Developing Good Agricultural Practice
(GAP) systems for dragon fruit
producers and exporters in Binh Thuan
and Tien Giang provinces

Campbell J, Nguyen Van Hoa, Nguyen Huu Hoang
December 2007 Final report to Hassall and Associates International

HortResearch Client Report No.
HortResearch Contract No. 20027 Campbell J
The Horticulture and Food Research Institute of New Zealand Ltd
HortResearch Nelson Region
PO Box 220
Motueka 7143; NEW ZEALAND
Tel: +64-3-528 9106; Fax: +64-3-528 7813

Nguyen Van Hoa
Nguyen Huu.Hoang
Southern Fruit Research Institute
PO Box 203 My Tho
Long Dinh - Chau Thanh - Tien Giang, VIETNAM
Tel: +84 73 834 699
Table of Contents

1. Institute Information ____________________________________________________ 1
2. Project Abstract________________________________________________________ 2
3. Executive Summary ____________________________________________________ 2
4. Introduction & Background ______________________________________________ 4
5. Progress to Date _______________________________________________________ 5
5.1 Implementation Highlights ___________________________________________ 5
5.2 Smallholder Benefits_______________________________________________ 10
5.3 Capacity Building _________________________________________________ 14
5.4 Publicity ________________________________________________________ 21
5.5 Project Management _______________________________________________ 21

SIPPO Swiss Import Promotion Programme
SOFRI Southern Fruit Research Institute
VinaFruit Vietnam Fruit Association
VNCI Vietnam Competitiveness Initiative

1

1. Institute Information
Project Name Developing GAP systems for dragon
fruit producers and exporters in
Binh Thuan and Tien Giang
provinces
Vietnamese Institution Southern Fruit Research Institute
Vietnamese Project Team Leader Nguyen Van Hoa
Vietnamese Project Operations Leader Nguyen Huu Hoang
Australian Organisation The Horticulture and Food Research
Institute of New Zealand
Australian Personnel John Campbell, Leonie Osborne
Date commenced 30 June 2005
Completion date (original) September 2007
Completion date (revised)
Reporting period Project final report

Contact Officer(s)
In Australia: Team Leader
Name:
John Campbell
Telephone:
+64 3 528 9106
Position:

+84 73 893 122
Organisation
SOFRI
Email:
1
2. Project Abstract Producers of dragon fruit in Vietnam have seen prices for their fruit decline by about 60%
since 2000, which can be attributed, in part, to their dependence on local and nearby
export markets. There are about ten major dragon fruit exporters in Vietnam but a
significant proportion of the total production is sourced from many small farmers. Returns

the Vietnam project team has been ongoing. The Southern Fruit Research Institute (SOFRI),
Ministry of Agriculture and Rural Development (MARD), Department of Agriculture and
Rural Development (DARD) and commercial personnel are included in the training which
covers all facets of Good Agricultural Practice (GAP) at the various levels of the
international standards. Enhancement of the national capability of people and infrastructure
continued to be given high priority by the project for ultimate sustainability obligations.

The “Introduction to Internal Auditor Training Course’s” delivered to selected SOFRI staff
and to the pilot packhouse key personnel and particularly the skills attained by Mr Nguyen
Huu Hoang reported on previously have been of great assistance to the stakeholders
understanding of GAP quality systems especially when undertaking the final internal audit of
the pilot prior to the Certifying Body assessment for Pilot Certification to EUREPGAP and
BRC Standards.

Field observations for the farmers’ benchmarking survey were completed in the first
reporting period. The data were subsequently translated into English, entered into a web
based database and analysed. The benchmarking survey report was prepared by
HortResearch personnel and delivered as a PowerPoint
®
presentation by the project leader to

2
SOFRI personnel, packers, farmers, MARD and DARD personnel of Binh Thuan during
March - April 2007.

Selection of a packer/exporter and farmer group for the project pilot to receive project input,
confirmed during the September 2006 visit, was formalised. Training of the pilot members
for improvement towards British Retailers Consortium: Global Standard – Food (BRC) for
the packer and EUREPGAP for the farmers continued, to enable them to reach compliance in
all areas. The training involved quality systems, health and safety, technical, product

The final internal audit for the pilot was completed in August/September 2007 to confirm
readiness for Certification Body inspection. The external audit was completed during
September by the certifying body ‘SGS Vietnam’. Corrective actions for non-conformity
issues were completed and a follow-up external audit was completed on 8 November 2007
with full compliance with the EUREPGAP standard being confirmed. The BRC external
audit is scheduled to be undertaken by the certifying body in late 2007.

