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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 MS6: Fourth Six-Monthly Progress Report April 2007 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, Leonie Osborne Date commenced 30 June 2005 Completion date (original) March 2007 Completion date (revised) September 2007 Reporting period Fourth six monthly progress report Contact Officer(s) In Australia: Team Leader John Campbell Name: Project Leader Position: Organisation HortResearch Telephone: Fax: Email: +64 528 9106 +64 528 7813 jcampbell@hortresearch.co.nz Telephone: Fax: +64 815 8819 +64 815 4202 Email: losborne@hortresearch.co.nz Telephone: Fax: Email: +84 73 893 129 +84 73 893 122 mch@hcm.vnn/vn In Australia: Administrative contact Mrs Leonie Osborne PA, Bioprotection Group Leader Organisation HortResearch Name: Position: In Vietnam Dr Nguyen Minh Chau Name: Project Champion Position: Organisation SOFRI 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 and BRC standards in a pilot packhouse in the Binh Thuan province, to enable Vietnamese growers to export dragon fruit to high value European markets When implemented, the pilot will provide a model GAP system for adoption by other dragon fruit farmers and packers in the Binh Thuan and Tien Gieng Provinces and also to other Vietnamese fruit sectors Executive Summary This report is the fourth progress report for the Collaboration for Agriculture and Rural Development (CARD) project 037/04VIE and covers the period September 2006 to 28 February 2007 For continuity of reporting much of the 3rd six-monthly report content has been retained; this has now been updated and the achievements for the fourth six-monthly period are included in this report The HortResearch project leader has made one visit to Vietnam during this reporting period as scheduled: 18 November to 12 December 2006 There have been no changes to project personnel during the reporting period Mentoring of the Vietnam project team has been ongoing Southern Fruit Research Institute (SOFRI), Ministry of Agriculture and Rural Development (MARD), Department of Agriculture and Rural Development (DARD) and commercial personnel are included in the training which covers all facets of Good Agricultural Practice (GAP) at the various levels Enhancement of the national capability of people and infrastructure continues to be given high priority by the project for ultimate sustainability obligations “Introduction to Internal Auditor Training” Courses were delivered to selected SOFRI staff and to the pilot packhouse key personnel Mr Nguyen Huu Hoang reported on his study tour to New Zealand and also used his Microsoft® PowerPoint presentation as a training tool when establishing GAP in the pilot Field observations for the farmers’ benchmarking survey were completed in the first reporting period The data were subsequently translated into English, entered into a web based database and analysed The benchmarking survey report was prepared by HortResearch personnel and delivered as a PowerPoint presentation by the project leader to SOFRI personnel also packers, farmers, MARD and DARD personnel of Binh Thuan during March/April Selection of a packer/exporter and farmer group for the Project Pilot to receive project input, confirmed during the September 2006 visit, was formalised Training of the Pilot members for improvement towards British Retailers Consortium: Global Standard – Food (BRC) for the packer and EUREPGAP for the farmers continues The training involves quality systems, health and safety, technical, product traceability and environmental issues that will, when adopted, enable the participants to meet compliance with the required standards A component of the field visits by the project leader has been to observe the current practices of the dragon fruit farmers and packers These findings have formed the basis for the quality manual preparation The dragon fruit quality manuals for the farmer and packer have been developed in a way that closely relates to the current practices, includes appropriate improvements to enable the farmer and packer to comply with the EUREPGAP and BRC standards, and are user friendly Most of the manual has been translated into Vietnamese The manual has been issued to the pilot packer and farmers The standards being implemented incorporate all issues identified in the project objectives During the project leader’s December visit, extensive training was provided to the pilot packhouse senior staff and farmers which involved all the physical changes to facilities, quality systems establishment, personnel training, compliance issues and auditing requirements as documented in the Dragon fruit Quality Manual for the Pilot to reach compliance with BRC and EUREPGAP Standards High value markets are being identified and evaluated for dragon fruit to be exported from Vietnam, both for fruit when certified and for the project-improved fruit exported during the transition period towards certification A financial incentive is to be paid by the packer for qualifying fruit during the transition period Inputs identified in the project document for Year had been purchased The CARD dragon fruit project continues to be well publicised in the local and national newspapers and television during this reporting period 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 groups in the field Establishing manuals, Codes of Practice and the development of training material that are 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 Progress to Date Implementation Highlights 5.1.1 Benchmarking The field portion of the benchmarking survey was completed by the SOFRI team in late July 2005 Some 124 farmers from Binh Thuan