Báo cáo Nghiên cứu khoa học Developing an agricultural research and development priority framework for VietNam

Developing an Agricultural Research and Development Priority Framework for Vietnam Crops Sub-Sector Workshop Data and Information Sheets: Areas of Research & Development Opportunity (ARDOs) ARDO 1: Rice ARDO 2: Upland Crops ARDO 3: Food Legumes ARDO 4: Industrial Crops ARDO 5: Fruit ARDO 6: Vegetables ARDO 7: Flowers ARDO 8: Animal Feeds ARDO 9: Crops for New Uses October 2006 Crops Priority Workshop. Data & Information Sheets 1 ARDO 1: RICE 1. ARDO DEFINITION 1.1 National Goal Increase yield, and quality of rice to ensure national food security, competitiveness in export markets, reduce the cost of production and maintain exports at 4-5 millions ton/year. 1.2 R&D Scope Research into genetic improvement and development of agronomic techniques (GAP, ICM, IPM) improving quality standards and food safety and further develop harvest and post-harvest management including storage and processing and development new and improved products to meet identified market needs. 1.3 Coverage:  Improved varieties  F1 hybrid varieties  Locally purified varieties  Varieties with high yield good quality and possess aromatic character (Aroma varieties).  For all varieties high yield, good grain quality (to meet exporting markets), suitable for different ecological environments (intensive cultivation areas, adverse condition areas such as salinity soils, acid-sulphate soils, floating areas, rain fed lowland as well rain fed upland conditions etc.) through out country.  These varieties should be divided in to 4 mainly groups base on growth duration. 1. Very early maturity (< 90 days from seed to seed); 2. Early maturity (90-100 days); 3. Medium maturity (>100 - 125 days); 4. Late maturity and/or Mua group (for most photosensitive varieties, growth duration relates to day length). Production zone High priority Medium priority Low priority Northern of country and highland zones Very early, Early maturity: - Improved varieties - F1 hybrid varieties Locally uniform varieties Locally uniform varieties Red rive delta (RD) Very early, Early maturity: - Improved varieties - F1 hybrid varieties - Aromatic varieties Medium maturity: - Locally uniform varieties - Aromatic varieties Late maturity: - Aromatic varieties Central zones Very early, Early maturity: - Improved varieties - F1 hybrid varieties - Aromatic varieties Medium maturity: - Aromatic varieties Late maturity: Locally uniform varieties Central plateau Very early maturity: - Improved varieties - F1 hybrid varieties Medium maturity: - Aromatic varieties - Local uniform varieties Crops Priority Workshop. Data & Information Sheets 2 Mekong Delta (MD) Very early, Early maturity: - Improved varieties - Aromatic varieties - F1 hybrid variety -Uniform varieties Medium maturity: - F1 hybrid variety - Improved varieties - Aromatic varieties - Locally uniform variety Late maturity: - Locally uniform varieties - Aromatic varieties 2. INDUSTRY STATISTICS 2.1 Introduction Rice production in Vietnam started more than 4,000 years ago. The skill and knowledge of producers has grown over time in keeping with neighbouring countries including China, Thailand and Indonesia... Rice is very important food crop. It provides about 20% energy requirement for the world, 60-70% for Asia people and 35 - 59% for more than 3 billion people (FAO,1984), particularly in Asia countries including Vietnam. Rice crop can develop and tolerate many disadvantageous environmental conditions (long time flooding soil, salt and acid soil) which many other crops cannot. For this reason rice is sometimes called a “volunteer plant” and in the tropical monsoon reason is one of the few annual crops that can be successfully grown. Rice is a core component of food security in many Asian countries including Vietnam, and has been grown repeatedly in the same areas for thousands of years. Diversification into more profitable crops has only been achieved once household and national food security needs have been met. Rice plays important role the daily nutrient and health requirements of many rice eating nations. New varieties, high in protein, ‘golden rice” with pro-vitamin A are now becoming available for further improvement in human nutrition. 2.2 Industry Characteristics and Prospects Area and Productivity According to statistical data (Agriculture Development - GSO), in 2005, Viet-Nam had 7326,400 ha of rice divided into 3 groups  Winter-Spring (W-Sp, from November to April the next year) rice crop season 2942,000ha;  Summer-Autumn (S-Aut, From April to October) rice crop season: 2348,600 ha  Mua (from July to December in the North and from August to February the next year in the South) rice crop season 2035,800 ha (table No.1). Table 1. Area and Production of Rice in (1990-2005) Year Area Production Total Of which Total Of which Spring paddy Autumn paddy Winter paddy Spring paddy Autumn paddy Winter paddy Thousand Hectares Thousand Tonnes 1990 6006,8 2037,6 1215,7 2753,5 19225,1 7865,6 4090,5 7269,0 1995 6765,6 2421,3 1742,4 2601,9 24963,7 10736,6 6500,8 7726,3 2000 7666,3 3013,2 2292,8 2360,3 32529,5 15571,2 8625,0 8333,3 2001 7492,7 3056,9 2210,8 2225,0 32108,4 15474,4 8328,4 8305,6 Crops Priority Workshop. Data & Information Sheets 3 2002 7504,3 3033,0 2293,7 2177,6 34447,2 16719,6 9188,7 8538,9 2003 7452,2 3022,9 2320,0 2109,3 34568,8 16822,7 9400,8 8354,3 2004 7445,3 2978,5 2366,2 2100,6 36148,9 17078,0 10430,9 8640,0 2005 7326,4 2942,0 2348,6 2035,8 35790,8 17331,7 10415,1 8044,0 Index (Previous year = 100)-% 1990 102,2 104,1 106,6 99,1 101,2 104,3 100,7 98,3 1995 102,5 101,7 109,9 98,9 106,1 102,2 114,5 105,3 2000 100,2 104,3 97,9 97,4 103,6 110,4 98,5 97,7 2001 97,7 101,5 96,4 94,3 98,7 99,4 96,6 99,7 2002 100,2 99,2 103,7 97,9 107,3 108,0 110,3 102,8 2003 99,3 99,7 101,1 96,9 100,4 100,6 102,3 97,7 2004 99,9 98,5 102,2 99,2 103,8 101,5 109,6 101,7 2005 98,4 98,8 99,3 96,9 99,0 101,5 99,8 93,1 Rice production in Vietnam is characterized by:  2 main rice seasons in the North (W-Sp) and Mua crop that coincides with dry and wet seasons  3 main crops in Central and the South (W-Sp, S-Aut and Mua)  The Green Revolution in 1960’s when a lot of new varieties with short growth duration, short stem, resistance to logging, adapt to intensive farming condition, high yield etc were developed. This enabled more intensive cropping systems to be developed that significantly increased total yield and income  From 1990 to 2005, the total area of rice has expanded by 22% (W-Sp rice up 44.8%, S-Aut rice up 93.4% and Mua rice down 26.2%). Since 2001 there has been a small (2.5%) decrease in the total area of rice grown.  The total yield of rice has increased by 86% from 1990 – 2005.  The big change in production over the years has occurred for the following reasons. (Table 2) o Strongly supportive Government of Viet Nam policies in agriculture e.g. Improvements in irrigation systems, development of improved varieties, food security and poverty reduction o Increased funding for rice research enabling development of new varieties and replacement of old varieties throughout the country o Introduction of F1 hybrids, mainly in RRD and parts of the Central Plateau o Photosensitive varieties that have a high yield and good quality as well as better adaptation and better tolerance/resistance to pests and diseases. o Mua crop varieties have declined and been replaced by improved varieties, especially in the RRD region. Table 2. Area, Yield and Production of Paddy (1961-2005)* Year Area Yield Production Thousand. ha Index (Previous year=100%) Ton /ha Index (previous year=100%) Thousand. ton Index (previous year=100%) Crops Priority Workshop. Data & Information Sheets 4 1961 4.744.000 - 1.896 - 8.997.400 - 1965 4.826.300 101,73 1.941 102,37 9.369.900 104,14 1970 4.724.400 97,88 2.153 110,92 10.173.300 108,57 1975 4.855.900 102,78 2.120 98,46 10.293.600 101,18 1980 5.600.200 115,32 2.080 98,11 11.647.400 113,15 1985 5.730.900 102,33 2.783 133,79 15.874.800 136,29 1990 6.027.700 105,17 3.189 114,58 19.225.104 121,10 1995 6.765.600 102,53 3.690 103,47 24.963.700 106,10 2000 7.666.300 100,23 4.240 103,28 32.529.500 103,61 2001 7.492.700 97,73 4.290 101,17 32.108.400 98,70 2002 7.504.300 100,15 4.590 106,99 34.447.200 107,28 2003 7.449.300 99,26 4.630 100,87 34.518.600 100,20 2004 7.445.300 99,94 4.860 104,96 36.148.900 104,72 2005 7.326.400 98,40 4.890 100,61 35.790.800 99,00 * Source from Ministry of Agriculture and Rural Development Average yields have increased 2.2% per year from 1961 – 1990 (1.896 to 3.189 tons/ha). This increase is attributed to the Green Revolution impact of rice breeding. From 1990 - 2005 total yield increased 2.3% per year (3.69 to 4.89 tons/ha) Most of this increase can be attributed to application of hybrid rice in the North (RRD) and high yielding varieties in the South (MKD). In addition improved rice cultivation and improved seeding techniques, and application of “3 increases 3 deceases”, (ICM, IPM and GAP). Over the last 30 years, total production of rice in Vietnam has increased about 6.6%/year – the first rank in the world. Vietnam now is the second/third largest rice exporting nation. Value and Markets Export Markets  Six countries (Thailand (30%), Vietnam (14%), America (14%), India (12%), China (9%) occupied 86% of the world rice export market (FAOSTAT, 2004).  World production of rice has increased increase from 144 million tons (1975) to 606 million tons (2005) (FAOSTAT, 2004)  FAO predicts that demand will increase to 800 million tons by 2030 – an annual increase of 1% per year.  Since 1975 the world price has declined from 750USD/ton (1975) to 240 USD/ton (2005). Relatively small increases in annual production can severely disrupt price.  The quality of exports varies: Egypt, EU, America, Australia, China, India, Argentina, Uruguay (India and Pakistan export Basmati variety) export rice with high quality. India, Thailand, Vietnam export rice with medium quality and India, Pakistan, Thailand, China, Vietnam export rice with low quality.  Some major exporting countries (Thailand, China and Vietnam are diversifying from rice into other crops while other producers (Cambodia) have increased area and yield as national goals. Crops Priority Workshop. Data & Information Sheets 5 Table 3. Rice Exports from Vietnam (1989- 2005) Year Export quantity (tons) Price (USD/tons) Value (1000 USD) Worldwide imported rice (tons) 1989 1.420.000 204 290.000 - 1990 1.624.000 248 304.637 - 1991 1.033.000 283 234.482 - 1992 1.945.800 239 417.742 - 1993 1.722.000 209 310.000 - 1994 1.983.000 230 359.600 - 1995 1.988.000 289 391.900 - 1996 3.500.000 303 750.000 19.700.000 1997 3.574.804 256 870.892 18.800.000 1998 3.800.000 288 1.023.997 27.200.000 1999 4.550.000 228 1.037.400 24.900.000 2000 3.476.000 177 600.000 22.300.000 2001 3.730.000 154 545.000 21.500.000 2002 3.480.000 180 560.000 23.800.000 2003 3.813.000 189 727.000 24.900.000 2004 4.059.740 233 950.390 27.230.000 2005 5.250.270 268 1.407.230 Source: FAOSTAT, 2000; Tran Van Dat, 2004 and Trading Ministry of Vietnam Crops Priority Workshop. Data & Information Sheets 6 Table 4. Export Markets Destination Market 2002 2004 2005 Quantity (1.000t0n) Value (million USD) Quantity (1.000ton) Value (million USD) Quantity (1.000ton) Value (million USD) Total 3.135,20 560.000 4.059,74 950,39 5.250,27 1.407.23 Nth. America 301,1 1,12 0,32 - - United States - 0,89 0,24 - - Europe 137,00 324,41 70,75 87,38 23,24 EU25 - 46,29 9,97 10,14 3,33 EU15 - 13,48 3,70 9,34 3,07 Eastern Europe 137,00 141,17 32,50 69,60 18,01 Asia 2.078,10 1.914,42 456,83 2.484,08 686.03 ASEAN 1.185,60 1.401,22 313,25 2.224,95 616,89 Middle East 886,30 351,02 102,02 12,03 3,12 Japan 4,70 75,36 16,06 196,83 53,42 China 1,50 82,62 19,21 48,28 11,97 Hong Kong 2,20 0,67 1,13 0,29 Australia + Oceania 100,0 4,48 0,95 3,20 0,84 Other countries 519,00 1.815,31 421,54 2.675,61 697.12  Rice exports form Viet Nam commenced in 1998 and have increased annually. The value of the rice crop in 2005 was approximately 40% of total agriculture GDP.  