High value markets are being identified and evaluated for dragon fruit to be exported from
Vietnam, both for fruit when certified and for the project-improved fruit exported during the
transition period towards certification. A financial incentive is paid by the packer for
qualifying fruit during the transition period. 3
Utopia UK, who import fruit to the United Kingdom for TESCO’s, have expressed a strong
desire to access GAP certified dragon fruit from the pilot. They have already implemented a
third party ethical audit of the pilot, and have indicated they will assist the project team with
the dragon fruit value chain analysis and achieving high prices for the safe, legal and quality
dragon fruit exported from the project pilot.

Inputs identified in the project document had been purchased in year 1 as documented in the
2
nd
Progress report, February 2006.

The CARD dragon fruit project continued to be well publicised in the local and national
newspapers and television during this reporting period. The projects achievements are being
held in high regard by the donor, MARD and the private sector. HAI/CARD requested the
project to submit an Expression of Interest for a new two year project to expand the initiative.
During the project leaders May 2007 visit stakeholder meetings were held and an EoI

appropriate, user friendly, developed by the Vietnamese extensionists, and appropriate to
the dragon fruit industry for transfer to subsequent “models” and ultimately other crops

4
¾ Establishing the required quality systems for the dragon fruit industry to adopt and obtain
proof of the system robustness, by obtaining EUREPGAP certification for the pilot model
¾ Maximising the impact of current initiatives to develop GAP in the dragon fruit industry
through full participation in the Dragon fruit GAP Project.

5. Progress to Date
5.1 Implementation Highlights
5.1.1 Benchmarking
The field portion of the benchmarking survey was completed by the SOFRI team in late July
2005. Some 124 farmers from Binh Thuan and 30 farmers from the Tien Giang Province
were questioned. The SOFRI team recorded farmer information for the formal EUREPGAP
oriented questionnaire (Inception Report: August 2005 Appendix 2) and also recorded
additional current agronomic and technical information relating to the surveyed farmers
dragon fruit production practices.

The benchmarking survey data were analysed at HortResearch by Dr Jim Walker and Patrick
Connolly who also prepared a PowerPoint
®
presentation (3
rd
Progress Report, August 2006,
Appendices 1 and 2) for delivery during the scheduled March 2006 visit. It was originally
planned for Dr Walker to travel to Vietnam to make the PowerPoint
®
presentations, but this
was not possible because of his other work commitments.

the packhouse to the BRC Standard and apart from being a living document, has been
completed in the final form. Future use and adaptation of the manual to other dragon fruit
packhouse/farmer groups (and other crops) will have the advantage of a manual that is the

5
actual documented quality systems of a working model. The HACCP report for the quality
manual was not included in the printed manual as this is of specific application to the pilot
packhouse quality system. The Vietnamese and English version of the HACCP report is
provided electronically.

Full verification of the appropriateness of the
Dragon fruit Quality Manual to address the
specific standards of BRC and EUREPGAP and
the requirements of the customer, the pilot packer
and farmers are in the process of being confirmed
by the independent certifying body, SGS
Vietnam. Compliance assessment by the
certifying body was planned to take place during
December 2006 however the pilot was not ready
and significant modifications were planned/being
implemented for the pilot packhouse to better
comply with the standards.

5.1.3 Develop Implementation Plan – Completed: First Progress Report

5.1.4 Establish pilot GAP programme for year one
As documented in the 2
nd
Progress Report, February 2006 report, Mr Hiep’s packhouse was
identified to be the project’s pilot for packing dragon fruit. Subsequently project personnel

¾ The customer and customer demands
¾ Quality systems, their purpose, structure, establishment and management
¾ Defining the “Processes” for the; on-farm through the packer to the exporter
¾ Linkages between farmer and packer and responsibilities and expectations
¾ The dragon fruit quality manual, its development, scope and application
¾ Feedback to ensure the “appropriateness/workability/fit’’ of the manual for the
intended purpose
¾ Identification, guidance and purpose for physical improvements required by the
project pilot facilities, both on-farm and at the packhouse, to comply with the dragon
fruit quality manual and adopted standards
¾ Identification of positions in the “process” and ensure responsibilities had been
correctly documented in the position descriptions within the manual
¾ Provide training to people designated for positions of responsibility in the pilot
¾ The role of the internal audit
¾ The responsibilities of the internal auditor
¾ Process corrective action and initiative sustainability.

