The transition of dairy farming in Vietnam

from semi-subsistence to commercial systems

Jean-Daniel Cesaro, Guillaume Duteurtre& Nathalie Hostiou

Sector policy transition : evolutions of models

1990 2000 2010 2020

Cooperativeagriculture

State Farm

National Dairy DevelopmentStrategy

Family farming

Industrialisation of dairy sector

Entreprise, mega ferme

Ba Vi State Farm(1960)

Family farms(2000s)

Farm TH Milk (2015)

Tenure contract

1986

Vietnam National Dairy PolicyToward Greater Food Self-Sufficiency

0

0,2

0,4

0,6

0,8

1

1,2

1,4

1,6

1,8

1961 1971 1981 1991 2001 2011

Tons

Mill

ions

Milk production & import since 1961

VN PRODUCTION VN IMPORT

2001 : 10 %2013 : 32%VN Dairy Self-Sufficiency 2001 : 0,1 MT

2013 : 0,5 MTVN Dairy National production

1994End US trade embargo of Vietnam

1986Starting Doi Moi

2007WTO membership

2000Bilat. Trade Ag.Vietnam - USA

1975End of Vietnam War

Price one liter of fresh milkat supermarket in Vietnam & USA

1996 1999 2002 2005 2008 2011 20140

0,2

0,4

0,6

0,8

1

1,2

1,4

1,6

Prix de vente Vietnam (USD)

Prix de vente Etats-Unis (USD)

Era of protectedmarket economyState Fixed price

Era of competitionmarket economySemi free-price

2007 : WTO

2008 : China Melamine crisis

Political adjustement & Sustainability of production systems

How are the policy strategies for import reduction and sectoral development translated into sustainable development issues?

Can small, medium and large farms respond to all the issues of sustainable development?

Is there a good dairy production model in Vietnam capable of being productive, competitive, providing employment in rural areas without risking damage to the environment?

What can we learn from the example of Vietnam in terms of the coexistence of production models?

0

50000

100000

150000

200000

250000

300000

2001 2011 Est 2015

[1000 & +]

[300-1000]

[100-300]

[30-100]

[10-30]

[2-10]

[1-2]

Restructuration of dairy herd : the reality behind ideology

AgricultureCensus

Hypoteticalprojection

Dominant and growingSmall-scale dairy family farming in Vietnam

Dairy herdby district

Ba Vi dairy territory : a symbiosis of actors

Local authorities

Farmers

Landscape

Land Urban sprawlResearch center

Small dairies

Large company

Factory

Development of the dairy value chain in Bavi : diffusion outside the farm

Consumers Consumers Consumers

Ba Vi State FarmIndus-

trial farm

Integrated marketing syst. Gvt collection systemPrivat.

coll.center

Gvt collection system

Privat.coll.

center

Privat.coll.

center

Privat.coll.

center

Privat.coll.

center

Indiv. farm

Indiv. farm

Indiv. farm

Indiv. farm

Indirect sales

Milk barsMilk bars

Dairy factories

IDP dairy factory

Official« Ba Vi » TM

IDP

State Economy Market after Đổi Mới Recent Industrialization1990 2005

Distri-bution

Concen-traton

Source : Pham Duy Khanh et al., 2016

Location of dairy holdingssurveyed by types in Bavi (2014) :

specialization inside the State farm

JD Cesro

- 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 9,0

10,0Raw margin per worker

Nomber of economicactivities

Quantity of fertilizerbought per ha

Work-time per farm

type 1type 2type 3type 4type 5

Source : Pham Duy Kanh et al., 2016

Milk Farms typology and performances in Bavi(2014)

Following the Pham Duy Khanh (IPSARD) on going work

Renc. Rech. Ruminants, 2015, 22

Mega-farms hypothesis : a solution to the lack of new space ?

Dairy herdby mega farms

2014

The great family of TH group

TH Farm : clusters & cow barns

6 km Cluster 1 : 5000 cows

Cluster 3,4,5 : 10000 cows

Cluster 2 : 2500 cows

Cluster 6 : 2500 cows

Quarantine zone

Head quarter : 1500 cows

Cluster 4 : 3500 cows

500m

Manure treatment

Water treatmentCluster of bans

Financial agriculture High level stackeholders

Local authorities

Public State farm

Private dairy farm

Exotic genetic

Full integration brand

Internation cooperationChina - Russia

Industrial feed

Is such a large-scale investmentsustainable ?

Work force

Pollution

Concentrated dairy production is always linkwith state land tenure management

Historical trajectory

Colonial concession

Dairy State farm

Dairy family holdings

Mega farm

State farm

Medium farms

No dairy30 locations 10 locations

More than 100 locations

VN Political decision

Limited land for mega-farms,what’s next phase of development ?

• Mega Farm development not sure and not enough secure for financial investment

• Coexistance and holdings diffusion around mega-farms ? How TH milk can provide technical assistance to small holders ?

• Private cooperatives development to support small and medium scale holdings

• Reparcelling land tenure, complexe issue supported by new policies 2016

Thank you

Vinamilk family holdings in Cu Chi (HCMC)