Export volumes are 3.6 times higher in 2005 compared to 1989, and rice exports have increased 21.1%/year on average.  Main exports are to Asia (40-60% of annual exporting volume). Europe, Africa, Middle East and Japan are also markets of Vietnam but are unlikely to increase in the foreseeable future. Domestic markets:  Viet Nam has a population of 80 million and rice as the main food in the diet. As living conditions improve the demand is for better quality rice.  The domestic market is estimated to be 22 million tons with a market value of US$5 billion.  A further 8 million tons of poor quality and split grain rice is used for animal feed (Value approximately US$1 billion).  Almost all regions of Vietnam are self-sufficient in rice – the majority – 80-90% of exports are from the Cuu Long River Delta. Government Policies Rice development is given high priority by the Government. It is not only for national food security but for maintaining 4-5 ton milled rice to export. It is also very important to farmers, especially in the MKD region, whose main income is based on rice production. Four major rice programs are supported by government: Crops Priority Workshop. Data & Information Sheets 7  Improved variety: Genetics improvement, breeding for very early and early maturity for Mekong delta areas, Red river delta areas, central areas, and intensive cultivation areas to meet the demand of importing markets, overcome floating and drought, rotation with winter crops ( vegetables, potato, sweet potato, corn, water melon)  F1 Hybrid rice: A big government, it contributes to increasing the yield from Red river delta areas, central areas, and central plateau to ensure national food security. In the coming year Viet-Nam will produce its own F1 hybrid seed to ensure rice production is based on domestic seed.  Aromatic rice: Strong attention to improvement genetics to release varieties (with very early and early maturity but high yield and aromatic character and good resistance/tolerance to disease and insect pets) to meet demand from rice markets as well as increase national income from exporting rice .  Locally uniform variety: Purification of Special rice varieties from local varieties such as Lua -Tam, Tam -Xoan, Nang-Thom, Nang-Thom -Cho-Dao.from to improve value in exporting markets. Comparative Advantage  Viet-Nam is a member of AFTA and as a member of WTO at the end of this year, the level of taxes and protection for export crops, including rice will be reduced.  The rice world market is expected to increase with increasing population and demand for affordable food.  Viet-Nam has well defined markets, in developing countries, where living standards are still low. Rice from Viet-Nam imports is not so expensive and Viet-Nam has a comparative advantage in these markets.  At present Vietnamese breeders have been released some of high quality with aroma varieties those are testing in lager scale. These varieties would be grown as national varieties on larger areas in the near future years. 3 Industry Analysis 3.1 Structure Households and Size of Holdings  In the MKD the area of rice per farmer household is rather large, may be several hectare for each household.  In other regions, especial in the RD regions, rice area of a household is very moderate, of some hundreds and thousands m².  On some river banks rice planting area of a farmer household is not so large - usually less than a hectare for each household.  In river delta regions, especial in the MKD and RRD regions, rice planting area is reduced; rice is replaced by crops that are more profitable such as vegetables, fruit trees, and flowers. 3.2 Supporting Infrastructure  At present irrigation systems for rice production are almost completed in RRD to MKD. Crops Priority Workshop. Data & Information Sheets 8  Seed production Plant protection centres are sufficient and good enough to control disease and insect pest.  Agricultural extension bureau belong to MARD and extension centres from provinces are strongly supporting in rice production, too.  There are 270,000 rice millers in Mekong Delta with total capacity of 21,000 tons paddy batch (equal to 11 million rice/year), more than 300 machines for polishing rice, and some rice grading machines are produced in Vietnam 3.3 Future Trends and Key Market Issues.  Market for rice is rather convenient to export and there is high domestic consumption demand.  Rice areas will decrease year to year due to developing industry and diversification into more profitable crops. The challenge is how to produce sufficient amount for market meanwhile.  In 1989 Viet-Nam exported rice (1,420,000 tons). Since 2000 Viet-Nam has become the second largest rice exporter  Value of exports was billion USD meanwhile to meet domestic demand.  Target for 2010 is to maintain 35 million ton of paddy rice with better quality and aromatic although rice areas would be decrease yearly also. 4 R&D Information 4.1 Main Research Areas  Genetic improvement in yield and quality including development of hybrid varieties, and selection for very early and early maturity, Uniform varieties, aromatic varieties  Introduction and evaluation of new F1 hybrid varieties  Development of production packages incorporating agronomic practices, pest and disease management and commercial production systems  Improvement harvesting and post harvest processing  The 1978-2000 national science and technology program for food crops (major crop rice) had a focus on germplasm collection, breeding and selecting new varieties for intensive areas and disadvantage areas.  The 2001 – 2005 varieties program for crops, animal and forest is focused on breeding and selecting rice varieties for intensive farming areas as well as dis- advantaged areas, breeding and selecting hybrid rice, super rice variety, special rice variety, high quality rice for exportation.  Main research disciplines/fields include: - Bio technology, breeding, regional planning/projecting, farming/crop systems, soil science, plant protection, post harvest technology. 4.2 Major Research Providers Ministry of Agriculture and Rural Development  Viet-Nam Agricultural Science Institute (VASI) (now Vietnam Academy of Agricultural Sciences – VAAS)  Institute of Agricultural Science for Southern Vietnam (IAS) Crops Priority Workshop. Data & Information Sheets 9  Agricultural Genetics Institute,  National Centre of Variety Evaluation and Seed Certification (NCVESC),  Cuu Long Rice Research Institute,  Food Crop Research Institute Universities  Hanoi Agricultural University,  Thai -Nguyen Agro-Forestry University,  Ho- Chi - Minh Agricultural University,  Hue Agricultural University  Can -Tho University Others  Vietnam Atomic Energy Commission (Mutation rice breeding).  IAEA (mutation rice breeding)  International cooperation on R & D of the rice crops is very active in training, scientific information exchange and particularly in germplasm for breeding as well as solutions F1 hybrid seed production in Viet-Nam.  International Rice Research Institute (IRRI)  Provincial seed companies with trained technicians  Hundreds senior scientists and thousands researchers with different research fields such as bio-technology, plant breeding, farming systems, regional project, variety pattern, soil research, fertilizer, irrigation, plant protection, agriculture, engineering and post harvest technology and protection of Vietnamese as well as foreign Intellectual Property especially in rice hybrid seed.  Total researchers working in rice crops are thousands people many of them are trained from developed countries (RUSIA, USA, UK, JAPAN, HOLAN, CHINA, INDIA.....)  Crop seed Companies, Agri. Science and Tech. service Companies of Vietnam and from out side which are investing in Vietnam just after Viet-Nam became a member of WTO.  Foreigner companies have invested for seed production in Vietnam, it needs to encourage in introduce new varieties and new materials into Vietnam for research collaboration. 4.3 Funding  Mainly from the Government and partly from international cooperation projects.  Budget for rice research and development are always much considered, many billion VND yearly. This amount would be increased in the next years also. 4.4 Major Achievements to Date  Selecting and maintaining germplasm for local special varieties  Breeding and selecting high quality rice varieties for exportation including: Crops Priority Workshop. Data & Information Sheets 10 o Breeding and selecting high quality new varieties o Identification of high quality varieties for export including OM1490, OM2717, OM2718, OMCS2000, OM3536, VND95-20, IR64. o Organizing seed production (from pre-basic to certified seed to supply seed to growers in rice growing areas for exporting (1 million ha in Mekong Delta and 300,000 ha in the North).  Breeding and selecting rice varieties for adverse soil conditions.  Hybrid rice research including: o Creation and selection of parents of two and three lines of hybrid rice varieties, o Creating new domestic crosses o Import the crosses with high yield and high quality from other countries o Improving techniques in Research and implement of male sterility lines (multiplication male sterility lines and produce F1 hybrid seed in Viet- Nam) o Agronomic research and definition of most suitable areas for commercial hybrid rice production.  Research on integrated intensive techniques to increase rice yield for different agro- ecological zones.  Research on IPM, ICM and GAP in rice production to ensure security and safety of food. Crops Priority Workshop. Data & Information Sheets 11 5. SWOT Analysis Strengths Weaknesses  Large area for rice production (ranked the 6th in the world  18 years of rice exporting experience  Ability to multi-crop and grow year round – particularly in the South.  Area of rice with 3 crops/year grown from 30,000 ha in 1977 to 239,000ha in 1995  4000 years of traditional rice growing experience  Diversified genetic resource with varieties adapted to different agro-ecological zones, tolerance to pests and diseases  Large domestic markets for 80 million people and well established in export markets  Strong support from government to maintain high production levels and improve quality  Very large research resource both in terms of expertise and research infrastructure and a relatively high proportion of the research budget  Proven track record in rice research in Vietnam and good international recognition of research and development skills  By-products provide valuable resources for the rapidly developing livestock industries  Competition for rice growing land – especially in the Red River and Mekong Delta from industry and urban development and throughout Vietnam from urban expansion  Rice producers diversifying into more profitable crops and production systems  Rice growing fields are small and scattered making it difficult to organize production for seed and export purposes  Relatively poor land-use planning including development of appropriate infrastructure (irrigation, fields etc)  Facilities for drying, storage, milling, and packaging lack cost effectiveness and require improvement  Low profitability for farmers due to quality of rice, poor market research, need to further develop trademarks/brands compared with other major exporting countries  Low and variable export prices  Scattered research facilities with uncoordinated and poorly focused research strategy and implementation plans  With a large investment in research in the past many of the potential gains from research have already been achieved and further gains are likely to be more difficult.  Profit form growing rice is comparatively low and rice farmers find it difficult to afford adoption of new technology Opportunities: Threats:  Domestic markets are likely to increase with population growth and quality demands likely to increase as standards of living rise  Further significant improvement of quality and diversity of rice production and products will improve export returns  WTO membership may reduce trade barriers but will also increase requirement for export standards  Improvements in dryer capacity and post- harvest and storage management including quality standards likely to improve export returns  Development of intensive rice production, with high yielding, high quality varieties  The changing global weather due to climate change, environmental pollution, and salt penetration may impact on ability to maintain high level of total rice produced.  