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AGAP Dairy project in Vietnam wins the prestigious FAO Edouard Saouma Award 2000/2001

TCP/VIE/6613 (T) VIETNAM : Improving the well-being of poor farmers by developing milk production from local resources
Project Number: TCP/VIE/6613 (T)
Duration: June 1996 - December 1997
Government Ministryresponsible for project execution: Ministry of Agriculture and Food Industry
FAO Contribution: US$221 000

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The Edouard Saouma award
Project summary

Detailed Project description

The Edouard Saouma award
The "Edouard Saouma Award" was established in 1993 by the FAO conference, for a national or regional institution which has implemented with particular efficiency a project funded by the Technical Cooperation Programme (TCP). Particular emphasis is given to the nature, the sustainability and the replicability of the achievements and the catalytic effects generated compared to the inputs provided by the Technical Cooperation Programme. The Awards for the achievements during the each biennium will be presented by the Director-General during a special ceremony, at the beginning of the Session of the FAO Conference, in November.

Project summary:
The award winning project (TCP\VIE\6621 "Improving the wellbeing of poor farmers by developing milk production from local resources"), focused on goat milk production, collection, processing and marketing of cheese and was set up in collaboration with the Goat and Rabbit Research Centre, Son Tay, Hatay Province, Vietnam. Project activities were towards responding rapidly to market demands and opportunities in the form of goat cheese. This approach enabled the provision of a high rate of return to farmers for their milk and has resulted in the successful and sustainable operation of the enterprises started by the project.

The project approach was based on simple low-cost technologies and on training. It is worth noting that the main beneficiaries of the project were small-scale women farmers who not only carried out much of the work at farm level but who were and continue to be the processors and marketers of their high quality cheese. The project also attracted significant attention from other donors and the approach was replicated by IFAD and GTZ among others in the region.

The milk is collected daily by a centre financed by the beneficiary community. The centre produces goat cheese which is sold here in Hanoi in several shops and restaurants. Other donors (UK, GVC Italian NGO) have funded the replication of this project in a larger area (UK) or in other locations (GVC). Several national and international institutions (NGOs, Embassies, line Ministries) are visiting the project site to know about this experience. Most of the success is due to the dynamism of the national institution involved (Goat and Rabbit Research Centre) which has been able to optimise the TCP resources.
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Detailed Project description:



1.1  Project background
There is no tradition in Viet Nam for the production or consumption of fresh milk.  Although Viet Nam has over 3 million cows, mainly of the Chinese Yellow breed, these are not milked, being used mainly for draught and breeding.  Some specialist state farms with Holstein cattle were set up in the 1980s with assistance from the Cuban Government, but most of these have failed.  An FAO-executed UNDP project VIE/80/013 was also active in Moc Chau state farm until the early 1990s and towards the end of the project cattle were dispersed from the state farm to smallholders.  There has been some private-sector development of milk production with Holstein cattle and their crosses in the peri-urban areas of Hanoi and Ho Chi Minh cities, but low prices for the milk and a shortage of land on which to grow green forage have constrained expansion.  Disposal of waste is a problem for such units and it can be expected that they will be further constrained by environmental pressures.  A government scheme to improve local cattle has supported the introduction of Sindhi bulls and semen at village level with the eventual aim of upgrading some of these crossbreds with Holstein cattle for milk production. There are almost 3 million buffaloes, almost all of the Swamp type.  Some Murrah buffaloes were imported from India for milk and there are some crosses between Murrah and Swamp types.  However, the number of Murrah buffaloes and their crosses is insignificant and few are milked.  In general, the impact on national milk production of these initiatives is insignificant.

The total goat population is 0.5 million, most of which are kept for meat.  However, an improved local dual-purpose breed - Bach Thao - is having an increasing impact at farmer level for meat and milk production.  The population of these animals is estimated to be approximately 15 000.  The main feed resources for livestock in Viet Nam are the residues (straw) and by-products from the rice crop (rice bran).  Rice bran is the basic feed for pigs and poultry, while straw is the main feed for cattle and buffaloes, especially in the lowlands where the only pasture available is on the bunds between rice paddies, on crop stubbles and on the small areas not suitable for crop production.  There is grazing in the mountainous regions and in the forests but this is not exploited in an organized way and there is an increasing risk of grazing systems entering into conflict with the need to conserve the environment.  Lack of appropriate feed resources is another barrier to the development of milk production.
 On the demand side, the market is expanding.  Consumption of milk products is increasing and condensed milk, yoghurt and small cartons (250 ml) of long-life milk, all reconstituted from imported powder, can be found on sale in most towns and villages.  According to FAO statistics, imports of milk products have increased from $US 2.5 million to $US 50 million during the last decade.  Rapid economic development in the country and the increasing number of tourists will lead to an increased demand for milk and meat products.  It is highly desirable that the general farming population have the opportunity to benefit from this expanding market.  This will require the development of a production system adapted to the resources available on small-scale farms and a system of milk collection, storage and processing at village level.
 In response to the above situation and the urgent need to rapidly develop local milk production and reduce the cost of imports, the Government requested FAO assistance to promote milk production from local cattle and goats and the village-level processing of milk products.

