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Project proposal

“Soybean cultivation for hunger & poverty abolition project in na ri district In the uplands of bac kan province”

 

Partner  : Highland Education Development Organization (HEDO)

           Director - Prof. Trinh Ngoc Trinh

Location : Nari District Peoples Committee & Farmers of 13

       out of 22 communes in Na Ri district.

 

 

Hanoi, May 2000

 

1. General characteristics of Na Ri district

1.1        Bac Kan province is located in the North of Vietnam, 166 km far from Hanoi. It is reestablished in 1996 (separated from former Bac Thai province). Bac Kan is a mountainous province with total area of 4,500 km2 in which 90% are mountainous and hilly and total population of 300,000 people in which 80% are ethnic minority groups. Its economy is underdeveloped, self-sufficient and mainly bases on agriculture. It is one of the poorest provinces in Vietnam.

1.2        Nari district is situated in the North of Bac Kan province, 250 km far from Hanoi. It has total areas of 86,450 ha of which 5,319 ha for food crop, the rest are stony mountains and bare hills. The population is 36,158 with average density of 41 people/km2. There are 7 ethnic groups living co-existence. The economic and intellect level is still low, people in some place still practice nomadic farming and commodity economy does not exist. This is the poorest district in Bac Kan province. The poor households account for 45% of total due to lack of capital, land, advanced technology and knowledge and also backward traditions such as being reluctant in using new breeds, fertilizers, land circulation and

2. Implementation process:

2.1        In order to make full use of cultivation land, create job opportunities for farmer, HEDO will and provide new high soybean breed - DT 84 that has high economic value and is suitable with local weather to farmers of Cuong Loi and Kim Lu communes to develop production in 1998. With experience withdrawn from harvest 1998, HEDO and People’s Committee of Nari districts work out soybean cultivation plan in the whole district and announce and discuss with farmers in order to register in project participation.

Plan content:

2.1.1                     HEDO sends agricultural engineers to directly drill project beneficiaries in techniques of planting and taking care high yield soybean.

2.1.2                     HEDO provides DT 84 soybean, fertiliser, and pesticides. If the farmer follow-up the technique process provided by agricultural engineers, the output will be from 1,200 kg to 20,000 kg per hectare (2,5 to 5 times higher than local output). The harvest duration will be shortened to 75 days comparing with 120 days of local seeds

2.1.3                     Average profit of each hectare:

In 75 days, each hectare minimally gets:

1,200 kg x 5000 VND/ 1 kg = 6,000,000 VND

Repayment to HEDO (excluding transport, administration fee for HEDO, district, communes and villages, review meeting and communication...)

Total expense for each hectare is 1,700,000 VND

Profit: 6,000,000 VND - 1,700,000 VND = 4,300,000 VND

2.1.4                     After harvest, farmers can repay loan by soybean product.

2.1.5                     HEDO will pay 110,000 VND/ 1 ha for agricultural officers at district level, 200,000 VND / 1 ha for agricultural officers at commune and village level to conduct, check and support farmers to plant, take care and collect soybean with correct techniques as being provided by agricultural engineers from Hanoi at the beginning of project.

2.2        Thanks to concrete plan of project, the poor farmers fully understand the benefit of project. And 596 households in 80 villages of 13 communes registered to participate in the project with total soybean area households in 80 villages of 13 communes registered to participate in the project with total soybean area of 61.80 ha.

2.2.1                     After registration of soybean area on 25th May 1999, HEDO and Vice Chairman of Nari People’s Committee in charge of economy and agriculture will sign contract which states that HEDO provide loan in kind such as DT 84 seeds, fertiliser and pesticide, provide administration fee and send agricultural engineers to carry training workshop for farmers.

2.2.2                     Then HEDO invite engineers to give technical training about techniques of cultivating, taking care, collecting and preserving new soybean breed to farmers of 13 project communes at 7 points.

2.2.3                     When training workshops finishes, HEDO will buy DT 84 soybean seeds, fertilisers and pesticides from Genetics Institutes under Ministry of Agriculture and Rural Development (MARD) and other famous companies and hire vehicles to transport all materials for 61.80 ha of soybean.

3. Expected results of project:

3.1        After 75 days, the results of project in 13 communes will be:

- Harvested soybean areas will be 200 ha with average output of 1,400 kg per ha (increase by 200 kg per ha comparing with minimum estimated output)

200 ha x 1,400 kg/ha = 280,000 kg

As in the report of Vice Chairman of People’s Committee, the total value of harvested areas was 357,280,000 VND. The total profit the beneficiaries got was 270,232,000 VND. The profit of each hectare for 75 days (after excluding the repayment to HEDO) was:

6,000,000 VND - 1,700,000 VND = 4,300,000 VND

(this amount is equivalent to 20,000 kg of rice).

This proved that the soybean cultivation for hunger eradication and poverty reduction project had got good results.

3.2        DT 84 soybean cultivation with new technology with the aim of abolishing poverty has become popular in 13 communes out of 22 communes of district.

3.3        Nari farmers not only had new cultivation techniques but also drew valuable experience about weather, pest and growth process of soybean etc.