Industrial development on traditional rice growing lands and pollution from rural based industries  Demands for water resources and high quality water for human consumption may impose limits on expansion of rice growing areas and availability of water for rice production. Crops Priority Workshop. Data & Information Sheets 12 ARDO 2: Upland Crops 1. ARDO DEFINITION 1.1. National Goal: To improve yield and quality and reduce cost of production. To contribute to meeting livestock feed requirements and the development of processing technologies to diversify the processed product base. 1.2. Research scope: Research into genetic improvement, development of agronomic techniques (GAP, ICM IPM), improving quality standards and food safety and further developing harvest and post-harvest processing, storage and preservation and conservation techniques. 1.3. Coverage: Maize, sweet potatoes, cassava and potatoes 2. INDUSTRY STATISTICS 2.1 Introduction In Vietnam, maize, sweet potatoes, cassava and potatoes are the upland food crops which ranked as secondary after rice. However, the role of these crops has been changed in recent years with a rather high rate of substitution from food crops (including upland crops) to industrial ones. The upland food crops are considered as additional cash crops for small households in many regions, particularly in mountainous areas (maize and cassava), sandy coastal areas (sweet potatoes). Recently specialized commercial production of some crops such as the “corn belt” in Son La, Dak Lak and Dong Nai provinces and cassava in the South East region, central plateau and Northern mountainous mid land areas has occurred. In other regions, upland crops are mainly for home consumption. Areas for the upland food crops are mainly under unfavourable natural and social conditions, difficult communications and limited storage facilities. With the exception in some large commercial upland crop areas, cultivars and other materials are supplied by agro–services. Demand of the upland crop products has increased rapidly and is likely to continue in the future as animal feed demands rise, for increased processing and for human consumption. Crops Priority Workshop. Data & Information Sheets 13 2.2. Industry Characteristics and Prospects Growing Areas and Yields Crops Criteria 1995 2000 2001 2002 2003 2004 2005 2010 Maize Acreage (1000 ha) 556.8 730.2 729.5 816.0 912.7 991.1 1,043.3 1,200.0 Yield (qtl/ha) 21.1 27.5 29.6 30.8 34.4 34.6 36.0 45.00 Production (1000 tons) 1,177.2 2,005.9 2,161.7 2,511.2 3,136.3 3,430.9 3,756.3 5,400.0 Sweet potatoes Acreage (1000 ha) 304.6 254.3 244.6 237.7 219.6 201.8 188.4 160.0 Yield(qtl/ha) 55.3 63.4 67.6 71.7 72.4 74.9 77.5 85.0 Production (1000 tons) 1,685.8 1,611.3 1,653.5 1,703.7 1,576.6 1,512.3 1,460.5 1,360.0 Cassava Acreage (1000 ha) 277.4 237.6 292.3 337.0 371.9 388.6 423.8 380.0 Yield (qtl/ha) 79.7 83.6 120.0 131.7 14.7 149.8 156.8 200.0 Production (1000 tons) 2,211.5 1,986.3 3,509.2 4,438.0 5,308.9 5,820.7 6,646.0 7,600.0 Potatoes Acreage (1000 ha) 27.74 28.0 33.3 34.97 33.89 33.96 35,00 50,0 Yield (qtl/ha) 89.3 115.7 119.4 120.4 106.9 107.5 105.7 140.0 Production (1000 tons) 247.7 324.1 397.7 421.0 362.37 365.0 370.0 700.0 Source: - FAOSTAT and General Statistics Office Production  Maize: Over the last 5 years the area has increased from 730,200 to 1,043,300 ha (1.5 times), yield from 2.75 to 3.6 t/ha (1.3 times), and total Production from 2.0 to 3.76 million MT (1.8 times). Hybrid corn now accounts for about 90% of the area. Vegetable corn (glutinous, sweet, baby corn for human consumption) occupies about 10% of the maize area. Vietnamese weather, climate and soil conditions are considered to be favourable for growing vegetable corn (glutinous, sweet, baby corn) for human consumption.  Sweet Potato: Over the last 10 years, acreage of sweet potatoes has fallen sharply (304,600 ha to 188,508 ha in 2005). Yields have inreased significantly (5.53 t/ha to 7.75 t/ha). Overall production has fallen slightly (1,685,800 to 1,460,500 MT)  Cassava: In 2005, total of fresh root cassava production was 6,646,000 MT (three times that of 2000). This is resulted from: expanded acreage (277,400 - 423,800 ha with an average annual growth of 11,7%); sharply increased yield (79.7 – 156.8 t/ha - 14,7% growth rate per annum).  Potato: Area has been static over recent years at about 35,000 hectares. 60% of potato acreage is in the Red river delta in an efficient crop rotation of Spring rice - Summer rice - Winter potatoes. In the South, only Da Lat and Lam Dong provinces have grown annually 1,000 hectare of potatoes. Yield is relatively low 11-12 t/ha Value and Markets  Maize: Vietnam is a net importer of maize. Net value of imports is US$10 - 30m/year. About 75% of the total maize production is for animal feed. The demand of feed for animal husbandry in 2010 is anticipated to be 11 – 12 million MT, which equals to 5 – 5.5 million MT of maize grain with an approximate value approximate of USD 700-800 million Crops Priority Workshop. Data & Information Sheets 14  Sweet Potato: used for domestic market, mainly for feed animals in farmer households. Some products from sweet potato as chip, jam, and starch powder are processed by simple techniques. In recent years, some vegetable sweet potato varieties have been released into production to meet the demand of urban regions. Some sweet potato varieties origin from Japan planted in the Central Highland and Cuu Long River Delta was exported and gained high benefit.  Cassava: About 70% cassava starch was exported. Wholesale value of exports to China is over USD 10 million annually. Annual, Vietnam export cassava chip about USD 14 million.  Potato: used as food for human as a fresh root and for chip production. Vietnam imports 60% of its total processing potato from China. Comparative Advantage  Maize: China is planning to import 10 million MT of maize by the year 2010 and 40 million MT by 2020. With the high price of fuel for transportation the import price of maize is about the same as the cost of domestic production.  Sweet Potato: Some countries such as China and Japan have bred varieties that have yields of 45-60 tons/ha with a high dry matter content (over 30% of fresh weight), polished root skin and nice shape. This is 6-7 times the yields obtained in Vietnam.  Cassava: In recent years, cassava’s yield has increased from 8.36 T/ha in 2000 to 15.68 T/ha in 2005. This is higher than the average yield of the world (10.7 T/ha), ranking the 4th in Asia after India (26.2 T/ha), Thailand (17.55 T/ha) and China (16.2 T/ha). Vietnam has some comparative advantage in this crop.  Potato: Potato yield in Vietnam is around 11-12 T/ha, which equals to 60% of the world average of 16-17 T/ha. Government Policies: Cereal development is an orientation given priority by the Government. It is not only for hunger alleviation, poverty alleviation, but also for human food security for the remote regions.  Maize: Maize development is not only to meet the demand of feed for animals but also to meet the demand of market of vegetable corn and in crop rotations to improve production and returns per hectare in plain regions.  Sweet Potato: Sweet Potato can take advantage of the ecological conditions of some regions. It is used for feed for animals and to diversify food for human consumption. . Emphasis is on varieties with high yield and best quality root and varieties with high yield and best quality leaves.  Cassava: Cassava development based in comparative advantage of ecological conditions and market, but environmental protection is also an issue for this crop.  Potato: Government encourages developing potato as domestic and international markets are large. Potato production in the North in winter and winter-spring crops has given high benefits to farmers. 3. Industry Analysis Crops Priority Workshop. Data & Information Sheets 15 3.1. Structure Households and Size of Holdings  Maize: In Northern-east, Southern-east regions, maize area of a farmer household is rather large, may be several hectare for each household. In other regions, especial in the river delta regions, maize area of a household is very moderate, of some hundreds and thousands m². On some river banks maize planting area of a farmer household is larger but usually less than a hectare for each household. In river delta regions, especial in the near urban of the Red River Delta region, maize planting area is reduced, field corn is replaced by vegetable corn – for human consumption. With adequate irrigation, some maize areas may convert to planting another crop that gives higher benefits. However in some rice growing areas without irrigation rice production is being replaced by planting maize. Farmers are encouraged to plant fallow land after the autumn rice crop in Northern mountain region with maize.  Sweet Potato: Sweet potato areas per household are small. Without better varieties the area will be reduced. In recent years, in Central Highland and Cuu Long River Delta, Japan sweet potato varieties are planted and provide high benefits. With stable markets, these varieties area will be increased. Sweet potato varieties with good leaf production has a high benefit but its scale is small, only several hundred metric square per household.  Cassava: Nowadays, cassava is not considered as a food crop but it is still the main income source for small households at many localities, especially in the mountainous areas of Vietnam. Cassava is mainly used for processing starch for exportation with some used for animal feeds. Cassava area for each household in Central Highland and Central Coastal regions are rather large, from several thousands metric square up to several hectares. It is also used in some areas for animal feed.  Potato: Contributes to shifting cropping systems for the Northern provinces, especially for the Red river delta and Northern midland regions. 3.2 Supporting Infrastructure  Maize: Small scale processing is established with products such as starch, alcohol, oil, milk, and cakes now available in the Vietnamese market. In the near future, it is anticipate that the demand for these kinds of products will grow significantly. According to MARD, there are now 249 animal feed processing mills with total capacity of 8 million ton per year. 23 large joint venture companies process just over 70% of all animal feedstuffs. Small feed processing companies find it difficult to compete with these large companies. By 2010, the total capacity will be increased up to 11-12 million tons. In 2005, it produced 5.5 million tons of feed for animals. Most of animal feed processing factories are located far from maize growing zones.  Sweet Potato: used mainly as fresh consumption. There are some sweet potato processing mills but their scale is small.  Cassava: Ten years ago there were no medium or large scale cassava starch factories in Vietnam. There are now 44 cassava starch factories operational and 9 more under construction. Total capacity of 2.4-3.8 million MT of root per year. Total annual cassava starch processed in Vietnam is 0.8-1.2 million MT, of which Crops Priority Workshop. Data & Information Sheets 16 70% was exported and 30% for domestic consumption. There is likely to be some over capacity deeveloped as new factories come on line. Intensive cassava production for processing needs to be on hills with a slope of 30 cm, and at a distance <100 km from processing factories.  Potato: used as fresh consumption. Its processing is simple.  3.3. Markets  Maize: There is no export market apart from re-exports. About 75% of maize produced is for livestock feed. With increasing livestock numbers, the demand for maize is likely to significantly exceed the capacity of Vietnam to supply. Demand for sweet, glutinous and baby corn is increasing rapidly. Presently, over 10% of the maize acreage is planted with this kind of maize. The major market is for animal feed and large amounts are delivered to feed processing factories by private traders with unreliable marketing contracts. Sometimes maize grain in Son La province, Central highland and South East regions is exported to China and some other countries.  