One of the most gratifying elements of project implementation for the project leader has been
the uptake and understanding, of the training provided, by the pilot management. Progress in
developing the documented quality systems and preparation for certification during the
project leaders between visit periods has been significant and robust. Of particular note is the
traceability system employed by the pilot packhouse from the farm through to the market –
the packhouse can now instantly identify the specific origin (farmer, block, date of harvest,
day of packing, export date, etc.) of any dragon fruit in the market place as well as all
supporting documentation if challenged by the market. The packer and farmers
documentation can also verify all inputs to production, quality and handling.


internal auditing and for an understanding of the quality systems and being market driven.

Choice of quality system standards:
The project chose the existing BRC and EUREPGAP quality standards as the most suitable
to meet the demands of the target customer while protecting the interests of the Vietnamese
stakeholders (a copy of the EUREPGAP General Regulations Fruit and Vegetables will be
provided electronically). At the farmer level the EUREPGAP Standards are being applied
and at the packhouse the BRC Standards are implemented. Both standards complement each
other to ensure the dragon fruit produced and packed is confirmed as safe, legal and of the
quality expected by the high value market customer.

The choice of the two standards has been determined by the access conditions to high value
markets identified in the project document. The project is very “customer driven” and the
quality system will meet all the customer’s requirements when fully implemented and will
specifically provide documented proof of compliance for safe, legal quality control and
traceability for the entire product during the production and packing processes. The quality
systems developed will easily respond to any additional requirements from specific
customers.

The quality checking and documentation systems being employed in the pilot can also
protect the farmer and packer from claims for damage to product (non-compliance issues)
subsequent to the product leaving the packhouse.

The current process and status of the quality system of the pilot is:
¾ Pilot participants identified and their association with the project formalised
¾ The BRC Standard has been selected for the packhouse quality system
¾ The EUREPGAP Standard has been selected for the farmer quality system
¾ The Dragon fruit Quality Manual has been developed in English and translated into
Vietnamese
¾ The English and Vietnamese version of the manual has been distributed to the packer

Unprotected tractor power takeoff with Well protected power takeoff
Workers exposed to hazard 5.1.6 Review Compliance
The project leader negotiated with Société Générale de Surveillance (SGS Vietnam), (in
Vietnam, Regional Indonesia and New Zealand) an international certifying agency, to
provide an estimate for certification evaluation of the project initiatives. Quotations for the
inspection and certification of project farmers and the packer were received from SGS
Vietnam and subsequently a proposal was presented to CARD for the funding of the SGS
services. CARD approved the funding of the external audit and certification services and this
component has been included in the project as a new and separate milestone.

During discussions with SGS Vietnam at their Ho Chi Minh office, the project team were
informed that SGS Vietnam now has trained inspectors for both EUREPGAP and BRC
Standards. SGS Vietnam was chosen by the project as the preferred certifying body to do the
external auditing and certification services for the project pilot and its future certifying
requirements on the grounds that:
• They have suitable qualified auditors for the EUREPGAP and BRC Standards
• The quality of their work is of a high standard which is respected in the market place
• They are prepared to develop their horticultural certifying body services in
cooperation with that industry.

Internal reviews of the pilot have been undertaken in the form of BRC/EUREPGAP internal
audits. The data collected has been used to determine the compliance status of the project
pilot development and to initiate/tailor corrective action and training. It is intended that the
learning process of the pilot development will be adapted for subsequent training during the
outreach programme.
During the project scoping and subsequent project
implementation visits by HortResearch personnel
considerable effort was made to identify individuals
both in the public and the private sectors who have
the capacity to be leaders of change, and quality
systems development, improvement and
maintenance.

A high priority was given to all aspects of national
capacity building to ensure sustainability upon
project completion.

