Transition towards sustainable shallot value chains in the Mekong Delta

Maybe unknown to many but shallot is one of the key vegetable crops in the Mekong Delta, generating one of the highest income contributions per m2 and month. One of the most important production areas for shallot in Vietnam, is Vinh Chau district in Soc Trang province in the Mekong Delta.

Shallots are a crucial source of income for farmers and workers, who mostly belong to the Khmer ethnicity. Poverty incidence among the Khmer, are one of the highest in the Mekong Delta. For those Khmer who have been able to switch to shallot farming, this has been one of the few pathways to grow out of poverty. Just the shallot sector in Vinh Chau district created jobs for about 70,000 Khmer.

Collecting shallots after harvest from the field (picture: Fresh Studio®)

High use of ground water

Although shallot has been an important crop to reduce poverty among the Khmer, the current farming system is putting pressure on the environment, as currently large amounts of ground water is used to produce shallots in an inefficient way.

Based on data collection by Fresh Studio, the volume of ground water being used for one shallot crop cycle being cultivated on 1,000 m2 is estimated to be 220.5 m3. The volume of 220.5 m3/1,000 m2 per crop cycle, means 2,205 m3/ha per crop cycle. If we multiply this number times the 6,000 ha of shallot cultivation in Vinh Chau, this means that in the main shallot season an estimated 13,230,000 m3 of ground water is used for shallot production. This is equal to 189,000 m3 of ground water per day for 70 days, which is an enormous amount of water.

There are two key reasons for this high use of water:

  • Inefficient irrigation methods
  • At least one to two crop cycles to produce the shallot bulbs used as propagation material, before the main shallot crop is grown. These shallot bulbs cropping cycles for propagation material also require quite some water.

The extraction of ground water for shallot production leads to land subsidence in Vinh Chau district. Land subsidence makes the Mekong Delta more vulnerable to the rising sea levels and accelerates salinization.

Irrigation by hand of shallot crop in Soc Trang (picture: Fresh Studio®)

Current irrigation method

That farmers mainly use ground water, through their own drilled wells for irrigation water is confirmed by a study among 90 farm households in Vinh Chau district in Soc Trang Province, of which 85% use groundwater from drilled wells during the dry season. Unfortunately, this groundwater is then used in an inefficient way, mainly delivered in buckets, whereby only 20% of the irrigation water reaches the crop, according to the head of the Soc Trang department of irrigation (Vietnamnet, 2013). 

This current inefficient irrigation methods, are confirmed by a study by Can Tho university with sprinkler irrigation on shallots in Vinh Chau. This improved irrigation system resulted in a 43-59% reduction in water use and an income increase of 20% (Hong Minh Hoang et al, 2016).  The Asian Development Bank in a paper published in 2017 also identifies the implementation of high efficiently irrigation systems (HEIS), such as sprinklers and drip irrigation, as a key strategy to reduce the amount of water used per kg of crop produced. 

Bringing these technologies to smallholder farmers in the Mekong Delta would be an important innovation and one that would be supported by government policy, which has recommended that HEIS be adopted more widely.

Shallot bulbs

Currently farmers produce their own shallots bulbs as propagation material, to produce consumption shallots in the December- March period which they sell to traders.

To produce these shallot bulbs, they use a part of the harvest of the December – March, and then plant those shallots bulbs again in very high density to produce bulbs as propagation material to be used for next season. They produce the shallot bulbs as propagation material in the Feb-April period, after which they need to store the shallot bulbs till December of the new production season.

During this storage period from April till November about 30-40% of the shallot bulbs stored as propagation material for the next shallot production season, will be lost (mainly due to Fusarium). As a result of losses, many farmers produce yet another shallot bulb crop in November – December, using additional water without increasing productivity.

In addition to significant post-harvest losses and the high costs to produce the shallot bulbs as propagation material, the shallot bulb production also has the big disadvantage of propagating diseases, thereby reducing productivity in future harvests as well.

Tropical hybrid shallot variety

A new tropical hybrid shallot variety (Maserati) developed by the Dutch seed company Bejo Zaden B.V. enables shallot farmers to produce shallots from seeds.