and 30 farmers from the Tien Giang Province were questioned The SOFRI team recorded farmer information for the formal EUREPGAP oriented questionnaire (Inception Report: August 2005 Appendix 2) and also recorded additional current agronomic and technical information relating to the surveyed farmers dragon fruit production practices The benchmarking survey data were analysed at HortResearch by Dr Jim Walker and Patrick Connolly who also prepared a PowerPoint presentation (Appendices and of the 3rd Progress Report, August 2006) for delivery during the scheduled March 2006 visit It was originally planned for Dr Walker to travel to Vietnam to make the PowerPoint presentations, but this was not possible because of his other work commitments As a consequence, the benchmarking PowerPoint presentations were delivered by the project leader during his March/April visit, initially to the staff of SOFRI then to DARD and some industry personnel in Binh Thuan The presentation has subsequently been used as a training tool for the farmers and packers of the area During the PowerPoint presentations, care was taken to emphasise the standards observed in the survey and to relate those conditions to the standards required to meet the high value customer-driven demands The PowerPoint presentation and other information contained in the benchmarking survey database are being used by the SOFRI scientists during their research work 5.1.2 GAP Manual Development The Dragon fruit Quality Manual has been completed in English and is currently being translated into Vietnamese This manual was to be completed by the end of March 2006 (milestone #4) in the draft form but had been delayed because of time constraints and the clarification of copyright issues The manual has been developed specifically to meet the needs of the quality systems of the project pilot The manual has been developed at the farmer level to the EUREPGAP Standard and in the packhouse to the BRC Standard and apart from being a living document, has been completed in the final form Future use of the manual to other packhouses will have the advantage of a manual that is an actual working document while being adapted to their particular packhouse/farm application Full verification of the appropriateness of the Dragon fruit Quality Manual to address the specific standards of BRC and EUREPGAP and the requirements of the customer, the pilot packer and farmers will be confirmed by the Independent Certifying Body Compliance assessment by the Certifying Body was planned take place during December 2006; however, the pilot was not ready and significant modifications were planned/being implemented for the packhouse to better comply with the standards An assessment/internal audit is planned during the next visit of the project leader and the decision on when to call for the Certifying Body inspection will be made at that time 5.1.3 Develop Implementation Plan – Completed: First Progress Report 5.1.4 Establish pilot GAP programme for year one As documented in the February 2006 report, the packhouse of Mr Hiep of Queen Farm, Hoang Hau Dragon Fruit Farm Co Ltd, was identified to be the project’s pilot for packing dragon fruit Subsequently project personnel negotiated with Mr Hiep to define the level of commitment to and cooperation with the project for the development of his packhouse to meet the BRC Standards and project expectations During the July visit by the project leader, a contract between Mr Hiep and Dr Chau as Project Champion was generated and signed Agreement to work together with the pilot is based on the memorandum of understanding that was under discussion as described in the February 2006 report Indeed many of the issues for improvement highlighted by the project during the previous visits were being or had been addressed by Mr Hiep Mr Hiep has committed his resources and staff to the project pilot development As well as committing the packhouse to the project, Mr Hiep also committed his 70 hectare, dragon fruit producing farm to the pilot to be developed for compliance with the EUREPGAP Standard During this reporting period Mr Hiep indicated that he was proposing development of a large packhouse modelled on the pilot packhouse for future expansion; indeed, construction for buildings to house the packing facilities was underway at the time of the project leader’s visit in December The Dragon fruit Quality Manual was presented to Mr Hiep in the English version and the Vietnamese version, which was complete apart from the Position Description section During this reporting period the project team conducted intensive training/mentoring sessions with the pilot’s staff holding responsible positions within the packhouse and participating farm owners/managers The areas of training and guidance covered included: The project scope and delivery The customer and customer demands Quality systems, their purpose, structure, establishment and management Defining the “process” on-farm through the packer to the exporter Linkages between farmer and packer and responsibilities and expectations The dragon fruit quality manual, its development, scope and application Feedback to ensure the “appropriateness/workability/fit’’ of the manual for the intended purpose Identification, guidance and purpose for physical improvements required by the project pilot facilities, both on-farm and at the packhouse, to comply with the dragon fruit quality manual Identification of positions in the “process” and ensuring that responsibilities had been correctly documented in the position descriptions within the manual Provision of training to people designated for positions of responsibility in the pilot The role of the internal audit The