Australian Team Leader’s report Welcome to the first issue of the MacadamiaNewsletterfor Vietnam. Congratulations to Vietnamfor joining the International Macadamia industry which includes Austra- lia, USA, South Africa, China and a number of other countries growing the worlds finest nut. The nut is a native of Australia’s rainforest and is still largely unknown, this is despite the fact, that it is one of the healthiest and finest tasting nuts the world has to offer. Growing Macadamia in Vietnam has the potential to enhance economic, socials and environmental values of the country, while at the same time helping to expand the global macadamia production of a higher value tree crop. Macadamia comprises of less than 2 % of the world nut trade, so additional production is needed if the world is to benefit from such a premium nut. Australia leads the world in terms of Nut in Shell (N.I.S.) production of over 40,000 tons a year and plantings of 21,000 ha more than double that of Hawaii and South Africa. Vietnam and Australian governments have recognised the importance of collaborative development in the agricultural sector with regard to many crops including that of Macadamia. Although Vietnam is a poor country, it has been recognise as a valuable partner when it comes to agricultural initiatives such as that of Macadamia. Under the Collaborative Agricultural and Rural Development program (CARD) the Australian and Vietnam governments are supporting a project which aims to help Vietnam in its sustainable devel- opment of a macadamia industry and integrate this development with that of the other involved coun- tries, especially that of Australia. The type of collaborative higher value agricultural development will help the poor farmers and agricultural workers while at the same time creating environmental and social benefits. Supported by MacadamiaNewsletterforVietnam Issue 1 2007 from little things big things grow 2 CONTENTS 1 Australian team leaders report 2 – 3 Macadamia project report 4—5 The Macadamia study tour of China 6—7 Project news updates • New training material –6 • The Lang son training workshop—6 • The 3 Macadamia nurseries; FSI, Lang son, & Ba vi —6 • New nursery at Yen Thuy—7 • Financial returns—7 8 Macadamia project supporting documentation Project report The Macadamia Project forVietnam (037/05/ VIE)–CARD is titled “Establish nurseries and training to effectively propagate high quality trees and trial plantation models of Macadamia in 3 provinces of North Vietnam.” This project is supported by the Collaboration for Rural Development Program, a joint initiative of the Vietnam and Australian governments. The 3 year project started in 2006 and is being conducted by the Center for Environment Tour- ism and Development (CETD) and the Subtropi- cal Farm Forestry Association of Australia (SFFA) This project has establish a new Macadamia nurs- ery and enhanced three existing nurseries. Also 3 principal variety trials of Macadamias are being established, of about 1 ha each involving 14 suit- able Macadamias varieties, in 3 provinces of north Vietnam. In addition the project is involved with 3 organizations undertaking 16 other trials. Training has been conducted in aspects of propa- gation, grafting, site design and preparation, planting, maintenance and plantation manage- ment at the nurseries and trial sites. This has in- cluded the distribution of CD, DVD and power- point presentations as well as hands on training at 2 formal Workshops as well as training in the field. 540 kg of seed nut from Australia and China have been provided to the nurseries along with 3000 sticks of Scion wood of the selected varieties and samples of grafting equipment dur- ing 2006. A further 1000 sticks of scion-wood was delivered to the nurseries in March 2007. A study tour to China was undertaken covering all the major nurseries and some key plantations in southern China. Reports of this tour including photos and a DVD video have been presented to the key stakeholders in Vietnam and Australia. A select group of small-holder farmers have been chosen to be involved with project activities in the provinces of Lang Son, B vi, Hoa Binh prov- inces. In addition the project continues to involve all known key government agencies involved with Macadamias in Vietnam including MARD, FSI, RCFTI, RIFA and RIFV. A number of pri- vate sector companies are also involved as is the Macca Club of Vietnam. 