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Ministry of Agriculture & Rural Development

CARD PROJECT REPORT

030/06 VIE

Developing a strategy for enhancing the competitiveness of rural
small and medium enterprises in the agro-food chain: the case of
animal feed

MS10:
Project Completion Report
August 2010

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Table of Contents

1. Institute Information ___________________________________________________ 2
2. Project Abstract _______________________________________________________ 3

Agriculture and Rural Development
Vietnamese Project Team Leader Dr Nguyen Do Anh Tuan
Australian Organisation
University of Western Australia
Australian Personnel
Ms Sally Marsh, Dr Donna Brennan,
Professor John Pluske, Dr Greg Hertzler (left
UWA in Jan 2008), Dr Jo Pluske
Date commenced
1
st
May 2007
Completion date (original)
30
th
April 2009
Completion date (revised)
30
th
April 2010
Reporting period
1
st
November 2008 – 30
th
June 2010
Contact Officer(s)
In Australia: Team Leader
Name:
Ms Sally Marsh

Telephone:
+84-4-37282551
Position:
Researcher – Market Analysis
Unit
Fax:
+84-4-37280489
Organisation
Center for Agricultural Policy –
Institute of Policy and Strategy
Email:
[email protected]

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for Agriculture and Rural
Development (CAP-IPSARD)
2. Project Abstract


Understand the role and performance of SMEs in the animal feed sector in other countries and
draw lessons for Vietnam; 3) Provide a quantitative assessment of the factors affecting the
competitiveness of the animal feed industry in Vietnam; and 4) Provide policy recommendations
to the government with regard to the efficiency of firms operating in the livestock feed sector, and
provide advice to SMEs competing in the livestock feed sector. Standard agricultural economics
techniques were used to quantify the characteristics of the animal feed industry, and to identify
issues and opportunities for small enterprises in the animal feed supply chain. Two project
research reports have been completed, documenting the results of the research assessing the
factors affecting the competitiveness of SMEs in the livestock feed sector, and the use of
industrial feed by livestock producers. Four policy briefs have been completed with
recommendations from research results on the topics: Quality Control, Competitiveness of SMEs,
Constraints facing SMEs, and Use of Feed. The capacity assessment demonstrated that there were
positive impacts of the project on capacity of IPSARD/CAP staff, and a Training Manual has been
completed.

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o Small-Medium Enterprises in the Livestock Feed Sector in Vietnam:
Vol II Feed use by pig and chicken livestock producers.
• A Training Manual based on the research work undertaken.
• A Policy Pathways Report outlining the role of IPSARD/CAP in policy
formulation.
• A report of the project’s impact on capacity of IPSARD/CAP staff based on
benchmark and end-of-project assessments.
• Four policy briefs based on the research work:
o Quality control in the livestock feed sector in Vietnam;
o Competitiveness of small-medium enterprises in the livestock feed
production sector in Vietnam;
o Constraints facing small-medium enterprises in the livestock feed
production sector in Vietnam; and
o Use of industrial and mixed feed by livestock producers in Vietnam.

• Training on data management techniques including: data entry in Microsoft
Access, data cleaning in Stata, techniques in Microsoft Excel and Word.
• On-the-job training for IPSARD staff on assessment of competitiveness of SMEs
and other firms in the Vietnamese animal feed value chain.

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• Development of a manual on how to conduct a study of competitiveness of SMEs
that can be used in other studies to be implemented by IPSARD in the future.
Objective 2
: Understand the role and performance of SMEs in the animal feed sector
in other countries
• Desk-top literature search and review of the nature, experiences and lessons of the
animal feed industries in other countries, and the role of SMEs in the animal feed
sector globally.
• A study tour to Thailand to assess the organization of the livestock feed sector,
and its applicability to Vietnam.
Objective 3
: Provide a quantitative assessment of the factors affecting the
competitiveness of the animal feed industry in Vietnam
• Collection of secondary data to provide an up-to-date assessment of the animal
feed industry in Vietnam, and, opportunities and challenges facing the sector.
• Detailed surveys of livestock feed enterprises and livestock producers conducted
in three regions to examine the value chain of the animal feed industry including
an assessment of characteristics and costs of production, the nature of information
and product flow, quality control standards and processes.
• Compilation of two detailed reports on the research work: Small-Medium
Enterprises in the Livestock Feed Sector in Vietnam: Vol I Livestock feed
production and Vol II Feed use by pig and chicken livestock producers.
Objective 4
: Provide policy recommendations to the government with regard to the