responsibilities of the Internal Auditor Processing of corrective action and sustainability 5.1.5 Implementation of Quality Systems In previous reporting periods the project had provided training in quality systems to any identified group that would benefit from adopting GAP Confirmation of the pilot participants and pilot scope during the last reporting period saw the training programme of the project become more focused and address the specific needs of the farmers and packer of the pilot, to enable them to meet compliance with the standards before the proposed assessment visit by the Certifying Body During this reporting period, training provided was very specific to the pilot’s needs and included all components as detailed in the Dragon fruit Quality Manual, guidance on physical changes required at the packhouse and on the farm, Internal Auditing and for an understanding of the quality systems and the need to be market driven Choice of quality system standards: The project chose the existing BRC and EUREPGAP quality standards as the most suitable to meet the demands of the target customer while protecting the interests of the Vietnamese stakeholders At the farmer level the EUREPGAP Standards are being applied and at the packhouse the BRC Standards are implemented Both standards complement each other to ensure the dragon fruit produced and packed is confirmed as safe, legal and of the quality expected by the high value market customer The choice of the two standards has been determined by the access conditions to high value markets identified in the project document The project is very “customer driven” and the quality system will meet all the customer’s requirements when fully implemented and will specifically provide documented proof of compliance for safe, legal quality control and traceability for the entire product during the production and packing processes The quality systems developed will easily respond to any additional requirements from specific customers The quality checking and documentation systems being employed in the pilot can also protect the farmer and packer from claims for damage to product (non-compliance issues) subsequent to the product leaving the packhouse The current process and status of the quality system of the pilot is: Pilot participants identified and their association with the project formalised The BRC Standard has been selected for the packhouse quality system The EUREPGAP Standard has been selected for the farmer quality system The Dragon fruit Quality Manual has been developed in English The Dragon fruit Quality Manual is being translated into Vietnamese The English and Vietnamese versions of the manual have been distributed to the packer and relevant portions of the manual provided to the farmers of the pilot Physical changes, required by the quality system, in the packhouse and on the farm have been initiated and in some areas completed Vietnamese project personnel have the skills to train dragon fruit industry stakeholders in all areas of quality Intensive and targeted training has been provided to packhouse staff and farmers Quality systems are being developed in the pilot as described in the manual, under the training and guidance of the SOFRI project team Health and Safety and Risk analysis studies have been made for the pilot and documented as required by the standards Internal Audits have commenced to determine the quality status of the pilot with corrective action and training process being implemented It is proposed to call for an external audit by a Certifying Body when the pilot is operating in compliance with the standards as verified by the Internal Audits 5.1.6 Review Compliance The project leader negotiated with Société Générale de Surveillance (SGS Vietnam), (in Vietnam, Regional Indonesia and New Zealand) an International Certifying agency, to provide an estimate for certification evaluation of the project initiatives Quotations for the inspection and certification of project farmers and the packer were received from SGS Vietnam and subsequently a proposal was presented to CARD for the funding of the SGS services CARD approved the funding of the External Audit and Certification services and this component has been included in the project as a new and separate milestone During discussions with SGS at their Ho Chi Minh office, the project team were informed that SGS Vietnam now have trained inspectors for both EUREPGAP and BRC Standards Internal reviews of the pilot have been undertaken in the form of BRC/EUREPGAP Internal Audits The data collected have been used to determine the compliance status of the project pilot development and to initiate/tailor corrective action and training It is intended that the learning process of the pilot development will be adapted for subsequent training during the outreach programme 5.1.7 Expanded Year Programme and delivery to additional farmer groups Word of the CARD dragon fruit project and how it can assist packers and farmers access high value markets is spreading in Vietnam and the SOFRI project team continues to receive serious approaches from interested parties for assistance 5.1.8 Implement Year training Farmers and packers showing an interest in the project are being included through invitation to training sessions being undertaken, or are mentored separately as time permits Following success of the pilot it is expected that this training will become more formal and serious At this stage it is also expected that the training will be done utilising the increasing capability of the Vietnamese personnel Smallholder Benefits 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 is being given to all aspects of National Capacity Building to ensure