Vietnam: More Produce, More Quality, More Income through Farm Partnerships

April 18, 2013

World Bank Group

  • It is expensive and challenging for farmers in Vietnam to grow crops that can meet high standards and satisfy customers.
  • Under a Bank-supported project, partnerships between farmers’ organizations and private companies help farmers improve their products by promoting good agricultural practices.
  • Since joining the partnership, farmers’ productivity has increased by 5 to 20 per cent and product sales have grown by 12 per cent.

Luong Kim Tien has never been happier working on his dragon fruit farm in the  Binh Thuan Province of Vietnam.

He used to grow the fruits with minimal planning, making it very hard to expand his production. Since joining a farmers’ organization that works in partnership with the Binh Thuan Fruits and Greens Company, Tien has been following a new production process with good results.

“My sales increased by 30 percent and the quality of my dragon fruits has improved,” Tien said while standing on his 1,300-tree farm.

The Vietnam Agriculture Competitiveness Project, supported by the World Bank, is promoting these partnerships. Farmers received around $2,000 from the project to purchase farm equipment and supplies, such as modern watering systems and compact light bulbs, as part of using new production methods.

Agriculture experts from the company provide regular advice to the farmers on production techniques and disease prevention. In addition, hundreds of farmers attended trainings on negotiations, communication, planning, and management skills.

“With our new skills, we can come to a win-win solution when negotiating contracts with the company,” said Pham Huu Truong, leader of the Ham Lien 1 farmers’ organization.

Before the partnerships, farmers often switched crops – from rice to vegetables to fruits – depending on whichever had the highest selling price at the time of planting. With this practice, however, they were at risk of losing profit when prices dropped at harvest time.

To protect them from sudden changes in prices and other risks that affect yields, farmers and companies agree on volume and price before production begins.

" My sales increased by 30 percent and the quality of my dragon fruits has improved. "

Luong Kim Tien

Farmer in Binh Thuan Province, Vietnam

As a result, farmers earn more and the company has a more reliable supply of high quality products. With this, the company has been able to expand their markets from the region to the U.S., Japan and South Korea.

“The company has seen a 30 percent increase of export sales, compared to 20 percent in previous years,” said Do Thi Minh Thuyen, Director of Binh Thuan Fruits and Greens Company.

This World Bank-assisted project supports around 100 partnerships for a wide range of produce, such as flowers, artichokes, dragon fruits, cashews and coffee.

The partnerships promote good agriculture practices and the use of new technologies to improve quality, raise productivity, reduce post-harvest losses, and reduce the use of agro-chemicals.

For all 100 partnerships, farmers’ productivity has increased by 5 to 20 percent while product sales have grown 12 percent.

Standing in front of his newly-built house, Tien happily says with a smile, “Income from dragon fruits helped me build this house. Our family is more financially stable now.”