industry compound, city, hospital, commodity and stagnant pond. 4/Deseases prevention: Apply method of controlliing general epidemic desease on a principle of limiting loss

48

caused by insects and deseases, for better economic value, less infection for human and environment. Use proper measures for correction:

a) For species: select good species. Seedlings should be treated for insects and deseases before letting out of seedling garden.

b) For cultivation: profit by most proper cultivation methods to best prevent sources of epidemic deseases for vegetables. It’s necessary to do the alternative cultivation between different kinds of vegetables for prevention of young worms and other worms as well.

c) For chemical: only use chemical when when it’s vital and use the proper ones, correct dosage, correct method and on time. It’s absolutly not to use chemicals not in the listings or those limited for used in Việt nam (see apdx 5). Strong limitation of use high harmful degree (chemical of group I and II), late disintergrated chemical from group m Cloride and organic phosphorus. Just use bio-chemical, herbs, low poisoneous degree (group III and above), fast intergrated chemical has less influence on friendly creature living in fields (see (see apdx 6). It’s necessary to use different chemicals alternatively so that insects shall not get familiar to chemical. Guarantee a distance before cropping as mentioned on label of each kind of chemicals. It’s absolutely not to protect fresh vegetables (treatment of new cropped products) by plant protection chemicals.

Part III

EXECUTION

Article 6: For outfits producing and trading safe vagetables: 1/ The outfits that produce safe vegetables for business must be responsible for: a) Registration with the department of Agriculture and Rural Development in order to

have planning and orientation for production and experiental control for certification. b) Proclamation of product quality for their safe vegetables the proclamation of product

quality standard must realized according to temporary provisions stipulated in decree No.2425 dated 12/12/2000 of the Minister of Scientific Industry and Environment.

c) Guarantee of proper execution as provided, the production process of safe vegetable and quality should conform with standard proclaimed. Self investigation and responsibility for the quality of safe vegetables of one’s outfit.

d) Guarantee of the standard proclaimed and it’s not contrary to the provisions stipulated by governmental agencies and correct information of qualitity proclaimed should be notified.

e) Guarantee of necessary documents proving the production of safe vegetables in accordance with process.

2/ Those shops dealing with safe vegetables must register with the department of Tourism and Commerce and must be granted a business certificate of safe vegetables, and also must sell only the vegetables that come from source of certified safe vegetable production. 3/ The enterprises that produce and do business of safe vegetables must obey and show documents relating to safe vegetables as requested by concerning governmental investigation agencies. Violations relating to productioin and trading of safe vegetables shall be punished: recovery of business permit, cease of business and legal responsibility shall be applied in case of bad result occurred. Article 7: Allocation of state responsibility in the management of production and trading of safe vegetables. 1/ The responsibility of the Department of Agriculture and Rural Development is: a) To establish and promulgate technical process for safe vegetable production based

on standard stipulated by this department according to decision 116/QĐ-BNN dated 04/12/2001 of the Minister of Agriculture and Rural Development and on the results

49

of scientific studies relating to production of safe vegetables. To organize training courses, instruct and announce legal regulations, state policies and practices that have provided for production process and product quality for farmers in the region.

b) To coordinate with concerning agencies and the People’s Committees of districts, chief towns and cities to proceed planning regions for production of safe vegetables and development programs as well. .

c) To guide the contents and registration procedure for safe vegetables production. Control the execution of provisions and safe vegetable process of the outfits that have registered for production of safe vegetables and issue certificates accordingly. (if fully qualified). In case of complaints from consumers, coordinate with the department of Science and Industry, Health, Tourism and Commerce and regional People’s Committee to solve the problem. 2/ The responsibility of the department of Science and Industry is to: a) Guide the contents and procedure for announcement of quality standard of safe

vegetables and methods of establishment of basic standard for each kind of product and proceed cerfification of proper standard announced.

b) Receive and examine the suitable statement of quality standard for safe vegetables announced and issue certification for it.

c) Conduct investigation of the quality announcement and solve complaints regarding quality of safe vegetables.

3/ The responsibility of the Department of Tourism and Commerce is to: a) Coordinate with the departments of Agriculture and Rural Development, Science

and Industry and Health to establish and announce the standard for safe vegetable shops. Instruct the procedure for registration of safe vegetable shops and issue certificate for those shops that respond to all conditional business requirement, and conduct investigation and control of proper execution.

b) Conduct and coordinate with the People’s Committees of districts, chieftowns and cities to set up network of safe vegetable shops to facilitate the sale and buy of producers and consumers as well in order to encourage productoin of this safe vegetable.

4/ The department of Health and the People’s Committee of districs, chieftowns and cities: have the responsibility to coordinate with the departments of Agricultrue and Rural, Science and Industry, Tourism and Commerce to realize the state functioning management for production and business of safe vegetables. Article 8: the departments of Agricultrue and Rural, Science and Industry, Tourism and Commerce have to direct the development and business production of safe vegetable according to the duties assigned. It’s necessary to advise on time the People’s Committee of the province regarding the practices and policies, the privileged treatment for producton and business of safe vegetables and to revise as required to overcome difficulties and unreasonable problems in the process of execution in order to encourage the development of business and production of safe vegetables.

For.THE PEOPLE’S COMMITTEE OF THE PROVINCE OF LÂM ĐỒNG CHAIRMAN

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File dossier of legal documentations

In the area of agriculture and rural development

----------------------------------------------------------------

Decision of the Minister of Agriculture and Rural Development Subj: Announcement of departmental standard.

------------

The Minister of Agriculture and Rural Development Based on Decree 73-CP ngày 1/11/1995 of the Government provision of functions, duties,

rights and the organizational structure of the Ministry of Agriculture and Rural

Development;

Based on Decree 86/CP ngày 8/12/1995 of the Government “Provision of allocation of

state management duties regarding the quality of goods.”

Based on Decree No. 135/QĐ-BNN-KHCN of the Minister of Agriculture and Rural

Development dated 1/10/1999 regarding the rules for approval and announcement of

departmental standard.

According to the proposal of the department chief of Sciences and Technologies and CLSP

Decision Article 1. It’s now promulgated departmental standard as below:

1. 10 TCN 442 - 2001 Provision for production of safe cabbage

2. 10 TCN 443 - 2001 Provision of production of safe french bean.

3. 10 TCN 444 - 2001 Provision for production of safe tomato.

4. 10 TCN 448 – 2001 Provision for production of safe cucumber.

Article 2. This decision shall be effective 15 days after the signing date.

Article 3. The chiefs of administrative offices of ministry, department chief of Science and

Technology and Product Quality, Chief of Study Institute of Vegetable and Fruut, Chief of

Institute of cereal tree – food tree amd Chiefs of concerning units have the responsibility to

carry out this decision.

For. the Minister of Agriculture and Rural Development

Deputy Minister Bùi bá Bổng Signed

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