IDH and the World Bank join forces for sustainable coffee production in the Central Highlands of Vietnam
The Vietnam Sustainable Agriculture Transformation Project (VNSAT) functions as a strategic partnership between IDH - the Sustainable Trade Initiative and the World Bank, with a non-binding cooperation agreement first signed in 2016. Together they have boosted the sustainability of coffee production in the Central Highlands of Vietnam, benefiting tens of thousands of coffee farmers in the region.
The VNSAT is a credit from the World Bank for Vietnam to support its efforts in transforming the agriculture sector toward sustainable production, especially in rice and coffee. In the coffee sector, the project will directly benefit 65,000 coffee-producing households of about 250,000 people in five major Robusta coffee-producing provinces, including Lam Dong, Dak Lak, Dak Nong, Gia Lai, and Kon Tum in the Central Highlands of Vietnam.
When the implementation of the VNSAT started in late 2015, IDH worked with companies on individual projects for sustainable certification, benefiting more than 17,000 coffee-producing households. The organization also invested in pilots of water-saving models for coffee production, intercrop for diversification of income sources, and agro-input management. In 2016, IDH started driving further connections among the public, private, and civil society sectors, facilitating the development of whole sustainable coffee landscapes.
From technical support
Valuable technical support has been contributed toward VNSAT by IDH through the replication of their approaches in intervention areas. According to Mr. Nguyen Quoc Hoan, Vice Director of the VNSAT Project Management Unit in Dak Lak Province. “IDH has convened all players of the coffee sector, including government, companies, traders, civil society, NGOs, etc., to co-invest in the project.”
“Promoting the public-private partnership in the coffee sector is the biggest strength of IDH,” emphasized Mr. Hardwick Tchale, Senior Agricultural Economist at the World Bank. “The Project’s sustainability depends on the partnership between private sector and farmers, and we hope that IDH will continue to provide technical support to this partnership so that Vietnam’s coffee sector thrives even after the project closes.”
It is also stressed by Mr. Le Van Hien, Director of VNSAT Project Management Unit under MARD, “The timely and effective support from IDH to link with the private sector is very helpful to make the investment of VNSAT program more effective to show the strong link with market demand, ensuring the sustainability of World Bank investment for the coffee sector in the long run”.
Alongside this, IDH has shared technical information on agrochemical management, agroforestry, intercrop, water management, and landscape development for VNSAT. As a consequence, The World Bank has invited IDH to participate in the bi-annual project implementation support missions as a technical adviser for the coffee component, recognizing their valuable technological insight.
To real investments and field impact
The World Bank and IDH co-invested in piloting the Internet of Things (IoT) solution in a coffee evapotranspiration model that analyzes the daily water demand of the crop, based on this mobile application farmers can be advised on the irrigation needed. The pilot shows that farmers’ performance in applying the system has improved water saving by 30% and created a reduction in electricity and labor costs by 20%. Due to the combined and continuous investment in technology by IDH, companies, and farmers, a greater impact has been made which proves critical as this year’s dry season has prolonged further than previous years. As such IDH will continue to facilitate the scaling-up of farmer adoption of water-saving technologies in the Central Highlands.
Last year further accomplishments were made, with VNSAT’s investment of 570,000 USD in farmer cooperatives in PPI (Production, Protection, and Inclusion) Compacts of Krong Nang District, Dak Lak Province, and Di Linh District thus improving infrastructure and irrigation systems. VNSAT also financed the capacity building and credit for coffee rejuvenation in the three PPI compacts of Krong Nang, Di Linh, and Lac Duong districts, based on market requirements of sourcing companies. The total investment for sustainable coffee production in three districts is expected to reach almost 2.5 million USD in 2020. “These investments from VNSAT are valuable, especially in adaptation with climate change to sustain coffee quality provided to markets”, said Mr. Nguyen Tien Dung, sustainability manager of Simexco Company.
Mr. Daan Wensing, IDH Global Landscape Director confirmed that “We are glad to be working together in the partnership between MARD and the World Bank to mobilize investment for coffee farmers in the Central Highlands. This will enable the transition to climate-smart coffee production, better farmer income, and the development of Vietnam. The next step is to scale the models we jointly developed, to benefit more farmers and the environment.”