PPP Task Force Meeting Hanoi, 11th April 2014

PPP coffee task force project

REPORT OF COFFEE SEASON 2013

Aim of the program:

Propose and validate a «package of innovations» with particular focus on:

– improving the yield and the quality compared to farmers practice;

– reducing the environmental impact

Share best practices with the farmers and provide training

Share knowledge and competences within the technical group (Nestlé, Syngenta, MARD, WASI, NAEC,…etc)

Farmer organization in PPP coop. PPP institutionalization in CCB

Location of the demo plots

Provinces District No. of demos

Dak Lak (17) Buon Me Thuot cityCu M’GarCu Kuin

755

Dak Nong (27) Dak SongDak Rlap

1710

Lam Dong (16) Bao LamLam HaDi Linh

852

Gia Lai (10) Chu RongIahrai

55

Total : 72 demos(15 demos)

Size: 0.25 - 0.5ha

ICM Good farming practice (varieties, pruning, irrigation)

New varieties from WASI: TR4 (7.3 tons), TR12 (4.3 tons), support 50% cost of plantlet for rejuvenation

Pruning technique: Recommend to keep the height of coffee tree around 1m7, balanced tree shape for better photosynthesis

Irrigation: reduce water amount up to 40% per round, irrigate based on the humidity of soil, shading tree, cover the soil using straw (monitor and follow up via farm diary)

ICM Good farming practice (nutrition, CPM and sustainability)

Crop nutrition: soil analysis, balanced nutrition, adjust fertilizer formula to fit

with the development of tree.

Crop protection: use fungicide to avoid berry drop

Sustainability – Water saving up to 40%

– Carbon footprint reduce 54%

– Recommend compost from coffee husk (at least 1.5 tons/ha) => reduced chemical fertilizer 0.25 – 0.5 kg/tree (equivalent to 30%)

– Reduce amount of insecticide

– Comply with sustainable standards, follow the recommendation of Monitoring Group etc.

Farmer’s practice and PPP programkg

/ha

(Ma

cro

nu

trie

nt)

100

g/h

a (M

icro

nut

rient

s)

Less N, P and K and extra soil application of Ca, MgO and TE

(Urea, Ammonia)

(Nitrate, Ammonia)

High rate of fertilizer applied in Control plot

17.9%

23.2%

Fer

tiliz

er r

ate

(kg/

ha)

264N - 126P2O5 - 280K2O - 90CaO - 25MgO - 53S +1,2 B + 0,28 Mn + 0,28 Zn

Proposed Coffee nutrition program :

Greener and healthier leaves in PPP plot

PPPControl

Farmer Doan Van At, Lâm Hà, Lâm Đồng

Better growth in PPP plot

Hộ ông Trần Văn Hiền, Đắk Song, Đắk Nông

More fruit and better yield in PPP plot

PPPControl

Farmer Nguyen Duy Thanh, Dak R’lap, Dak Nong

PPP program increases in average yield by 8 to 13 %Average yield of 3 provinces demos (ton of green beans/ha)

• Yield increase: +480 kg/ha (11.4%)

• Turnover:

+18,252,000 vnd/ha

+ 12.2 %

+ 13.5 %+ 8.5 %

Coffee price: 38,0000đ/kg

Cost- benefit analysis of 6 demos in Lamdong (2), Daknong (2) and Gia Lai (2)

* Unit area: Ha

* Increased profit: + 555 USD/ha ( + 10 %)

Category PPP Control PPPvs Control (+/-)

Yield (ton/ha) 5.212 4.841 0.331

Fertilizer cost (USD) 1,428.57 1,365.32 63.25

Crop protection cost (USD) 40.02 48.26 - 8.24

Total cost (USD) 3,445.51 3,329.85 115.66

Cost per kg of bean 0.66 0.69 - 0.03

Total return (USD) 9,431.24 8,760.51 670.73

Profit (USD) 5,985.73 5,430.66 555.07

Sustainability - PPP program: 55.4% less carbon emission CFP calculation for 6 demos

PPP program: 304 kg N/ha5.2 t g.b./ha

Control program:484 kg N/ha4.8 t.g.b/ha

From : Yara Research Center, Haninghof, Germany

kg C

O2e

q/t

gree

n be

an

661

1,487

Effective rainfall is circa 113 mm from January to April.