Sweet Potato: used mainly as fresh consumption and feed for animals in farmer household. In recent years, products of Japan sweet potato varieties are sold in domestic and overseas with high price.  Cassava: Vietnam is the second largest exporter of cacssava products after Thailand. 5.9 m MT of cassava products including cassaca slices, tablets and starch were produced in 2003 . Thailand and Vietnam are the two leading exporters with a total annual production of 5.6 and 0.2 million MT, respectively. Major markets of Vietnam cassava are China, Taiwan, Japan, Singapore, Malaysia, South Korea and some other countries in Easten Europe.  Potato: Up to now, potato is used in domestic market as fresh root and chip processing. Vietnam imports large volumes of potato from China for processing. The market for potato in the Asian region is still large and growing and with increased production Vietnam could export potato to regional countries as Japan, Korea, Malaysia, Australia, and Singapore. 3.4. Future Trends and Key Market Issues  Maize: Prior to 1996 Vietnam exported maize. (250,000 MT in 1996). Since 1997, Vietnam has become a maize importer (50,000 MT in 2001 to over 300,000 MT in 2002). Value of imports was US$ 51.6 million (2003), US$ 17 million (2004). Small amounts of maize have been re-exported but Vietnam has continued to be a net importer of maize. (Vietnam General Customs Department, 2005). Maize is now mainly used for animal feeds with a continuously increasing demand. Target for 2010 is to expand area to 1.2 million hectares with aerage yield of 4.5-5.0 tons per ha and a total production of 5.5 – 6.0 million MT. Also to expand the area of vegetable maize (mainly hybrids), that has high quality and yield  Sweet Potato: Recently, acquired renewed attention due to its mutli-end uses such as fresh vegetables and production of pharmaceuticals. Target for 2020 is an area of 160,000 hectares and to increase average yield to about 8.5 tons per ha.  Cassava: Intensive monoculture production systems has caused some problems, Crops Priority Workshop. Data & Information Sheets 17 including expansion into areas of other crops such as sugar cane, tea, fruit crops and deforestation, reduction of yield and soil degradation on the hills and environmental polution from cacssava processing factories. It is illegal to expand cassava into forest areas. Target for 2010 is to maintain area of 380,000 hectares with an increased yield of 20 tons per ha and a total production of about 7,600,000 MT.  Potato: It is estimated that 200,000 ha are suitable for production. To date this has not been achieved due to a low number of cultivars with high yields, quality and tolerance to pests and disease, imported commercial potatoes from China being used for seed potatoes in Vietnam; the application of traditionally cultural techniques and poor post harvest and processing technologies. The 2010 National goal is to increase area to 50,000 hectares and total yield to 700,000 MT (14t/ha). 4. R&D Information 4.1. Main Research Areas  Genetic improvement in yield and quality including development of hybrid varieties and selection for early maturity  Introduction and evaluation of new varieties  Development of production packages incorporating agronomic practices, pest and disease management and commercial production systems  Limited work on processing including development of novelty foods (chips, candies etc) 4.2. Major Research Providers Ministry of Agriculture and Rural Development  National Maize Research Institute (NMRI) which is located in Dan Phuong district, Ha Tay province.  Institute of Agricultural Science for Southern Vietnam (IAS) (maize, cassava, potato)  Agricultural Genetics Institute, (maize)  National Centre of Variety Evaluation and Seed Certification (NCVESC), (maize)  Cuu Long Rice Research Institute, (maize)  Food Crop Research Institute (sweet potato, potato)  Research Centre for Root Crops of Vietnam Agricultural Science Institute (VASI) (now Vietnam Academy of Agricultural Sciences – VAAS) (Sweet potato, cassava, potato) Universities  Hanoi Agricultural University,  Thai Nguyen Agro-Forestry University,  Ho Chi Minh Agricultural University,  Hue Agricultural University Crops Priority Workshop. Data & Information Sheets 18 Others  International Maize and Wheat Improvement Centre (CIMMYT), and FAO etc.  CIP, CIAT (sweet potato, cassava) 4.3. Funding  Mainly from the Government and partly from international cooperation projects.  1996-2000: MARD’s fund for upland crop project held by NMRI was VND 1,032 million, (approximately USD 70,000). Annual fund was about USD 14,000  2001-2005: MARD’s fund for maize crop project held by NMRI was VND 13 billion (approximately USD 830,000). Other sources of fund for maize from international cooperation projects was USD 37,800.  Funding for root crops was smaller 4.4. Major Achievements to Date  Maize: During period 2000-2005 the main achievements have been: Field corn: Area from 730,200 to 1,043,300 ha (1.5 times). Yield from 2.75 to 3.6 t/ha (1.3 times). Total Production from 2.0 to 3.76 million MT (1.8 times). Proportion of maize grain in total food production from 5.7% to 9%. Percentage of hybrid maize acreage increased from 0% in 1990 to about 60% in 2000 and approximately 90% in 2005. Vietnamese developed hybrids occupy about more 60% of the total maize area as they appear to be more adapted to Vietnamese conditions. In spite of this Vietnam is not self-sufficient. For vegetable corn: Imported hybrid varieties are supplemented by domestically released hybrid varieties since 2000 now some promising waxy corn hybrids have been demonstrated. NMRI, IAS and NCVESC have released dozens of maize varieties (TSB1, TSB2, MSB49, Q2, and HL31) and maize hybrids (LVN10, LVN4, LVN9, LVN99 etc). Maize breeding has applied bio-technology in areas such as anther culture, ovule culture, genetic diversity analysis, and the use of molecular markers.  Sweet Potato: Several newly released sweet potatoes varieties such as K51 and KL5 can yield 20-25 tons per ha with high quality. Imported varieties VD1 and VT1 can have high vegetable yield with high quality. Some new cultivars such as K51, KL5, and DT2 have been evaluated for yield and quality.  Cassava: Collaboration with CIAT in release and evaluation of and importing varieties inlcuding promissing cassava cultivars such as KM60, KM94, KM95, KM95-3, SM937-26, KM98-1, KM98-5, KM98-7, KM140 and HL124. Application of intensive farming packages such as intercropping, rotation, application of farm yard compost or microbilogical fertilizers, cultivation on the hill soil, and utilization of mechanization in soil preparation and crop harvest. In 2004-2005, about 270,000 hectares of Vietnam cassava were planted with new varieties, equals to 60% of the total national acreage. Construction of cassava starch Crops Priority Workshop. Data & Information Sheets 19 processing factories has enhanced the increased yield and total production of cassava in many provinces.  Potato: Four new varieties (KT2, KT3, VC38-6, and P-3) and two hybrid varieties (Hong Ha 2 and Hong Ha 7) released with P0-3 provisonally released. Atlantic potato varieties promissing for the prosessing industry are under large scale production testing. Technologies of potato conservation in cold storage, high health seed potatoes are certified and advanced packages for production developed. Research results show that within 90 days, one hectare of potatoes can yield harvest 15-30 MT. Crops Priority Workshop. Data & Information Sheets 20 5. SWOT Analysis Strengths Weaknesses  Diversified climate and soil conditions suitable for development of upland crops  Demand for water is less than for crops such as rice, but there is a need to ensure available moisture at critical times (e.g. tuber development for root crops)  Use of crops (e.g. maize) in cropping rotations assists in the management of pests and diseases  Farmers very familiar with traditional cropping systems over a range of cropping seasons  Some processing facilities established  Good relevant research experience, but relatively low level of investment in research  Release of improved varieties adapted to Vietnamese conditions  Low yields and quality compared with other Asian producing nations  Declining areas and profitability of some crops makes them less attractive to growers  Planting in marginal areas can lead to soil degradation and adverse environmental impacts  Most upland crops lack competitive advantage with imports  Many crops require good cultivation and agronomic practices to achieve high yields and quality  Although grown for a long time the understanding of correct agronomic practice is relatively low  Vietnam is not self-sufficient in most upland crops  Competition from other crops such as fruit and vegetables for available land  Not many crop cultivars with high yield, high quality and resistant to stress conditions are available  Relatively high costs of production and high risk to variable weather and poor soil conditions and drainage  Potential for overcapacity in cassava processing industry  Poorly developed domestic and export markets and contracts for production and marketing  Lack of diversity in processed product range Opportunities Threats  Significant improvements of yield and quality are obtainable  Post-harvest handling, storage and processing to add value  Development of a diverse range of processed products for local markets  Development of self-sufficiency and import substitution  Role in improvement of conservation techniques for animal feeds (maize and  Entry into WTO may ease restrictions on imports making imports more competitive and possibly lead to further reductions in areas  Environmental impacts of increasing planting areas may have flow on effects for local communities Crops Priority Workshop. Data & Information Sheets 21 cassava)  Use of improved research strategies including bio-technology should improve yields, quality, resistance to pests and diseases, improve competitiveness and reduce costs of production  Extension of production season through development of early and late maturing varieties  Development of larger scale commercial production packages.  Development of varieties to fit end use needs including higher starch yields, and/or different food quality attributes and processing end uses  Development of high health propagation and seed certification techniques Crops Priority Workshop. Data & Information Sheets 22 ARDO 3: LEGUMES 1 ARDO DEFINITION 1.1 National goal: Cultivated area expansion, crop yield and quality improvement, production cost reduction, and satisfaction of domestic consumption and export-related demands and requirements. 1.2 Research Scope: Research into the introduction, adaptation and genetic improvement, integrated crop management (ICM), product preservation and processing, and market development of food legumes 1.3 Coverage: Groundnut, soybean, and mungbean 2. Industry Analysis 2.1 Introduction Legume development is an important part of agricultural production in Vietnam. Favourable conditions associated with soil, weather and different ecological regions have enabled the expansion of cultivated areas and the diversification of legume crop varieties. This has helped improve legume crops productivity, yield and quality to satisfy domestic consumption and export-related demands and requirements while contributing to improving soil quality. Specifically, soybeans contribute 20-50kg N per hectare while each hectare of groundnut-growing soil provides 10-12 tons of the green manure. Over the past years, along with rice, paddy and other farm produce exports, groundnut and mungbean have contributed significantly to increased Vietnam’s agricultural produce export revenue as well as to the country’s GDP (Gross Domestic Product) growth. Besides, the production of legume crops and other plants has generated a large number of jobs and contributed greatly to the processing industry’s development and agricultural modernization in Vietnam. 