Maserati is based on the genetic material of the Vinh Chau shallot and therefore has the same appearance and taste. These shallot seeds can be sowed directly in the field or first used to produce shallot seedlings, which are then transplanted in the field to produce shallots. Because these true shallot seeds are hybrid and will be guaranteed disease free, the farmer will get higher yields and a better pest and disease resistance.

In addition, they will not have to spend one or two seasons on producing and storing the shallots bulbs as propagation material. Even though the seed price might be higher, starting with hybrid shallot seedlings (produced from seeds), will have an enormous impact on increasing farm income and will halve their use of ground water for shallot farming.

Adaptation of innovative and sustainable production practices, such as sprinkler or drip irrigation, irrigation decision support tools, fertilizer application advise and integrated pest and diseases management to name a few will further increase the positive impact on farmer’s income, water use efficiency and reduce the agro-chemical footprint of shallot production on the environment.

Successful mini-bulb production from hybrid seed for early planting of next shallot production season. After mini-bulb production, shallot seedlings are produced in the nursery for the main shallot production season.

Impact cluster: combining technologies and knowledge

This is also an important reason why this impact cluster is formed, as just introducing hybrid shallot seeds to shallot farmers is not the optimal solution. The combination of the knowledge and technologies of the impact cluster partners enables the cluster to establish and introduce shallot farmers the system to start their shallot production from hybrid shallot seedlings.

The creation of nurseries specialized in producing hybrid shallot seedlings and mini bulbs provides an opportunity to generate additional income and jobs in the region. As part this project the following parties collaborate together:

  • Bejo zaden
  • Groot & Slot
  • Royal Brinkman
  • BvB Substrates
  • Eurofins
  • Can Tho University
  • Fresh Studio
Project meeting at Can Tho University

Project objective

The main objective of the impact cluster “Transition towards sustainable shallot value chains in the Mekong Delta” is to strengthen the shallot production sector in the Mekong Delta (Soc Trang province, > 6,000 hectares of shallot production), by introducing and making innovative Dutch production technologies and methods accessible for local shallot farmers, which will make shallot production more sustainable and profitable.

The impact cluster will further strengthen the adoption of these improved production technologies, by creating market linkages for the shallot farmers, so that a sustainable shallot value chain is developed.

Project activities

Through this impact cluster an important contribution will be made to address excessive and inefficient water use by shallot farmers in the Mekong Delta.

In the area of Vinh Chau district of Soc Trang Province, shallot farming is the second largest agricultural land use activity. This type of land use is contributing to one of the highest rates of subsidence in the Mekong Delta (Minderhoud et al, 2018), making the shallot sector a key contributor to reduced water security in the region. By increasing water use-efficiency, the extraction of ground water can be halved, which can help to reduce the rate of land subsidence. 

The main activities of the impact cluster to achieve the project objective are:

  • Demonstrating optimized irrigation strategy and water use efficiency
  • Demonstrating optimized shallot production technologies through hybrid shallot seedlings and integrated pest and disease management
  • Demonstrating optimized fertiliser application strategy
  • Field days to showcase improved hybrid shallot production technologies
  • Develop training programs in sustainable and improved hybrid shallot production for farmers
  • Capacity building shallot sector stakeholders
  • Creating market linkages of hybrid shallot producers with the domestic and export markets

Value chain management and market linkages for fruits and aquaculture in Mekong Delta training

On 9 and 10 September 2022 Fresh Studio under the lead of our value chain development expert Mr. Siebe van Wijk organized the 2nd value chain management and market linkage training as part of the Nuffic OKP project: ‘Towards a climate resilient nursery sector and value chains in the Mekong Delta through capacity building in the educational and governmental sectors’.

During the training the trainee learned how to do a value chain analysis and which tools they can use to gather the insights of a current chain to be able to develop a value chain.