Under the condition of no soil water stress, the required irrigation to meet the deficit CWU is about 347 mm, i.e. 1,050 liter/tree/round

(cf. penmann Montheith)

However, crop phenological factors require induced water stress during January to April.

Sustainability - Water Results

Item Data series Survey

Sample size (N) 664 (2005 – 2009) 300 (2011)

Plant density (tree / ha) 1,094 ± 129 1072 ± 86

Productivity (kg / ha) 2,420 ± 1,010 (max. 3,458) 2,872 ± 906 (max. 3,119)

Net Income (usd / ha) 1,664 ± 988 1,213 ± 956

Irrigation (liter/tree/round) 470 ± 224 1,391 ± 854

# of Irrigation rounds 3 3

Sustainability – Pruning, Compost

Pruning technique: – Recommend to keep the height of coffee tree around 1m7

– Balanced tree shape for better photosynthesis

– Reduce the berry drop (34 – 40 berries per bunch)

– Reduced the disease

Provide training for making compost from coffee husk: – Coffee husk for each hectare is 2.5 – 3 tons/ha

– Making compost from coffee husk, leaves after pruning, rubbish etc.) will deliver 2.5 – 3 kg compost/tree

– Reduced chemical fertilizer 0.25 – 0.5 kg/tree (equivalent to 30%)

– Monitor the compost process via farm diary book

– Comply with sustainable standards

PPP Coop Structure

Technical Working Group (province)

Farmer

Group

Farmer

Group

Farmer

Group

Farmer

Group

Farmer

Group

Farmer

Group

Local collector/retailer

CooperativeManagement Board

Companies, PAECs, local authorities

Companies

PPP Coop vs. old style coop

PPP Coop Old Coop

Structure Build on the base of farmer groups.

Build on the base of farmers

Contribution Minimal contribution to operate the services to farmer

Contribution in cash and in kind to form charter capital

Benefit sharing Benefit sharing at farmer group level

Share profit among the coop based on capital contribution

Training At farmer group level At coop level

Supporters All companies in the value chain via “wholesales” mechanism

Support by gov. stakeholders and PAEC network

Support by research institutes and NGO

Donor/company, mainly via administration and management support

Support by gov. stakeholders

N/A

Piloting: COOP Nam Hà – Lâm Đồng

Overall:

- 310 farmers

- Follow 4C program from 2011.

- Total coffee area: 1600-1800 ha.

Challenges :

- Weal training activities.

- Low profit business operation (looking for a stable output)

COOP Nam Hà strategy:- Provide sustainable agricultural material for famers.- Each company in PPP will sign an MOU with this coop to support the coop

across the value chain (April 2014)

PILOTING COOP Đạt Lý (Đắk Lắk)

Overall:

- 60 farmers – 8 farmer groups

- Follow 4C program from 2011.

- Total coffee area: 250-300 ha.

Challenges :

- Lack of capital & management skill

- Business operation is not effective (looking for a stable output)

COOP Đạt Lý strategy:- PPP support on technical information and training, give discount on selling

input material - Each company in PPP will sign an MOU with this coop to support the coop

across the value chain (April 2014)

CCB Organization (by IPSARD)

Coffee Coordinating Board

Production Sub-com

Co-chairs: Nestle - CPD

Permanent Office

Processing Sub-comCo-chairs: Vinacafe – Agro Processing Dept.

Trade & access to financeSub-comCo-chairs: Trung Nguyen - MOIT

Strategy & Sustainability Sub-comCo-chairs: IPSARD - IDH

PPP Coffee Task Force

CCB Update

Eliminated the co-chair mechanism of PPP: Public sector hold the chair position, private sector hold the vice chair position in each committee

Removed the Processing Sub-committee of CCB. Only 3 sub-committees: Production, Trading and Sustainable – Strategy

CCB is revising the charter based on the comment of Vietnamese companies

PPP Coffee Task Force is pending for decision of CCB Chairman to upgrade to Production Committee

Conclusion

Cooperation between NAEC and private sectors are contributing to update and improve our knowledge on better coffee management

PPP program increases the yield by 10.8 % and profitability by 14 %

Sustainability: Carbon emission by 55.4%, water reduction by 40%, making compost to reduce chemical fertilizer by 30%, smaller amount of CPM

Piloting 2 PPP Cooperatives with 58 demos

Need to review the role of private sector in CCB

Thank you