survey was conducted: Ha Noi and Hung Yen in the north, and Binh Duong, Dong
Nai, Long An and Tien Giang in the south. In total, 300 livestock producing
households were surveyed: 50 households were interviewed in each province and
these were almost equally divided between chicken and pig producing households.
The sampling design for the 300 livestock producing households was based on the
VHLSS 2006 framework, so that it would be representative of the overall production
situation. Within each province, the aim was to interview 25 households producing
chickens and 25 producing pigs. With consultation from the Livestock Division of
provincial Departments of Agriculture and Rural Development (DARDs), we selected
one of the biggest livestock producing districts in each province. From that district,
selection was narrowed to about four communes listed in the framework of VHLSS
2006 and having large numbers of households involved in chicken/pig production.
However, in many cases we did not find enough households on the VHLSS 2006 list,
as some of them at the survey time were no longer involved in livestock production,
or were too distant to be surveyed because of our time and budget constraints. Instead,
additional households were selected randomly for the survey, given their expected
similarity to other producers in the survey sites.
During the scoping activities carried out for the study, it became apparent that small
scale livestock producers were often regarded as those who usually use raw combined
feeds, low-protein materials (sometimes with contaminants), lacked adequate quality
control and had poor equipment. On the contrary, large scale livestock producers were
thought to mainly use industrial feed for their livestock. It is difficult to conclude
which feeding pattern is more economical for households, as the cost paid for more
expensive industrial feed may or may not be covered by reduction in the length of
time the stock are raised (that is, greater feed efficiency).
Therefore, in this study, the aim was to gain a deeper insight into feed use by different
types of households in terms of scale, region, and breed type raised. It was hoped that
these insights would provide some useful suggestions for SMEs in the feed production
sector to survive in the competitive livestock feed market.
The research therefore focused on answering the following questions:

• Small-Medium Enterprises in the Livestock Feed Sector in Vietnam: Vol I
Livestock feed production and
• Small-Medium Enterprises in the Livestock Feed Sector in Vietnam: Vol II Feed
use by pig and chicken livestock producers.

Visit to UWA for training by CAP staff:
In August 2009, two CAP staff visited UWA for 3 weeks to undergo intensive
training in data analysis and report writing. This is discussed in more detail under
Section 5.3, Capacity Building.

Stakeholder workshops held in Ho Chi Minh City and Hanoi to communicate results:
Stakeholder workshops to communicate results from the draft research reports were
held in Hanoi in December 2009, and Ho Chi Minh City in January 2010. Ms Marsh
attended the workshop in Hanoi. Discussion at both workshops was lively, and
following the workshops the reports were revised in line with feedback from
stakeholder participants. Summaries of the participants and discussions are provided
in Appendices I (Hanoi workshop) and II (Ho Chi Minh City workshop).

Final policy workshop held in Hanoi:
A final project workshop was held in Hanoi on May 21
st
2010. The focus of the
workshop was to present and discuss the 4 policy briefs. Around 25 participants
attended the workshop and once again discussion was animated. Detail about
workshop participants and the discussion was provided to the CARD office in the
response to the appraisal for Milestone 8.
5.2 Smallholder Benefits
At this end of the project it is difficult for us to identify smallholder benefits, but this
remains a likely impact of the project in the medium to long term, through increased
efficiency and competitiveness, and better quality control, in the livestock feed sector.

A seminar on the project results was given at the School of Agricultural and
Resource Economics (SARE) at UWA in August 2009.

A discussion was given at CAP in December 11 2009 before the stakeholder
workshop held in Hanoi to review the project results and fix presentation contents
5.5 Project Management
Dr Donna Brennan returned to Australia from Hanoi in December 2008 and took
maternity leave from January to May 2009 inclusive. This put pressure on project
completion, as her input was essential for the completion of Milestones 8 and 9. Dr
Brennan was also unable to travel to Vietnam to participate in the stakeholder
workshops and project completion workshop. One trip originally budgeted for Dr
Brennan was used by Ms Marsh to enable her to attend the final project workshop in
May 2010 (and work with the team in Hanoi prior to this).

