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1 Ministry of Agriculture & Rural Development Project Progress Report FIRST SIX-MONTHLY REPORT CARD Project 030/06 VIE Developing a strategy for enhancing the competitiveness of rural small and medium enterprises in the agro-food chain: the case of animal feed Date: 1 st January 2008 1 1. Institute Information Project Name Developing a strategy for enhancing the competitiveness of rural small and medium enterprises in the agro-food chain: the case of animal feed Vietnamese Institution Institute of Policy and Strategy for Agriculture and Rural Development Vietnamese Project Team Leader Dr Nguyen Do Anh Tuan Australian Organisation University of Western Australia Australian Personnel Ms Sally Marsh, Dr Donna Brennan, Professor John Pluske, Dr Greg Hertzler, Dr Jo Pluske Date commenced 1 st May 2007 Completion date (original) 30 th April 2009 Completion date (revised) Reporting period 1 st May – 31 st October 2007 Contact Officer(s) In Australia: Team Leader Name: Ms Sally Marsh Telephone: +61 8 6488 4634 Position: Senior Research Officer Fax: +61 8 6488 1098 Organisation University of Western Australia Email: spmarsh@cyllene.uwa.edu.au In Australia: Administrative contact Name: Ms Jan Taylor Telephone: +61 8 6488 1757 Position: School Manager Fax: +61 8 6488 1098 Organisation Agricultural and Resource Economics, University of Western Australia Email: Jan.Taylor@uwa.edu.au In Vietnam Name: Ms. Pham Tuyet Mai Telephone: +84-4-7280493 Position: Researcher – Market Analysis Unit Fax: +84-4-7280489 Organisation Center for Agricultural Policy – Institute of Policy and Strategy for Agriculture and Rural Development (CAP-IPSARD) Email: phamtuyetmai@cap.gov.vn 2 2. Project Abstract 3. Executive Summary Contract signing for this project was delayed, but work commenced not long after the scheduled project implementation date of 1 st May 2007. Australian team planning meetings commenced at UWA on a regular basis from the second week of May, and joint planning by the Vietnamese and Australian teams for the Project Inception Workshop and first training activities commenced in June 2007. Team meetings were held in Hanoi at the Centre for Agricultural Policy (CAP) between 2 nd – 10 th August. Ms Sally Marsh, Dr Donna Brennan, Professor John Pluske and Dr Jo Pluske travelled to Hanoi for these meetings. Highlights of these meetings included: • A half-day workshop held at IPSARD on 7 th August to scope issues facing the livestock feed sector attended by a range of industry stakeholders and others. • Field trips to a range of feedmills and livestock farms, and meetings with industry representatives. • Training activities linked to the workshop and field visits focussed on identifying problems and issues, developing researchable questions, identifying data required to address research questions, and developing the survey instrument (questionnaire). Dr Jo Pluske has completed a draft report entitled “A desktop review of the animal feed sector at a global scale” which will contribute to the identification of both key policy and operational issues in the feed sector. This report is being reviewed by the project team prior to its finalisation. Work is progressing steadily in several areas including: • Development and testing of the survey instrument for livestock producers and livestock feedmills and distributors. The objectives of this project are to: 1) Build capacity at IPSARD in agricultural marketing research, specifically the value chain, industrial organization and production economics; 2) Understand the role and performance of SMEs in the animal feed sector in other countries and draw lessons for Vietnam; 3) Provide a quantitative assessment of the factors affecting the competitiveness of the animal feed industry in Vietnam; and 4) Provide policy recommendations to the government with regard to the efficiency of firms operating in the livestock feed sector, and provide advice to SMEs competing in the livestock feed sector. Standard agricultural economics techniques will be used to quantify the characteristics of the animal feed industry, and to identify issues and opportunities for small enterprises in the animal feed supply chain. Activities include a combination of training courses, and supervised research exercises combining collection of secondary data, field work, analysis and synthesis of findings. Activities during this first six months of the project have focussed on scoping the issues facing the livestock feed sector in Vietnam by: 1) collecting available secondary data and reports; 2) conducting an implementation workshop involving industry stakeholders; 3) field visits and stakeholder meetings; and 4) planning sessions for the desktop review and survey instruments. 