Fruits and Vegetables in Vietnam - International Food Policy ...

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Only 12 percent of the processors surveyed reported problems with transportation. The main problems involved poor road infrastructure and demurrage (lateness) (27.5 and 22.5 percent of respondents respectively). Unreliable drivers, informal rents, and overloaded vehicles were seen as the next most common forms of problems. 8.4 Marketing Problems and Constraints Almost 40 percent of processors surveyed indicated that they suffered from infrastructure related problems., with higher proportion of medium and large processors reporting problems. The proportion of processors citing infrastructure problems was similar in the North and South. The main infrastructure problem cited by processors was physical access infrastructure (roads, rail, docks) for purchasing inputs and selling products. This was considered to be a major problem for by all sizes, types and locations of processor. The main regulatory problems identified are problems with tax administration and tax laws, which together account for over 44 percent of the cited problems (see Table 5-29). When asked to name the main constraints facing the fruit and vegetable processing industry as a whole, the most common complaints concerned the low levels of demand for processed products and unstable prices of processed products. 9 Credit and investment The average initial investment to start the processing business was around VND1.8 billion. The most common source of start up capital for processors was immediate family., accounting for 72 percent of the total sources cited. This was true for all three size categories and all three processor types. Although immediate family is the most common source of start-up capital, the average contribution of family is small relative to the average contribution from other sources. The capital obtained from family and friends, non-government organizations, state companies and foreign investment, is typically in the form of equity in the company. In contrast, start-up capital from commercial banks and suppliers tends to take the form of credit. In addition to start up capital, processors also require working capital in order to carry out their operations. The most common source of working capital is reinvested profits of the processor, followed by formal short term credit. These patterns hold for small, medium, and large companies. Informal credit was relatively important for small firms, while formal credit was more important for large ones. Of the 241 processors surveyed, 56 percent indicated that they used credit during the year 2000 or had older, still outstanding loans. Small processors were somewhat less likely to have outstanding loans (49 percent) compared to large processors (61 percent), but this indicates a relatively high level of access to credit even among small processors. Most processors obtained loans Chapter 5 Fruit and Vegetable Processors Page 5-16
from the Agricultural Bank (36 percent of respondents), family and friends (24 percent), and commercial banks (21 percent) (see Table 5-30). On average, processors obtained loans from only one source, but a few processors obtained loans from multiple sources. Few processors (6 percent) had loans outstanding from previous years, indicating that most of the credit available to processors is short-term. Virtually all the loans were denominated in Vietnamese dong (99 percent of respondents). The type of collateral required for loans varied according to the lending institution. Family and friends, other enterprises, moneylenders, and other credit institutions usually did not require collateral (95, 100, 82 and 54 percent of respondents respectively). In contrast, banks usually required a house, building, or land as collateral. The majority of small processors required to put up their house as collateral (64 percent of respondents) while many medium and large processors were not required to put up any collateral (43 and 48 percent of respondents respectively). This may reflect the greater risks, as perceived by banks, in lending to small enterprises. Box 5-2. Expanding fruit and vegetable processing capacity In the year 2001, Vietnam completed five new fruit and vegetable processing plants with a total annual capacity of 28,600 tons of processed product. This represents an increase of almost 20 percent in the capacity of fruit and vegetable processing plants. One of the main constraints on the government’s plan to expand fruit and vegetable processing is that the provinces have failed to develop fruit and vegetable growing areas in order to provide sufficient raw materials for the planned processing plants. A number of newly opened processing plants have operated far below capacity and have incurred losses because of the shortage of raw materials and falling export prices. According to officials at the Ministry of Agriculture and Rural Development, VND 960 billion (US$ 6.3 million) has been earmarked to promote production, build processing plants, and improve preservation methods this year. Priority is being given to processing plants located near fruit and vegetable growing areas, and projects will not be approved unless they have access to at least 60 percent of their raw materials requirements. Source: Vietnam News Service, 21 January 2002. The majority of processors used loans to purchase raw materials (89 percent of respondents), with only 17 out of the 160 loans taken out by producers used for other purposes. The other purposes included the purchase of equipment, construction, and business start-up. The amount borrowed and the terms of the loan varied across lending institutions. On average, processors borrowed VND 2.2 billion, for an average of 13 months and at an interest rate of 1.14% per month. Commercial banks loaned relatively large amounts, VND 4.3 billion, for an average of 11 months at an interest rate of 0.8% per month. Loans from family and friends were for VND 129 million, for an average of 5 months at an interest rate of 1.4% per month. Loans from moneylenders appeared to be for emergencies, with the amount borrowed being the lowest amongst Chapter 5 Fruit and Vegetable Processors Page 5-17
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Fruits and Vegetables in Vietnam: A
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Ta Minh Tuan SOFRI Data collection
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Table of Contents Chapter 1: Introd
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Chapter 5: Characteristics of fruit
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List of Tables Table 2-1: Trends in
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Table 5-7: Proportion of processors
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List of Figures Figure 2-1: Growth
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Chapter 1 Introduction This is the
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quality. In addition, they may face
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This, in turn, creates an incentive
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definition is also convenient becau
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Chapter 2 Patterns and trends in fr
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south, and different varieties of l
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fruits and vegetables. Because of t
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2.2 Characteristics of fruit and ve
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and to fruits, for which the corres
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2.4 Input use How widespread is the
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• The calculations do not take in
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Figure 2-6. Change in the percentag
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1993, the share of output sold was
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Table 2-1: Trends in planted area o
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Table 2-7: Trends in gross value of
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Table 2-10: Plan for fruit and vege
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Table 2-12: Percentage of rural hou
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Table 2-14. Distribution of farm ho
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Table 2-17: Share of fruit and vege
