Vietnam – SUCCESS Alliance

Building a Sustainable Cocoa Industry & Strengthening Rural Business Support Services for SMEs

Through a three-year U.S. Department of Agriculture (USDA) Food for Progress award valued at $5.5 million, ACDI/VOCA builds on successful projects in Indonesia and the Philippines and ACDI/VOCA’s strong relationship with the cocoa industry. Through its project, ACDI/VOCA also works to strengthen services to small enterprises in the Mekong Delta Region.

The first component of the program focuses on building a sustainable cocoa industry in Vietnam from the ground up. This project, the SUCCESS Alliance, will increase and diversify farmer incomes in southern Vietnam by producing high-quality cocoa on approximately 7,500 hectares of land; training 17,000 smallholder farmers in southern Vietnam in cocoa production using sustainable cropping practices; and establishing cocoa bean quality standards and providing monitoring and training assistance to assure farmers meet and maintain cocoa bean quality.

Target cocoa production areas include the Mekong Delta and other southeastern provinces close to Ho Chi Minh City. These areas have favorable climatic and soil conditions for cocoa production. It is expected that the newly established cocoa farms will begin to produce cocoa within 18 months of initial planting and will be in full production within 4 years. Peak production is expected to be between 1.5 to 2.0 MT per hectare, which at current world prices would earn over $2,000 per hectare. These new cocoa farmers are independent smallholders who trade their cocoa production through private, free enterprise channels. This addition to the cash-crop portfolio in Vietnam will provide an opportunity for rural traders, businessmen and domestic food processors to participate in the global cocoa bean trade, which exceeds $6 billion annually.

In implementing this component of the project, ACDI/VOCA will be supported by the World Cocoa Foundation (WCF), which was founded by the Chocolate Manufacturers Association of America, Mars Inc. and Nong Lam University (NLU) in Ho Chi Minh City. Together, these partners bring years of experience in cocoa production worldwide and also specifically in Vietnam. ACDI/VOCA’s local implementing partners include provincial departments of science, technology, agricultural development and agricultural extension.

In addition to the USDA Food for Progress funding, ACDI/VOCA’s cocoa development work in Vietnam is also supported by a Public-Private Partnership Grant from USAID. This grant, valued at $870,000, strengthens market linkages in the cocoa supply chain and improvement in cocoa bean fermentation quality. With donor support from USAID, USDA and the U.S. chocolate industry support, and with ACDI/VOCA project management and local partner implementation, the SUCCESS Alliance is well on its way to building a new and sustainable smallholder cocoa economy in Vietnam.

Recently, ACDI/VOCA won an additional grant from USAID to expand the SUCCESS Alliance and introduce cocoa to approximately 1,600 smallholder farmers in the Lak and Ea’Kar districts of Dak Lak Province in the Central Highlands region. SUCCESS in the Central Highlands will target poor and ethnic minority communities. This grant will allow ACDI/VOCA to extend improved cocoa farming systems and cropping practices for cocoa using the same methodologies that have been so successful in other parts of the country.

The proceeds from the monetization of soybean meal also were used support the recently completed Rural Business Services Development (RBSD) project, which addressed development needs in the cocoa-growing areas of Vietnam through competitively established rural business centers (RBCs). By supporting RBCs, ACDI/VOCA activities, which ended in January 2007, developed sustainable business support services for 900 small- and medium-scale rural enterprises involved in the provision of input supplies, post-harvest equipment, processing, transportation and marketing.

RBCs provided services to their small- and medium-scale enterprise clients to improve their business management and marketing, thereby growing their businesses and creating new jobs in rural areas of Vietnam. RBCs focused on:

• market-chain development
  
• marketing
  
• skills training
  
• product development
  
• new technologies
  
• management training
  
• supplier information
  
• commercial partnerships
  
• access to credit
  
• lobbying and policy dialogue
  
• financial and information systems

The design of the RBCs also included technical assistance that met the needs of female entrepreneurs, including ensuring that women have equal access to credit.

For more information contact Elizabeth Adams at eadams@acdivoca.org.

Updated: 1/07

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