3 Significant progress has been made with regard to the capacity building of extension and technical staff since the commencement of the project in January 2006. The project continued over 2006 and the last 6 months of 2007 and included meetings in Austra- lia and Vietnam between participants communi- cating progress and key information relating to the participating organisations. The final report of the Macadamia study tour of China was made up of 2 written reports by both the Vietnamese team and the Australian team as, as well as a DVD video and photo CD and ac- companying notes. A summary of this report is included in this newsletter. The Australian team visit to Vietnam takes place every 6 months, during which over a 1000 pieces of Australian Scion wood has delivered to the 3 existing nurseries. This included all of the 10 Australian varieties, 246, 344, 741, 814, 816, 842, 849, A4, A16, A38 (originally Hawaiian except for A4, A16 and A32) selected for the trial. The team has also been visiting the FSI nursery and the Yen Thuy new nursery and trial site and pro- vided hands on training and information relating to key aspects of progress. Issues such as germi- nation problems of Australian seed nut and poor strike rates of some varieties were addressed. It was decided to import future seed nut from China not Australian. The strike rate of A varieties is very poor and this was re-confirmed to the nurs- eries. It was agreed that younger wood from Aus- tralia should be used as scion in the future. Solu- tions to problems with the new florist grafting tape were demonstrated. Some of the nurseries have adopted the Australian grafting techniques demonstrated during the training sessions. This along with techniques practiced in Vietnam and China were demonstrated to all participating tech- nicians once again enabling technicians to better train grafting staff and fine tune techniques. Those that had not attempted these techniques have been encouraged to do so. Further input was provided by the visiting 3 Chinese collaborators in this training and information delivery process at the Lang son Training Workshop detailed be- low. Nurseries that had tried Australian formulas for propagation and potting mixes were commended and encouraged to keep comparative data. Early evidence indicated that the new mixes were working well. The highlight for this period was the Lang son Macadamia Training Workshop held over 2 days and involving 44 participants. The comprehensive program included presentations and field visits. The program included presentations by the Viet- namese and Australian project leaders, Hoang Hoe and Martin Novak, providing an overview of project progress and key aspects of project devel- opment. Kim Wilson CEO of Gray Plantations and AMS Vice Chairman, made two presentations including a project update of the 3 principal trial sites and nurseries and an overview of Macadamia R&D in Australia and the World including the latest infor- mation presented at the Macadamia Congress in Brasil August 2006. A summary is included in this newsletter. The project partners presented reports on the re- sults of their activities and challenges. Dr Hai of FSI presented a report on his and Dr Kha’s Maca- damia research ranging over 6 years and 6 prov- inces of Vietnam. Again a summary of this report is included in this newsletter. Dang thi thuy Thao of WASI presented a brief report prepared by Tran Vinh of their trials at the workshop and have continued to work collabora- tively with the project team. Some aspects of this report are included in this newsletter. The visiting Chinese delegation represented by Dr Chen presented a comprehensive report on R&D in Quangxi China. The presentation fo- cused on a trial of 8 varieties examining quality and yield of NIS. This was followed by a pictorial presentation of nursery practice which stimulated a debate focusing on the variations between prac- tices in China, Australia and Vietnam. The field sites visit provided an opportunity for participants to demonstrate and further debate their various practices. The project is now working with organizations that are undertaking 16 Macadamia trials. There are the 3 principal Varietal trials at Lang son, Ba vi and Yen Thuy, the 8 FSI trials and the 6 WASI trials. On top of that there is the ThaiBinh Foods planting about to commence and the 8+ trials in China. 