The project tried very hard and expended a lot of
project time on the identification of small holder
farmers and to subsequently provide quality training
to fulfil the project document’s obligations.
However, the ability of small-holder farmers to
commit themselves in a sustainable way to GAP at
the level required by the customer and the project

10
remains an issue. For this reason the project had accelerated the development of the pilot to
demonstrate that GAP is viable at the small holder farmer level. All farmers were welcomed
into the project training programme when they indicated that they could step up to the
required commitment to customer standards.

As the project developed the pilot towards
the quality standards of BRC and
EUREPGAP, high value markets were
identified. It is intended that product from

1. A lack of resource to enable the small-holder farmer to make the physical changes to
their property and meet the standards:
It is expected that when the compliant pilot high value dragon fruit returns become
known and demand for product increases then credit will become available.
2. The technical requirements of the standards were beyond the capability for the small-
holder farmer to understand and sustainable implement:
The project had housed the quality system management in the packhouse for the
major purpose of making it technically easy for the farmer to meet compliance, for
the quality system to be “in control” at all times and for the system to be the most
economical model to implement.

11
3. It had been previously thought that the small size of small-holder properties (0.3 to
1.0 hectare) was a constraint to their inclusion in a large packhouse GAP operation:
This is not the case as large farms supplying the packhouse do in fact subdivide
their properties into even smaller units with many blocks as small as 0.2 hectare.

There is a dearth of appropriate and approved infrastructure for the GAP dragon fruit
industry at the level that meets the high value market driven standards. However, for the
project pilot this constraint has been largely overcome in the short term and on a small scale
through the use of recognised related specialists and services and the training of people to
perform specific duties (Appendix 1 Certificates of training).

Early indications are that there is a significant and continuous volume high value export
market available for safe, legal and quality dragon fruit that has been produced, packed and
exported by certified operators. These markets are initially in the United Kingdom and
Europe but the top end market in China is developing rapidly, the markets of North America,
Japan and other countries are possible if market access constraints are overcome.

It is expected that when the high value markets have been tested with dragon fruit that is


12
The project’s dragon fruit pilot at Hoang Hau Dragon fruit Farm Co Ltd. now meets the
standards expectations of the market and has the ability to now bring in many small-holder
dragon fruit farmers through:
• The provision of GAP training to the necessary standards
• Provide quality system guidance and internal auditing services
• Include, guide and control the small-holder farmer in the SGS Vietnam certification
process to ensure compliance at Certifying Body external audit time and ongoing
compliance maintenance and confirmation/documentation
• Enter into a supply agreement with each farmer to lock in all compliance issues and
obligations and to give security of market and income for the farmer
• Provide the farmer with income guarantee to enable the farmer to resource necessary
compliance issues changes
• Assist small-holder dragon fruit farmers with small business and financial
management training.

An extension of this dragon fruit project is for all the recipients of the project to work
together with the aim of being market driven, maintain compliance with the standards
honestly at all times in the pilot and to bring in as many small-holder dragon fruit farmers as
possible.

Project benefits of the future

The dragon fruit GAP project does not claim
all the credit for bringing the Hoang Hau pilot
packhouse and farmer group to its current GAP quality status but it has certainly made a
major contribution. The combination of the private sector unit supported by the CARD
dragon fruit GAP project initiative at this particular time is having a major impact in the
Vietnam horticulture industry for demonstration of a working quality model meeting the

throughput of his new packing facility capability
¾ It is expected that the other 50% (some 200 hectares) will be produced by contracted
dragon fruit farmers, many of whom will be small-holder farmers
¾ The aim is to have all areas of the development meet the GAP standards installed in
the pilot by the project
¾ Packhouse throughput of dragon fruit is expected to exceed 10,000 tonnes in 2009
(400 hectares producing approx 40 tonnes per ha with packouts of 50% to 70%)
¾ It is expected that <100 small-holder dragon fruit farmers will ultimately be brought
into quality dragon fruit production and become certificated for the GLOBALGAP
standard
¾ Each small-holder farmer of about 1 hectare producing for the quality initiative has
employment for at least 1 permanent and 5 casual labourers

In summary there is clearly something very special going on in the project pilot that is having
a major impact in many areas. For example:

