Tarn Hoa plums (Prunus salicina) in the maize based system in the north west highlands of Vietnam

The research found that Tam Hoa plum production and marketing is a large, complex system that is interconnected with the marketing of green immature plums to China and other substitutabl

  Acta Hortic 1128 ISHS 2016 DOI 10.17660/ActaHortic.2016.1128.14

XXIX IHC - Proc Int Symp on Horticulture in Developing Countries and 103

Tam Hoa plums (Prunus salicina) in the maize-based

system in the North-West Highlands of Vietnam

L.B Bonney1, O Nicetic2, R Collins2, A `Le Quoc3, H Đặng Thị3, T Hoang Thanh3, A Đào Thế3, T.T.H Nguyen4 and H Pham Van4

1 University of Tasmania, Hobart, Australia; 2 University of Queensland, Brisbane, Australia; 3 Centre for Agrarian Systems Research and Development (CASRAD), Hanoi, Vietnam; 4 Vietnam National University of Agriculture (VNUA), Hanoi, Vietnam

Abstract

Tam Hoa plum is one of three hybrids of the Japanese plum (Prunus salicina),

originating from southern China, and grown between 700 and1000 m altitude in north-west Vietnam for the domestic market Along with some leguminous crops grown in rotation with maize, plums are an important source of additional income for smallholders The aim of the project was to develop competitive value chains for plums with high levels of smallholder engagement The research design was both structured and adaptive, based on participative action research In addition, sensory evaluation to determine optimum measurable indicators of ripeness (soluble solids and hardness) based on consumer preferences was conducted to adjust time of harvesting The research found that Tam Hoa plum production and marketing is a large, complex system that is interconnected with the marketing of green (immature) plums to China and other substitutable fruit such as lychees, longans and other plums

It is a highly opportunistic, low-input system the outputs of which depend on plum prices, the relative production capability of districts and local microclimates The 40-

to 45-day plum harvest season is highly variable regarding harvesting dates, harvest duration, plum quality and, consequently, market prices It was established that there

is sufficient profit margin for all chain participants to establish a sustainable niche value chain based on high-quality sweet plums if reliable and sufficient throughput can be achieved It is recommended that future similar value chain projects pay particular attention to selecting large ‘aggregators’ and ‘distributors’ so as to achieve volume and stable market access

Keywords: temperate fruits, value chains, profitability, market interactions

INTRODUCTION

Vietnam has 53 ethnic minority groups, accounting for 12.6% of the total population, who for the greater part inhabit the mountainous areas in the north-west and north-east regions and the Central Highlands In 2006, 52% of ethnic minority people were reported to live in poverty, in comparison with 10% of the Kinh majority group The main reasons for this disparity have been summarised as differences in assets, capacity and voice (van de Fliert et al., 2010)

The North-West Highlands provinces are among the poorest in Vietnam, with a regional poverty ratio of 28% compared with an average of 10% across the country, and rural poverty increased in the period 2008-2012 (ILRI, 2014) Lack of market integration, inappropriate and unsustainable land management and limited ability of poor smallholders

to absorb risk have resulted in continued poverty within the region The ethnic minority people, who dominate the North-West Highlands, are increasingly disengaged from the benefits of a rapidly developing Vietnamese economy, and approximately 75% remain below the international poverty line, contributing to their persistent poverty (United Nations, 2002; United Nations Development Programme, 2013)

In the North-West Highlands, the dominant agricultural system is based on maize production, with temperate fruit being a smaller but important part of the system Maize and temperate fruit production are complementary, because they provide local smallholders

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with options to spread production and marketing risk for household income

Temperate fruit production provides 62% of smallholders’ annual income in some areas; however, the temperate fruit industry is also characterised by poor market engagement, low yields, high post-harvest losses (25-40%) and low profitability, which result in low incentives for farmer investment in improving production and marketing practices

One of those temperate fruits, Tam Hoa plums (Prunus salicina), is a significant crop in

Mộc Châu District in Sơn La Province in north-west Vietnam, with a total production of 17,000-25,000 t from 1719 ha (Mộc Châu Extension Centre) The Tam Hoa plum is one of

three hybrids of the Japanese plum (Prunus salicina), originating from southern China, that

are grown between 700-1000 m altitude, mainly for the domestic market, in Vietnam In