4 The Macadamia Study Tour of China In March 2006, as a part of the Macadamia CARD project,11 participants went on a fact find- ing tour of China to look at how the country’s Macadamia Industry has developed and what les- sons could be learned for Vietnam. The team spent 10 days in China involved in briefings, presentations and field visits, taking photographs, videos and detailed notes. The tour covered over 5000 klms of south China spanning from the east coast to the southwestern border regions. The tour entailed traveling by 4WD, bus, train and plane. A DVD Video and photo CD have been produced of the highlights of the study. A report of preliminary research of Macadamia was provide by Dr Chen and is available through the CEDT office. Prof. Hoang Hoe has prepared a comprehensive report in Vietnamese. Since he speaks, writes and reads Chinese he was able to translate into Eng- lish during most of the tour for Kim Wilson and Martin Novak the Australian project team repre- sentatives. We advise readers of this report to also refer to Prof Hoe’s Vietnamese report, which is very comprehensive. The translated Summary English version is Part 2 of this report. We also advise readers to refer to the DVD Video and CD photos of the tour in order to experience the atmosphere of the Macadamia culture of China and for addi- tional technical and experiential information. These are available though the CETD Office, Ha- noi as is Prof Hoe’s report. Tour Participants Martin Novak, President SFFA, Austra- lian Project leader. Kim Wilson, Vice Chair AMS Manager Gray Plantations. Project Consultant Hoang Hoe, National Director, Project 037VIE05. Nguyen Huu Loc, Chair, Vietnam Maca- damia Club, Interpreter. Nguyen cong Tan, President, Vietnam As- sociation of Rural Industry Small & Medium Enterprises. Nguyen huu Quang, President, Vietnam Forestry Association. Hoang Phuc, Managing Director, Long Phuong Co. Ltd. Nguyen Duc Son, Managing Director, A Chau Co. Ltd. Dang van Xuan, Chairman, Yen Thuy Dis- trict People Committee. Chen Xenguo, Chinese Expert, Subtropical Crops Institute of Guangxi,. Key regions visited included, Nanning Guangxi, Zhangjiang Guangdong, Kun- ming and Jinghong Yunnan and Long Zhou Guangxi. Key places visited included: GAMac Guangxi Fusui Company Chongzua city in the Fusui district Guangxi province, Guangxi Subtropical Crops Research Institute, Guangxi Subtropical Crops Research Centre, South Sub- tropical Crops Research Institute Zhangjiang, Yunnan Forestry Administration Kunming, Insti- tute of Tropical Crops at Jing hong, Jing Hong State Farm, Long Zhou State Farm and Nursery. 5 Summary of lessons learnt There are some limitations to the following ob- servations. At times the translation from Chinese and Vietnamese was difficult. Also cultural dif- ferences and variations in definition may have affected the perception of the outcomes of the research. However every effort has been made to record accurate information: The group visited most of the main large nurs- eries including GAMac – Fusui Co. 100000 Seedlings; Guangxi Subtropical Crops Re- search Institute - 50,000 Grafted and seed- lings; Zangzhiang - 100000 Grafted, cut- tings and seedlings; Yunnan Macadamia Development Company - 200000 grafted trees available (Claimed to be the biggest in Asia). Tree costs range from 12, 15-18 Yuan. The best nursery and plantation companies were the 2 Joint Venture Companies GA- Mac Fusui Co. in Guangxi and Yunnan Macadamia Industry Development Ltd in Yunnan. Both had Australian partners, pri- vate investors and state support. Yunnan Province is the most suited for Maca- damias both in terms of climate and soil. It has by far the largest plantings approxi- mately 3300 ha. Best varieties from all sites visited included 695, 788, OC, 741, 900, 800 and some of the Chinese selections. Varieties included some good selections of high performing trees, however there was a lot of uncertainty of varieties and varie- ties that were mis-labelled or incorrectly identified based on Australian understand- ing. Long Zhou State Farm and Nursery, near the Lang son border also showed some good tree selections, one of which is being in- cluded in the project trials. Field performance is based on highest yielding trees but these are few, up to 11 in some places. So the genetic diversity will be small if they become the principle industry trees. Original mother tree variety and ori- gin are uncertain in many cases. The quantity of grafted trees is mixed some good some not so good in all the nurseries. Claims of 95 % success rates appeared in- accurate upon viewing trees in the nursery. Generally nursery success rates and pro- duction rates appeared based on best per- formance rather than averages, which would provide a more accurate picture. Potting mix formula for cloned Eucalyptus at Forest Research Centre (Not allowed pho- tos) may have promise forMacadamia pot- ting mixes. This included charcoal rice husks, composed sawdust, sand and fertil- izer. There was little evidence of a well structured industry. Cooperation between organiza- tions lacked a well-developed management structure considering the 20-year develop- mental history of Macadamias in China. 