2.2. Industry characteristics, current situation and prospects  Legume crops in Vietnam are divided into two major groups: 1) Grain legumes (groundnut, soybean, mungbean etc.) and 2) Vegetable legumes (cowpea, long bean etc.).  Among them, groundnut, soybean and mungbean are grown on a large area of tens of thousands to hundreds of thousands ha.  Groundnut is mainly produced for export, soybean is developed for domestic consumption (food for human and feed for animal), and mungbean is produced for both domestic consumption and export purposes.  Mungbean-growing areas are scattered, and farmers mostly plant this crop on soil that was used to grow rice seedlings, rice, or intercrop it with other plants.  Production of groundnut, soybean and mungbean has had specific advantages and Crops Priority Workshop. Data & Information Sheets 23 disadvantages. However, the common points for three crops is the cultivation area, yield and production in general tend to increase (shown in table 1). Table 1: Cultivated area, yield and production of Groundnut and soybean (1985- 2005) Crop 1985 1990 1995 2000 2005 Groundnut Cultivated area (1,000ha) 213.2 201.4 259.9 243.9 265.6 Yield (kg/ha) 950 1060 1290 1450 1750 Production output (1,000 tons) 202.4 213.1 334.5 352.9 465.0 Soybean Cultivated area (1,000ha) 102.0 110.0 121.0 122.3 200.0 Yield (kg/ha) 780 790 1040 1160 1350 Production output (1,000 tons) 79.1 86.6 123.5 141.9 270.0 Mungbean Survey Cultivated area (1000ha) 10 25 32 Yield (kg/ha) 500 700 900 Production output (1,000 tons) 5 17.5 28.8 Table 2: Cultivated area, production of Groundnut at ecological regions (2004) Region Area (1000 ha) Production(1000 ton) Whole country 246.7 469.0 Red River Delta 30.6 75.7 Northeastern region 31.5 56.9 Northwestern region 7.3 9.6 Northern Central region 74.3 138.8 South Central coastal region 24.1 38.7 Central Highlands 25.4 17.3 Southeastern 43.3 97.8 Mekong river Delta 10.2 34.2 Highest groundnut yield is at Nam Dinh province (3.7 ton/ha), while in Nghe and Thanh Hoa provinces it is only 2.0 to 2.1 tons/ha. Table 3: Main Soybean Growing Areas (2002) Region Area (1000 ha) Yield (kg/ha) Production(1000 ton) Whole country 145 1340 245.9 Northern mountain area 53.0 1070 75.1 Red river Delta 40.0 1660 84.4 Cuu Long river Delta 23.0 2130 41.2 Central highlands 14.0 990 25.8 Highest soybean yield at Cuu Long river Delta (2.13 tons/ha), while Northern mountain area province it is 1.07 tons/ha. Ha Tay province is one of the biggest area, with total area 30,000 ha (in 2005), of which winter soybean is 27,000 ha. 2.3 Importance of Legumes and Government policies and regulations Groundnut has become an important raw material for the oil production industry, and Crops Priority Workshop. Data & Information Sheets 24 soybean and mungbean are widely used in the foodstuff industry. Vietnam imports hundreds of thousands tons of soybean to process feed for livestock. Apart from helping improve soil quality, these crops have been contributing to agricultural sustainable development and employment generation in Vietnam. Exports: In 1995 115,100 tons of Groundnut was exported with approximate value of USD 74.7 million. 20,000 tons of Mungbean are exported annually. Table 3. Production and export profit of groundnut (1995 – 2004) Year 1995 2000 2001 2002 2003 2004 1.000 tons 115.1 76.1 78.2 106.1 82.4 44.9 USD (mil) 74.7 49.4 50.8 68.9 53.5 29.1 Source: statistic department, 2006 Diet:  Groundnut, soybean and mungbean are important components of the daily diet  Per capita consumption of tofu is estimated to be 12 kg. Total consumption of tofu is 984,000 tons.  National dietary requirement of soybean is 300,000 tons of grain. Total production is 291,500 tons, of which 190,000 tons is used for feed animal. This leaves a deficit of approximately 200,000 tons for human consumption.  If per capita consumption of groundnut is 10kg/year, the national requirement is 820,000 tons. Total production is about 300 thousands tons per year. At least 100 thousand tons is used for animal feeds. Animal Feed:  Groundnut and soybean are important in reducing imports of animal feed. Vietnam imports more than 1 million tons of material to process into animal feedstuffs. However in 2005 Vietnam imported 1.7 million tons, including 225,700 tons of maize and 787,300 tons of dry oil including 105,000 tons soybean residues. Competitive Advantage:  Compared with other countries, Vietnam has favorable soil and weather conditions and a range of different ecological regions.  Millions of hectares of sloping land and mountain areas have the potential to grow 2 or 3 crops including during winter when other countries find it difficult. New soybean varieties with very short duration (73 days) and high yields (2.3 tons/ha) competes well with USA soybean varieties with durations from 150-180 days.  However livestock feed processing costs are 10 -20% higher than the average for the Asian Region. For example, the cost of maize is 2,700 VND/kg, sativa is 2,350VND/kg; soybean dry oil is 6,390 VND/kg (in 2004); 4,500 VND/kg (in 2005). Profitability  On average, 1 hectare of groundnut with a yield of three tons provides income value of VND18 millions and a profit of more than VND 10 million  1 hectare of soybean with a yield of two tons provides an average income of VND14 million and an average profit of VND 9 million Crops Priority Workshop. Data & Information Sheets 25  1 hectare of mungbean with a yield of 1.5 tons provides incomes worth VND15 millions and a profit of VND 10 million Government Policy  In the next five years, the State will continue to consider legume crops (mainly groundnut, soybean and mungbean) as important crops, with groundnut and mungbean being earmarked for export and soybean for domestic consumption.  The State plans to increase the legumes growing area to one million ha by 2010, including 450,000ha of groundnut, 400,000ha of soybean and 150,000ha of mungbean. There will be areas that are specialized for growing a certain legume crop and areas on which legume crops are intercropped with other plants, while the cultivated area of groundnut and soybean will be expanded. 3. Industry analysis 3.1. Structure Groundnut: focus is Northern Central and South-eastern regions roughly equally areas. Soybean: focus is Red river Delta region; Northeastern region and Central Highlands. Northern regions have 140,700 ha, and South region is 56,400 ha 3.2. Markets  Almost all groundnuts and mungbeans are exported via unofficial channels by companies and service groups.  Most export markets for groundnut and mungbean go to China, Thailand, Hong Kong and Singapore.  China is biggest market for Vietnam. Annual imports are 10 million tons.  Japan is biggest market for Vietnamese mungbean 3.3 Processing  Processing facilities are still limited with relatively low efficiencies.  There are 106 centrally-controlled and local feed processing factories with a combined capacity of 2.8 million tons per year, and 9 oil pressing factories that have a total designed capacity of 386,000 tons per year that process groundnuts and soybeans. 4. R&D INFORMATION 4.1 Major Research Areas  Introduction and testing new varieties and genetic improvement to increase yield and oil content  Improved seed production technologies  Integrated Crop Management (ICM) to improve yield, quality and management of pests and diseases  Product preservation and processing, and market approach  Application of advanced, high quality seeds and new cultivation techniques, including include covering plants with nylon, growing soybean on wet soil, and cultivation and harvest mechanization to reduce average production costs. Crops Priority Workshop. Data & Information Sheets 26 4.2 Major Research Providers Ministry of Agriculture and Rural Development  Agricultural Genetics Institute  Cuu Long Delta Rice Research Institute  Food Crops Research Institute  Institute of Agricultural Science of South Vietnam  National Center for Variety Evaluation and Seed Certification  National Institute for Plant Protection  National Maize Research Institute  Institute of Biotechnology Ministry of Industry and Commerce  Oil plant Research Institute Agriculture Universities  Hanoi Agricultural University  Thai Nguyen Agro-forestry College  Hue Agro-forestry University  Thu Duc Agro-forestry University - HCM City  Can Tho University There are over 100 legumes researchers, who hold university or higher degrees in 14 Research Institutes and Universities or Organizations nationwide: 4.3 Ministerial and State programs and projects. Research funds are derived from the State Budget, enterprises, production factories and assistance sources through international programs and projects. 4.4 Major Achievements to Date From 2001 to 2005:  Seven new groundnut varieties, 10 new soybean varieties and 3 mungbean varieties were released. More than 80% new varieties release to the farmers.  Advanced technology for groundnut, applied to all areas in country  Have been successful demonstrated trials for groundnut, soybean and mungbean at 20 provinces. Groundnut yield: 4-5 tons/ha; Soybean: 2.5-3.0 tons/ha; mungbean: 2.0-2.5 tons/ha.  Area, yield and production of groundnut, soybean and mungbean have been increasing.  Over 20 years a collection of fairly high-yield varieties (groundnuts, four tones per hectare; soybeans, three tons per hectare; and mungbean, 1.5 tons per hectare) using advanced technologies.  Large growing areas (60,000ha of groundnuts in three provinces of Thanh Crops Priority Workshop. Data & Information Sheets 27 Hoa, Nghe An and Ha Tinh, 30,000ha of soybeans in Ha Tay; and tens of thousands of hectares of mungbean in Ha Tinh province.)  Several provinces have achieved high productivity (6,000ha of groundnut in Nam Dinh province yielding an average of 3.7 tons per hectare.  Soybeans planted on over 300ha of the Dan Phuong Cooperative in Ha Tay province yield an average of almost three tons per hectare, and the production cost has reduced to less than VND2,000 per kilogram.  Some progress in process – 20% of groundnuts pressed for oil – residues used for production of animal feed. 30% of soybean production been pressed for oil, with soybean residues used for production of animal feed, soymilk, soy curds, and fermented soy sauce. 5. SWOT analysis Strengths Weaknesses  Diversity of land, topography and climate, suited for legumes as a main crop or rotated with spring, summer and autumn-winter crops  Large areas of ecological areas, which are suited to the growth: for groundnuts in the northern central region, Tay Nguyen (the Central Highlands) and the south-eastern region.  Large areas of land for soybeans in the northern mountain areas, Red River Delta, the Cuu Long (Mekong) Delta, and the Central Highlands.  Availability of relatively high-yielding varieties (groundnut, six tones per hectare; soybeans, four tones per hectare; mungbean, two tones per hectare; varieties that are resistant to pests, droughts and floods).  Used in crop rotations gives improved soil nitrogen and assists in improving soil organic matter.  Experience in advanced farming techniques such as covering groundnut growing areas with mulching nylon, and integrated management of crops.  Progress in preservation and processing of seeds using drying machines.  Most products sold as raw materials.  Development of advanced and complete processing facilities is relatively poor resulting in low prices.  Low price for unofficial exports (US$625-650 per tonne - world average price of US$900 per tonne).  Limited capital investments in all legume crops.  Poor infrastructure development for crop purchase, storage and processing.  Comparatively high production costs (soybeans VND 1,500 per kilogram in the US, VND 2,065 per kilogram in the Cuu Long (Mekong) Delta and VND 2,870 per kilogram in the Red Delta.  Relatively poor production practices including low level of mechanisation.  