sustainability upon project completion The project has tried very hard and expended a lot of project time on the identification of small holder farmers and their subsequent quality training to fulfil the project document’s obligations, but it still remains that the small holder farmers will not commit themselves to be sustainable to GAP at the level required by the customer and the project For this reason the project accelerated the development of the pilot to demonstrate that GAP is viable at the small holder farmer level Farmers are being welcomed into the project training programme when they step up to the required commitment to customer standards As the pilot develops towards the quality Standards of BRC and EUREPGAP, high value markets are being identified It is intended that product from the pilot will be, following negotiations with the customer, exported in a form that can go directly to the high value market and not be subject to any rework in the country of destination It is the desire of the project to maximise returns and reduce waste from product exported to ensure increased revenue for the farmer and sustainable returns for the service operators such as the packer and exporter Capacity Building Initiate capability building of Vietnamese project collaborators Capability building of Vietnamese project collaborators has again advanced dramatically over this reporting period Dr Chau has set up an environment at SOFRI that is encouraging his staff to adopt the GAP initiative This environment is greatly assisting the project leader to transfer his quality skills to the project team and subsequently to farmers and packers The Vietnamese project collaborators have an excellent understanding of GAP, and are showing confidence in delivering the project training to farmers and the packer both while the New Zealand project leader is in Vietnam and also between visits Mentoring and communication, both ways, between the project leader and the Vietnamese team, are excellent Dr Chau’s enthusiasm for the CARD project’s success continues to lead to the establishment of GAP support facilities being developed at SOFRI that, while outside the scope of the project, are required by a future GAP-driven horticultural industry and will ultimately be of benefit to the project and its sustainability It has been disappointing that DARD personnel in the Binh Thuan Region have shown a reluctance to embrace the dragon fruit to the level anticipated by the project A formal Internal Auditor Course was presented to eight appropriate SOFRI staff by the project leader and Mr Nguyen Huu Hoang The New Zealand Organisation for Quality (NZOQ) gave official approval for the project leader to use a percentage of the same course material as that used during Internal Auditor training in New Zealand This is the same material as the two day course that Mr Hoang attended during his New Zealand study tour in June 2006 Because of the requirement of NZOQ to only use a portion of their course material the SOFRI training was done over one day and was called an “Introduction to Internal Auditing” (Appendix 1: Course content, participant names and Certificate of attendance) A less formal Internal Auditor training course was also presented to the senior pilot staff/participants Such was the response to the SOFRI Internal Training course that the project leader has been requested to present the full two day course on a future visit The project leader is seeking approval from NZOQ to use their material and present the course: initial indications are that the project leader will meet the NZOQ presenter qualification and experience criteria The scope of NZOQ Internal Auditor training course material presented was a real eye opener for attendees Publicity During this reporting period the project leader prepared a draft paper on “Quality Systems for Good Agricultural Practice of Dragon fruit Production, Packing and Export” (Appendix 2) The paper was prepared as part of SOFRI’s commitment to publish a document about “Quality in the Vietnam Horticulture Industry” It was also intended that the paper would provide some background to the decision making process employed by this project and to assist other quality practitioners when implementing quality initiatives in the future Project Management There has been no change to the Project Management team during the reporting period The project team continues to work well together with excellent, friendly, transparent and honest communication Equipment purchases for the project for Year and Year are complete A table of equipment purchased, the identification information, equipment location and responsible person appeared in Appendix of the August 2006 report 6 Report on Cross-Cutting Issues Environment Environmental issues identified during the benchmarking survey continue to be addressed as part of the technical transfer presentations to farmers They include: Safe use of agrichemicals Appropriate use of fertilisers to provide good plant nutrition without damaging the environment Disposal of human waste and grey water And other areas identified in the standards of EUREPGAP and BRC 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 and equal opportunity for both men and women Documentation of good working conditions, responsibilities and accountabilities and conditions now appear in the Dragon fruit Quality Manual text and specifically in the Position Description section Implementation & Sustainability Issues Issues and Constraints At the farmer level: Issues and constraints at the farmer level remain unchanged from those reported in previous reports The role of the collector, through providing early cash flow for the farmer, sometimes harvesting