Because of the late start up to the project, Ms Marsh had an existing contract with
UWA to employ her on the CARD project (at 20%) through to end September 2009.
Following that date, Ms Marsh worked on the project partly in her own time and

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partly in an “in-kind” capacity funded by the School of Agricultural and Resource
Economics.

As previously indicated, options for in-kind assistance from the School of
Agricultural and Resource Economics (SARE), following the departure of Dr Greg
Hertzler, proved difficult to identify. Both Dr Brennan and Ms Marsh have provided
more than their budgeted time input to the project, which has assisted with the
provision of the technical assistance and training that is required.

Ms Pham Tuyet Mai left CAP in January 1
st

to address this were recommended in the project research report and policy brief on
quality control.

Few feed mills nominated either quality control or technical support and training as
needing support from the government. We would suggest that this may be a
perspective detrimental for the livestock feed sector. Better quality control is needed

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in the sector, and it seems unlikely that this will be achieved voluntarily by the large
number of domestic mills.
7. Implementation & Sustainability Issues
7.1 Issues and Constraints
The late start to the project, and staffing issues with the Australian team put pressure
on the completion time of the project. However, activities for the project were
successfully completed in May 2010.

Sharp increases in recent years in the costs of energy and livestock feed raw materials
have the potential to bias the data from the research work, as well as put pressure on
SMEs in the sector in general. In particular, since the survey work was completed,
imports of raw materials for livestock feed have dramatically increased in Vietnam.
Problems associated with the procurement of raw materials were clearly a major
concern of participants in the stakeholder and final project workshops. This issue,
along with possible solutions for SMEs, is worthy of further research effort.
7.2 Options
At project completion, there are options for further distribution of the project research
reports and policy briefs and this will be explored as outlined in Section 8. One or two
journal articles may also be considered.
7.3 Sustainability
The location of Dr Brennan in CAP during a large part of this project has contributed
to the sustainability of the skills and knowledge being applied by the project team in

submitted as part of Milestone 9). More specifically, the comparison of staff more
involved in the project compared to those less involved shows some knowledge and
skill areas directly related to the project research where more improvement among the
involved group suggests that the project has been directly responsible for this capacity
improvement. In the exploration of attitudes, the non-involved respondents tend to
have made more progress. These respondents tend to be more senior staff, and it is
likely that they have been exposed during the last 2.5 years to the project results (as
well as many other policy discussions), and perhaps are better able to realise policy
implications.

Medium- to long term benefits from the project to stakeholders outside
IPSARD/CAP, including SMEs in the livestock feed sector and smallholder livestock,
are difficult to identify at this stage. However, we are confident that the research
reports will contribute to the ongoing policy debate about issues relevant to the
development and improvement of the livestock feed sector in Vietnam, and the role of
smaller enterprises in the sector. 12

10. APPENDIX I

CARD discussion workshop December 10, 2009

1. Date/Time/Place: Thursday, 10 Dec 2009, 8.30-11.30, Bao Son Hotel
2. Participants:
There were about 40 participants in the workshop, including:
- relevant Departments of MARD, IPSARD (Agroinfo, Units)
- CARD program
- Animal Husbandry Institute, Agricultural Planning and Projection
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11. APPENDIX II

CARD discussion workshop January 20, 2010

1. Date/Time/Place: Wednesday, 20 Jan 2010, 8.30-12.00 a.m, Duxton Hotel,
HCMC
2. Participants:
There were about 30 participants in the workshop, including:
- Relevant DARDs (Dong Nai, Tien Giang)
- CARD program (Mr Keith Milligan)
- Vietnam Livestock Science - Technique Association
- An Giang University; HCMC Agricultural Forestry University
(Department of Veterinary & Livestock, Department of Economics)
- South CAP
- Feed enterprises
- Feed agent/farming household

Also research team: Phong, Hoa, Phuong, Thinh, Thuy (admin support).
3. Purpose:
- Present preliminary results from two major surveys to stakeholders and
participants for comment and feedback before finalisation of reports.

4. Presentations:
- Welcome remark: Mr Phong, Mr Keith Milligan
- Project overview: Phong
- Background info: Hoa
- SME result: Phuong