Perennial Cropping System Development and Economic Performance of Perennial Cropping System in Dak Lak Province, Vietnam45259

Perennial Cropping System Development and Economic Performance of Perennial Cropping System in Dak Lak Province, Vietnam Thuy Phan Thi 1,2,* , Thuy Bui Thi Thanh 1 , Hop Ho Thi Minh 2

Perennial Cropping System Development and

Economic Performance of Perennial Cropping System

in Dak Lak Province, Vietnam

Thuy Phan Thi (1),(2),(*) , Thuy Bui Thi Thanh (1) , Hop Ho Thi Minh (2) , Niem Le Duc (1) , Philippe Lebailly (2)

1 Tay Nguyen University, Dak Lak, Vietnam

2 Gembloux Agro-Bio Tech, University Liège, Belgium

*Correspondence: phanthuydhtn@gmail.com

Abstract: The paper deals with the perennial crop development in Dak Lak Province by using the

mixed data collection of quantity and quality At the same time, the economic efficiency of two major perennial crop systems including mono-cropping and intercropping systems concentrating on coffee and pepper was analyzed The findings indicated that development and adjustment of perennial crop systems in Dak Lak province highly related to economic, political and social changes; and underwent through five main stages as following large scale perennial crop plantations as early-stage; perennial crop systems as state-owned and cooperative farms; intensified perennial crop systems; mixed perennial crop systems; and specialized and diversified perennial crop systems Additionally, the study revealed that intercropping systems were more efficient than mono-cropping systems due to the potential presence of economies of scope Consequently, the results provided useful information for local households in making sustainable production strategies and policymakers in enacting suitable policies as well as diagnosis of the future evolution of perennial crops for the coming years

Keywords: Perennial crop systems; historical development; economic performance; Dak Lak;

Vietnam

1 Introduction

There were various definitions of cropping systems and interacting with farming resources such as land, labor and capital showed by previous authors (Diepart & Allaverdian 2018; Rana & Rana 2011) Furthermore, the cropping system is an important component of the farming system of which the perennial crop sector is one of the elements

of the cash crop system (FAO 2019) As compared to annual crops, perennial crops can be harvested multiple times before dying or replacing On the other side, regarding many authors such as (Alexander et al 2015; Araya et al 2012; Galati et al 2016; Hatfield & Walthall 2014; Nguyen 2017), the changes of agricultural, in general, and cropping systems,

in particular, are results of climate change, agro-technology, socio-economic transformation, liberalization and globalization In which, cropping systems not only changed along the time, the local, the regional and international economic situation but also sustainably adapted to the specific conditions to ensure human needs under population growth (Darnhofer et al 2010; Hatfield & Walthall 2014) In other words, these changes require to move to another place or to develop new practices for survival (FAO 1999; Fresco & Westphal 1988; Lebailly et al 2015) Thus, the major trends and trajectories of different farm types were accurately understood to apply appropriate strategies in protecting natural resources as well as securing households’ income by enhancing productivity (Jayne et al 2014) Subsequently, determining the evolution of cropping systems to support future research and extension might be enclosed to the best service of the rural communities

(Herridge et al 2019) Moreover, economic performance is the key in determining the resilience and sustainability of farming systems because economic change caused the threads to agricultural lands and natural resources (Barbier et al 2010; Zinnanti et al 2019) Thus, a study about the historical development of perennial crop systems and its economic efficiency is essential

The perennial crops such were introduced to Vietnam at the end of the nineteenth century by the French Until now, they have become the top 10 commodities in the world and play a crucial part in agricultural development and export earnings Interestingly, Vietnam had become the biggest exporter of black pepper and the second largest for coffee from 2011 to 2013 (ICC 2019; OECD 2015) Perennial crops have been growing popularly in Central Highlands of Dak Lak, Dak Nong, Gia Lai, Lam Dong, and Kon Tum thanks to the

favorable conditions

Going beyond, the changes in driving forces such as ecological, technical, socio-economic, political issues resulted in either challenge in perennial crop production or adopting different approaches (Pham et al 2001; Phan et.al 2019a) In other words, there was

a significant relationship between the changes such as economic reform, government support (by direct and indirect policies) and evolution of perennial crop systems (Lindskog et al 2005; Scherr et al 2015) However, empirical evidence on the analysis of the evolution and profitability of the different perennial crop systems in Dak Lak Province, Central Highlands, Vietnam is limited In such circumstances, the purpose of this study is to give a comprehensively real picture of the temporal and spatial transformation in perennial crop systems at distinct stages Furthermore, evolutionary information can be used to explain how farms generate and adapt changes in driving forces at different levels (Han Quang et al 2017) Besides, an analysis of the economic efficiency of two representative perennial crop systems provides empirical evidence and opportunities for practices This can help farmers in choosing perennial crop production systems as well as policymakers in enacting the

appropriate strategies to perennial crop system in forthcoming years

2 Methodology

2.1 Study area

This study was carried out in Dak Lak Province with advantageous conditions for agricultural development including basaltic soil and flat or gently hilly relief, especially for perennial crops such as coffee, pepper, etc Based on knowledge from provincial documents, Dak Lak Province was divided into six agro-ecological zones by soil types, rainfall patterns, and altitudes based on various sources (Karimov et al 2016) Additionally, as a result of discussions with head and key informants at the provincial level, agricultural experts and survey implementation, Dak Lak Province was separated into three perennial crop zones by fertility criterion as below:

Zone 1: Highly favorable for perennial crops growing (including Buon Ma Thuot City, CuM'gar, Cu Kuin, Krong Ana, Krong Buk, EaHleo, Krong Ana, Krong Pak Districts)

Zone 2: Moderately favorable for perennial crop growing

Zone 3: Unfavorable for perennial crop

Moreover, based on secondary data, observation and conducting the survey, two distinct cropping systems chosen in this study are mono-cropping systems (Mono-Coffee Systems-MCSes and Mono-pepper systems-MPSes) and intercropping systems (coffee and pepper intercropping-CPI)

2.2 Data collection

For reliable findings, the study collected both qualitative and quantitative data from primary and secondary sources (Faruque et al 2017; Ulmer & Wilson 2003)

The primary data were gathered from visual observation, key informant interviews (KIs), Focus Group Discussion (FGDs), and household surveys through questionnaires Furthermore, the economic performance of two major perennial crop systems showed via using simple and stratified random sampling of perennial crop households

Secondary data were gathered from differently official sources such as annual statistic books published by the General Statistics Office (GSO), the Dak Lak Statistics Office, Provincial People’s Committee, maps, historical books, annual reports of local authorities in Villages, Communes, Districts, and Province Furthermore, research documents and scientific reports were also collected as complementary sources for this study

KIs and FGDs provided qualitative data on the following subjects: (1) the history of changes of local perennial crop systems regarding coffee and pepper; (2) current cropping patterns and changes of perennial crop systems overtime; (3) key driven forces of change related to adopt the current perennial crop systems (4)

Simultaneously, to collect quantitative data, a list of 86 households who cultivated mono and intercropping systems related to coffee and pepper in the three villages was conducted by the same probability of statistical units (FAO 2016) It means the study collected 10% of villagers (selected households (N) = 0.1 n (n=populated size), who are cultivating coffee and pepper crops The households list provided 90 plot samples for data about perennial crop production because some households owned more than one piece The farms that were between 0.5 ha and 2 ha is similar to the average area of local farms The data at given year including (1) profile of perennial crop system such as area, yield, age; (2) the cropping calendar (timing of plot care crops and harvesting); (3) annual cost (inputs, labor); sale of crop and revenues

Table 1 The distribution of surveyed samples by research sites

2.3 Data analysis

- Analysis of the evolution of perennial crop systems

The historical analysis was obtained by hierarchy, chronology and timeline methods

- Economic analysis

This study used a comparative analysis (examining the differences in economic efficiency) and descriptive statistical analysis (means, percentages, charts, and growth rates) Many indicators such as production cost, revenue, value-added, and profit indicate which cropping systems generating the best economic performance for households (Hill & Bradley 2015; Newton et al 2012) Furthermore, a Kruskal Wallis -test was applied to test whether there is a significant difference in the non-parametrical distribution of distinct groups (Chu Nguyen & Hoang 2008)

3 Results

3.1 The development of perennial cropping systems in Dak Lak province

Sourse: Secondary data, KIs and FGDs

Figure 2 Important historical milestones and consequences of perennial crop systems

EDESUS 2019, FOR PEER REVIEW https://edesus.ueb.edu.vn

3.1.1 Large -scale plantations of perennial crop systems under the regime

Dak Lak has exploited the best appropriate conditions for the growth of the perennial crop such as coffee, rubber by the French since the 1920s (Tran & D’haeze 2005; ICC 2019; Pham et al 2001) In this era, two major crops as coffee and rubber were planted initially for economic purpose At that time, coffee and rubber trees were only practiced and developed by large -scale plantation in highly suitable fertility for perennial crop growing regions-Zone 1 There was a limitation of a low population density, a dependence of natural conditions, a lack of manpower, know-how knowledge and simple implemented tools In this context, the production was inefficient as a result of mainly mono-coffee and rubber systems (Do 2016)

3.1.2 Existence of state and cooperative owned farms of perennial crop systems The perennial crops recovered after the Revolution of Vietnam In the past, most plantations operated under State ownership and cooperatives However, in 1981 the private ownership admitted under Decree 100 (Khoan 100) (Meyfroidt et al 2013) To take advantages

of natural conditions, mono-cropping systems were applied causing absolute exploitation of land area in Zone 1 Furthermore, the high population density thanks to resettlement program (New economic Zones-NEZs) made the perennial crops expanding on moderately favorable for perennial crops' growth -Zone 2 (Maurice G 2004; Lindskog et al 2005) Although other cash crops like pepper and tea were planted at the beginning of the 1980s, lands were owned

by the state in formal management (namely, State ownership) (Muller & Zeller 2002) This

leads to stagnancy in the economy with low productivity of perennial crops

Table 2: The number of farms and producers participated in owned state and cooperative

production

Number (Farms) Producers (People) Number (Farms) Producers

(People)

(Source: People’s Committee of Dak Lak 1986)

3.1.3 Intensifed perennial crop systems

From 1986 to the 1990s, perennial crop sector in Dak Lak, especially in the coffee-growing area had a significant increase The reasons for rapid growth of the coffee sector were the policy privatization, economic liberalization, state-sponsored migration and price spikes (as the frost in Brazil destroyed a large part of the coffee production led to a sharp reduction in the international coffee supply which in turn made the high price of coffee) (Dang & Shively 2008) to lead Vietnam as becoming the world’s second-largest exporter of coffee (Pham et al 2001) Furthermore, labor and capital intensive have been because of introduced fertilizer, improved rural infrastructure, and markets as well as expanded irrigated systems since 1992 Additionally, local governments explained an increase in the coffee-growing area due to demographic resettlement, socio-economic liberalization and

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legislation towards land ownership Perennial crops were planted to Zone 2 and 3 (unsuitable lands for growing perennial crops) Furthermore, spontaneous migration was also a reason for the diversification of perennial crops Besides, the direct and indirect government-supported funds encouraged the development of perennial crops (Dang & Shively 2008) By direct support, the government enacted financial, technological and economic policies Additionally, the local government stimulated to apply new crops or efficient crop management methods In such, farmers could access the finance as well as knowledge of crop protection (Cheesman et al 2007; D’haeze et al 2005) Additionally, indirect support has made a large number of migrants from constrained and crowded regions to Dak Lak Province as well as more investment in rural areas However, the over-exploitation of perennial crops resulted in some enormous vulnerability such as land

degradation and deforestation (Figure 1)

Figure 1 The coffee growing area during 1986-2000 (Source: Dak Lak PSO 1986, 2011)

3.1.4 Mixed perennial crop systems

Unfortunately, in 2004, coffee price decreased dramatically As Ponte S, the global coffee chain changed significantly due to new consumption fashion, the evolution of corporate companies In other words, technical development resulted in low-cost Robusta processing to parallel inelastic demand which contributed the decrease of international coffee price to below

40 cents per pound in 2004 (Doutriaux et al 2008; Ponte 2002) Moreover, frequently natural disadvantages such as drought, pests and infectious diseases are challenges to farmers To solve these, the government implemented many policies including a ban of planting more coffee trees through enforcement of land use rights and limitation of bank loans related (Cheesman et al 2007) Also, the government encouraged convertibility of coffee in the unsuitable areas to more profitable and fewer water crops such as cashew and cassava, cotton, pepper, and corn (Lindskog et al 2005; Meyfroidt et al 2013) Apart from coffee, hence, other crops such as rubber, pepper and cashew in both perennial and annual crop mixed systems developed steadily over this period However, as the previous period, an expansion of perennial crops is a reason for deforestation resulting in various other obstacles as degradation and soil erosion

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3.1.5 Specialized and diversified perennial crop systems

From 2010, perennial crops continuously faced challenges For instance, aging of coffee tree stock that accounts for over one-third of the provincial coffee-growing areas was 15–20 years resulting in low yields and returns (Ho 2018) Apart from pests and infectious diseases

on pepper, a fall in the price of rubber, coffee and pepper made farmers into difficulties such

as bad debts and discouragement (Scherr et al 2015) Under this condition, different crop systems practiced In terms of coffee, applying technology and innovation for perennial crops was popular such as irrigation, seedling and processing Especially, certified coffee production attracted participants Although linkages, certified production and development

of specialty coffee trees have given more efficient than conventional models, certificated production has not been apply widely because of strict requirements

Table 3 The area and number of producers by certificate in Dak Lak Province

(2) (3) (1) (2) (3) (1) (2) (3) (1) (2) (3)

(1): Number of certificate; (2): Area (thousand hectares); (3) Producers (Thousand people)

Source: Provincial People’s Committee of Dak Lak 2018

On the other hand, the 2014 good price of pepper motivated farmers to convert from coffee plantations or intercropped orchards Unfortunately, pepper price from 2016 to now has dropped significantly causing many difficulties for producers To mitigate market risks, intercropping systems such as coffee and pepper and diversified perennial crop systems (coffee, pepper and fruit) have become more popular According to People’s Committee of Dak Lak, there are over 39 000 ha of the intercropping area with 11 000 ha intercropping models of coffee and pepper (People’s Committee of Dak Lak 2019) Intercropping systems including coffee trees and others (pepper and cashew) are generating higher profitability than conventional ones (Nguyen & Phan 2017; Phan et al 2019b) Additionally, diversified systems including perennial crops and fruits (avocado and durian) are popular with higher returns and sustainability (Ho et al 2017) Nonetheless, the intercropped area is still limited

A lack of government intervention and farmers’ financial constraints negotiation also led to

inefficiency

3.2 Current perennial crop systems comparison

3.2.1 Characteristics of perennial crop systems

- Mono-cropping and intercropping systems profile

The profile of three perennial crop systems is presented in Table 4 as following below:

Table 4: General information of three selected systems

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2 Density (tree/ha)

Average age of system (years)

Yield (tons/ha)

Source: Authors’ own calculations

For MCSes, the average growing area was at 1.1 ha The density reached 958 trees per ha, which was a lower density than the technical recommendation (1100 trees/ha) ( Phan 2015; ICC 2019) because of many trees dying without replacement at the gap (coffee growers converted other crops instead of new planting of coffee tree) Also, the yield reached only 2.1 tons per ha which linked to (Amarasinghe et al 2015), because of the high proportion of aging tree stock (17 years in this study) and the fluctuation of weather On the other hand, MPSes started from residential gardens of very small acreage in the last decades Although they have been developed strongly due to favorable prices recently, the average size of pepper was the smallest one compared to the rest, by 0.8 ha Regarding pepper density, it was not high, only 1344 trees/ha as compared to recommendation (about 1700 trees/ha) Pure pepper gardens were converted from renewing an old coffee plantation instead of an initial design for MPSes Unfortunately, black pepper that was sensitive with diseases was affected about

2000 ha in 2017 (equal to 13.2% of all plant diseases in the whole country such as foot rot or quick wilt disease, Pollu disease, slow decline or slow wilt, and stunt disease) Most MPSes have been planted since the 2000s which is quite youth (7.43 years), to create yields at 2.3 tons/ha The surveyed data showed that MPSes were applied in an unregulated way (in areas not zoned for farming), with wooden and concrete pillars rather than live plants Even though rubber trees could be used as pillars, play areas, ponds and rice fields were used to grow pepper

In terms of diversified systems as CPI, it can obtain higher yields, more returns or mitigate environmental damages such as in Uganda with coffee-banana intercropping (van Asten et al 2011), Thai Lan with rubber-based intercropping systems (other perennial crops

or fruit) (Romyen et al 2018) CPI that was formed from coffee and pepper grew together in the same field In such, pepper was grown initially into a coffee garden as a shade tree Over time, this model has been widely and enthusiastically in farmers' plantations According to the surveyed data, CPI planting was quite young (7.3 years of pepper, 13 years of coffee, and 1.0 ha of plot size) Besides that, the density was mentioned to be estimated at 964 coffee trees and 914 pepper trees per ha, including two intercropping methods: Group (a small sub-area

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of coffee and pepper was planted in the orchard) and intersection (two coffee rows or three coffee rows or five coffee rows to intercrop one pepper row where pepper was designed at the intersection point of coffee holes) Additionally, the yield of CPI was at 2.3 tons of coffee and 1.8 tons of pepper/ha (Table 4)

According to interviewees, high pepper density means the competition for space and light leading to decrease yields Furthermore, many respondents admitted that there were some productive difficulties due to specific techniques (i.e., irrigation and harvesting)

Cropping calendar

Figure 2 illustrated the calendar of coffee and pepper crops in distinct perennial crop systems during the cropping year by various activities

Under dry season with high sunlight and evapotranspiration during six months, irrigation and pruning of coffee become the main activities in MCSes The coffee trees, for example, are provided water from January to April by pumping from private wells or drip irrigation systems Meanwhile, pruning often occurs after harvesting season that significantly attracted by both men and women, sometimes, households hired non-family labor by fixed- paid wage (3000 VND/coffee tree), with the average of pruning coffee trees about 40 trees/day/person Harvesting lengthens from October to December when coffee is harvested totally Additionally, fertilizer is used at least three times for breaking flower, feeding fruits and recovering post-harvesting among two seasons On the other hand, weed control was carried out in mainly wet season However, weeding that needs to be done at least monthly is costly by requiring more labors as shown Nowadays, producers considered applying equipment and herbicide to kill grass rather than by hand

In terms of MPSes, crop care activities are considered the same as MCSes However, pruning has just carried out with living poles for pepper growing on the vine (alive trees as Cassia siamea and/or Leucaena leucocephala; fruit) during the rainy season Besides, turning

to irrigation, pepper although require less water than coffee, it needs to be irrigated more regularly For instance, coffee needs about three rounds per year, pepper is at least ten-day- irrigated cycles Additionally, on the rainy season, drainage needs to be done as fast as possible to avoid flooding the soil On the other hand, harvesting is a constraint when farmers have to spend at least two-three month with a high demand of labors, from Feb to April

Concerning CPI, farmers considered costing more workdays as compared to others

As responded by interviews, most of the planters implemented concurrently some operations such as fertilizer, irrigation, and weeding However, some farmers separated such acts on crops for growth Nonetheless, this act requires many labors and technology to secure each other