VF Franchise Consulting

Female farmers plot an organic future

Nov 4, 2015

The road is narrow and obstructed by heaps of drying corn. Past the farm’s perimeter, marked by a curtain of elephant grass reaching toward the sky, conical hats bob among rows of greenery.

     Under the hats are 18 women and a lone man, all residents of Duy Tien District in Vietnam’s northern Ha Nam Province. Together they form the Trac Van Organic Vegetables Collaborative Group, a hectare-sized experiment in self-preservation.

     Vietnam — an agrarian society in which nearly half of the workers are farmers, according to official figures from 2013 — faces a future that demands either innovation or a wholesale change in identity.

    It is one of the world’s biggest rice exporters, but Vietnam’s agricultural sector faces numerous challenges, from an aging and shrinking farming force to poor practices and infrastructure. Slow productivity growth and low-quality crops produce profits so tiny that many farmers are better off leaving land fallow.

     One attempt at rethinking the sector has been organic farming, which, after more than a decade of concerted effort, is finally gaining traction. Farmers, desperate to abandon cheap commoditized crops like rice and corn, are increasingly willing to stop using pesticides and old techniques to meet demand for pricier organic products.

     In Hanoi, 60km from the farm, the potential for organic products is huge. According a study by Sigrid Wertheim-Heck of Wageningen University, 93% of Hanoi consumers say they are concerned about food safety, yet only 3.2% of market produce is “safe” and “organic.” Tight purse strings are not an issue either. A Vietnam University of Agriculture survey conducted this year found that the vast majority of respondents would pay at least 20% to 50% more for guaranteed safe vegetables; 14% said they would pay double.

     The seed that eventually produced the farmer group was planted in 2012 at a provincial meeting of the Women’s Union, a national network of 13 million women. Le Thi Huan, president of the Duy Tien District Women’s Union, said she heard a pitch for piloting an organic produce farm and found it convincing. She thought that if she could find enough willing farmers, the growing market in Hanoi would make it a gamble worth taking.

     The pitch was made by a Danish nongovernmental organization, Agriculture Development Denmark Asia, which was nearing the end of a decade-long organics project.

     In 2002, ADDA began work in nine northern provinces to develop a product guarantee system — a network of local farm groups, district groups and organic retailers that could train, certify and monitor each other. For northern Vietnam, a region of disjointed half-hectare farm plots, a PGS is probably one of the only certification systems that could work, especially without government support.

     PGS-Vietnam President Nhung Tu Tuyet, who left a comfortable government job and pension to join the ADDA project, stayed on after the Danish group departed in 2012 and built the system up to its current 290 farmers and 45 retail venues in Hanoi.

     “To be honest, it finished in 2012 and it was the worst project,” she said, upbeat despite her words. “They focused on training techniques and wanted to open 100 farmer groups, but they really didn’t focus on the market.”

For her, the goal was too ambitious and overlooked two issues: first, farmers needed a place to sell their products; second, they faced consumer distrust. After media reports about failures affecting VietGAP, a government-backed safe agriculture program, many consumers became wary of supposedly “safe” food products, and, by mistaken association, organic foods as well.

Nhung decided to rely on women to build a strong market and boost credibility. She got members of provincial and district Women’s Unions involved as PGS trainers and inspectors and encouraged female farmers to join.

“Women are the primary shoppers, cooks and producers of food in the household,” Huan from the Women’s Union in Duy Tien District said, explaining why women are more inclined than men to get involved in the PGS system.

     Women make up half of Vietnam’s agricultural labor force, and more in some northern regions. Huan saw an opportunity to harvest two crops simultaneously, winning over females as both farmers and consumers of organic products. She called a meeting with the Trac Van Commune to relay the PGS message — safer farming, safer food, higher profits. Thirty farmers responded to the call, all of them women.

Reflecting on their efforts at a group meeting in September, the farmers said that joining the project had not been easy. It required a year of soil testing and ad-hoc inspections by PGS monitors, discarding farming techniques learned practically from birth, overcoming startup funding hurdles and braving the chaos of building an organic-farm infrastructure from scratch.

