Key lessons challenges and opportunity in project implementation

Project on Market-Oriented Agro-forestry to

Reduce Poverty in Quang Nam Province,

Vietnam

“Improving gardens and support systems

to reduce poverty”

By: ES Guiang

Presented during the TPR on 25 February

2011, Tam Ky City, Quang Nam Province, Viet

Nam

The Sites in Quang Nam Province: Six out of more than 200 communes in two out of 16 districts

Six communes in two districts, Quang Nam Province

Phu Ninh Dist

•Tam Loc

Tien Phuoc Dist •TienHa,Tien Cam • Tien Son

•Tien Phong • Tien Tho

Project Objectives

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

poverty

2. Help conserve natural resources by supporting sustainable and high quality Market-Oriented Agro-Forestry (MOAF) Systems

Specific objectives With 6 communes:

Improve and/or develop 1,500 ha of market-driven gardens

Strengthen enterprise-oriented coops and groups Pilot viable micro-finance with village groups

With province and 2 districts:

• Strengthen extension delivery system •Develop market research information system

Implementation Strategy: Collaborative Approach

OUTPUTS

Garden owners,

1,500 ha gardens entrepreneurs

Rural enterprises

Microfinance Model

PROJECT Strengthened with

extension delivery 6 communes,

system 2 Districts,

Provincial DARD Market Research

Information System Developed

Accomplishments as of 15 February 2011 Outputs 3-Year Targets Achieved as of 15 Feb 2011 % of Targets & Remarks

1. Developed or improved home and forest gardens in ha

1,500

1,916

125% - mostly improvement of home gardens with 20-50 high value and market-oriented seedlings

2. Strengthened coop and group enterprises

Target coop and similar groups strengthened

Strengthened the informal grouping of nursery cooperators and six commune savings groups but not Cam Ha, Women’s and Farmers Groups

Did not meet target to strengthen Cam Ha & Women’s Group after initial efforts failed

3. Piloted micro-finance with groups

Microfinance piloted

Organized six savings-oriented microfinance groups; two are linked with repayments of 4 enterprise loans

Microfinance approach piloted but needs more time to strengthen capacities

4. Strengthened extension delivery system

Extension delivery system strengthened

Decentralized implementation of agroforestry plans with downloaded funds strengthened communes’ delivery system and highlighted the need for district ag office client-oriented support

Adopted a decentralized approach with downloaded funds to strengthen communes’ implementation to respond to their garden owner constituents

5. Developed MRIS with the province

MRIS prototype developed

Prototype developed and under review for piloting with six communes, districts, and province

Needs more time for piloting and determining next steps before provincial adoption

What have we learned with the Italian Government’s grant

of US $ 2.8 million?

What have we learned from the processes and approaches to

achieve the targets and outputs?

Key Lessons 1. With support and guidance, most forest and home garden

owners will develop or improve their gardens in response to market opportunities. Relevant training, cross visits, and initial inputs of high quality and market-oriented planting materials are the key.

2. With downloaded funds and technical guidance to implement jointly prepared and approved agroforestry plans, communes are better positioned to respond to their garden owner-constituents.

3. The cost center approach with downloaded funds provides flexibility for communes to adjust implementation activities to fit reality. A good model for the government’s ongoing Tam Nong Program

Key Lessons 4. About 60-80% of the communes’ downloaded funds for

agroforestry implementation was spent for initial inputs of high value seedlings and fertilizer. The project simply responded to the great need to improve value chain at the production stage of agroforestry system. There was less interest for improving agroforestry value chain at the support or post harvest stages.

5. Investments for improving support enterprises and systems for agroforestry development – nurseries, microfinance to improve HH financial assets, and delivery of market information and extension- take intentional, coordinated, and considerable efforts. Projects like GCP 027 & 035 could only point the way and test some approaches but not establish such support systems.

Key Lessons 6. Agroforestry could reduce poverty in Quang Nam by

assisting garden owners reduce the number of species from 10-15/ha to 4-5/ha of market-oriented species or apply thinning/pruning and enrichment planting. 200 banana plants inter-planted with jackfruits and citrus (which

yield in 3-4 years) could generate a gross revenue of least VND 15 million in nine months even at farm gate price of VND 50,000 per bunch and suckers sold at VND 7-10,000 each

A six year old Acacia hybrid planted at 1.5 by 2 m can be harvested in six years (in Tien Ha) could generate a gross revenue of at least VND 40-45 million per ha. This could be more if sold as saw timber in year 10 or 12.

Gardens with well-managed black pepper vines inter-planted with green tea and other species or a Lansium-based home garden inter-planted with other fruit trees and combined with raising livestock could generate enough income for households.