¾ The dragon fruit GAP project pilot has completely embraced the project’s quality
initiative
¾ The packhouse provides direct employment for over 150 people which will increase
as the business develops; possibly more than doubling
¾ The pilot will expand to some 400 hectares of quality dragon fruit production and
handling by 2009
¾ New areas contracted to the packer will include more than 100 small-holder dragon
fruit farms that may not otherwise be capable of reaching the standards demanded by
high value markets
¾ Accessing the high value markets will increase dragon fruit returns and greatly
improve the living standards of all quality producers
¾ The employment and spending power improvement will have a significant and
beneficial effect to the community of the pilot
¾ The model and leadership provided by the pilot is providing an excellent example for

tour in June 2006. Due to the requirement of NZOQ to only use a portion of their course
material the SOFRI training was done over one day and was called an “Introduction to
Internal Auditing”. The Internal Auditor training has continued and its principles
incorporated into much of the training programmes. As part of the obligation to NZOQ in
accessing the Internal Auditor training material the project leader was required to present a
report to NZOQ. This report was subsequently published in the NZOQ monthly newsletter
Q
NEWZ in the October 2007 issue (Appendix 2).

Time constraints have precluded the project leader from seeking approval from NZOQ for
him to use their material and present the previously requested, full two day Internal Auditor
course at SOFRI and in the field. It is hoped to continue with this initiative if the new dragon
fruit project materialises.

The horticultural Good Agriculture Practice initiative in Vietnam has gathered momentum
during the life of this project. It is important to note that the dragon fruit project pilot is the
only working model for Good Agricultural Practices in fruit in Vietnam. The SOFRI national
capability, the quality manual developed for the pilot and the pilot working model are
available to be used for further expansion of GAP into the dragon fruit industry and across
other crops.

The project and project trained personnel are making a major contribution to this initiative in
a positive and quality approach. For example:
¾ Project trained personnel have an understanding of the customer driven concept
which, accompanied with their quality practitioner skills, can apply the GAP
technology at any appropriate level of:
o VietGAP at the local market level
o AsiaGAP and EUREPGAP at the close neighbouring country export level
o EUREPGAP to access markets in Europe and the UK with the product still
being reworked in those market countries

director of SOFRI, and Mr Tran Ngoc Hiep, director of Hoang Hau Dragon Fruit
Farm Co Ltd. (the project pilot), have been appointed as directors of The Vietnam
Fruit Association (VinaFruit). It is expected their input to VinaFruit will add
momentum to the development of a well organised and sustainable GAP dragon fruit
industry.
¾ Capability building of the SOFRI project team has been clearly demonstrated by their
contribution as quality practitioners to the project pilot, to the improvement of small-
holder farmers understanding of GAP, at the political level, through setting examples
to their colleagues and in the implementation of GAP principles to other crops of
Vietnam. (PowerPoint
®
presentations given for Sri Lanka, Mango and Citrus will be
sent electronically on CD)

5.3.2 An assessment of the impact on stakeholders/beneficiaries: Farmer dragon fruit
returns.

Pre-project values:
In May 2005 at the commencement of the Dragon fruit GAP project the prices being paid by
export and local market packhouses to the farmer at the packhouse were advertised as:
 Fruit weighing >320 gms @ 3.000 dong per kg
 Fruit weighing >500 gms @ 5,000 dong per kg
 Fruit weighing >550 gms @ 8,000 dong per kg

Current non-GAP values:
At project completion in September 2007 prices being received at the farm gate were
observed as being very similar to those at the start of the project. Seasonal fluctuations saw
prices fluctuate between 2,500 dong and 12,000 dong per kg during project implementation.

16

Certifying Body external audit 17
The new dragon fruit project will document market returns and production and export costs
to accurately determine this project’s impact on stakeholders/beneficiaries.