Lack of availability of soybean varieties with high yields (7-8t/ha), for animal feed. Limits competitiveness of Vietnamese soybeans.  Little specialized production systems as most legume crops are grown in rotations with rice and corn.  Small scale uncoordinated production systems  Relatively poor linkages between scientists, extension, enterprises and farmers,  Market and technology information is not updated among farmers and traders. Opportunities Threats  Large export market for groundnuts in particular  High domestic demand for soybeans to produce 2.8-3 million tones of animal feed per  Expansion of the cultivated area may lead to epidemics such as soybean rust.  Expansion into marginal lands will cause a decline in the average productivity. Crops Priority Workshop. Data & Information Sheets 28 year (of which soybeans and soybean residues account for 15-20 percent),  Animal feed processing industry needs 600,000-650,000 tones of soybeans annually, (production 270,000 tones per year).  Improved quality to meet first-grade commercial standards (150-160 seed/100g) will lift current price (200-220 seed/100g) fromUS$625/t to US$900-1,000/t  Increase in area and yields of high quality legumes to meet human food needs  Development of high yielding varieties for animal feeds  Development of higher oil yielding varieties .  Membership of the World Trade Organization (WTO), may inhibit exports if quality standards are not met. . Crops Priority Workshop. Data & Information Sheets 29 ARDO 4: INDUSTRIAL CROPS 1. ARDO DEFINITION 1.1 National Goal Increase yields and improve product quality, food safety and competitiveness in export markets. 1.2 R&D Scope Research into genetic improvement for higher yield and better quality, new and improved propagation techniques including application of conventional and modern methods, advanced cultivation and agronomic practices (GAP, IPM, ICM), management of pests and diseases, technologies for improved post harvest practices by producers and processors, processing and food sanitation and safety (HAACP) and development of market research. 1.3 Coverage High value group: Coffee, rubber, cashew, black pepper, sugarcane and tea; Low value group: Cotton, coconut and cacao (newly developed). 2. Industry Statistics 2.1 Introduction Industrial crops contribute significantly to GDP. They provide approximately 20% of the agriculture contribution to GDP and because of investment in processing industries industrial crops create a large number of downstream employment opportunities. Vietnam is competitive in many industrial crops produced but quality and price is a limiting factor. Most industrial crops are exported, either as raw materials or semi- processed materials. The level of value adding is low compared with other countries. The profitability of most industrial crops is relatively high compared with most staple crops. Significant increases in production are planned but the benefits of that and improvement of quality and safety at the farmer level is not likely to be achieved without significant investment in equipment and practices in the processing industry 2.2 Industry Characteristics and Prospects Growing Areas: Growing areas and production volumes of main industrial crops in Vietnam (2000- 2005) Crop Area (x 1.000 ha) Production (x 1.000 tons)2000 2005 2000 2005 Crops Priority Workshop. Data & Information Sheets 30 Coffee 562 491 802 767 Rubber 412 480 290 568 Cashew 200 330 120 350 Black pepper 28 56 39 90 Sugarcane 302 287 15,044 14,290 Tea 88 118 314 534 Cotton 18 23 19 29 Coconut 161 132 884 972 Cocoa 4 Source: Vietnam Statistics Department, 2005)  Some industrial crops such as tea and sugarcane are grown nation-wide. Most of important industrial crops (rubber, coffee, cashew, black pepper, cotton and coconut) are grown mainly in the South of Vietnam. Several industrial crops can be grown only in suitable soils such as coffee, tea, black pepper, cotton and coconut while others can be grown in many soil types with different chemical and physical characteristics.  Rubber: The main growing areas (2020 projections) are; Central Highland Region (330,000ha), South Eastern Region, (300,000ha) and the Central Coastal Region (70,000ha).  Coffee: Growing areas about 500,000ha of hectares. Concentrated in the Central Highland Region, parts of the South Eastern Region and a small area in the Central Provinces. Major variety is Robusta. Small volumes of Arabica but in higher elevations (e.g. Lam Dong Province). The fluctuating and low price for Robusta, coffee planted in unsuitable environments and competition from other crops has recently led to a reduction in coffee area.  Black pepper: Growing area 55,000ha (100 times that of 1975). Grown in many regions of the South such as the South Eastern Region (Binh Phuoc is the biggest growing area province), the Central Highland Region, several provinces in the Central and Phu Quoc island.  Cashew: Area of 350,000ha grown in hot and humid tropical areas (from Hai Van mountain pass towards the south). Binh Phuoc (165,000 ha) and Dong Nai (70,000 ha) are the two biggest cashew growing provinces In the past grown widely in many provinces of the Central and the South Eastern Region as it is tolerant of a wide range of soil types and drought and useful for afforestation of bare hills and deforested areas.  Tea: Area 122,000ha. Yield 1.2t dry tea leaves/ha. A traditional industrial crop of Vietnam that has an important socio-economic role in the midland and mountainous areas.  Sugarcane: 300,000ha (50% new cultivars) grown widely from the North to the South. Major growing areas are Northern Central Region, Southern Central Coastal Region, South Eastern Region and Mekong Delta  Cotton: 25 – 35,000ha. Major growing areas in the South Eastern, Central Highland and Northern Mountainous Regions. Crops Priority Workshop. Data & Information Sheets 31  Coconut: Is considered a minor industrial crop. Area has declined to 132,000ha in 2005. The major growing areas are in several provinces of the South, mainly in Mekong Delta (Ben Tre, Bac Lieu, Tra Vinh, Can Tho, Soc Trang and some other provinces).  Cocoa: Small area less than 4,000ha. Most grown in the Ben Tre Province Production:  Rubber: Approximately 500,000t, (5% of world production). 90% is exported 10% for domestic consumption.  Coffee: Annual production is 600-800,000t (10% of World production). Vietnam is one of the biggest coffee exporters.  Black pepper: Annual production is 100-120,000t. (40% of world production) Vietnam is the biggest exporter (2005: 96,000t). Yield 2.5t/ha  Cashew: Annual production is 300 – 350,000t. Yield 1-1.2t/ha. Vietnam is the second largest cashew nut export country after India.  Tea: Annual production 140,000t (4% of world production). Yield is about 85% of the world average and quality is low. Price is only equal to 65% of the world average price. Vietnam is ranked the 5th in the growing area and 9th in the total production. In South East Asia, Vietnam is the second largest tea production after Indonesia.  Sugarcane: Annual yield 15-16m ton. Low average yield of 50 - 54 tons/ha. (target 65t/ha) 2005 National sugar production was 1.2m ton (0.8% of the world sugar production).  Cotton: Provides material for Vietnam Textile and Garment Corporation. Annual fibre production is 10 – 12,000t. Yield 1-1.6T cotton seed/ha. Domestic demand is 150 – 180,000t. Vietnam imported US$190m of cotton in 2004. The plan is to increase cotton areas to 100,000 ha but this may not be achieved.  Coconut was grown in Vietnam for a long time ago. The total growing areas are estimated about 150 thousands of hectares. The coconut production volume is about 1 billion of nuts per year (250 thousands of tons of copra).  Cocoa: Little reliable estimate of yield. Annual production is 30 – 40,000t green pod. Value and Markets:  Contribution to GDP: Value of industrial crops in 2005 was approximately 20% of total value of agriculture.  Export values of industrial crops in 2005 was approximately US$2.3 billion: USD850 million (rubber) and USD750 million (coffee); US$500 million (cashew); US$140 (Black Pepper); US$100 million (tea). In 2004 export volumes were; Pepper 112,000t, coffee 975,000t, rubber 513,000t and cashews 105,000t Crops Priority Workshop. Data & Information Sheets 32  Cotton coconut and Sugarcane is mainly consumed by the domestic market  Cotton imports included yarn 35,000t (US$45.5m) and 100.120,000t fabric (US$200m) Comparative Advantage  As a member of AFTA the level of taxes and protection is falling for all export crops. It is zero for pepper and cashew and is expected to fall to 5% for sugar cane.  Most of the main industrial crops compete well in international markets although the relatively low quality of tea and coffee reduce competitive ability.  Pepper and Cashew industry had a competitive advantage (domestic resources costs: DRC 0.472 and 0.379 respectively).  Cotton production in Vietnam has not real competitive advantage apart from import substitution.  The comparative advantage of sugar cane is low as production cost is too high (337 USD/ton in Vietnam while 205 USD/ton in Thailand). The material cane cost is also high (Vietnam, 200 USD/ton; India, 139 USD/ton and Thailand, 131 USD/ton). Government Policies  Rubber: The government has many policies and projects to support rubber development  Black pepper: Policy is to maintain existing growing areas and to improve cultivation techniques in order to increase yield and to improve the quality of processed black pepper  Cashew: Rapid expansion of growing areas (100,000ha of grafted high yielding cashew nuts since 2001) will continue as Vietnam imports 20-40,000t of raw nuts from Africa and Cambodia to keep processing plants fully operational.  Sugarcane: 2010 Plan is 1.5m of ton. Total imports (legal and illegal) estimated to be 200-300,000t annually  Coconut: There is no long-term, stable and comprehensive development program of coconut so far as other industrial crops.  Cocoa: Plan to increase areas to 15 – 20,000ha by 2010. Plans for processing factories when area of cocoa reaches 10,000ha. 3. Industry Analysis 3.1 Structure Households and Size of Holdings  Rubber: 27 rubber companies (10-20,000ha per company. 67,550 smallholders with 1.3 to 2.8 hectares per smallholder, located in the South Eastern, the Central Crops Priority Workshop. Data & Information Sheets 33 Highland and the Central Coastal Regions  Coffee: Mainly grown by farmer households, average size of 1.3 hectares per household  Black pepper: Approximately 100,000 households involved. Average area of 0.5ha  Cashew: Approximately 300,000 households. National average holding estimated at 1ha. In Binh Phuoc and Dong Nai provinces is 2.1ha  Tea: Approximately 250,000 households, average area 0.5ha  Sugarcane: 320,000 households, average area 1ha.  Cotton: Approximately 50,000 households growing cotton. Average area 500- 1000m².  Coconut: Approximately 100,000 households, average area 0.4ha. 3.2 Supporting Infrastructure  Rubber: Rubber processing factories are distributed in rubber growing areas. The most important issue is to determine the rubber processing products having proper quality for the international market demands.  Coffee: Coffee processing factories are evenly distributed in the growing areas (including domestic and foreign invested processing factories).  Black pepper: There are about 90 black pepper processing and export companies of which 78 companies can export directly. 26 of these export more than US$100,000/year. 80% of the companies are located in Ho Chi Minh City and the South Eastern Region. Harvesting, drying, processing and storage of black pepper are carried out by farmer households. Product is mixed with impurities reducing the quality and price of the products is 20% lower than the world average price.  Cashew: 130 processing/export companies. The 20 biggest processing companies have annual export value of more than US$10m. These companies meet the international standard of management and food sanity and safe based on ISO 9001:2000, GMP and HACCP.  