1. PPP Coffee Taskforce (Production Sub-committee under VCCB) PPP Taskforce Meeting, HCMC, Sep 22 nd, 2015

2. MARD PUBLICPRIVATEPARTNERSHIP WASI NAEC “Make Vietnam the recognized reference of Robusta”

3. WHERE WE ARE

4. Disseminating good farming practices  Farmer group model  NSC  Value chain  51 demos in 2015/16 Consolidating PPP Coop  PPP Coop model with satellite farmer groups  3 Coops in 2015  Trading 3.000 tons of coffee  Trading 600 tons of the input agricultural materials Cooperation with Agri finance WG  Transaction model: Coop-bank-company  Micro finance solutions EXPAND THE PPP MODEL, TEST FARMERS FINANCING SOLUTIONS, MONITORING GROUP and COFFEE COORDINATING BOARD “Make Vietnam the recognized reference of Robusta” AGREED 2015 STRATEGY

5. Technical tours: 04 (4 Provinces) Technical meetings: 01 ToT for farmer leaders: 01 (55 farmer leaders representative for 8304 farmer in 4 provinces) PPP Coffee Taskforce meetings:01 2015 Activity Report: Technical activities

6. Pillar I: Steady Higher Yield by Years +5% +11% +13% Keep sustainable Average yield of 4 years: +10% higher In crop 2015/16, PPP Demos farms vegetative and cherry is growing better than Control demos

7. 7 Update: Coffee PPP & Control demo in Jul 2015: Control demo: Lack of Micro nutrients symptom on leaves PPP demos: Green leaves, more fruits, long branches reserve for next crop

8. Pillar I: Good Practice with Better bean size Summary of 71 demos in 4 Provinces Improve ripenning and bean size

9. Pillar I : Maintain crop program to continue reducing 55% of gas emission: 6 demos PPP program: 304 kg N/ha 5.2 t g.b./ha Control program: 484 kg N/ha 4.8 t.g.b/ha From : Yara Research Center, Haninghof, Germany kg CO2eq/t green bean 661 1,487

10. 2014/15: Summary of 71 demos in 4 Provinces CategoryPPPControlDifference Yield (ton/ha) 4.4 3.9 + 0.5 (13%) Profit (USD) 6,6215,813 +809 (14%) Pillar I: Not only Good farming practice with Better Profitability … * Unit area: Ha AT JAN 2015: with coffee price 1800 usd/ton, PPP demo increased profit: + 809 USD/ha ( + 14 %) UPDATE: For now, Aug Average Price of coffee is 1668$/ton, PPP still produce higher profit: 742$/ton AT JAN 2015: with coffee price 1800 usd/ton, PPP demo increased profit: + 809 USD/ha ( + 14 %) UPDATE: For now, Aug Average Price of coffee is 1668$/ton, PPP still produce higher profit: 742$/ton …But also significant reduce the amount of chemical fertilizer usage: PPP: 1.850 kg/ha Control: 2,240kg/ ha

11. 11 Update: Sustainable coffee outreach: PPP coffee documentary film program on Dak Lak TV

12. NEXT STEPS Now that benefits are proven, how to increase the scale? Getting the right economy of scale PPP practice to be aligned and included in coffee certification processes Institutionalization issues and alignment of stakeholders (SCP, NSC, rejuvenation plan): PPP results to be recommended from gov/local authorities to coffee farmers ►►► Increase linkages & alignment ►►► Build trust with partners & farmers through cobranding Input alliances: Cost cutting Input alliances: Cost cutting Farmer groups/ Coops: Whole sale Collectors/ Buyers: Large scale business Collectors/ Buyers: Large scale business Certified input materials & fertilizer Certified coffee of farmers Certified coffee of buyers Gov. partners/ build credit Input cost & benefit analysis Input cost & benefit analysis Gov agencies voicing

13. Pillar II: Operating Model of PPP Farmer Group Technical Group DARD/PAEC “Extensionist” Farmer Group Leader Farmer Relationship: Management support Relationship: Technical support Tech support, organization and management support 13

14. Pillar II: Operating Model of PPP Coop Input company Farmer Group Coffee buying company Management Board MOU Coop’s warehouse Large quantity Wholesale price List of farmers Buy input List of farmers Sell coffee MOU Large quantity Price with premium Wholesale model – From input to output Payment Delivery 14

15. Pillar II: PPP Coop – The flower model Satellite group CENTRAL COOP Satellite group -1 Central coop for each province (legal entity) -PPP farmer groups will play the role of satellite mini coop -Order for buying input, selling output will be sent to central coop => central Coop will achieve the volume target of companies to enjoy the wholesale price, then, share the benefit to satellite

16. Pillar III: Coffee Crop Cycle and Financial Needs  Coffee farmer don’t need financing all the time. The need of money varies based on the development of coffee trees:  For 1ha coffee farm, farmer will need 6 mio VND in July and 10 mio in Sep. Around 70% coffee farmer will need small loans (350K out of 500K farmer households) New crop Jan March Blossom May Form cherry July Sept Develop size of bean Develop size of cherry Dec End of Crop Farmer don’t need to be financed Need to be financed 50% Need to be financed 100% 16

17. Pillar III: Short term loan via credit card 1. Coffee company inform the bank a list of farmer who sell coffee sustainably for 5 years 2. Bank consider to issue a credit card/credit book to farmers in the list 3. Farmer using credit card/credit book to buy fertilizer from coop from July to September 4. Farmer payback principal and interest to the bank on December 17

18. Pillar III: Flow of credit and fertilizer Coffee Company Bank Farmer Cooperative Fertilizer Company Credit card Payment (December) Payment (July – Nov)

19. Current discussion with Agribank Agribank already grant loan to farmer groups. The loan based on value chain has a good potential. Fertilizer companies welcome the initiative and may consider to partly support interest rate via bank for farmer who buy their product. Farmer/cooperative: Welcome the initiative. This will be an attractive point for farmer to join cooperative. Agribank is considering to participate to a pilot project with 2 coops (500 farmers) in 2015 – 2016 and will scale up after the pilot. 19

20. Thank you