The following schedule documents all stages of the process from the farm to the customer
and includes the value of each step of the pilot:
 Fruit presented at the farm gate to the safe, legal and quality standards demanded by
the market and conveyed to the farmer by the packhouse
 Transport of fruit to the packhouse

small is better which is the case for other products. Having said that I believe with the
current China market that usually takes the bigger fruit Vietnam would be in a better
position to supply the more lucrative UK market with the smaller fruit.
• Supply chain steps and associated costs - can you work back from the market end
as it is difficult to get information out of Vietnam

18
Currently all fruit is air freight from Ho Chi Minh City airport into the UK mainly London
Heathrow Airport.
Process:
o Trucked from packhouse to HCM airport in unchilled (in precooled
containers from the pilot packhouse)
o At airport individual boxes are weighed and re stacked onto pallet (Critical
Control Point) - (possible mishandling, temperature abuse)
o Depending on the flight departure times product could potentially stay un-
chilled until loaded on plane.
o Product loaded on plane for UK via Hong Kong or another stop over
destination
o Arrives London after a 14 hour journey and is stored in the airport cold stores
for processing and checking documentation etc
o Collected by refrigerated trucks and transported to our facilities. A 2-3 hour
drive.
o Ideal temperature for travel would be 8C which is what all refrigerated trucks
will be set at.
o Once at our packhouse we carry out an intake check and within 1 hour
product is stored in our chillers at 8C

• Any other information you feel can help with
o Ideal temperature for travel would be 8C which is what all refrigerated trucks
will be set at.

PRODUCT SIZE: 250g minimum weight

APPEARANCE: FRUIT MUST BE INTACT, EVENLY SIZED AND GRADED, SOUND,
CLEAN. FREE FROM ALL EVIDENCE OF EXCESSIVE EXTERNAL
MOISTURE, ABNORMAL TAINTS OR SMELLS. THE FRUIT MUST
BE CAREFULLY HAND PICKED

TASTE: MILD SWEET FLAVOUR

TEXTURE: SLIGHTLY SOFT

COLOUR – INTERNAL: WHITE FLESH WITH BLACK SEEDS OR PURPLE
FLESH WITH BLACK SEEDS
EXTERNAL: PINK BODY WITH GREEN FLESHY LOBES

MATURITY: NO SIGNS OF DEHYDRATION TO THE LOBES

SHAPE: OVAL

DEFECTS: FRUIT SHOULD BE FREE FROM: PESTS AND DISEASE,
SOILING, SPLITS, SEVERE SKIN SCARRING, BRUISING AND
BLEMISH
TRACEABILITY: EACH BOX MUST CARRY A DAY-OF-PACKING DATE AND A
GROWER CODE ANY PRODUCT SUPPLIED TO UK:
• MUST NOT BE GROWN FROM PLANTS OF GMO
• MUST NOT BE IRRADIATED AT ANY POINT
• MUST CONFORM TO UK AND EU MRL FOR PESTICIDES
5.4 Publicity
There has been no new significant in-country publicity during this reporting period.

The Nelson Mail printed an article on the NZ project leader and his involvements with aid
projects in July. The Dragon fruit GAP project and donor recognition were included in the
article. The article subsequently resulted in the project leader presenting a lecture on aid
project management as part of an English language course being held at the Nelson
Marlborough Institute of Technology on 10 August 2007 to 7 Vietnamese, 4 Cambodians, 4
Lao and 1 from Myanmar; all were government officials, some senior: – included Mr Bui Chi
Kien from the International Co-operation Department of MARD in Hanoi.

The project leader had an article published in the NZOQ October Q
NEWZ about the dragon
fruit project (Appendix 2 of the English version of this report)

5.5 Project Management
There has been no change to the Project Management team during the life of the project. The
project team continued to work well together with excellent, friendly, transparent and honest
communication.

This project has generated a significant amount of printed material through its reporting
obligations, the Dragon fruit Quality Manual development, project training material
generation, and other publications. As project material was prepared in English it all needed
to be subsequently translated into Vietnamese. Translations were, at times, burdensome to
the SOFRI project team however the importance of the translation process in the national

21
capability development and in improving the depth of understanding of the quality systems

environment
¾ Disposal of human waste and grey water
¾ Other areas identified in the standards of EUREPGAP, Section 13; Environmental
Issues and BRC, Section 3; Environmental Standards.

6.2 Gender and Social Issues
The CARD dragon fruit project implementation has systematically addressed gender and
social issues. For example, Good Agricultural Practices demand good working conditions,
appropriate treatment of labour, observation of good health and safety practices, etc. and
equal opportunity for both men and women, these conditions are reinforced through the
implementation of the quality standards of EUREPGAP and BRC.

Documentation of good working conditions, responsibilities and accountabilities and
conditions now appear in the Dragon fruit Quality Manual text and specifically in the
Position Description section. 22