3.4        Besides, the project helped farmers to generate income, make full use of land and improve land nutrition. And advanced science and technology were applied in agricultural production to increase productivity, improve living standard of ethnic minority people in highland areas and abolish hunger and poverty.

4. Finance and loan collection:

4.1        In some areas of Vietnam, there are two opposite situation concerning loan for poverty abolition:

- Poor farmers are reluctant to borrow loan from Agricultural and Rural Development Bank because they do not have correct production plan so the loan will not be used effectively. They can not repay the loan and interest.

- The uncollected loan of banks are very big because the farmers can not make full use of loan in production, they use it with other purpose so there is not enough money to repay.

4.2        However, HEDO successfully used the fund by British Embassy with the aim of cultivating soybean to abolish hunger and poverty. Mass media such as Nhan Dan newspaper, Tien Phong newspaper, Vietnamese Television, Voice of Vietnam ... has highly appreciated the success of project and considered as “good model of poverty abolition” in the highland and ethnic minority people.

4.3        But HEDO had to accept the lost so that the farmers can get profit. For example, HEDO send all administration fee funded by British Embassy to district management or HEDO paid admistration fee at commune level, travel cost and review meeting... These actual expenses will be included in the financial report.

4.4        HEDO voluntary contribution:

- HEDO called on professors, agricultural engineer to give technical training such as cultivation techniques free of charge.

- HEDO requested Fertilizer Company to support on reducing price of fertilizer provided to the project.

- HEDO spend its own budget to pay transportation cost of soybean seeds, fertilizer and pesticide from Hanoi to Nari.

- HEDO used its budget to pay for mass media such as newspaper, television, radio ... to introduce the effective results of the project and to disseminate the experience to other areas in Bac Kan province as well as in the whole country.

- HEDO staff who participated in the project did not received any salary or subsidy.

II. Financial report

1. Expenditure for the project:

Amount received:   11,448 USD  x  13,895 =  159,069,960 VND,

Total area of soybean cultivation                   =   61,8 ha

Expenditure includes:

Fertilizers :                             63 tons    =      58,450,000 VND

DT 84 soybean seeds:               3,403 kg   =     23,821,000VND

Pesticides :                                  360 bottles   =       4,972,200 VND

Fertilizers for leaves :         1,800 packets   =       4,500,000 VND

Administration fee at district level:                           7,000,000 VND

Administration fee at commune level:                   12,340,000 VND

Site visit ( petrol, vehicle, food, accommodation): 12,181,500 VND

Reviewing meeting of first year:            3,604,000 VND

                                          Total :                  126,867,700 VND

2. A number of rising problem:

Total areas of soybean of year 1999 are 61.8 ha. HEDO signed contract with People’s Committee of Na Ri district that HEDO would get repayment of 1,700,000 VND per ha and at initial expectation total assumed repayment would be 105,060,000 VND.

In the implementation process, however, 10.67 ha of soybean were spoiled due to bad weather. This is objective reason, therefore, HEDO agreed to exempt the loan of above 10.67 ha with the rate of 385,000 VND per ha as Na Ri People’s Committee requested.

- Exemption: 10.76 ha  x  385,000 VND/ha  =   4,142,600 VND

Therefore the repayment HEDO will get from People’s Committee is :

105,060,000 VND -  4,142,600 VND =  100,917,400 VND

At the begining of project, HEDO promised to get repayments in kind at local seasonal price from farmer. At that time, the price was 5,000VND/1kg and each households would have to pay 340 kg of soybean per ha (5,000 VND x 340 kg   = 1,700,000 VND/1 ha). But at the harvest the soybean price went down to 3,5000 VND per ha and HEDO had to collect loan at this price.  So the actual repayment HEDO gets from each farmer has been reduced 30%: (3,500 VND/kg x 340 kg = 1.190.000 VND per ha) comparing with invested capital (5,000 VND/kg x 340 kg = 1,700,000 VND per ha). It means that District People’s Committee only can collect and repay HEDO the total amount:

70% x 100,917,400 VND  = 70,642,180 VND.

3. Proposals and plan for year 2000:

In reality, the farmers invested total capital (including fertilizers, pesticide, administration fee, site visits...) of 2,050,000 VND per ha in 1999.

People’s Committee and people of Na Ri district expect to extend the soybean area to 100 ha in 2000. In order to reach this objective, the necessary capital will be: 2,050,000 VND x 100 ha = 205,000,000 VND.

In which:

+  Outstanding amount of year 1999

             159,276,024 VND  - 126,867,700 VND    =  32,408,324 VND

+  Repayment amount from farmers of year 1999:     70,642,180

                      Total:                      103,050,504 VND

+ Necessary amount for year 2000:

             205,000,000 - 102,926,534       =  102,949,496 VND

Equivalent to 7,282 USD

HEDO and Na Ri District’s People’s Committee would like to request British Embassy to consider and provide further fund with the aim of continuing implementing the poverty abolition project for ethnic people in the poor and backward communes of Na Ri district

Yours sincerely,

Prof. Trinh Ngoc Trinh

Director of HEDO