Profit motives

So, why did they join? The farmers cited environmental and health concerns, the prospect of cleaner food and a sense of community. “But, honestly, higher income is everyone’s core motivation,” farmer Do Thi Thuy said.

Previously the women relied solely on growing rice and corn, which fetched less than half the price of their organic produce, at about 14,000 Vietnamese dong ($0.63) per kilogram. According to Huan, the farmers’ incomes have increased two- or threefold. But there have been problems, including a troubled relationship with the consumer market.

    The project started out haphazardly with the support of just one local Women’s Union and some financial backing from the local government. In the end, it required assistance from VECO, a Belgian NGO specializing in sustainable agriculture, to complete the transition and encourage a crucial focus on marketing.

“Consumers know about safe and organic produce, that’s not the problem. Distrust is the biggest issue,” said Nguyen Hue Phuong, of the Hanoi-based Action Center for the City Development, which works with PGS to improve links between farms and urban markets in Hanoi and other cities.

Phuong said many consumers lost trust after they saw negative reports about VietGAP’s “safe” vegetables, while others said they did not know where to find organic products. In addition, she said, many modern retailers — small and large — are not prepared to sell organic.

New markets

The government’s retail modernization policy aims to phase out the country’s distribution network of traditional wet markets, increasing monitoring capacity and improving food safety to comply with World Trade Organization standards.

The policy has been a relative success; retailers from around the world now have a presence in Vietnam, including Malaysia’s Parkson, Hong Kong’s Dairy Farm and Japan’s Family Mart. Seven-Eleven group, also of Japan, has said it will soon establish outlets in Vietnam, while mega-retailers Tesco of the U.K., France’s Carrefour and Wal-Mart of the U.S. are understood to be seeking licenses.

All this activity should be a boon for the organic market, but consumers have been slow to switch because such retailers have not adapted to local consumption habits. Until modern retailers become better vehicles for organic produce, farms such as Trac Van have to rely on word-of-mouth in their communities, PGS retailers, and groups like VECO that can help create sustainable public-private partnerships.

Currently, 60% of Trac Van’s produce is sold through Bac Tom, a PGS retailer based in Hanoi, 30% is sold to Ha Nam district officers, and the rest is sold to local residents and markets. Despite the slow progress in Hanoi, Nhung and regional partners such as ACCD and VECO are optimistic about domestic growth.

A year-old PGS network in the central province of Hoi An is already popular with consumers and growing quickly with active local government support. In late September, the International Federation of Organic Agriculture Movements agreed to fund a project to create a PGS network in Tan Lac District.

Also encouraging is news that French hotel Sofitel Plaza Hanoi is working on a contract to source organic produce from the Trac Van farm to meet the company’s target of using at least 10% organic food in its restaurants.

Beyond Vietnam, demand for organics is growing and may expand further when a recent trade agreement with South Korea goes into effect and if multilateral trade deals such as the Trans-Pacific Partnership go through. Nhung said that international companies call frequently to discuss import possibilities.

She said PGS is not yet ready for exporting, but pieces of the puzzle are falling into place.

As farmers took a shady respite from the sun, talk turned to the prospective Sofitel partnership and the possibility of adding another hectare to the farm. Breaking her silence, one Trac Van farmer, Tran Thi Hong, raised her hand and blurted, “Yes! Yes we can.” The ladies giggled into their bandanas, donned their straw hats and headed out into the fields for the late-afternoon shift.

Source: http://asia.nikkei.com/

Related news:

Southeast Asian laggards move up in Doing Business rankings

Franklin Templeton plans to invest $3 bln in Vietnam’s service sector

Vietnam on track to replace China as new manufacturing hub: experts

JYSK Vietnam plans up to 20 stores

Vietnam’s Vingroup snaps up local grocery chain

AuchanSuper Vietnam plans 18 stores

Story-i launches into Vietnam

European cosmetics chain heads to Asia

Smoothie King Vietnam expansion plan

Corner stores still dominate Asia retail

KAfe Group wins funding for Vietnam store rollout

[ Go back ]

Franchise Opportunities