3 • Continued industry liaison activities by the Vietnamese team and work on the report on key issues identified from consultations with major industry stakeholders. • Compilation and documentation of available secondary data. • Investigation and documentation of the policy environment facing the sector and SMEs in Vietnam. • Planning for future training activities and the study tour to Thailand. The team has endeavoured to strengthen links with an ACIAR funded project on the pig industry being conducted in collaboration with the International Livestock Research Institute. Several joint meetings have been held with visiting ILRI scientists, Dr Donna Brennan, and the Vietnamese team to build on synergies between the projects. The Director of ILRI recently visited Vietnam and was briefed on the CARD project activities. 4. Introduction & Background The underlying aim of this project is to investigate the circumstances under which SMEs in Vietnam can operate at an efficient level and compete with other firms or not, especially in the context of the globalization process. This project seeks to gain benefit from Australian collaboration in designing methodology that can be used in ongoing work at IPSARD. In this study the animal feed industry is being used as a case study, but the methods and lessons learned will be applicable in other areas of agricultural marketing. The proposed training and supervised research exercises will provide the IPSARD/MARD with a suitable methodology for ongoing work in quantitative policy analysis. The project will be carried out using a combination of training courses, and supervised research exercises combining collection of secondary data, field work, analysis and synthesis of findings in reports and policy briefs. Training will focus on building skills and experience in market analysis, including value chain analysis, production economics, and industrial organisation. Field work will be undertaken in several sites incorporating the three regions, Mekong Delta, South East region and Red River Delta, to cover a broad cross section of performance of animal feed enterprises. Local stakeholders will be involved throughout the process, and findings communicated through a workshop held in each region. Specific activities and outputs under the project objectives will include: Objective 1: Build capacity at IPSARD agricultural marketing research, specifically in analysis of the value chain, industrial organisation, and production economics • Training workshops at IPSARD on survey and data collection techniques; and market analysis, including value chain analysis, production economics, and industrial organisation. • On-the-job training for IPSARD staff on assessment of competitiveness of SMEs and other firms in the Vietnamese animal feed value chain. • Development of a manual on how to conduct a study of competitiveness of SMEs that can be used in other studies to be implemented by IPSARD in the future. Objective 2: Understand the role and performance of SMEs in the animal feed sector in other countries • Desk-top literature search and review of the nature, experiences and lessons of the animal feed industries in other countries, and the role of SMEs in the animal feed sector globally. 4 • A study tour to Thailand to assess the organization of the livestock feed sector, and its applicability to Vietnam. Objective 3: Provide a quantitative assessment of the factors affecting the competitiveness of the animal feed industry in Vietnam • Collection of secondary data to provide an up-to-date assessment of the animal feed industry in Vietnam, and, opportunities and challenges facing the sector. • Field investigation in three regions to examine the value chain of the animal feed industry including an assessment of characteristics and costs of production, the nature of information and product flow, quality control standards and processes. • Compilation of a detailed report on the research work. Objective 4: Provide policy recommendations to the government with regard to the efficiency of firms operating in the livestock feed sector, and provide advice to SMEs in the sector. • Writing of policy briefs. • Workshops in study regions and in Hanoi, to report and discuss the findings of the research work with local stakeholders and with policy makers. 