1995, 1000 certified disease-free plum rootstock seeds were planted in 11 provinces The original plantings of about 32,400 ha expanded to approximately 100,000 ha over the last 15 years Sơn La Province, with approximately 12,000 ha, is now the second-largest growing area (Cao-Van and Chau, 1999) During the early 2000s, many trees were removed as a result of a major fall in demand; however, the Mộc Châu Extension Centre (Son La) estimates

1719 ha is presently in production

Due to the rapid market transformations currently underway in agriculture and their potential impact on smallholder livelihoods, temperate fruit production was investigated, focusing on the potential for both technical production and marketing practice changes This paper describes the temperate fruit component of ACIAR Project ‘AGB/2008/002 Improved market engagement for sustainable upland production systems in the North West Highlands

of Vietnam’

METHODS

The research design for the temperate fruit component was both structured and adaptive to the emerging research questions and findings It was a participative action research design (Heron and Reason, 2001) incorporating a cycle of learning, reflection and improvement However, other appropriate methods (e.g., sensory testing, householder analysis and biophysical testing of ripeness) were also incorporated to build understanding

of the variables operating on this system

The aim of the project was to increase smallholder engagement in competitive value chains associated with maize- and temperate fruit-based farming systems

Three villages investigated in this component were in the Mộc Châu District, Pieng Sang, a Dao minority community, Co Do (Kinh, Thai and Hmong) and Ban On (Kinh and Thai)

In all villages, farmers cultivate crops in small fields, many on slopes The average size of agricultural landholdings in villages in Son La province is 2.71 ha

A rapid supply chain analysis (Collins and Dunne, 2008) was undertaken in Mộc Châu and Mai Sơn Districts of Son La Province to map the market mechanisms, constraints and opportunities for more profitable farming systems for smallholders This analysis identified that China frequently provides a large market outlet for green Tam Hoa plums, so plum traders in western Jiangxi Province, P.R China, were interviewed at a wholesale market close

to the border between Vietnam and China (25 km) This was followed by a 2-day visit to the wholesale market and supermarkets in Nanning, the capital of the Guangxi Zhuang Autonomous Region in southern China Supermarket and speciality fruit retail interviews were undertaken in Hà Nội (Hanoi) to identify and validate the market potential, followed by consumer sensory testing and surveys correlated with objective testing of plum characteristics (size, colour, firmness and sugar content) to determine plum value attributes

In 2011, a full value chain analysis (VCA) was undertaken, involving more extensive, confirmatory sensory evaluation with consumers Value-chain-building workshops were conducted before the plum season (May-June) with smallholders and supply chain members

to link market opportunities with current capacity These were followed by annual collaborative value-chain planning meetings to review progress and emergent problems During the short plum season, continuous monitoring and advising on harvesting, packing and transporting, along with monitoring of prices in the Hà Nội markets and at the various

stages of the chain to smallholder farmers, was conducted as part of an assessment of the project’s impact on chain benefits

RESULTS AND DISCUSSION

Tam Hoa plum production and marketing is an activity carried out by many thousands

of households across Moc Chau District and is a much larger, more complex system than originally envisaged, being interconnected with the marketing of green plums to China and the market for other substitutable temperate fruit such as lychees, longans and other cultivars of plum It is a highly opportunistic, low-input system the results of which depend

on plum prices, the relative production capability of communes and local microclimates (earliness and quality) The plum harvest season is highly variable for date and duration, but usually extends over 40-45 days, with a mid-season of 20-25 days and a premium price period of 7-10 days at the beginning of the season In Pieng Sang Village and, to some extent,

Co Do Village, low-quality fruit are a major constraint to more profitable marketing of plums However, recent access to the Chinese green plum market has increased the demand significantly and stabilised the average price at a level that is profitable for farmers The lack

of capital and market information was identified as the major non-natural resource constraint for future growth of agricultural enterprises in the village