the crop and providing transport for the fruit, remains a major constraint to fruit traceability Traceability is a “major” requirement of GAP production The VNCI-developed Grade Standards and a photographic wall chart for dragon fruit as described in the February 2006 report have proved unsuitable for the purposes of the CARD project Pilot At the packer level: The lack of Wall Chart Grade Standards is also a constraint to packhouse quality system development and operations A potential issue/constraint at the packer level could be delays in implementing all the quality system, physical change, and personnel training required to meet manual instructions for compliance to the standards At the exporter level: There has been no reported improvement to the two very serious issues and constraints that become evident during the August 2006 reporting period: All fruit being airfreighted from the Ho Chi Minh City airport are scanned in the individual carton state While the integrity of the individual carton security remains intact, a major problem occurs during the disassembly of the consignment It has been reported that: cartons of fruit out of coolstorage are being held on the tarmac awaiting the scanning process; cartons are sometimes covered by tarpaulin for a period of time where fruit heats and cartons can become water soaked; cartons from different consignments become mixed The loading process is determined by the availability of plane containers Airlines used to airfreight dragon fruit from Vietnam not respect the perishable nature of dragon fruit and consignments have been reported as arriving in either a heated or a frozen condition – with no value in the market and ensuing legal battles to get compensation At the market level: The high value markets, especially in Europe, require fruit that meets EUREPGAP and BRC compliance for production and packing and handling As project implementation advances, there will be fruit available for export that will be close to meeting the standards but not certified It is important that this transition fruit is exported to a high value market that produces improved returns to the farmer At this stage, market availability for the transition fruit and greater returns are not guaranteed At the project level: While not a major constraint, improvement to the SOFRI communication systems would be an advantage As the CARD project is the first to implement GAP in the Vietnamese horticulture industry, it is finding a dearth of infrastructure to support this initiative National infrastructure deficiencies for GAP production are being developed on a “project specific” basis However, it is not certain that these preparations will eventually meet the standards required by the certifying agency Options At the farmer level: The packer has increased the price paid for quality-compliant transition fruit No provision has been made for the collector in the project pilot A protocol will be subsequently prepared for the collector to operate in a way that meets the quality systems standards The protocol will include auditing of collectors to ensure they meet compliance and the biggest issue of traceability is being addressed Wall charts tailored to the specific needs of the project pilot (dragon fruit industry) are being developed by SOFRI personnel The charts are based on a dragon fruit quality paper written from earlier research done by SOFRI and HortResearch scientists, still to be published High value markets are being identified in Europe and the United Kingdom At the packer level: The wall charts being generated and will be utilised through every stage of the supply chain to the customer Project manuals and training are being provided for project recipients Intensive training for the pilot packhouse senior staff and farm managers/owners has continued during this reporting period and has included: BRC Standards; Quality Manual content, purpose and use; packhouse changes to meet requirements; personnel training/understanding; packhouse operations; quality systems; Internal Auditing processes; Certifying Body At the exporter level: The two very serious issues and constraints identified have the potential to nullify all the efforts of the dragon fruit project Resolution of these constraints is outside the scope of the dragon fruit project but they have been brought to the notice of Dr Chau and will be presented to the other project which has the responsibility to deal with supply/value chain issues in Vietnamese horticulture Leaders in the horticulture industry are aware of the constraints The externally audited quality systems being implemented by the project are of such a standard that there should be no need for cartons of dragon fruit to be disassembled from the consignment or scanned An exemption from scanning for these consignments would be appropriate Airlines airfreighting dragon fruit from Vietnam must respect the perishable nature of the fruit and freight at the correct temperature Airlines failing to comply should not be used (will not be used by the project when exporting compliant fruit) At the market level: The project has negotiated a premium to be paid by the packer for farmers’ fruit that meets the GAP standards during the transition period New initiatives to access high value markets are progressing and it is expected that long-term beneficial supplier/customer relationships will materialise At the project level: SOFRI is currently improving its communication systems The CARD project continues to encourage the establishment of appropriate infrastructure to support the quality systems being developed in the dragon fruit industry Sustainability Sustainability is being addressed by the project through: Development of the national capacity This reporting period has seen a great increase in national capability and understanding of horticultural quality systems The improvement has been particularly noted in the SOFRI project team in their understanding of “quality”, their willingness to train others and enthusiasm for the project delivery Every effort is being made to transfer the knowledge gained by Mr Hoang during his study tour to New Zealand to all project recipients An Introduction Internal Auditors’ course was presented during the project leader’s November/December visit to SOFRI staff and senior pilot personnel The project leader was involved in a CARD (GTZ) study tour of senior Vietnam personnel to HortResearch at the Mt Albert Research Centre on 28 February The study tour purpose was “to expose leading agricultural research sector decision makers to the approaches taken by Australia and New Zealand to the reform of the agriculture research sector in both countries” The study tour was seen as an integral part of developing an active and appropriate infrastructure in Vietnam to support the quality initiative piloted in the dragon fruit project The briefing document and a list of participants for the Study Tour is contained in Appendix and the project leader’s PowerPoint presentation is included in Appendix Training of exporters, packers and farmers by practical demonstration while establishing the pilot Establishment of appropriate infrastructure within Vietnam to support the project and the current GAP quality initiative in the horticulture industry Systematic expansion of the model to other groups and areas Provision of the critical mass of EUREPGAP/BRC Standards-compliant fruit and processes for high value market evaluation as early in the project as possible, to demonstrate the financial viability of having robust quality systems in place Communication of the merits of health and safety, environmental and social reasons for GAP implementation – especially for farmers The implementation of constant improvement and installing of systems to prevent slippage back to old ways Good progress has been made in these areas during this reporting period It is expected that the pilot will be operating sustainably at compliance with the standards in preparation for the external certification inspection/audit during the next reporting period Next Critical Steps The next critical steps are continuation of the project directive, which involves: Mentoring of Vietnamese project personnel Completion of the translation of quality manuals based on EUREPGAP/BRC Standards, for the farmers and packer The manuals include Codes of Practices, Protocols and Position Descriptions for specific functions, Grade Standards for fruit maturity and quality, identification of Certified Service Providers, etc Establishment of the documented quality systems on the pilot farms and packhouse to reflect the documented quality system Training of farmers and packhouse operators to ensure their operations “match” the intent of the quality manual Conducting internal auditing to confirm compliance is being met and appropriate corrective actions are being implemented Arrange for SGS Vietnam, as the appropriate Certification Body, to audit the farmer/packer pilot when the pilot has been operating in compliance for a period that demonstrates competence Fine tuning of the pilot structure for certifying purposes requires some negotiation with SGS to ensure the ongoing inspection and certification costs to farmers and the packer are kept to a minimum Identifying high value markets to which to export certified EUREPGAP/BRC fruit Testing those markets with transition fruit to determine “Client needs” and an early indication of higher profits (if any) to encourage farmers to make the change to GAP Constraints within the project scope: There has been no change in constraints for farmers to embrace GAP fully at a level to meet the EUREPGAP Standards The project-negotiated increase in dragon fruit price per kilo from the packer for fruit from GAP transition farmers has helped to increase farmer interest Farmers need demonstration that their energy to produce GAP fruit will indeed materialise in higher returns Farmers require access to development and seasonal finance at an economical rate The role of the collector through purchasing the farmers’ fruit either at the farm gate or on the dragon fruit plant provides early cash flow for the farmer but prevents the application of fruit traceability systems Mitigation: Farmers (and the packer) are being encouraged to implement GAP for environmental, family/staff health and safety reasons as well as accessing high value markets Negotiations with high value markets are progressing to determine actual values for the fruit that meets compliance Those markets will be tested with transition fruit prior to certification being achieved It is anticipated that higher fruit returns will encourage more farmers to adopt GAP production practices The need to identify seasonal and development finance providers continues to be highlighted It is recommended that farmer training in small business and financial management should accompany any provision for seasonal and development finance Financial independence for the farmer will greatly reduce the power of the collector over the farmer’s operations Constraints outside the project scope: It has been brought to the attention of the project team that all airfreight dragon fruit being exported through Ho Chi Minh City airport must go through the airport scanner Security of the individual carton is not compromised because each carton has been taped top and bottom and a heat sealed band applied but the pallet of cartons