The highly participatory approach of the training resulted that all trainees were actively involved in the various training sessions. The knowledge and methods trained during the classroom sessions were applied by the trainees during their assignments and field work, including on site interviews with actors active within a water spinach and mustard chain.  The training activities accumulated in 2 groups presenting their ideas and approaches required to develop a water spinach and mustard value chain by the end of the training.

The OKP project is a Dutch-Vietnamese knowledge partnership project to promote the development of a climate-resilient nursery sector & value chains in An Giang, Dong Thap, Can Tho, Soc Trang, Tien Giang and Vinh Long, funded by the Ministry of Foreign Affairs of The Netherlands and managed by NUFFIC.

This project introduces scalable water technology pilots for the aquaculture and horticulture sectors to develop climate-smart value chains. The project international partners including Aeres University, Has University, Fresh Studio Innovations Asia and Nong Lam University work with local governments and educational institutions to enhance capacity so that adaptations to cope with transformation in the Mekong Delta can be accelerated at the local level.

Irrigation efficiency and water use-efficiency in crops production

2021 April 16-17th Ho Chi Minh City

Twenty professors and researchers from universities, DARDs, TVET and research institutes will participate in a two-day training entitled “Irrigation efficiency and water use-efficiency in crops production”. This is one of several pieces of training offered by the Orange Knowledge Programme (OKP) Project “Towards a climate resilient nursery sector and value chains in the Mekong Delta through capacity building in the educational and government sectors”.

OKP project is A Dutch-Vietnamese knowledge partnership project to promote the development of a climate resilient nursery sector & value chains in An Giang, Dong Thap, Can Tho, Soc Trang, Tien Giang and Vinh Long, funded by the Ministry of Foreign Affairs of The Netherlands and managed by NUFFIC. This project introduces scalable water technology pilots for the aquaculture and horticulture sectors to develop climate-smart value chains. The project international partners including AERES University, HAS University, Fresh Studio Innovations Asia and Nong Lam University work with local governments and educational institutions to enhance capacity so that adaptations to cope with transformation in the MD can be accelerated at the local level.

The main outcomes of the projects are :

  • Improved capacity of trainers and teachers, upgraded curricula and training materials applying interactive multi-disciplinary approaches in higher education (HE) and technical vocational education and training (TVET).
  • Establishment of an indoor nursery R&D facility for Pangasius to pre-nurse robust juveniles which deliver higher yields, and thereby added value to local farmers.
  • Enhanced knowledge & capacity on integrated adaptation strategies, climate smart agriculture (CSA) and efficient water management themes of support organizations within aquaculture & horticulture value chains

“The Netherland- Vietnam Strategic Partnership Agreements (SPAs) focus on technology and knowledge transfer in climate change, water management, sustainable agriculture and food security; the focus themes of this project. The Mekong Delta Agricultural Transformation Plan (MD-ATP) and VN Government Resolution 120 endorse agricultural transition toward vertically integrated value chains and a shift to modern agro-business specialization. The OKP NUFFIC project contributes directly to realize this vision through the transfer of essential technology, knowledge, and skills, “ said Mr. Willem Schoustra, Agriculture Counsellor, Embassy of the Kingdom of the Netherlands in Vietnam

The supply of fruits and vegetables in the MD still cannot meet the increasing demand domestically and abroad. According to the World Bank (2016), the fruit demand in Vietnam will increase from 5 million tons by 2009 to 7 million tons by 2030. Vietnamese exports of fruit show ongoing growth. The capacity to produce diversified fruit types is an advantage of Vietnamese fruit when penetrating the world market.

In addition, the participation of Vietnam in trade agreements (CPTPP and EVFTA) brings great market potential for processed fruits due to big and rapid tax reduction commitments by member countries, especially compared to fresh and raw products. Freshwater supply, suboptimal groundwater tables and reducing agricultural lands due to salinity intrusion and rising sea levels has strong impacts on fruits & vegetables production in the MD. This requires efficient and climate smart water management strategies.