Ban On was recognised as having the best-quality plums, but, to achieve high quality attributes, harvesting is delayed by 10 and 15 days compared with Pieng Sang and Co Do, respectively This creates a tension for the Project (Hi-Q) Plum Chain because of the price-quality balance Earliness is a key value attribute for consumers, and there is some willingness by farmers to trade ripeness to achieve the earliness and premium prices that are associated with the first 7-10 days of the season In the latter stages of the season, ripe plums are in abundance in the wet markets and do not command premium prices Hence, farmers from Ban On are keen to get to market as early as possible with fruit that, whilst it is higher in quality than Pieng Sang and Co Do plums, may compromise the standards required

by the project’s Hi-Q Plum Chain marketing protocols

Mộc Châu has two main channels for marketing its Tam Hoa plums: the green plum channels into China and the ripe plum channels to both north and south Vietnam, with Hà Nội being the dominant destination market (Figure 1)

Figure 1 Mộc Châu Tam Hoa plum value chains with typical relative product volume flows

Source: interviews with collectors in Mộc Châu, 2010-2013 Relative volumes are estimates No official records are available

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Consumer value analysis indicated that consumers valued colour, sweetness, size, firmness and freedom from blemishes The creation of these value attributes occurred largely on the farm (sweetness, size and colour) and at the local collector (level 1) (grading for colour, size, blemish and packing to preserve quality) VCA also highlighted the absence

of market information and feedback and the lack of relationships between the upstream and downstream partners in plum chains Sensory evaluation established that perception of sweetness is closely related to colour and that, once 11 °Brix is reached, consumer preferences are not correlated to the objectively measured sugar content This finding indicates that the balance between quality and being early enough in the market to capitalise

on higher prices may be achieved by harvesting at 11 °Brix, providing fruit has changed colour from dominantly green to deep red (Tables 1 and 2)

Table 1 Relative contribution of objective consumer value attributes to the preference and

purchase decision (2011)

Attribute Overall preference Adjusted R 2 =0.272

Influence decision to buy

in early season Adjusted R 2 =0.216

Influence decision to buy

in main season Adjusted R 2 =0.238

Sweetness (°Brix) 0.041 P=0.452 0.101 P=0.279 -0.067 P=0.466 Hardness (kg cm-2) -0.239 P=0.010 -0.067 P=0.481 -0.205 P=0.029 Colour of skin (0

yellow-green, 1

purple-red)

0.334 P=0.002 0.374 P=0.001 0.392 P<0.001

Table 2 Relative contribution of perceptions of consumer value attributes to preference and

purchase decision (2011)

Attribute Overall preference Adjusted R 2 =0.556

Influence in purchase decision in early season Adjusted R 2 =0.269

Influence in purchase decision in main season Adjusted R 2 =0.280

Perceived

sweetness 0.686 P<0.001 0.383 P<0.001 0.389 P<0.001 Perceived

The investigation of the market for green plums in Pingxiang and Nanning in southern China showed that the demand for Vietnamese Tam Hoa plums is dependent on the price and availability of the Chinese Man Com variety, which means demand is highly unpredictable However, recent interviews with Moc Chau traders revealed that the green plum market has recently extended to Guangdong province, tending to make the market more stable The factors driving Chinese demand are:

• Chinese large-scale domestic production, which is difficult to forecast, as it is strongly affected by climate and disease;

• International market demand for processed plums, which is also unpredictable, due

to fluctuating internal and global economic conditions

When Chinese demand is high, green plums are diverted from Vietnamese production areas into that market, but, if the demand is low and the Vietnamese season is good, prices are driven down in Vietnam by a glut As a consequence, some trees are not harvested in some years However, other factors also influence the price of ripe plums:

1 Competition and substitution by other similarly priced fruits (longans, lychees, rambutans and other types of plums) occurs due to the large variation in the timing

and duration of the plum harvest period, as well as the rate of ripening This may mean that, when the premium price period for plums coincides with that of those fruits, substitution may occur, moderating the price of Tam Hoa plums (Figure 2);

2 The profitability and workload of competing enterprises in Moc Chau district such

as cattle production, tea harvesting and dairying;

3 Ripe plum harvesting is much slower than for green plums (100-150 versus 400-500 kg person-1 day-1), which means a higher cost of production for ripe plums;

4 Green plums have a much shorter harvesting season, of 5-10 days, whilst ripe plums have a peak mid-season of 20-25 days So, if the farmer has more profitable enterprises, then the longer, more complicated engagement with harvesting ripe plums is an opportunity cost for his livelihood

5 Marketing green plums avoids the cost and effort involved in fruit fly control

6 There are increasing farm labour shortages for plum harvesting because the trees

in many orchards have been planted too close together and allowed to grow without pruning which, in some instances, has resulted in the canopy becoming intertwined, making picking difficult

Figure 2 Seasonal competitors with Tam Hoa plums (1) Source: Nguyen et al (2005); (2)

source: Jiang et al (2002); (3) the scientific and varietal names of these fruit are not known

Green plums are usually harvested from the warmer hilly slopes, commonly starting nearly 10 days earlier than for ripe plums Some areas such as Pieng Sang and Co Do are early areas, but produce poorer-quality ripe plums, and this is an important decision-making factor for farmers supplying green or ripe plum markets As soon as the higher-quality areas start harvesting, the prices for these poorer-quality supplies drop significantly Therefore, farmers in areas producing poorer-quality plums make early decisions to optimise their income by selling to the Chinese market if the prices are reasonable, thus minimising the risk that they will receive no income from plum production The decision to supply the green plum markets has recently been made easier because green plum prices have been steadily rising In early season 2013, nearly 300 t day-1 (approximately seven trucks with a loading capacity of 40 t truck-1) were being sent to the Chinese market

Plums are climacteric fruits, so they continue to ripen after harvest However, cultivars

of Prunus salicina show a diversity of climacteric behaviour (Singh et al., 2012) Thus, during

the project, there was major variation in harvesting dates, harvest duration, quality and, consequently, market prices

Over the 4-year period of the project, major price variations occurred, and green plum production increased, whilst ripe plum production declined Some districts appeared to accept that they could not consistently achieve the best prices in the ripe plum market and

so sold early to the Chinese green plum traders Economic analysis indicated that there appeared to be a potential for premium-quality plums in high-quality greengrocers in Hà Nội The project monitored production and engaged in awareness-raising activities in three communes for 2 years, but the farmers in only one commune, Ban On, voted to proceed with establishing a High-Quality Plum (Hi-Q) Chain as part of the project In 2011, arrangements

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were made with three high-quality greengrocers in Hà Nội to participate in the chain, and the Ban On farmers trialled grading at harvest as well as grading at the local collector level The season was very late, resulting in ripe plums competing with other substitutable temperate fruit, so the prices were only moderate for the Hi-Q chain The 2011 results indicated the need for the new chain to be very early to market, with consistently high-quality fruit, and the need to increase throughput by involving more wholesalers and retailers It also demonstrated that grading whilst harvesting was not economic, because the pickers were only 40% as efficient

Economic analysis of the 2012 data (Table 3) showed that the Hi-Q plum chain was able to achieve a higher net benefit for all chain participants over the traditional ripe plum chains, as well as the low-input green plum chains to China Further, the net benefit to the four retailers of Hi-Q plums ranged from VND 65,000 to 175,000 per day and VND 2,489,500

to 6,648,000 for the 2012 season

Table 3 Comparison of profit and net benefit to chain stages from different plum marketing

channels (2012)

Hi-Q plum chain (Ban On Farmer Interest Group) Net profit

(VND) Net profit (VND) Net profit (VND) Net benefit vs ripe Net benefit vs green

The 2013 season activities focused again on increasing throughput and the number of outlets, achieving the largest total throughput of 3 t

CONCLUSIONS

Project results showed that:

• There is sufficient profit margin for all the chain participants to establish a sustainable niche value chain if sufficient throughput can be achieved;

• Engaging with large collectors and wholesalers is important for improving smallholder systems;

• There are few opportunities for farmers to ‘add value’ for other chain members to justify sharing premium price;

• Plums are highly substitutable with other fruits, presenting difficulties for establishing large, stable, coordinated chains;

• Opportunistic production and marketing are very difficult to coordinate;

• Where the opportunity and motivation to improve is low, chain members will not

be willing to invest;

• The market price is highly dynamic, dependent on diverse, uncontrollable conditions, and therefore risky for smallholder investment;

• Not all supply chains are suitable for coordinated supply;

• Future value chain projects based on smallholder production systems should pay particular attention to selecting large ‘aggregators’ and ‘distributors’ so as to achieve required volumes and stable market access

ACKNOWLEDGEMENTS

The authors wish to acknowledge the funding and assistance provided by the Australian Centre for International Agricultural Research (ACIAR)

Literature cited

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