Lessons Learned

7. Just like other projects, the ultimate value of a six-year “piloting’ efforts depends on local initiatives to move towards replication and scaling up with some of the best practices generated especially under current or planned government’s programs i.e. Tam Nong.

8. Despite the limited opportunities to “transfer” cash to farmer-participants, a mechanism for setting up savings-oriented microfinance groups worked because savings were linked with 50% project matching fund and tied up the repayments of enterprise loans as part of the saving group’s capital build up amount.

Opportunities and Challenges

A. Moving ahead with replicating or scaling up market-oriented agroforestry systems at the production stage and linking this with Quang Nam’s advancing tourism industry, increasing urbanization and industrialization, and expanding local economies as a result of spillovers of Danang City as a growing metropolis.

Opportunities and Challenges B. Focusing on moving up the value chain of market-

oriented agroforestry especially in consolidating small producers for commune-level raw material sorting and quality control, organized transporting system, high value processing, and marketing of selected products that are considered to be Quang Nam’s competitive products – black pepper, lumber from mini-sawmills, other products from small diameter pulpwood, cinnamon, banana, and meat products from native chicken and cattle.

C. Planning and implementing a district-level decentralized system for assisting garden owners to improve the marker-orientation of their gardens with responsive and strengthened extension and market information service delivery system.

Opportunities and Challenges D. A province or a district-led initiative in

partnership with the private sector and donors to further strengthen support enterprises for market-oriented agroforestry system in Quang Nam especially for:

Pump-priming privately-owned nursery enterprises that will raise high value planting materials for garden owners

Savings-oriented (not credit-oriented) microfinance at the village and commune levels to help build up household financial assets and reduce their vulnerabilities to disasters and market failures

Recommendations: Moving Forward with 6-month extension (July-Dec 2010)

1. Help the communes complete the implementation of their agroforestry plans up to June 2011.

2. After June 2011, strengthen capacities of six savings groups to manage their savings/relending operations and leveraging other funds (public and private) to expand their relending program for household enterprises and for financing garden improvements.

3. Move up the value chain of agroforestry by: Linking the savings group with the establishment of enterprises

(setting up buying station of H/F garden products in Tien Cam; household processing of banana fruits and doing consolidated quality control and marketing)

Consolidated commune-level trading, quality control, initial processing, branding, and marketing of Tien Phuoc black pepper.

Recommendations ...

• Support Tien Phuoc and/or Phu Ninh with the province to plan, finance, and initially implement the replication and scaling up of market-oriented home and forest gardens under the Tam Nong Program. Activities may include piloting the MRIS with the province and training of extension workers, partnership with Agribank/Policy Bank to help align lending towards home and forest gardens improvement to increase local demand for high value planting materials.

• Support Tien Phuoc’s initiative to organize and facilitate the mini-sawmill operators’ efforts to re-tool, improve quality and efficiency, diversify product mix that meets furniture makers needs

Recommendation: Re-Align Remaining Funds with Additional Support

GCP/VIE/035/ITA Project - Revised 3-Year Total Project Budget up to 30 June 2011

Budget Item

Original

Project Total

Revised

Total Project

Budget after

Re-

Alignment in

July 2010

Budget

Status as of

31 Dec 2010

Proposed

Budget up to

30 June 2011

Increase (+) or

decrease (-) in

budget item

Revised Total

Project with

Proposed Jan

2011 Re-

alignment

1. Sa laries Profess ional

(Parent)459,999 464,368 116,227 15,165 101,062 363,306

2. Sa laries General

Services (Parent)99,999 149,297 38,486 24,000 14,486 134,811

3. Consultants (Parent) 54,000 15,500 15,500 42,000 -26,500 42,000

4. Contracts (Parent) 250,000 186,313 117,575 112,998 4,577 181,736

5. Local ly contracted

labour (parent)0 43,810 11,714 8,410 3,304 40,506

6. Travel (parent) 58,251 51,039 8,111 35,500 -27,389 78,428

7. Tra ining (parent) 39,999 62,005 3,787 15,256 -11,469 73,474

8. Expendable

Procurement (parent)0 2,113 -692 0 -692 2,805

9. Non-expendable

procurement (parent)20,000 17,073 -6,171 0 -6,171 23,244

10. Technica l services

support (parent)36,999 29,826 24,666 24,666 0 29,826

11. General operating

expenses (parent)42,699 40,603 -28,977 22,231 -51,208 91,811

12. Support cost (parent) 138,054 138,052 39,028 39,028 0 138,052

Total 1,200,000 1,199,999 339,254 339,254 0 1,199,999

XIN CAM ON