One of the most effective means to conserve water appears to be through carefully managed deficit irrigation strategies that are supported by advanced irrigation systems. Implementation of crop location strategies, conversion to crops with higher economic value or productivity per unit of water consumed, and adoption of drought‐ and/or salt-tolerant crops are discussed in academic research, however these strategies are still very limited in practice. This project will focus on filling this gap. Technical trainings on water quality management and irrigation efficiency for agricultural value chains will be developed and contextualized to close the gap between theory and practices.

Shallot value chain analysis highlights key intervention opportunities

In Vietnam, the province of Soc Trang is famous for its shallots. Since a few years, however, it is no longer the shallot itself but the shallot farmers which are grabbing headlines across the country.

Most shalllot farmers are among the poorest people in the country. Increasingly unpredictable rainfall has lowered yields and changing market conditions have created demand uncertainty. Each year thousands of tons of shallots remain unsold. Soc Trang province is aware of the difficulties facing the sector and wants to provide support.

Fresh Studio was requested to support Soc Trang province in this process. In the first phase of the project, Fresh Studio conducted a value chain analysis to critically assess the issues faced by different stakeholders and identify opportunities for improvement, including:

  • High cost and inconsistent quality of shallot seed.
  • Unstainable shallot production practices.
  • Short storage period with high losses of consumption shallot and seed shallot.
  • Losing market share in the domestic market due to strong competition from cheap and year-round available Indian shallots.
  • Consumers like the Vinh Chau shallot, but are not aware about the heritage of Vinh Chau shallots and can only buy them a few months per year.

Based on the findings of the value chain analysis, a detailed action plan will be made to develop the shallot sector. Read more about our Soc Trang value chain analysis below or contact us for further information about this project.

Soc Trang Purple Onion value chain analysis

In Vietnam, the province of Soc Trang is famous for its purple onion. Since a few years, however, it is no longer the onion itself but the onion farmers which are grabbing headlines across the country. The onion sector is in trouble.

Background

Life is difficult for Soc Trang onion farmers at the best of times. Most onion farmers are among the poorest people in the country. Over the last years, their struggle is becoming even more desperate. Increasingly unpredictable rainfall has lowered yields and changing market conditions have created demand uncertainty. Each year thousands of tons of onion remain unsold. Soc Trang province is aware of the difficulties facing the sector and wants to provide support. It is motivated by the importance of purple onion for the province, in particular for the impoverished Khmer ethnic minority. Therefore, they want to implement a support program based on a thorough understanding of the current situation.

Approach

Fresh Studio was requested to support Soc Trang province in this process. In the first phase of the project, Fresh Studio will conduct a value chain analysis to critically assess the issues faced by different stakeholders and identify opportunities for improvement. A team of consultants from R&D, Sourcing, Quality Assurance, Business Development and Marketing will interview hundreds of stakeholders in Soc Trang and Ho Chi Minh City. Based on the findings of the value chain analysis, a detailed action plan will be made to develop the purple onion sector. The plan will be presented back to stakeholders from the sector, including input suppliers, farmers, traders, and buyers during a workshop. Based on their feedback, a final proposal will be developed and presented to Soc Trang province.

Expected outcome

There are few magic bullets in the world and it is unrealistic to expect that there exists a quick and easy solution to solve the problems the sector is currently facing. Instead, whatever solution will be identified will require hard work and sustained commitment from all stakeholders. Therefore, a decidedly interactive approach was chosen for this project. Throughout both the analysis and the proposal development phase the public and private sector are actively involved. Expert opinions will be used to trigger discussion and encourage out-of-the-box thinking, but at the end of the day, the only solution that works is a solution supported by all. Once such a solution has been identified, Soc Trang and Fresh Studio look forward to working together on its implementation.

Developing the first safe, traceable and sustainable pork value chain of Vietnam

Vissan, De Heus and Fresh Studio have formally signed a Memorandum of Understanding to establish the first safe, traceable and sustainable pork value chain in Vietnam. The Ceremony was held on the 15th of August at the Vissan premises in HCMC.

The partnership between Vissan, De Heus and Fresh Studio has opened a united direction in the development strategy of the parties with the aim to bring to Vietnam safe and traceable pork products.