1.2  Outline of official arrangements
The Technical Cooperation Programme project TCP/VIE/6613, “Improving the Well-being of Poor Farmers by Developing Milk Production from Local Resources”, was approved on 16 August 1996 with a budget of $US 221 000 and a scheduled duration of 18 months.  The Goat and Rabbit Research Centre of the National Institute of Animal Husbandry was designated the counterpart agency responsible for project execution.  The activities of the project began in October 1996 and ended in September 1998.  FAO provided milk processing equipment, motorcycles and computers to facilitate coordination and communication, plastic for low-cost biodigesters, seed, plant material and improved goats, as well as training workshops and consultants in livestock production and milk processing.

1.3  Project objectives
The original objectives were to provide assistance in training and implementing milk production systems based on the local cattle and on the Bach Thao goats fed on local resources to produce milk, beef, fuel and fertilizer at smallholder-farmer level.  This production system was to be associated with appropriate milk processing technologies and would be located in five different agro-economical zones in the country.

Following visits in October 1996 by the livestock consultant, the milk processing consultant and the FAO senior adviser for milk production, it was agreed that the impact of the project would be improved by concentrating activities on goat production and on processing the goat milk into high-quality cheese.  This change of emphasis took place for the following three reasons.  The recent agreement between Nestlé and Vinamilk (the state company engaged in milk processing and the sale of milk products) had led to a more aggressive marketing and procurement strategy for milk which was not foreseen when the project was formulated.  The market for fresh cow’s milk had become less attractive as a result of the Vinamilk factory selling its milk products at relatively low prices, owing to the use of cheap imported milk powder and the low prices paid to farmers for fresh milk.

Surveys of supermarkets in Hanoi and Ho Chi Minh City, catering especially to foreigners, showed that the market for cheese, especially goat cheese, was very attractive and that the prices for goat cheese were high. The collection, processing and marketing of goat milk in the form of cheese is an activity which is appropriate for small-scale farmers in mountainous regions.  The technology for processing goat milk into cheese is relatively simple and the equipment required can be obtained locally.  The transport to, and sale in, Hanoi and other major cities of a high-value concentrated product such as goat cheese, also presents no major difficulties.  At a price for the local product that would be competitive with the imported product the margin makes it economically feasible to pay farmers at least $US 0.42 per litre for fresh goat milk.  The whey, which is the by-product from cheese production, is an excellent feed for pigs.  There would also be weaned kids for sale for breeding and meat production.

1.4  Project implementation
The project was implemented by the National Coordinator (Director of the Goat and Rabbit Research Centre) under the guidance of two international consultants (livestock production and milk processing).  There were five sites of activities: Son Tay town and Bavi district in Hatay province and the provinces of Thai Nguyen, Tuyen Quang and Hue.  Milk collection and cheese-processing facilities were established at the Goat and Rabbit Research Centre, serving Son Tay town and Bavi district, and in the principal cities in the provinces of Thai Nguyen and Tuyen Quang.  A total of 165 improved goats was distributed to farmers in each site under an agreement that, after two years, the beneficiaries would hand on to neighbours the equivalent numbers of goats received from the project.


2.1  Providing improved goats to farmers
There was a major increase in the population of improved goats at all project sites.  No major problems were encountered and the recipient farmers rapidly acquired the skills needed to manage and feed the goats on a full or semi-confinement basis.  Most families were able to comply with project obligations to hand on to neighbours the equivalent in numbers and weight of the goats received.

2.2  Use of local feed resources
A major activity of the project was to promote the use of tree and shrub foliage as the staple diet of goats in confinement.  The Jackfruit tree (Artocarpus heterophyllus) is found in the home gardens of farm families throughout Viet Nam.  Planted originally for the consumption and sale of the fruit, it was demonstrated that the leaves provided excellent feed for goats.  This led to an alternative use for the tree in areas remote from markets or in situations where the sale price of the fruit did not compensate for the labour of transporting it to the market.  The multipurpose tree Trichanthera gigantea, introduced from the coffee-growing mountain regions of Colombia in South America, and the shrub Flemengia macrophylla, introduced from the Philippines, both adapted well to the infertile acid soils that characterize the hilly and mountain areas of North and Central Viet Nam.  Farmers were pleased with the productivity and ease of management of these trees and their good acceptability by goats in confinement.

2.3  Milk production, collection and processing
Simple equipment for pasteurizing milk and processing it into cheese was installed in all five project sites.  In Hatay province 15 000 kg of milk were processed into 1 500 kg of cheese during the 16 months following the installation of the first unit in the Goat and Rabbit Research Centre.  In the mountain provinces of Tuyen Quang and Thai Nguyen the quantities of cheese were 100 kg and 120 kg in shorter periods of 5 and 8 months, respectively.  The technology was simple, employing a proprietary lactobacilli starter and rennet as coagulant, with prior pasteurization of the milk.  The cheese produced was sold in Hanoi in restaurants and specialized food shops.