5. Progress to Date 5.1 Implementation Highlights Team meetings were held in Hanoi at the Centre for Agricultural Policy (CAP) between 2 nd – 10 th August. Sally Marsh, Dr Donna Brennan, Professor John Pluske and Dr Jo Pluske travelled to Hanoi for these meetings. Highlights of these meetings included: • A half day stakeholder workshop held on 7 th August to scope issues facing the livestock feed sector with a range of industry stakeholders and others. Opportunity was given to key people in MARD, the Animal Feed Association and from the processing sector to address the workshop. The workshop program, participant list and workshop report are included as Appendix I. • Field trips to a range of feedmills and livestock farms. • Meetings with Mr Le Ba Lich, Chairman of the Animal Feed Association, and Dr Tran Cong Xuan, Chairman of the Vietnam Poultry Association. Dr Jo Pluske submitted a final draft report to the project team, “A Desktop Review of the Animal Feed Sector at a Global Scale”, in September 2007. This report is currently being reviewed by the project team. Dr Donna Brennan and Sally Marsh held further working sessions with members of the Vietnamese project team in late October/early November to progress the questionnaire design. 5.2 Smallholder Benefits At this stage of the project no smallholder benefits have been achieved, but this remains an objective of the project, through increased efficiency and competitiveness in the livestock feed sector. 5 5.3 Capacity Building Capacity building activities at IPSARD/CAP have commenced. Activities in this first six months have been designed to: • Establish baseline capacity within IPSARD/CAP. The surveys used for this are included as Appendix II. • Ensure that IPSARD/CAP had input into the planning of the desktop review. • Identify perceived training needs with IPSARD/CAP, including what tangible outputs they would like to see from this project. • Scope and discuss issues facing the livestock feed sector in Vietnam (e.g. mill operations, nutrition issues, supply and storage issues, economic and institutional issues), with the aim of emphasising the importance of this process before commencing research and survey work. • Identify problems and issues, develop researchable questions, discuss and identify data required to address research questions, and develop the survey instrument (questionnaire). 5.4 Publicity Publicity for the project was achieved through the inception workshop, which was attended by representatives from MARD, Hanoi Agricultural University, the World Bank, and the livestock feed processing and the livestock animal industries. 5.5 Project Management The project was late commencing because of difficulties in addressing budget issues identified by the CARD PMU, and hence there was a delay in signing the Contract between UWA and Hassall & Assoc. This resulted in a delay in establishing the budget line at UWA (obtained on 31.07.07), and a corresponding delay in transfers of funds to IPSARD/CAP. Accordingly, this first six monthly report is late and we envisage that Milestones 2 and 3 will also be slightly late. We expect to be on track with Milestone Reports by mid 2008. Dr Greg Hertzler had been scheduled to attend the project meetings and workshop in Hanoi in August 2007, but at the last minute (3 days before scheduled departure) had to change his plans and travel to America on bereavement grounds. This has reduced the time that Dr Hertzler has contributed to the project during this reporting period. There have been a number of changes in the Vietnamese personnel working on the project. There have been a number of changes in the Vietnamese personnel working on the project. Firstly, Mr. Phung Duc Tung has been in Germany since August 2007 in order to pursue his PhD study, therefore, could not continue joining the project. Dr. Nguyen Anh Phong then was assigned to replace Mr. Phung Duc Tung as technical supervisor for the CAP team. Second, Mr. Hoang Dinh Quoc is also involved in a PhD preparation that makes him unavailable for the project. Ms. Pham Tuyet Mai took over the work of Mr. Hoang Dinh Quoc. Also, Ms. Nguyen Le Hoa and Ms. Tran Thu Ha was assigned to be in charge of other work, and Ms. Pham Thi Lien Phuong and Ms. Nguyen Thi Thinh in the Market Analysis Unit were assigned to do the work instead. (See Personnel Inputs table in the Statutory Declaration for more details on the contribution of each team member). 6 6. Report on Cross-Cutting Issues 6.1 Environment Questions addressing environmental issues and concerns are being included in the survey instrument, and scoped in the Desktop Review. 6.2 Gender and Social Issues Questions addressing gender and social issues and concerns (e.g. females working in livestock and livestock feed businesses, health and safety issues in the sector) are being included in the survey instrument, and scoped in the Desktop Review. 7. Implementation & Sustainability Issues 7.1 Issues and Constraints The late start to the project has put pressure on timing of training activities from the perspective of both the Vietnamese and Australian team members. However, these activities will be able to be accommodated as the project progresses. The Australian team wants to work with the Vietnamese team to ensure that training being delivered is relevant and needed. 7.2 Options The location of Dr Donna Brennan with CAP in Hanoi since October 2007 will mean that it is possible to deliver shorter training sessions with key CAP people. This approach could be useful because it can fit in more easily with the busy work schedule of CAP team members. Accordingly, Dr Brennan will conduct a 3-day training course in December on analysing feedmill costs, with an emphasis on linear programming techniques to investigate least cost feed rations and the influence of the price of feed ingredients on feedmill costs. 7.3 Sustainability The location of Dr Brennan in CAP will contribute to the sustainability of the skills and knowledge being applied by the project team in this project, by enabling more frequent follow-up and feedback on activities. 8. Next Critical Steps Activities for the next six months include: • Comment on the Desktop Review from Vietnamese and Australian team members, revision if necessary, and submission to CARD as a Milestone Report – by the end of the year. • Continue work on the quantitative description of the supply chain (from GSO and secondary data). • Finalisation of the survey instrument and submission to CARD as a Milestone Report – by early 2008. 7 • Training on analysing feed production costs planned for early December 2007 to be conducted by Dr Brennan. • Training planned for late-January to identify and discuss key issues from the Desktop Review, particularly those that will be relevant for the study tour to Thailand (e.g. policy environment), and specify learning objectives for the study tour, to be conducted by Sally Marsh. • Piloting the survey and commencement of surveying. • Study tour to Thailand in March 2008. 9. Conclusion Activities during this first six months of the project have focussed on scoping the issues facing the livestock feed sector in Vietnam by: 1) collecting available secondary data and reports; 2) conducting an implementation workshop involving industry stakeholders; 3) hands-on training in research-scoping skills conducted through field visits and stakeholder meetings; and 4) planning sessions for the desktop review and survey instruments. The late start to the project has put pressure on timing of training activities from the perspective of both the Vietnamese and Australian team members. However, these activities will be able to be accommodated as the project progresses. There have been some difficulties in developing a comprehensive survey that will provide the needed data, yet at the same time not be too difficult or lengthy for firms to complete. Activities for the next six months are planned and progressing. 8 9 Project Progress Against Proposed Objectives, Outputs, Activities And Inputs Project Title: Developing a strategy for enhancing the competitiveness of rural small and medium enterprises in the agro-food chain: the case of animal feed Vietnamese Implementing Institution: Institute of Policy and Strategy for Agricultural and Rural Development PROPOSAL PROGRESS REPORT Narrative Information Required Performance Measures Assumptions Information Required OBJECTIVE 1: Build capacity at IPSARD in research of value chain, industrial organisation and production economics Staff at IPSARD/CAP will be the primary beneficiaries of this Objective. Increased capacity at IPSARD/CAP has the potential to improve policy at the national level and hence impact on the livestock feed industry as a whole. Improvement in capacity as assessed against benchmark indicators by end of project 1. Capacity assessment is possible 2. Training and research will build capacity in needed areas 3. Australian team members have adequate knowledge in needed areas This objective is still very relevant – as IPSARD/CAP have many commitments to the Ministry and need capacity (e.g. problem formulation into researchable questions, data collection and analysis skills) to deliver useful information. OUTPUT 1.1 A training manual is developed over the life of the project, incorporating experience and knowledge gained during the training and case study This output will be a hardcopy and electronic resource and so contribute to both institutional capacity within IPSARD/CAP, and also sustainability of the knowledge and skills gained in the project. Training manual is developed and approved by IPSARD 1. Case study provides useful information for manual. 2. Manual will be relevant for future IPSARD research and policy work. Structure of the manual is being planned, and documentation of activities commenced. The research project will provide a suitable framework for a manual of this nature. ACTIVITY 1.1.1 Develop a training manual that describes the relationships between input and output markets in agri-industrial enterprises, the influence of government policies, scale economies and other cost factors on competitiveness. This activity will last the length of the project and is primarily the task of the Development of the training manual will be ongoing over the life of the project. [...]... was critical to building capacity of the team in relation to key indicators and operations of feedmills, and aspects of nutrition and livestock feed safety OUTPUT 1.2 ACTIVITY 1.2.1 Staff at IPSARD are trained in research methods for assessing the competitiveness of the animal feed chain This output is designed to build institutional capacity in linking problem formulation and data collection, and the. .. Report of evaluation of learners - Marks of learners in the training course A report on the training is included as Appendix III No formal evaluation of this training was conducted ACTIVITY 1.2.2 INPUTS OBJECTIVE 2 Provide a training course at IPSARD in quantitative techniques to be used in the analysis of the animal feed industry Time and expertise of Australian team members, commitment to training activities... capital, labor, asset and general business performance only), and • The data do not distinguish clearly between feed trading firms and feed mills Activities 3.1.1 and An important consideration in the development of the survey Quantitative description of the supply chain for animal feeds in Vietnam Develop questionnaires for the collection of Secondary data are relevant and available 15 detailed data... the GSO Indicators available are: • Total capital • Total labor • Total asset • Business performance • Income of labors ACTIVITY 3.1.2 - Number of It has become apparent that available secondary data is not enough to provide a quantitative description of the supply chain for animal feed in Vietnam, since: • There are not enough indicators for a quantitative description of the supply chain (information... Learners understand the method, and can use the techniques in Training meets IPSARD/CAP and CARD project research needs The concept of the training has been rethought to ensure that the training addresses specific capacity gaps in IPSARD/CAP, rather than just delivering “material-on-hand” from the Australian institutions On-going hands-on supervision of the survey process is planned as being part of. .. tour to Thailand ACTIVITY 2.1.1 Undertake a desktop review of the animal feed industry at the global scale, with special attention to the nature of demand for feed in industrial and in extensive animal industries, economies of scale in feed production, the role of SMEs; and the role of public policy in supporting the development of a competitive sector A report about world animal feed sector, clear lessons... (questionnaire) Team meetings and training in these areas took place from August 3-8 Training was provided by Dr Donna Brennan, Sally Marsh and Professor John Pluske The training was interactive and linked with industry consultation – field visits and meetings were followed by debriefing and discussion survey and quantitative analysis Training courses held - Short report on implementation of training course... results of quantitative analysis to policy advice Provide a training course at IPSARD in survey and data collection techniques to be used in the field work IPSARD/CAP staff already had a great deal of practical survey experience in the field IPSARD staff are able to carry out research work to achieve Objective 3 – and Outputs 3.1 and 3.2 are achieved Active participation by IPSARD staff in training courses;... written Information on SMEs in other countries accessible and relevant It has proved difficult to obtain information about SMEs in other countries The reviewer (Dr Jo Pluske) has been able to access information on SMEs mainly from China, the Philippines and Japan The draft report has not addressed the role of the poor in the value chain to any great extent A draft report is already completed and is being... tour and specify learning objectives Design a plan of working and study tour effectively, learning objectives clear A good working plan in Thailand, resulting in a useful Study Tour Report about SMEs in the animal feed sector of Thailand, and lessons from Thailand’s experiences The CAP team has discussed briefly on the Vietnamese delegation to be for the study tour The Australian team is pursuing possible . of rural small and medium enterprises in the agro-food chain: the case of animal feed Date: 1 st January 2008 1 1. Institute Information Project Name Developing a strategy for enhancing. enhancing the competitiveness of rural small and medium enterprises in the agro-food chain: the case of animal feed Vietnamese Institution Institute of Policy and Strategy for Agriculture and. strategy for enhancing the competitiveness of rural small and medium enterprises in the agro-food chain: the case of animal feed Vietnamese Implementing Institution: Institute of Policy and Strategy