from the packer has to be broken down This can result in: A breakdown in the integrity of the documentation of the consignment Potential for cartons from different pallets to be mixed Cartons of dragon fruit being damaged during handling Cartons of fruit exposed to the elements – left in the sun; or water damaged during rain It has also been noted that airlines freighting dragon fruit from Vietnam not respect the product and there have been reports of cooked and frozen fruit arriving in the market place Mitigation: These two issues were brought to the notice of the project team at the end of the July/August visit to Vietnam Both issues have the potential to destroy all the project efforts to develop safe, legal and high quality dragon fruit from the farm through the packer and exporter to the customer The project leader is attempting to overcome these potential problems by: Legislation/standards search for airport handling of perishable fruit and vegetables Legislation/standards search for airline carriage of perishable fruit and vegetables Creating awareness of the potential problem with the Vietnamese Institution for them to lobby Government for a resolution of the problem Bring the problem to the notice of other projects in the area – particularly in the area of identifying and resolving constraints to the value chain The quality system being applied to the dragon fruit industry will have the capability to determine where problems occur in the delivery chain, but airlines will still contest any claim made on them for malpractice Opportunity: Refer to the briefing document for the CARD Study Tour to Australia and New Zealand in Appendix The success of the current changes proposed for the Vietnam agricultural research sector will be dependent on that sector’s ability to be appropriate to industry needs and to generate revenue from its research and extension The ability to identify industry agronomic, pest, disease, harvest and postharvest problems of economic significance and to generate sustainable revenue from problem solving and extension will be very dependent on the strength of the agricultural/horticultural industries it serves The quality initiative currently being implemented in the dragon fruit industry is at an opportune stage of development and, given appropriate leadership, could be coordinated into an enterprise that has the size and ability to generate revenue for ongoing promotion, research and development Access to the high value markets of Europe, the United Kingdom and North America is dependent on the stringent quality standards being developed for the dragon fruit industry through this project As the dragon fruit initiative develops, all new participants could be directed to join the coordinated approach Areas that require addressing include: Registration of all dragon fruit farmers, packers and exporters Product branding (country - market) Coordinated marketing (even to single desk selling) to maximise returns Coordinated quality systems, data collection and analysis Coordinated promotion, research and development Integration of the research sector with a well organised industry would ensure research is appropriate and funded The project is addressing most of the constraints as they emerge However, the project team believes that outside assistance will be necessary to solve the seasonal and development finance situation of farmers as the pilot demonstration is delivered to the wider dragon fruit industry and to resolve the Airport and Airline problems Conclusion 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 based on the development of a demonstration “package” of Exporter/Packer/Farmer group with quality system standards compliance as a working model for subsequent expansion of GAP in both the dragon fruit and other fruit sectors in Vietnam This reporting period saw an increase in commitment by the identified packer to the project pilot and a significant increase to the national capability in quality system management, understanding and training The identified project dragon fruit pilot packer has become customer driven and is providing the necessary resources required to implement changes The packer is preparing/has started construction of expansion to his operations for new packing, coolstore and storage facilities modelled on the Project pilot The pilot development has enabled the quality manual to be completed, BRC Standards to be initiated in the packhouse to complement EUREPGAP Standards developed on the farm, quality systems to be installed and staff trained in identified position responsibilities The major highlights during this reporting period have been the enthusiasm, reception to training and delivery by the pilot personnel and the Internal Auditing Course as presented to SOFRI staff No major constraints to project implementation have been encountered at this stage Some critical issues outside the project scope have been identified and are being addressed separately The project is on track 10 Statutory Declaration The CARD contract is a lump sum outputs based contract CARD does not require institutions to submit receipts (although they need to be retained by institutions for accounting and taxation purposes) CARD does need to be assured that the inputs detailed in the Contract Schedules have been delivered The statutory declaration below is to be used to provide this assurance  ...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... 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... manuals and training are being provided for project recipients Intensive training for the pilot packhouse senior staff and farm managers/owners has continued during this reporting period and has included: