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Observations and feedback from the benchmarking, survey preparations, implementation, and interpretation of the data collected, gave an early indication that a demonstration model to sho

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HortResearch Nelson Region

PO Box 220 Motueka 7143 NEW ZEALAND

DISCLAIMER

Unless agreed otherwise, HortResearch does not give any prediction, warranty or assurance in relation to the accuracy of or fitness for any particular use or application of, any information or scientific or other result contained in this report Neither HortResearch nor any of its employees shall be liable for any cost (including legal costs), claim, liability, loss, damage, injury or the like, which may be suffered or incurred as a direct or indirect result of the reliance by any person on any information contained in this report

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Page

BACKGROUND 1

1 DOCUMENTATION OF GAP APPLIED BY CLUSTER GROUP SMALL-HOLDERS 3 Farmer Selection 6

Small-Holder Sector of Project Pilot Group Establishment 6

2 PROGRESS TOWARDS SMALL-HOLDER CERTIFICATION AS EUREPGAP COMPLIANT AND PERFORMANCE AUDITED 8

Choice of Quality System Standards 8

Dragon Sruit Quality Manual 9

Stakeholder Skill Sevelopment 9

Associated Dragon fruit GAP Project 11

3 BASIC ANALYSIS OF SMALL-HOLDER, AND EXPORTER FINANCIAL BENEFITS 13

APPENDIX 1 14

Benchmarking Questionnaire 14

APPENDIX 2 21

VNCI Certification 21

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BACKGROUND

The implementation of the dragon fruit GAP project has been based on the development of people’s skills in good agricultural practices (GAP) principles The people targeted have been: project personnel stationed at Southern Fruit Research Institute (SOFRI) and other SOFRI staff, Department of Agriculture and Rural Development (DARD) personnel in the two project responsibility provinces, dragon fruit exporters, packers and dragon fruit farmers both small and large holders (with priority given the project document requirement of addressing small-holders)

The national capability has been developed by the project in a sustainable way and there has been an increasing awareness, understanding and confidence in GAP principles, especially in the project national team, which has been evident in their subsequent achievements

At the commencement of the project implementation, a benchmarking survey to define baselines for GAP being applied at the small farmer level was undertaken 126 small-holder farms were surveyed in the Binh Thuan province and 30 small-holder farms were also surveyed in the Tien Giang Province

The purpose of the benchmarking survey was to define the level of operations on the holder farms compared with the documented standards of Euro-Retailer Produce Working Group; Good Agricultural Practice (EUREPGAP) EUREPGAP was chosen as the standard

small-by which the farms would be compared, as this is the minimum standard that is accepted small-by the high value markets of the United Kingdom and Europe and the standard the project initiatives would seek to attain

Some 92 questions, based on the EUREPGAP standard, were asked of the farmer (Appendix

1 – Benchmarking Questionnaire) by the Vietnamese project team and assisted by young scientists from SOFRI All data were subsequently translated into English, entered into a specially prepared database and analysed by HortResearch personnel A Microsoft® Office PowerPoint® presentation (Refer to August 2006 Project Report: Appendix 2) was prepared

by HortResearch and delivered to SOFRI staff and to DARD staff, packers and farmers of the Binh Thuan Province by the project leader during his March 2006 visit

The benchmarking database is held at SOFRI and portions of the database and Microsoft® Office PowerPoint® presentation have subsequently been used by SOFRI personnel for training and research purposes in dragon fruit and other crops

Observations and feedback from the benchmarking, survey preparations, implementation, and interpretation of the data collected, gave an early indication that a demonstration model to show and prove the viability of Good Agricultural Practices in the dragon fruit industry was needed before small-holders would respond to project initiatives for them to adopt GAP (the many constraints preventing small-holder farmers from adopting GAP have been documented

in the project regular reporting)

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Figure 1 Benchmarking survey, questionnaire testing with small-holder dragon fruit

farmers

A commercial model “Pilot” of dragon fruit exporter, packer, large farm and small-holders has been systematically developed by the project and is close to meeting the selected quality system standards

The pilot model was set up for two main purposes:

1 To prove the viability of the pilot when implementing GAP, quality systems and standards that would provide access to high value export markets

2 To establish the structure within the pilot that has a quality system embedded in the packhouse, to assist the small-holder dragon fruit farmer in implementing their quality systems, to provide uniformity of standards across the pilot, to be simple to operate, accurate and a low financial burden to operate

Following external audit and certification by a registered Certifying Body, the pilot will begin exporting to high value markets It is at this time that the true value and costs of GAP implementation will be defined It is expected that returns could be significant for the farmer and there will be little problem with attracting and holding the interest of the small and large holder at this time; indeed strong organisation of the industry and possible constraint could be required at a later date

This dragon fruit GAP project has placed great importance on a systematic delivery of the project objectives and the ultimate sustainability of the intended outcomes To address the three bullet points of this report, it is necessary to outline the technology transfer progression/evolution of GAP from the project, firstly into the host Vietnamese Institution, SOFRI, and then out to the wider dragon fruit industry When implementing a ‘people development’ project of this type, it is necessary/important to lift each prerequisite stage progressively to a high level of understanding prior to its replication and/or moving on to the next stage

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1 DOCUMENTATION OF GAP APPLIED BY CLUSTER GROUP SMALL-HOLDERS

The following table documents the project training programme:

Stage Area Component Prerequisite Training Outcome

ƒ Responsiveness to change training

ƒ Ability to implement project obligations

ƒ Motivation to pass on knowledge gained

ƒ From project leader via mentoring, presentations, team interactions, etc

ƒ Learning from training delivery feedback

ƒ Networking

ƒ Study Tour: to New Zealand

ƒ Formal courses: e.g NZOQ Internal Auditor Course

ƒ Complete understanding of the dragon fruit crop

ƒ Being customer driven

ƒ Complete understanding of quality systems and their implementation to the level of the adopted standards

ƒ Peer recognition as experts in the field

ƒ Respect for their competence in the project scope and nationally

ƒ Increased demand on their quality knowledge transfer

ƒ SOFRI Environment

ƒ SOFRI leadership is quality driven

ƒ SOFRI Leadership has set up a strong quality environment at the institute

ƒ SOFRI staff quality motivated

ƒ Project leader presentations

ƒ All SOFRI staff are on the path to GAP learning and application/support

ƒ Respect for Dr Chau has facilitated the smooth establishment of the project’s commercial “Pilot” and

a start to national infrastructure development to support the high quality dragon fruit industry

2 Project

delivery

ƒ Benchmarking survey

ƒ Project team with the necessary understanding and skills

ƒ Test sample

ƒ Training of young scientists

ƒ Conducting the survey

ƒ Learning through listening and observing

ƒ Documentation of the GAP status of small-holder farms in relation to the EUREPGAP Standard

ƒ Selection of farmers with project delivery potential

ƒ Increased GAP understanding and capability of SOFRI and DARD staff

ƒ Identification of a suitable packer/exporter for project GAP intervention

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Stage Area Component Prerequisite Training Outcome

ƒ Small-holder GAP project intervention

ƒ Competent project team and trainers with the necessary understanding and skills

ƒ Willingness to learn GAP principles

ƒ Have access to necessary resources to make the physical changes needed

ƒ Have the ability to understand and implement GAP

ƒ GAP benefits extolled during the benchmarking survey

ƒ Farmer group training through discussions, Microsoft® Office PowerPoint® presentations, demonstration, etc

ƒ Individual farmer training through discussions, farm mapping, and requirements needed to meet the standards, etc

ƒ HACCP surveys and training

ƒ Health and Safety training

ƒ Risk analysis and documentation

ƒ Safe use of agrichemicals

ƒ An increase in GAP understanding by small-holder dragon fruit farmers

ƒ Initial training presented to a wide range of farmers previously selected through the benchmarking survey and DARD personnel

ƒ Workable alternatives to small-holder farmers’ lack of commitment to take their level of GAP to the customer driven standards of EUREPGAP

ƒ Project continues to recruit small-holder farmers for GAP intervention as they increasingly become committed

ƒ Small-holder farmers are ready to flock to the GAP production of dragon fruit following proof of viability

as demonstrated by the project pilot

ƒ Infrastructure development

Prerequisites for a dynamic quality driven dragon fruit industry include:

ƒ Certified laboratory services for soil, leaf, water analysis

ƒ Safe use of agrichemicals

ƒ First Aid certification

in this area

ƒ Approved/certified/appropriate providers to service the quality needs of the dragon fruit industry to the standards demanded by the customer – BRC and EUREPGAP

ƒ A competitive market for the service providers to ensure costs to the farmer are kept to a sustainable minimum

ƒ A strong quality-driven, organised dragon fruit industry is established

ƒ Pilot development

ƒ A commercial packer/exporter of dragon fruit that has the resources, desire, skills and attitude to adopt the changes necessary to comply with the selected quality standards

ƒ Quality advice for the

ƒ Identification and project selling to the packer/exporter –

an education/negotiation process

ƒ Mutual respect between pilot and project team, particularly with the packer

ƒ Identification of farmers for project quality intervention – farmers include large-holders

ƒ Pilot packer/exporter selected and agreement to cooperate with the project

ƒ Full cooperation by farmers with project team

ƒ Implementation of systems and advice delivery

ƒ Documented quality system developed – “Dragon

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Stage Area Component Prerequisite Training Outcome

packer/exporter to follow on its path to quality compliance – to work closely with the project team

ƒ Establishment of a documented quality system

ƒ A code of honesty, transparency and understanding

ƒ A willingness to take the lead in the quality development of the pilot and to fulfil the system responsibilities to the “supplier”

(small-holder)

ƒ Allow the project to have access

to all the data generated by the project initiative, for subsequent analysis and technology transfer

to other dragon fruit groups (and other crops)

and well as small-holders – an education/negotiation process

ƒ Define the existing processes and train for changes necessary

to facilitate compliance – general and very specific training

ƒ Train individuals and groups to

a level of proficiency for stakeholders to “understand”,

“control” and improve all processes continuously

ƒ Train the quality manager as leader of the “quality”

responsibilities and in the role

of self assessment (Internal Auditing)

fruit Quality Manual” in English and Vietnamese written and presented to pilot

ƒ Specific achievements in implementing the dragon fruit quality manual e.g Product traceability, quality control, etc

ƒ Physical changes made in the packhouse and on the farms and services to facilitate compliance issues as directed by the project team

ƒ Farm registration, location, mapping, documentation, etc

ƒ Supplier contract and schedule of costs agreed and signed between packer and farmer in compliance with the standards

ƒ Honest, transparent and customer-driven supply, grade, pack and postharvest chain

3 Marketing ƒ Identify High

Value Markets

ƒ That the pilot has attained compliance with the BRC and EUREPGAP Standards and operates at that level at all times

ƒ Train all pilot personnel to understand the processes, to keep those processes under control at all times and have the ability to improve them constantly

ƒ Train to be customer driven

ƒ Attain and maintain preferred supplier status with the customer and to work together

to resolve any issues jointly

ƒ BRC Global – Food Standards Certification at the packhouse: maintained

ƒ EUREPGAP Standards Certification for all supplying farms: maintained

ƒ Consistently high returns for product being exported

ƒ Access to top-end markets through providing product that is safe, legal, of the quality and presentation demanded by the customer

ƒ Good communication between customer, exporter, packer and farmer

4 Compliance ƒ External Audit ƒ Compliance of the pilot

confirmed by internal audit

ƒ Internal Auditor trained to the appropriate proficiency

ƒ Corrective action process and implementation

ƒ Good working relationships with Certifying Body

ƒ External audit completed

ƒ Corrective action implemented

ƒ Sign off of changes

ƒ BRC Global – Food Standards Certification at the packhouse

ƒ EUREPGAP Standards Certification for all supplying farms

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FARMER SELECTION

The project has continuously encouraged the forming of cluster groups of small-holder farmers and for them to receive project training support The project has continually included willing small-holder farmer individuals as well as cluster groups

During the benchmarking survey the opportunity was taken, when interviewing each farmer,

to discuss the “project”, identify areas for improvement on the property and discuss issues and concerns of the farmer During the survey, it was also a chance to identify farmers who would respond to the project initiatives with those identified being targeted to receive project GAP training

The survey identified that significant changes were needed right across the questionnaire scope to most properties, for them to be able to meet the standards of EUREPGAP

Indeed the benchmarking survey was the first project training initiative, as during the farmer interviews it was necessary to talk about GAP principles and how to achieve the necessary GAP standards as part of winning the farmer’s confidence, so that all questions could be answered in a relaxed and honest manner: some questions being of a sensitive nature for the farmer The benchmarking survey was an excellent chance for the project team to deliver the project intentions to the region and to gain an indication of the best approach for project delivery

The benchmarking survey preparation and implementation enabled the project leader to define GAP competence at all levels of the project scope and the most appropriate approach for implementing the project’s documented outcomes in a sustainable way

It was found that most farmers targeted in the survey did not have resources to make the necessary changes for them to comply with the standards Many farmers were found to be reliant on collectors to harvest and sell their dragon fruit The combination of small farm size, poor agronomic practices and the farmer being dependent on the collector for finance that could involve pre-harvest advance payment for the crop indicated to the project that it would

be difficult for the farmer to respond to the project GAP initiatives, no matter how strong the initial enthusiasm was No provision had been made either within or outside the project to provide the resources the farmer would require to make the changes It was also very difficult for the project to convince farmers with extremely limited resources to implement change when, because there was no precedent, the project could not guarantee that, until tested and confirmed, the farmer would increase profits from their dragon fruit crop

The project document scope determined that the poor farmer must be targeted for improvement However, it was found during the initial project training programmes that, after initial enthusiasm to make change by the poor farmers, they quickly lost interest and did not attend more ongoing GAP training sessions

SMALL-HOLDER SECTOR OF PROJECT PILOT GROUP ESTABLISHMENT

The project shifted its stance slightly by targeting farmers that had the willingness, ability and resources to exploit the project’s GAP training, to establish a pilot of a packer/exporter and a group of farmers that were serious about making the quality changes

Considerable urgency was placed on the establishment of the pilot The project has consistently extolled the benefits of GAP to the farmers in the areas of improved living

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to the standards required by the high value markets would more than offset the cost incurred

to implement the changes

In spite of the project negotiating a bonus incentive payment from the exporter/packer for GAP produced dragon fruit, the true return potential will only be realised following the actual production, grading, packing and export of dragon fruit through a certified system to high value markets

The project pilot consists of: a packer/exporter, up to three large farms and several smaller farms The farms are at varying stages of meeting compliance and the quality systems being established in the pilot are dynamic and can expand as new farms reach the minimum quality standards

The structure of the project pilot has been established so that farmers can join the pilot at any time, either as an individual or as a group, including cooperatives The farmers’ group, for the early part of the pilot establishment, is quite fluid with farmers intermittently attending the GAP training Serious farmers have made excellent progress towards meeting the EUREPGAP standards It is anticipated that when compliant dragon fruit is exported to high value markets and increased profit returns are advertised, there will be a surge of committed farmers willing to undertake the necessary changes to enable them to receive the same benefits

Figure 2 High quality dragon fruit packed for export: Exporter purchase order to farmer

Project initiatives and training are determined to develop the pilot that has robust, transparent and honest quality systems to demonstrate the advantages of GAP, to be very market driven and to provide a viable, sustainable and clear model for duplication to the wider dragon fruit industry and across to other crops

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2 PROGRESS TOWARDS SMALL-HOLDER

CERTIFICATION AS EUREPGAP COMPLIANT AND PERFORMANCE AUDITED

CHOICE OF QUALITY SYSTEM STANDARDS

The quality standards of EUREPGAP at the farmer level and BRC Global - Food at the packer level were chosen to be implemented by the project These quality standards are very similar and compatible standards and are the minimum requirements for market access to the high value markets of Europe One of the key advantages of the two systems is to gain direct access to high value markets and prevent any product rework in the importing country

Management of the quality systems of the project pilot has been embedded in the packhouse under the control of the Quality Manager There are many advantages from having the quality system managed by the packhouse They include:

• The packer is market driven and can provide the vision, leadership and motivation to develop and maintain the full quality system so that it conforms with the standards at all times

• The packer can provide coordination of the quality systems from the field to the customer

• The packhouse requires a strong quality management system to meet the standards and these include many on-farm functions

• The packhouse quality manager can assist farmer’s quality obligations in areas where they are deficient This area is particularly important when lifting the GAP standards

at the small-holder level

• Distribution of technical information to the farmers in an accurate and systematic way

so all farmers are coordinated in their management and quality approach

• The operation is of a size that gives it the capability of contracting out to specialists for problem solving

• Bulk purchasing of consumables at discounted prices

• Provision of internal audit services at the packhouse and on the farm to enhance uniform operating standards and to ensure corrective action for non-conformities is undertaken and closed off

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managed at the packhouse and those costs can be spread over a large throughput of fruit

Figure 3 Spray diary auditing and farmer training in the pilot dragon fruit production

programme

DRAGON FRUIT QUALITY MANUAL

A dragon fruit quality manual has been developed by the project (Milestones # 4; Draft Manual and #8; Final Draft of GAP/EUREPGAP Manual) with the small-holder farmer section encompassed in the overall quality manual The farmer section documents the farmer

response to every EUREPGAP Standard Major, Minor and Recommended question

Figure 4 High quality dragon fruit

STAKEHOLDER SKILL DEVELOPMENT

Project training emphasis has been on improvement and development of understanding of all the stakeholders in the dragon fruit industry Delivery of training to the stakeholders has been

a mixture of:

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