6 Project News updates: New training material. New training material including a “Macadamia Nursery Manual for Vietnam” 2007 and a video “Grafting techniques in Australia and Vietnam “ have been developed this year. This is in addition to materials developed in 2006 listed below. The manual focuses on the propagation of grafted macadamia trees and covers such topis as the raising of seedlings, grafting techniques, nurs- ery design and and record keeping. It is princi- pally based on proven Australian techniques that have been adapted to suit the situation in Vietnam The Lang son Training Workshop The Lang son Training Workshop was the project highlight of 2006. The effort and ability of the Vietnamese team leader and the CETD staff in planning then implementing the activities neces- sary to ensure a comprehensive program and presentations and gain good participation by all know stakeholders was outstanding and is a great asset of the project. The presentations by all, were of a high standard and facilitated broad participation. It was particu- larly encouraging to see technicians and exten- sion staff, provide informative reports and dem- onstrate their keenness by a high level of involve- ment in all sessions both at the workshop and in the field. There was a notable difference in this regard when compared to the involvement during the Introductory Training Session held in Hanoi earlier in the year. Considering the limited experi- ence and exposure to the Macadamia industry it is to their credit that they are responding so effec- tively. The workshop was held in an atmosphere of openness which allowed participants to raise is- sues of concern, including the need for increased support for the trials, the need to undertake more pilot plantings in other provinces, the need to im- prove the quality of the seed and scion wood and the desire to involve more smaller farmers as well as to link more strongly to bigger commercial interests. Ways of addressing these issues were debated and are being implemented. All presentations are included in the Workshop Proceedings listed in this newsletter. The 3 existing Macadamia Nurseries FSI, Lang son & Ba vi and the variety trials. It is encouraging to see progress in the nurseries and trial sites. Most of the information and tech- niques delivered in previous sessions and visits were being tried, including grafting techniques and equipment, propagation techniques, potting mixes and fertilizer regimes. It was good to see the progress of FSI research in Macadamia presented by Dr. Hai and Mr. Kien at the Training workshop. Clearly FSI is the princi- ple Macadamia research body underpinning the projects role as well as that of some of the other private developments. They are using a compre- hensive range of genetic material including the following from Australia: Daddow, 246, 294, 344, 816,849, 856, 741 and NG8 and 2 varieties from China OC and A800. Also trees grafted from original trees planted in Ba Vi in 1994 including: MC1, MC2, MC3, MC4, MC5, MC6, MC7, MC8, MC9, MC10, MC11, ðC1 (trees planted from Australian seed), ðC2 (trees planted from seed in Ba Vi) and ðC3 (Cutting trees in Ba Vi). Mrs Ngo mai Phuong, Mr. Nguyen Duc Son, Nguyen thu Van, of the Lang son Seed Enterprise Co. under the directorship of Hoang Le Minh have also been doing some very good research Lang son workshop: Dr Chen (China), Martin No- vak, Hoang Hoe and Kim Wilson 7 both in the nursery and in trialing macadamia varieties in the field. They have been successful at trialing cutting and cloning techniques. This is very important work along with similar work by FSI which will help the industry produce macadamia trees quickly and cost effectively. Mr Nguyen Cong Duong and Bui Vu Anh at the Ba vi Nursery have been successfully propagating and grafting successfully all of the scion-wood received from Australia. They now have trees old enough to take scion wood from. And their nursery is now providing trees for the trials and other plantings. Progress at the