Accordingly, the parties will maximize their capability to establish a safe supply chain from farms, slaughterhouse to finished products and distributing to the market, in accordance with the TRACEPIG standards.

The “TRACEPIG” set of standards has been developed to guideline all parties involved in the production chain to follow a standardized procedure to obtain a high quality and safe pork. This is to answer growing concern of consumers about food safety, workers conditions, animal welfare and environmental protection.

All products will be labeled with traceable origin and do not contain chemical residues or pathogenic microorganisms that exceed the legal limits. Uniquely, all involved parties must also comply with the Animal Welfare module during the process of farming, transporting and slaughtering. In addition, TRACEPIG also integrate compliance with the Ethical Trading Initiative standard principles to ensure a fair working environment for all employees along the chain.

The following flow chart defines the roles of each party: 

Vissan is one of the leading enterprises in the food industry with specialization and business focus on production of chilled and frozen meat products, as well as processed foods from meat. With company strategic orientation is to approach the market through food quality and safety, Vissan has been implementing the closed process system in production, and continues to improve the efficiency and superior product quality. In addition, Vissan also actively cooperates with business partners and mobilizes the social resources to focus on the supply chain from production to processing as well as distribution.

DHFS – Safe Pork is a joint venture between De Heus LLC and Fresh Studio Innovations Asia to cooperate in creating the first safe and traceable value chain pork products in Vietnam. De Heus has over 100 years of experience worldwide in animal feed production and animal husbandry management. Meanwhile, Fresh Studio has possessed an insight and extensive experience in the fields of sourcing, market research and business development, and management and promotion of safe food products.

This signing event between Vissan and DHFS is the milestone for sustainable long-term cooperation between the three companies, in accordance with the Dutch – Vietnam subsidy cooperation program for farming, and it will contribute to the development of the food industry in particular and Vietnam agriculture in general.

Creation of a value chain for vegetables in North Vietnam

Urban consumers in North Vietnam encounter problems buying guaranteed safe vegetables especially during the hot and humid summer period in North Vietnam which starts in April and lasts until September.

Background

Temperatures and humidity are too high in the Red River Delta plains to produce the required range of vegetables and there is limited supply of vegetables from Dalat from April to September. Therefore markets in North Vietnam are flooded with vegetables imported from China. This concerns consumers and government regulators due to questionable food safety standards.

The rapid urbanization in Northern Vietnam combined with consumer demand for high quality and guaranteed safe vegetables, the long distance from Dalat to Hanoi (1,400 km) and the influx of Chinese vegetable imports, provides an opportunity to develop regional supply of safe vegetables for urban markets in North Vietnam.

Approach

Since 2010 Fresh Studio has been cooperating with METRO Cash & Carry Vietnam in North Vietnam to:

  • Provide small holder vegetable farmers with a direct linkage to modern trade
  • Diminish the negative environmental impacts of the current unsustainable horticulture production systems
  • Offer urban consumers guaranteed high quality and safe vegetables for a wide range of vegetables in large volumes

To develop year round supply of guaranteed high quality and safe vegetables from North Vietnam, Fresh Studio clustered small holder vegetable farmers in the lowlands of the Red River Delta, as well as the poorer and more remote farmers located in the mountains in the North. Using the climatic advantage of the cooler mountains in North Vietnam, a regional solution has been developed to supplement the vegetable supply from the Red River Delta during the summer period. This resulted in the possibility for METRO and other retailers to source high quality and safe vegetables year round from North Vietnam.

Outcome

At the end of the project, 6 farmer groups were developed, representing a total of 113 farmers across 3 sourcing areas: Dong Anh, Hai Duong and Moc Chau. All farmer groups achieved government food safety certification and were trained in the METRO Requirement standard. In addition to government certification 46 farmers received METRO Requirement certification. Out of the 36 vegetables selected as project assortment, 26 are now METRO Requirement certified.

Supply chain before intervention

  • Limited cooperation within the chain
  • Limited knowledge exchange between actors

Value chain after intervention

  • Good cooperation within the chain
  • Extensive knowledge exchange between actors

Recent developments in this project:

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