Tea: The annual tea export value is 100 millions of US dollars involving 235 companies directly exporting tea products to 68 countries of all over the world.  Sugarcane: There are 38 sugar factories with total full design capacity of 76 thousand tons of cane per day, annually producing 1.1 to 1.2 million tons of sugar. Most sugar mills produce 2 main products such as white and refined sugar (60% and 40% respectively). Post-sugar products include alcohol, bio-fertilizers, and plywood, etc. Crops Priority Workshop. Data & Information Sheets 34  Cotton: 12 big textile companies belonging to Vietnam Textile and Garment Corporation.  Coconut: Processing factories mostly located in Ben Tre. At least 20 factories in Ben Tre town producing desiccated coconut. 400 smaller workshops in rural areas processing to produce fibre, meat, shell, water, wood, midrib. VOCARIMEX, a state-owned vegetable oil company produces about 400,000 tons of vegetable oils per year. But 80-85% of materials are imported from Malaysia, Singapore (mainly palm oil). The rest of materials (15-20%) are collected from the domestic sources in which coconut oil makes up 60%.Several other joint venture companies of Vietnam and foreign countries in vegetable oil production such as GOLDEN HOPE, NHA BE, CAI LAN, BINH AN hold the market share in Vietnam. 3.3 Markets Main markets include: Industrial Crop Main Markets Comments Rubber China, Korea, Taiwan, Germany, United States and Russia Price is lower than Thailand and Malaysia because of poor processing. Cheaper labour and production costs Potential to expand markets to EU. Coffee Main markets: Germany, United State, Spanish and Italy. Other minor markets include England, Japan, Korea, Switzerland, France and Netherlands. The price of Vietnam exported coffee is lower than that of other surrounding countries (India and Indonesia) due to underdeveloped processing technologies Black Pepper Traditional markets are Europe (Netherlands, Switzerland, Germany, France, Russia and Poland) occupying 43%; United States, 20%; Middle East and Asia, 19%. Vietnam exports to 72 countries and territories. United States is a big and potential market Most exports are Fair Average Quality, with only about 10% exported as white pepper or high quality black pepper (ASTA). Cashew Untied States, Canada, Netherlands, England, Russia, China, New Zealand and Australia. Cashew kernels are the main export products Since 1998 imports of raw nut materials (20- 40,000t/year) has supported utilization of processing facilities. Tea Middle East, Russia, the Eastern Europe, Japan, Taiwan and the United States. The major tea export product is black tea. A small amount of green tea and yellow tea are also exported. Low tea quality and export prices are the biggest constraints India, Kenya and Indonesia are the main tea export competitors of Vietnam. Sugarcane Imports of 200-300,000 tons of sugar Comparatively high production costs Crops Priority Workshop. Data & Information Sheets 35 3.4 Future trends and key market issues  Rubber: The world demand of natural rubber is increasing. High oil price is one of main reasons leading to increment of natural rubber price. Improving quality of processed rubber to satisfy market demands in order to increase rubber export value  Coffee: Coffee price is static or declining. Stabilizing coffee growing areas. Apply intensive cultivation techniques to increase coffee yield and quality. Improving processing technology to increase the export value. Increase the proportion of Arabica proportion over Robusta  Black pepper: Maintain existing growing areas to avoid oversupply. Intensive cultivation techniques to increase black pepper yield and quality. Apply advanced processing technology to improve the quality of export products, especially white pepper  Cashew: Increase productivity to maintain throughput of processing factories. Develop domestic market and expanding new markets (the Middle East and Eastern Europe). Establish and develop trade/brand names. Apply international standards of food safety and quality management based on ISO, GMP and HACCP. Diversifying processing products from cashew kernels and improving nut processing technology  Tea: Improve quality and processing technology to increase the export value of tea; Expand markets in Japan, Taiwan, the United States and ASEAN  Sugarcane: Apply intensive cultivation techniques to increase cane yield and quality on existing growing areas. Reduce cost of production. Invest in factory processing capacity and new technology and equipment to improve the quality and cost effectiveness processing. Establish alcohol factories using advanced technology 4 R&D Information 4.1 Main Research Areas  Breeding for high yield and good quality and adaptation for main ecological regions;  Developing new propagating techniques including conventional and modern methods;  Researching and applying intensive cultivation techniques and integrate pest management;  Establishing and applying new technologies of post-harvest, processing and diversifying processing products  Establishing models of intensive cultivation and GAP. 4.2 Major Research Providers Ministry of Agriculture and Rural Development  Rubber: Rubber Research Institute;  Coffee and Cocoa: Western Highland Agriculture and Forestry Science Institute (WASI);  Black pepper and cashew: Institute of Agricultural Science of South Vietnam (IAS); Crops Priority Workshop. Data & Information Sheets 36  Tea: Tea Research and Development Centre belonging to the Northern Mountainous Agriculture and Forestry Science Institute (NOMAFSI);  Sugarcane: Centre of Sugarcane Research and Development belonging to IAS; Ministry of Industry  Institute for Cotton Research and Development (INCORD). 68 Researchers B.Sc and above.  Oil Plant Institute (OPI) Universities  Hanoi Agriculture University  University of Agriculture and Forestry HCMC  Can Tho University  Hue University of Agriculture and Forestry  HCMC University of Technology Others Local organizations (Departments of Agriculture and Rural Development, Departments of Science and Technology and Provincial Agricultural Extension) estimated number of researchers involved in industrial crops is about 600. There is no official organization of private sector involved in research. Major collaborators include FAO/UNDP, GTX, Nestle Group, CIRAD, Government of France and Vietnam Pepper Association, Vietnam Cashew Association, etc. 4.3 Funding  Estimated research budget in 2005 is:  Cashew Nuts VND 14b (US$875,000)  Other Industrial Crops (Rubber, Coffee, Black Pepper, Tea, Sugar Cane, Cotton/Coconut) VND 4-6b (US$250,000) each  Total Funding approximately VND50b (US$3.2m) 4.4 Major Achievements to Date  Cashew: 10 new cultivars selected for high yield, nut size and nut recovery. Research in agronomy and growth regulators and foliar fertilisers. Over 5 years (2000 – 2005), the national average yield doubled, production volume and export value increased 4 times and export income rose to US$500m.  Coffee: New clones released, improved practices for farmer harvest, processing and storage  Black pepper: Selection of adapted cultivars, fertilizer requirements and fertigation technologies, disease management (Phytophthora), agronomy and household harvest and semi-processing and storage  Tea: Released 3 state varieties Crops Priority Workshop. Data & Information Sheets 37  Sugar Cane: Varietal selection, pest and disease management including bio-control, models for intensive production systems  Coconut: 10 improved and 3 hybrid varieties released. Pest and disease management (Brontispa) Crops Priority Workshop. Data & Information Sheets 38 5. SWOT analysis Strengths Weakness  Soil and climatic conditions are favourable for industrial crop development.  Large areas of most industrial crops with experienced producers  Farmers quickly acquire new technologies for higher yielding crops.  Diversification into industrial crops has significantly improved farmer income and profitability  Many research achievements successfully transferred to production.  Significant investment in industry infrastructure for processing and export markets.  Large and growing exports of many industrial crop products provides large export income and contribution to GDP  Industrial development creates very large employment opportunities  Some industrial crops with high competitive advantage (pepper, cashew)  Low labour costs also increase competitiveness  Some supply chains well developed  Many agricultural products are in the top rank of the world export and production (coffee, rubber, cashew, black pepper).  Processing technology and equipment needs upgrading  Little value adding or diversification of products for most industrial crops  Apart from some crops (e.g. cashew) insufficient attention to good agricultural practices, food safety and certification and development of quality standards  Lack of long-term projection for industrial crops.  Small and scattered production areas and little larger scale commercial production  Expansion of areas for increased production has led to production in unsuitable environments and an oversupply of low yielding, low quality product  Low quality of raw materials and export products reducing export prices.  Lack of competitiveness in production of some crops (cotton, sugar cane)  Relatively low quality semi-processing by producer households  No trade/brand names of agricultural products in the international markets.  Weak linkage among managers, companies and farmers and between institutions of MARD and MoI.  Weak marketing in new markets.  Weak systems of technology transferring to farmers. Opportunities Threats  Improved quality, GAP and food safety to capitalize on market expansion after joining AFTA and WTO.  Diversification of product base to expand the domestic and export market demand for industrial crops.  Soil and environmental classification to identify most suitable areas for expansion of area for all crops  Development of lower cost production systems and improved semi-processing and storage at the grower level  Development of intensive production systems with an emphasis on high yielding varieties, high quality and GAP.  Entry into WTO is likely increase costs of compliance to international market standards  Failure of industry to invest in improved processing systems will impact on future growth of production and export revenue  Competition with other cheaper and better agricultural products in export and domestic consumption.  Competition from other producing countries especially for uncompetitive crops (cotton, sugar cane)  Fluctuation of price due to change of the world supply and demand.  Strict requirements of quality and food Crops Priority Workshop. Data & Information Sheets 39  Further development of improved agronomic and pest and disease control and management practices  Joint ventures to improve processing facilities  Linkages with processing and export companies to facilitate supply of high quality raw materials for processing and export  Industry investment in research programs that meet industry and export needs  Development of suitable crop rotations to optimize grower income and minimize risks from market fluctuations and pests and diseases  More chance for getting information and international contacts to improve production ability. sanity and safety. Crops Priority Workshop. Data & Information Sheets 40 ARDO 5 FRUIT 1. ARDO description 1.1. National goal Increase yield, quality and competitiveness of fruit in the domestic market and increase the volume, value and quality of export fruit production to meet the demands of export markets. Target is export value of US$1 billion by 2010 (fruit vegetable and ornamental plants – fruit about 30% of exports) 1.2. Scope: Research and development into improvement of quality of nursery production of high health, high quality saplings, introduction of new standards that meet the demands of export to high value markets (such as GAP, EUREPGAP, AsiaGAP). Further development of agronomic and other practices to extend the fruit growing and harvesting season and manage production, fruit size and quality and research into plant protection, postharvest management, fruit marketing and commercial promotion. 