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Table 2-19: Share of growers sellin
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Table 2-21: Percentage of fruit and
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Table 2-23: Percentage of fruit and
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Table 2-25. Gross and net revenue f
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Table 2-27. Gross and net revenue f
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Table 2-29. Comparison of fruit and
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1 Introduction Chapter 3 Commercial
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2.4 Sources of revenue Survey respo
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that year, with similar patterns by
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The most popular tomato varieties a
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5.2 Culling of fruit Trees The majo
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Producers in Ha Noi, however, have
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The amount of manure used by dragon
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Producers generally do not rent sto
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For longan and litchi producers the
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contractors while 97 percent said t
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Box 3-3. Lam Dong farmers face risk
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percent had access to a telephone,
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9.3 Quality of Extension Organizati
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10.2 Credit sources As Table 3-40 s
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these laborers account for about ha
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Table 3-1 Sample Locations and Prod
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Table 3-6 Sources of revenue by reg
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Table 3-10 Profitability of Househo
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Table 3-12 Planting Profile for Cro
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Table 3-14 Production Profile for S
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Table 3-16 Fruit and Vegetable Mana
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Table 3-18 Propagation Methods for
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Table 3-22 Production, Sales, Consu
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Table 3-27 Sales of Fruit And Veget
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Table 3-32 Proportion of Crop Affec
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Table 3-36 Extension services provi
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Table 3-39 Credit Usage by Region R
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1 Introduction Chapter 4 Fruit and
Page 127 and 128: elated activities. The large differ
Page 129 and 130: traders (16.2). Wages paid by expor
Page 131 and 132: Figure 4-1. Percentage of traders r
Page 133 and 134: The average exporter was a member o
Page 135 and 136: About 85 percent of fruit and veget
Page 137 and 138: Only 17.0 and 28.7 percent of trade
Page 139 and 140: domestic traders. In the South, onl
Page 141 and 142: traders used refrigerated trucks to
Page 143 and 144: price information in domestic and i
Page 145 and 146: The average trader in employed 47 w
Page 147 and 148: Table 4-3. Percentage of traders us
Page 149 and 150: Table 4-6. Sources of post-startup
Page 151 and 152: Table 4-10. Types of post-harvest a
Page 153 and 154: Table 4-13. Types of post-harvest a
Page 155 and 156: Table 4-15. Characteristics of meas
Page 157 and 158: Table 4-19. Organizations that insp
Page 159 and 160: Table 4-23. Prevalence and characte
Page 161: Table 4-25. Characteristics of prof
Page 164 and 165: operating expenses, and profits of
Page 166 and 167: The daily wage varies from VND 34 t
Page 168 and 169: processors wanting to access more l
Page 170 and 171: private farms and traders, together
Page 172 and 173: processors taking no action to ensu
Page 174 and 175: The most common types of processed
Page 176 and 177: while 18 percent use a closed shed,
Page 180 and 181: all of the lending institutions (VN
Page 182 and 183: The main reason cited by processors
Page 184 and 185: 11.2 Perceived level of Competition
Page 186 and 187: Despite the fact that processors ut
Page 188 and 189: Table 5-3. Distribution of manager
Page 190 and 191: Table 5-9. Distribution of function
Page 192 and 193: Table 5-14. Percentage of processor
Page 194 and 195: Table 5-21. Capacity utilization (%
Page 196 and 197: Table 5-27. Proportion of sales to
Page 198 and 199: Table 5-33. Percent of processors r
Page 200 and 201: Table 5-38. Revenue and costs for d
Page 202 and 203: Table 5-40. Value added and asset r
Page 205 and 206: 1 Introduction Chapter 6 Fruit and
Page 207 and 208: Like other exports, fruit and veget
Page 209 and 210: Figure 6-1. Trend in exports of fru
Page 211 and 212: As a result, China is the largest e
Page 213 and 214: short distance, belonging to AFTA,
Page 215 and 216: In September 1999, the government i
Page 217 and 218: Of course, expanding exports cannot
Page 219 and 220: The past five years, there has been
Page 221 and 222: Table 6-1: Trends in fruit and vege
Page 223 and 224: Table 6-3: Destination of Vietnames
Page 225 and 226: Table 6-5. Composition of Vietnames
Page 227 and 228: Table 6-7. Fruit tariff reduction s
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1 Introduction Chapter 7 Fruit and
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the case of kohlrabi, which is cons
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Figure 7-2. Consumption of fruits a
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The results of the demand analysis
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Of the ten categories of fruits and
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5 Retail marketing of fruits and ve
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ands, but additional products can b
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Table 7-1. Summary of fruit and veg
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Table 7-4 . Per capita consumption
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Table 7-8. Share of consumption fro
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Table 7-12. Determinants of Demand
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Table 7-24. Comparison of fruit and
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In recognition of the marketing pro
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was obliged to cover its cost with
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The company has a staff of 200 work
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Given this background, it would be
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4 Plant protection Plant protection
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attitudes toward pesticide risk, th
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options are understood, the final s
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gave them the contacts and marketin
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7 Summary and conclusions The insti
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combination of random testing in th
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just over half (54 percent) of the
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government institutions, particular
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The average gross revenue among the
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smaller processors experienced a gr
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household category (83 percent of w
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growers, forcing them to improve ef
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The government should facilitate pr
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countries are becoming increasingly
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Bibliography ANZDEC/IFPRI/Lincoln.
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Vietnam News Service. 2001. “Grow
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