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Ministry of Agriculture & Rural Development

CARD Project Progress Report




037/04VIE
Developing GAP systems
for dragon fruit producers and exporters
in Binh Thuan and Tien Giang provinces






MS2: FIRST SIX MONTHLY REPORT






August 2005


1. Institute Information
Project Name
Developing GAP systems for dragon fruit

producers and exporters in Binh Thuan and
Tien Giang provinces
Vietnamese Institution
Southern Fruit Research Institute
Vietnamese Project Team Leader
Nguyen Van Hoa
Australian Organisation
The Horticulture and Food Research Institute of
New Zealand
Australian Personnel
John Campbell, Jim Walker
Date commenced
30 June 2005
Completion date (original)
March 2007
Completion date (revised)

Reporting period
Inception/First Progress Report

Contact Officer(s)
In Australia: Team Leader
Name:
John Campbell
Telephone:
+64 3 528 9106
Position:
Project Leader
Fax:
+64 3 528 7813

Organisation
HortResearch
Email:


In Australia: Administrative contact
Name:
Mrs Leonie Osborne
Telephone:
+64 9 815 8819
Position:
PA, Bioprotection Group Leader
Fax:
+64 9 815 4202
Organisation
HortResearch
Email:


In Vietnam
Name:
Dr Nguyen Minh Chau
Telephone:
+84 73 893 129
Position:
Project Champion
Fax:
+84 73 893 122
Organisation
SOFRI

Email:
/vn


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2. Project Abstract

















Producers of dragon fruit in Vietnam have seen prices for their fruit decline by about 60%
since 2000, which can be attributed, in part, to their dependence on local and nearby
export markets. There are about ten major dragon fruit exporters in Vietnam but a
significant proportion of the total production is sourced from many small farmers. Returns
from dragon fruit could be significantly improved if small growers and exporters can gain
access to new high value markets in Europe and North America. Unfortunately, regulatory
requirements and recent consumer concerns over food safety and security mean that

Vietnamese growers can now only export to these high value markets if they have Good
Agricultural Practice (GAP) programmes in place. EUREPGAP is a comprehensive and
auditable GAP programme which is now the minimum fruit quality, safety and
sustainability standard required by most supermarket chains in Europe. This project will
develop the basis for EUREPGAP implementation amongst groups of dragon fruit
growers in Binh Thuan and Tien Giang provinces, to enable Vietnamese growers to
export dragon fruit to high value European markets. If successful it will also provide a
model GAP system for potential adoption by other Vietnamese fruit sectors.


3. Executive Summary
The delivery timing for the CARD 037/04VIE project Inception Report and First Progress
Report fall within one month of each other. As a result, this report combines both the project
inception and progress-to-date efforts.

HortResearch personnel made two visits to Vietnam in February and May 2005 during which
time the scope of the project was established. Contracts were developed and signed for project
implementation between Hassall and Associates International (HAI) and HortResearch also
Southern Fruit Research Institute (SOFRI) and HortResearch. A Memorandum Of
Understanding (MOU) and One Pager were developed and signed for the coordination of
various donor initiatives to improve Dragon fruit GAP production and export in Vietnam.

A change of Project Leader occurred for both HortResearch and SOFRI at project inception to
provide continuity of appropriate leadership for the duration of the project.

Implementation of the project has focused on establishing communication lines and the
benchmarking of 150 farmers in the Binh Thuan and Tien Giang provinces to evaluate current
dragon fruit production practices compared to those required under GAP. Some
benchmarking findings have been delivered through seminars to farmers.

Identification of a Binh Thuan province exporter, packer and farmer group to be the initial
“pilot” to receive project delivery was made during the benchmarking survey.

No major constraints to project implementation have been encountered at this stage. The
project is on track and milestones 1 and 2 are complete.


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4. Introduction & Background

Objective 1:
To increase small holders’ competitiveness and capacity to supply dragon fruit to high-value
international markets, introducing new concepts of food safety, environmental responsibility,
sustainability and worker safety into their production practices.

Objective 2:
To provide technical support and training for Vietnamese extension/researchers to improve
their capacity in group training procedures for GAP implementation in dragon fruit.

The outputs expected include adoption of new practices that are required for entry into the
European market, and empowerment of small farmers to negotiate improved supply
arrangements. Vietnamese personnel from SOFRI, Department of Agriculture and Rural
Development (DARD) and the private sector will be trained in the field in Vietnam and two
SOFRI members will undertake a study tour to observe GAP systems in the fruit industry in
New Zealand.

It is intended that the development of the Vietnamese personnel, both in the public and
private sectors, will be through the practical application of:
• Establishing the current status of the dragon fruit industry against EUREPGAP standards
through a benchmarking survey

• Improving the current understanding of dragon fruit agronomy within SOFRI and
establishment of systems for constant improvement and problem solving
• The development of pilot models of EUREPGAP-compliant Exporter/Packer/Farmer
group in the field
• Establishing manuals, Codes of Practice and the development of training material that is
appropriate, user friendly, developed by the Vietnamese extensionists, and appropriate to
the dragon fruit industry for transfer to subsequent “models” and ultimately other crops
• Establishing the required quality systems for the dragon fruit industry to adopt and obtain
proof of the system robustness, by obtaining EUREPGAP certification for the pilot model
• Maximising the impact of current initiatives to develop GAP in the dragon fruit industry
through full participation in the Dragon fruit GAP Project.