1.3. Coverage: High Priority: Banana, pineapple, longon, lychee, mango, pomelo, dragon fruit. Medium Priority: Durian, rambutan, mangosteen, orange Low Priority: Guava, papaya, starfruit 2. Industry statistics 2.1 Introduction Fruit is increasing in importance in Vietnam. Growth of the industry has been rapid since 2000, and this will continue. The potential for fruit crop development is considered high although its contribution to GDP is low (fruit, vegetables and flowers 6% - fruit alone probably around 2%). Vietnam has the capability to produce most fruit types, including tropical and sub-tropical fruits and there is a wide range of fruits in the domestic market. There is also some potential to produce temperate fruit crops but suitable area is limited and the quality of temperate fruit is comparatively low. With accession to the WTO there is good potential for further development of the fruit industry especially if attention is given to quality and good agricultural practices (GAP). The industry structure is dominated by small holdings with little development of commercial fruit orchards. This makes it difficult to coordinate production, quality assurance and marketing and most domestic fruit is sold in small local markets. 2.2. Industry Characteristics and Prospects Area: 747,800 ha in 2005 (increase 19,300 ha compearde with 2004) Production: 6,2 million metric tonne (2004) Average yield: 10 -12 metric tonne /ha Major fruit trees: citrus, banana, pineapple, longan, mango, lychee, dragon fruit. Crops Priority Workshop. Data & Information Sheets 41 Table 1: Area and production of major fruit trees in Vietnam 2004 and 2005 (Source: MARD 2006) Fruit tree Area (x1000 ha) Production (x1000 tonne) 2004 2005 (Estimated) 2004 2005 (Estimated) Longan 121.1 120.3 606.4 628.8 Orange, lemon, mandarin 82.7 87.2 540.5 606.4 Pomelo 28.6 30.4 209.3 242.2 Banana 102.2 103.4 1,329.4 1,354.3 Lychee, rambutan 110.2 113.7 507.5 379.6 Mango 77.5 78.7 337.7 380.9 Pineapple 44.3 47.4 414.9 472.7 Durian 20.2 146.0 - Dragon fruit 8.5 133.3 - Grape 2.0 2.0 25.0 26.4 2.3 Importance of Fruit and Government Policies and Regulations Diet:  As living standards improve it is expected that the demand for fruit in the diet will increase. The domestic market for some fruits is satisfied (e..g. longon, lychee) but for others demand is much greater than supply. GDP: DT (x1000 ha) 346.4 384.8 426.1 384.4 496.0 544.0 609.6 677.5 692.2 747.8 0 100 200 300 400 500 600 700 800 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Vietnam fruit tree area during 1995-2004 (General statistic Department, MARD and Provincial Agriculture Services) Crops Priority Workshop. Data & Information Sheets 42  Prior to 2000 the contribution of fruit to GDP was low, but while still at a low level has imprved over the last 5 years. The contribution is expected to increase significantly over the next few years as recently planted orchards come into full production and new plantings continue. The accession to the WTO will also stimulate fruit production. Volume and Export Value:  Vietnam Fruit & Vegetable export income was $US 235 million, a 31.3% increase as compared to the previous year.  Export volume was estimated about 6-10% of total production. (data is generally expressed as of fruits and vegetables, no data for fruits, but is probably less than US$60m).  Dragonfruit is a major contirbutor to export income. Volume and Value of Local Consumption: Around 90% of fruit is consummed domestically. There is no data on the value of domestic consumption, but it is estimated to be close to US$1 billion. Volume and Value of Imports: Fruit & Vegetable imports from China is $US 50 million, mainly orange, pear, apple, mandarin. Markets:  The local market is the main trade. Anual domestic demand is predicted increase 8- 10%/year  Major export markets are: China, Taiwan, Singapore, Hong Kong, and Cambodia.  Potential markets include: Europe, US, Australia, New Zealand, Japan, Korea and Russia.  Main exports include: pineapple, banana, mango, lychee, longan, water melon, rambutan, dragon fruit.  Fruits exported to China are for fresh consumption. Processed or canned fruit products are exported to Euroupe, Japan, the US. In recent years, fresh sapodilla has been exported to Malaysia and Brunei.  Dragon fruit is major export product, export value of dragon fruit only in Binh Thuan province reach about $ US 10 million annually.  Enjoyable high priced fruit in local markets include: King mandarin, Duong mandarin, star apple, mango, pomelo, Chin Hoa durian, Ri-6 durian, Xuong longan, Da Xanh pomelo. Competitive Advantage:  Relatively low competitive advantage for exports as export protocols (sanatory and phytosanatory agrements and certification) have not been signed with most potential markets for most Vietnamese fruits. Thsi affects the US, Japanese, European and Australian markets where as Thailand has done well on SPS agreements. Crops Priority Workshop. Data & Information Sheets 43  Main market competition for China market comes from Thailand in durian and mangosteen as they have large specialised growing areas, experience in intensive farming systems to produce higher yields, better and more uniform quality and certification systems.  Lack of branding, registration and agreements for exports to China for Vietnamese fruit has led to small amounts of unofficial exports with no labelling, and poor prices compared with Thailand. Government Policies  Decision No 182/1999/QĐ-TTg dated 03rd September 1999 for approving the project in developing vegetable, fruit and flower, ornamental in 1999-2010 period, with emphasis on the development of specialized production areas for pineapple, banana, longan, lychee, mango, citrus and dragon fruit.  Resolution No 09/2000/NQ-CP has stated enhancement of fruit development, pay attention to: mango, longan, dragon fruit, pineapple, papaya, citrus, durian, mangosteen for export.  Steering Committee of the “developing vegetable, fruit and flower, ornamental Programme” under MARD has been set up, but is not yet providing good guidence and facilitation in development of the fruit industry in Vietnam. 3. Industry analysis 3.1. Structure  Average size of fruit production unit in Mekong River Delta is 5,000 m2/household.  Relatively poor development of specialized production on a larger scale restricts the abitilty to produce good quality fruit volumes that meet commercial requirements.  Many small domestic markets provide high prices for fruit where demand exceeds supply (e.g. Hoa Loc mango, Da Xanh pomelo, Chin Hoa durian, Ri-6 durian, Xuong Com Vang longan etc).  Many small businesses involved in export of fresh fruit in Tien Giang, Ben Tre, Soc Trang, Binh Thuan, Long An.  Few larger exporters (e.g. Hoang Hau Dragon Fruit (Binh Thuan), 10 Hoa Khanh (Tien Giang), Vegetexco (HCMC) etc.  Many nurseries in each province (especially Mekong Delta region) is a weakness because of relatively poor quality assurance.  Poor infrastructure in many provinces does not allow access by cool chain trucks. Growers have to bring fruit to traders who are usually located near the main road. This places growers at a disadvantage and increases handling cost.  Supply chain, although operational cannot meet GAP requirements(no safety and quality assurance and trace back to production site) Crops Priority Workshop. Data & Information Sheets 44 3.2. Markets  Existing fresh fruit markets are: China, Cambodia, Hong Kong, Taiwan, Singapore and Europe (small amount). Vietnam export fresh dragon fruit to Thanland which is re-exported to other countries  Main markets for processed fruit are: pineapple juice to the US, Japan, Europe  For US and Japan markets, Vietnamese produce can not penetrate because Vietnam has not yet signed SPS agreement with these countries whereas Thai fresh fruits have been exported to Japan, Australia since SPS agreement between Thailand and those countries has been signed. Vietnam is behind Thailand in several aspects: production, policy, Thai trademark existing for long time, Vietnam had to produce food crop and begin upon growing fruit crop recently  Recently, there are some supermakets owned by Vietnamese: (Co-opMart, G-7Mart) who are ready to purchase local fruits under supply contracts but there are difficulties with consistency of supply, and uniform quality.  The main obstacles to penetrate markets include: uncertain quality of some fruits, low marketable volumes, inability to provide food safety assurance,lack of registered brands, poor packaging, lack of sanatory and phytosanatory protocols and certification, inability to meet GAP requirements, uncoordinated market information and except for dragon fruit hig level of unofficial exports. 4. R&D Information 4.1. Main Research Areas  Development of new cultivars and high health planting material (nurseries)  Management and control of important pests and diseases (phytophthora, fruit fly)  Techniques for extending the growing season and out-of-season production  Quality improvement  Awareness of good agricultural practices and food safety requirements  To increase productivity through increased yields, ICM and reductions in cost of production  Briefly, to enhance competitiveness by producing specialized-high quality- safe fruit. 4.2 Major Research Providers Ministry of Agriculture and Rural Development  Southern Fruit Research Institute  Research Institue for Fruit and Vegetables  National Institute for Plant Protection Several universities also participate in fruit research activities and collaboration is expected between institutes/universities, with guidance from the Management Board of the Fruit, Vegetable, Flower and Ornamental Programme. Crops Priority Workshop. Data & Information Sheets 45 4.3 Funding: Major financial sources are from GoV, international and local cooperations through contracts of research and transfer. In addition, research in plant quarantine are carried out by Plant Protection Department under cooperation with JICA (Japan) will promote fruit export. 2005 Budget National Government: 3.0 billion VND Provincial Government: 0.4 billion VND International Cooperation: 1.2 billion VND Total 4.6 billion VND (US$290,000) 4.4 Major Achievements to Date Southern Fruit Research Institute (SOFRI)  Cultivars: Best quality varieties for growing are identified: durian, pomelo, longan, pineapple, mandarin  Red flesh dragon fruit has been bred  Planting Material: supply high health disease-free saplings (banana, citrus)  Manage effectively HLB on citrus, found out intercroping guava with citrus drive away Diaphorina citri (a disease transmitting vector) from the citrus tree  Manage effectively Phytophthora disease in fruit crops (durian, citrus, longan)  Procedures to disinfest fruit fly for export (mango, dragon fruit)  Induce flowering in off-season to extend harvesting season for many kinds of fruit (mango, pineapple, mangosteen, durian, longan, dragon fruit, rambutan)  Produce agent to control fruit fly (SOFRI protein), chemical to control Phytophthora disease (Agri Fos-400) on durian, citrus, rubber, black pepper.  Measures to control anthracnose disease after harvest with heat treatments for mango and dragon fruit Research Institute for Fruits and Vegetables (RIFAV):  Select mango varieties GL1, GL6 suitable with climatic condition in the North  Select early season lychee  Select lately season longan  Select and breding of several vegetable cultivars  Measures to preseve lychee up to 1 month  Methods to rapidly multiply pineapple cv. Cayenne in nursery National Instutute for Plant Protection (NIPP):  Invitro shoot-grafting procedures to screen HLB disease Crops Priority Workshop. Data & Information Sheets 46  Apply PCR technique for HLB disease diagnosis, ELISA for Tristeza disease dianogsis  Procedures for re-planting, intensive farming prevention of re0infection with HLB and IPM in citurs orchards  Collecting and evaluation trials for stone fruit trees. 4.5. Impact of research on agriculture and small-scale farm household  The main impact on agriculture sector is to identify which varieties should be