2.4  Installation of low-cost plastic biodigesters
The technology of low-cost plastic biodigesters was developed originally in Colombia and has reduced the cost of a family size biodigester to less than $US 50.  A total of 116 units was installed and these were well received by participants in the project.

2.5  Electronic mail linkages
The priority given by the Government to the upgrading of telecommunication networks was a vital component in ensuring the effective use of the computers and modems installed in all five participating centres.  In the first year of the project use was made of the e-mail linkages to the Internet established by the regional FAO-supported project (GCP/RAS/143/JPN), which used a UUCP protocol over a standard telephone line from a server in the Oxford Forestry Institute in the United Kingdom.  Since January 1998 there has been direct dial-up access to the Internet through service providers in major cities in Viet Nam.  The ease and immediacy of communication provided by e-mail helped considerably in the process of coordinating the project activities, especially regarding contacts with the international consultants.

2.6  Training and demonstrations
More than 600 farmers and extensionists participated in the training courses held in all five cooperating centres.  The National Coordinator, staff of the Goat and Rabbit Research Centre and the international consultants shared in the task of imparting knowledge on: the management and feeding of dual-purpose goats; clean milk production; the collection, pasteurization and processing of milk into cheese; the planting of multipurpose trees and shrubs and harvesting of the foliage; the installation and maintenance of low-cost plastic biodigesters; and the use of e-mail.

2.7  Impact
The number of people visiting the project sites increased from 684 (28 delegations) in 1996 to 955 (54 delegations) in the first 8 months of 1998.  Other institutions involved in poverty alleviation activities in rural areas began to support the introduction of goats as a means of income generation from locally available inputs.  The project technology was introduced into remote villages in Quang Binh province as a component of the activities of an Integrated Feed Security project financed by German Technical Cooperation.  An International Fund for Agricultural Development-funded poverty alleviation project in tribal areas of India (Bihar/Madhya Pradesh Tribal Community Development Project) will introduce the technology as a major feature of activities destined to increase income from livestock.


3.1  Extension of the programme
The main needs are to expand the population of improved (dual-purpose) goats and to strengthen market opportunities for goat milk products. There is an unsatisfied demand from farmers, especially those in mountain areas, for improved goats of the Bach Thao breed.  Investment needs are relatively small as turnover is rapid, owing to the short generation interval, and repayment can be made on an in-kind basis.

3.2  Goat milk marketing
It is recommended that an advertising campaign be conducted to highlight the nutritional and health-securing qualities of goat milk and its products, which are produced in rural areas with no chemical inputs and thus qualify for the green “organic” label.  Diversification into long-life packs of fresh milk and yoghurt will increase market opportunities.

3.3  Poverty alleviation
The government programme for poverty alleviation is an obvious vehicle for the above initiatives.  It must be continually stressed that the promotion of small livestock able to make maximum use of local resources is a more appropriate strategy for addressing problems of rural poverty than schemes based on cattle improvement, which have extended payback periods and entail greater biological and economic risks.

The concept of “small is beautiful” is especially relevant to goat production, as can be seen in France and other Mediterranean countries, where small-scale goat production organized in farmer-controlled cooperatives has proved to be sustainable (in contrast to cow milk production, which has become large-scale with an attendant loss of image, owing to soil and water pollution and concerns for animal welfare).  These aspects strengthen the cases for the promotion of goat production as an important element in the campaign to assist less-advantaged rural dwellers, especially those in mountain areas.

3.4  Goats and the environment
The image of the goat as the enemy of natural ecosystems is based on experiences with free-grazing systems which are not integrated into the farming system.  Grazing systems are not an option in Viet Nam, owing to the pressure on land from the increasing human population and the need to reforest large areas that were over-exploited in colonial times and destroyed during the war of reunification.  Putting emphasis on dual purpose production of milk and meat creates the need for more intensive management which is incompatible with uncontrolled grazing.
 Stressing the role of tree foliage as the preferred feed for goats could act as a stimulus to reforestation with multipurpose trees and shrubs, with obvious benefits to the environment.


Progress report, October 1996-March 1997.  Dinh van Binh.  Hanoi, 24 April 1997.  7 pp.
First mission report, October/November 1996.  Centro de Investigación en Sistemas Sostenibles de Producción Agropecuaria.  Cali, Colombia, 14 November 1996.  14 pp.
Second mission report, 19-28 March and 20 April-7 May 1997.  Centro de Investigación en Sistemas Sostenibles de Producción Agropecuaria.  Cali, Colombia, 1 July 1997.  10 pp.
Mid-term report.  Centro de Investigación en Sistemas Sostenibles de Producción Agropecuaria.  Cali, Colombia, 7 September 1997.  12 pp.
Third mission report.  Centro de Investigación en Sistemas Sostenibles de Producción Agropecuaria.  Cali, Colombia, 30 September 1997.
Fourth mission report.  Centro de Investigación en Sistemas Sostenibles de Producción Agropecuaria.  Cali, Colombia, 7 October 1997.
Goat cheese production from local resources; an opportunity for poor farmers in mountain areas of Viet Nam.  T.R Preston and Dinh van Binh.  Capricorn, France, 15 January 1998.  4 pp.
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