5. Progress to Date
5.1 Implementation Highlights
There have been two visits to date by New Zealand project personnel (Drs Barbara Waddell
and Jim Walker in February, and Dr Waddell and John Campbell in May 2005) with the
purpose of scoping the CARD project and finalising the various contracts. Contracts now
signed include:
• CARD 037/04VIE Developing GAP systems for dragon fruit producers and exporters
in Binh Thuan and Tien Giang provinces; between Hassall and Associates
International and The Horticulture and Food Research Institute of New Zealand Ltd
(HortResearch)

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• A Collaboration Agreement for the project between The Horticulture and Food
Research Institute of New Zealand Ltd and Southern Fruit Research Institute (SOFRI)
in Vietnam
• A Memorandum of Understanding to coordinate the dragon fruit development
initiatives (Dragon fruit GAP Project - DGP) in Vietnam between the parties:

HortResearch, Vietnam Competitiveness Initiative (VNCI), USAID/EGAT RAISE
SPS Project (RAISE/SPS) and SOFRI
• A Dragon fruit GAP Project One Pager information pamphlet.

The New Zealand Project Leader changed between the first and second visit from Jim Walker
to John Campbell. The second visit to Vietnam by the New Zealand team included
familiarisation for the replacement Project Leader. At the second visit the decision was made
to have two pilot demonstration EUREPGAP components developed through the wider DGP
collaborative agreement: a CARD Top Down (Exporter/Packer/Farmer group) and the
VNCI/IMO Bottom Up (Establishment of a Co-op Group of Farmers).

During the development of the Collaborative Agreement between HortResearch and SOFRI a
schedule of activities was developed, based on the Log Frame for the first year of the project.
As well as establishing SOFRI as the in-country Project Implementation Agency, the
following activities have either been completed or initiated:
• The benchmarking questionnaire was developed.
• The benchmarking questionnaire was tested in the field during the second
HortResearch visit.
• Agreement on the appropriateness of the questionnaire and training of SOFRI project
team was completed during the May visits to the field also.
• The SOFRI project team trained SOFRI Young Scientists in the method of
questioning farmers and recording questionnaire data.
• The extended SOFRI team subsequently completed the Benchmarking programme of
some 150 farmers in the Binh Thuan and Tien Giang Provinces.
• The benchmarking questioning of farmers was expanded by the SOFRI project team
to include questions on general agronomy, to gain a greater knowledge of the current
status of Dragon fruit production methods.
• Information collected on crop production methods has been collated and some aspects
delivered at farmer seminars – this will be ongoing as knowledge is accumulated.
• Benchmarking data collected was recorded in Vietnamese and subsequently

translated to English.
• HortResearch developed a database with web access for SOFRI to enter data.
• During the benchmarking recipients for the CARD project “Top Down Pilot” were
identified.
• A schedule of work during the New Zealand project leader’s second visit was
developed (Appendix 1).
• Communications within the DGP were established with fortnightly sessions by
internet telephone. These have been satisfactory between HortResearch and VNCI by
voice, but limited to written chat sessions with SOFRI. DGP coordination by Nguyen
Phuong Thao of VNCI has been established and is working well.
• Efforts to improve channels of communication between HortResearch and SOFRI
continue.


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5.2 Smallholder Benefits
Benefits to the smallholder farmer will be generated and reported as the project
implementation gathers momentum.

5.3 Capacity Building
During the project scoping and subsequent project implementation visits by HortResearch
personnel considerable effort has, and will continue to be, made to identify individuals both in
the public and the private sectors who have the capacity to be leaders of change, and quality
systems development, improvement and maintenance.

A high priority will be given to all aspects of National Capacity Building to ensure
sustainability upon project completion.

5.4 Publicity
The CARD project has been publicly exposed through a Television Talk Back programme in

Binh Thuan for the dragon fruit projects on 29 July. The programme participants were
nationals only from VNCI, IMO and Mr Vo The Truyen of SOFRI representing the CARD
project. Keith Milligan advised on CARD information to be included in the television session
introduction. A copy of the transcript is expected to be available for a subsequent progress
report.

On 29 September the DGP MOU will be publicly signed in Ho Chi Minh City.

A one-pager information sheet was developed to advertise the various participants of the DGP
and is to be given out when appropriate. Likewise Business Cards for project personnel were
developed for the same purpose.
5.5 Project Management
A change of the HortResearch project leader from Jim Walker to John Campbell occurred in
April.

Dr Nguyen Van Hoa replaced Vo The Truyen as the SOFRI Project Leader in July. This
change was made because Truyen will travel to Massey University, New Zealand to
undertake his PhD studies.


6. Report on Cross-Cutting Issues
6.1 Environment
Analysis of the benchmarking database should confirm observations made in the field during
the two visits by New Zealand personnel. There appears to be a substantial gap between the
current environmental situation in the dragon fruit industry and the standards required to meet
EUREPGAP compliance. The use/misuse of human waste, non-composted farm manure,

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special fertiliser mixes, unregistered agro-chemicals, and inadequate withholding periods for
agro-chemicals need urgent corrective action.

6.2 Gender and Social Issues
The CARD dragon fruit project implementation will systematically address gender and social
issues. For example, Good Agricultural Practices demand good working conditions,
appropriate treatment of labour, observation of good health and safety practices, etc.


7. Implementation & Sustainability Issues
7.1 Issues and Constraints
Issues and constraints will become evident as the project is implemented. However,
identification of appropriate key personnel, both in the private and public sector, is seen as
paramount to a successful outcome.

Communication, trust and co-operation between HortResearch and SOFRI personnel is
extremely important for the smooth implementation of the project between the periodic visits
by the HortResearch team to Vietnam.

7.2 Options
Options and problem solving will be an important component to project implementation. A
“Teamwork” approach is seen as the best method to ensure that the outcomes of both the
CARD and the DGP projects are achieved and lead to an improved ability of dragon fruit
farmers to access higher value markets.

7.3 Sustainability
Sustainability is being addressed by the project through:
• Development of the national capacity
• Training of exporters, packers and farmers by practical demonstration through the
Top Down pilot
• Systematically expanding the model to other groups and areas
• Providing the critical mass of EUREPGAP-compliant fruit for high value market
evaluation as early in the project as possible, to demonstrate the financial viability of

having robust quality systems in place
• Communicating the merits of health and safety, environmental and social reasons for
GAP implementation.

8. Next Critical Steps
Schedule 3 of the HortResearch/SOFRI contract lists the SOFRI activities and outlines the
tasks to be implemented during the next twelve months. The programme of work for the
September 2005 visit by the HortResearch project leader is attached (Appendix 1).

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9. Conclusion
Export of non-EUREPGAP fruit to the European Union is expected to cease at 31 December
2005.

The CARD project as outlined in the project document, when implemented, will be
appropriate for development of GAP in the dragon fruit industry. The ultimate outcome
sought remains the development of a demonstration “package” of Exporter/Packer/Farmer
group with EUREPGAP compliance as a working model for expansion of GAP in both the
dragon fruit and other fruit sectors in Viet Nam.

No major constraints to project implementation have been encountered at this stage. The
project is on track.


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APPENDIX 2. Publicity from USAID

FOR IMMEDIATE RELEASE
July 13, 2005
2005-003

Contact: Robert Webster
Project Director, VNCI
Phone: (84-8) 827-9488
Email:
www.vnci.org






EXPERT RECOMMENDS STRATEGY FOR MARKETING
DRAGON FRUIT IN EUROPE
HO CHI MINH CITY − Dragon fruit from Vietnam already enjoys a strong reputation among
European importers, but as competition from other exporting countries increases,
Vietnam’s fruit industry must take action to maintain and improve its market share.
Steven Humphreys, an international expert on marketing tropical fruits in Europe,
discussed these and other findings with over 60 fruit industry stakeholders today at a
workshop sponsored by USAID’s Vietnam Competitiveness Initiative (VNCI) project. A
similar event will also be held in Binh Thuan province on July 15.
According to Mr. Humphreys, the principal challenges confronting Vietnamese producers
and exporters in the European market include: high transportation costs, lack of access
to new varieties of fruit, and greater availability of dragon fruit from other countries such
as Thailand, Israel and Colombia. “In order to sustain its current position as the dominant
supplier of dragon fruit in Europe, the Vietnamese fruit industry should work together to
address these constraints. There are several specific steps that stakeholders can take,
including: improving fruit quality through application of EUREPGAP procedures and
adoption of new and better varieties, lowering air freight costs by consolidating
shipments and improving packaging, and focusing on key markets such as the
Netherlands and France, where the main buyers of dragon fruit are located,” he

concluded. “Improving post harvest and handling procedures, such as cold storage, is
also necessary.”
Linking to other donor efforts
VNCI plans to apply the results of Mr. Humphrey’s extensive market research to the
Dragon Fruit GAP Project (“DGP”), a collaborative initiative funded by AusAID, USAID
and SOFRI that aims to help Vietnam’s fruit industry adopt Good Agricultural Practices
and access higher-value export markets. The DGP is already working with local farmers,
exporters and government officials to achieve EUREPGAP certification. “With this new
information on the European market and potential competition, we can now help local
businesses develop a marketing strategy for boosting exports and strengthening
Vietnam’s reputation as a reliable source for high-quality dragon fruit,” commented Ms.
Nguyen Phuong Thao, DGP Project Coordinator.
About VNCI
VNCI is a five year, USAID-funded economic growth project to improve the
competitiveness of small and medium-sized enterprises (SMEs) in Vietnam. The project
has three components: policy environment, SME capacity building, and SME access to
finance. VNCI is managed by Development Alternatives, Inc. (DAI) of Bethesda, MD.

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