Hanoi’s Organic Food Supply Chain circa 2010
A study of Hanoi’s 2010 Organic Food Supply Chain (OFSC) by Veerapa and Chien found a city on the “verge of embarking on full commercial scale” organic vegetable production and distribution (Veerapa, N.K. and Chien, T.M. 2012). They identified a full OFSC ecosystem that included five key organisations involved in organic vegetable production and distribution with “very clear supply chain roles that can be identified as supply inputs, distribution and retailing.” These five were a farmer group, two non governmental agencies (NGOs), one local and one international, a major commercial distributor of organic produce, a state owned retailer and a private retailer.
Overseas Development Aid
Organic practices in Vietnam were started through a 2005–2010 ODA project funded by Denmark’s Agricultural Development Denmark Asia (ADDA). Denmark’s involvement in Vietnam began in 1999 and was overseen by Danida, the administrative agency responsible for the planning, implementation and quality assurance of Denmark’s development cooperation. Danida acts through the Ministry of Foreign Affairs of Denmark according to Denmark’s development policy aims of combating poverty through the promotion of human rights and economic growth.
Organic Food Supply Chain 2010
Veerapa and Chien found four hurdles for whether or not the OFSC could become successful and move beyond being “on the verge” to actually being a full-scale commercial success. First, there was the hurdle of a shrinking supply to small scale retail stores for distribution. Second, they questioned whether the farms could transition from NGO-funded to for-profit commercial success. Third, at the time of the 2012 study organic products were still unknown and consumers had difficulty distinguishing between genuine organic products and other “clean” products. They called for a certification system for organic agriculture did not yet exist, neither did an independent certification organization. Fourth, Vietnam’s land allocation policy was a “major hurdle to large scale and commercially viable production of organic vegetables” that forced farmers to work with small plots of land (1 hectare for ten families) which made large scale organic production difficult.
On the positive side, they found that for-profit commercial distributors, such as ASIMCO, were becoming interested in developing an OFSC and creating backwards integration through a reliable supply to retailers. This strategy was believed to hold the key to the survival of the organic vegetable production in Vietnam. into organic farming.
In order for Vietnam to fully develop an OFSC, the authors called for three things. First, a system that integrated distributors and retailers. Second, the development of a Vietnamese certification system that was government supported through standards and law. Third, creating more organic farms in regions where they can be contiguous and in close to distributors in order to minimise costs associated with transportation.