new macadamia nursery at Yen Thuy The progress at the new nursery, accords with design plans and exceeds expectation of the Aus- tralian team. It is already demonstrating tech- niques include seed germination in well drained sand, potting mixes using much less soil and more sand and organic matter, larger potting bags, a lighter shade cloth and the use of plastic and gravel underlay for the potting bags. The Long Phuong Company’s new nursery is us- ing the people from the local community, to build the new nursery, for preparation of plantation land. Six workers are involved in propagation, preparation of potting mix, and maintenance. The Company has also successfully submitted a pro- posal to the Sweden Environment Fund (SEF) focusing on " the village environment". The Project objectives includes helping 20 house- holds, by building, Eco toilets, planting high quality grass in home-gardens, building 2 water wells to provide clean water and organized 4 Training Courses on Environment protection to all the local village people. The project has devel- oped successfully to date and compliments the Macadamia project. Financial returns The Macadamia Capital Development and Finan- cial Projection Model has been prepared, based on available cost data to date for a generic 20 ha plantation providing NPV and IRR projections over a 20 year period. This is based on a model developed in Australia and adapted for the situa- tion in Vietnam. Data used in the model has been collect since 2005. Additional data and some analysis was pre- sented by participants in the Lang son Workshop of October 2006. The yield data is based on Aus- tralian figures. Consideration of Chinese yield provided some validation, but until good yield data is available from Vietnam the resulting IRR and NPV figures should be treat with significant qualification. They should not be used to make serious commercial or research assumptions. Even much of the cost data needs to be expanded and progressively validated as the project pro- gresses and the infant industry grows in Vietnam. The model will be presented at the next Macada- mia Training Workshop. Copies of the Model are available from the CETD office. FSI Nursery Kim Wilson, Dr. Think, Dr. Hai, Mr. Phuc and Mr. Kien New Nursery at Yen Thuy Ba vi Variety trial by Jessy, Phuc and Kim 8 Macadamia Project Supporting Documentation available through the CETD office. Video - DVDs 1. Macadamia in Vietnam 2004 2. Macadamia in Vietnam 2005 3. Macadamia Study Tour of China 2006 ** 4. Macadamia in Vietnam – March/April 2006** 5. Grafting Macadamias in Australia March 2006** 6. Macadamias in Australia – AMS Promotional Video 7. Grafting techniques in Australia and Vietnam 2005 - 2006 Photo Presentations CDs 1. Grafting Macadamia in Australia – 2006 2. Macadamia China Study Tour – March/April 2006 3. Australian Macadamia Nurseries – 2006 4. Macadamias in Vietnam – 2004-6 5. Illustrated guide to identification of macadamia cultivars in South Africa by Peter Allan Training and Support Documents 1. Choosing Varieties and Tree Spacing. * 2. Row and Tree Spacing Options * 3. Planting Procedure * 4. Managing Young Trees * 5. Propagation. * 6. Notes on Macadamia China Study Tour – Novak 7. Notes on Macadamia China Study Tour – Hoe 8. Report on the Macadamia Study Tour of China – Part 1 Novak Part 2 Hoe 9. Proceeding of the Macadamia Training Workshop Lang son 2006 10. Proceeding of Macadamia Training Workshop Ba vi 2007 11. Macadamia Nursery Manual forVietnam 2007 News Letters. Macadamia News Letter for Vietnam—Issue 1 2007 Note: 1. * Notes based on Australian Macadamia Manual. Translations were provided at the Lang son Training Workshop October 2006 2. **Training support documentation and materials provided to project participants during the Workshop. All other documents were provide to participants at the Macadamia Introductory Workshop in Hanoi April 2006 or directly at field site training sessions. . Leader’s report Welcome to the first issue of the Macadamia Newsletter for Vietnam. Congratulations to Vietnam for joining the International Macadamia industry which includes Austra- lia, USA,. Lang son 2006 10. Proceeding of Macadamia Training Workshop Ba vi 2007 11. Macadamia Nursery Manual for Vietnam 2007 News Letters. Macadamia News Letter for Vietnam Issue 1 2007 Note:. Phuc and Kim 8 Macadamia Project Supporting Documentation available through the CETD office. Video - DVDs 1. Macadamia in Vietnam 2004 2. Macadamia in Vietnam 2005 3. Macadamia Study Tour