Women fruit farmers harvesting in the Mekong Delta

Vietnam Fruit producer expands sustainable supply chain in the Mekong Delta

Asia
DEG
Classic

More severe flooding and the resulting salinisation of the land are making fruit cultivation in the Mekong Delta increasingly unprofitable. More and more smallholders are therefore giving up their land and moving to the cities. To counter the rural exodus and make fruit production in the region more profitable for Les Vergers du Mékong Ltd. (Les Vergers), the company has developed new cultivation areas in the northern Mekong Delta within the framework of the develoPPP programme funded by the German Federal Ministry for Economic Cooperation and Development (Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung, BMZ). The measure has allowed close to 2,000 small farmers in Vietnam to significantly improve their income. Les Vergers succeeded in establishing more reliable supply chains for the cultivation of pineapple, guava and other fruit varieties, increasing its productivity and thus expanding its competitiveness. The develoPPP project was carried out by DEG - Deutsche Investitions- und Entwicklungsgesellschaft mbH.

The consequences of climate change in the Mekong Delta are leading to rising sea levels, more frequent flooding and increasing salinisation of the land, which is deteriorating the conditions for rice and fruit cultivation in the region. Because of a lack of economic prospects, more and more young farmers are migrating to the cities. Local fruit producers such as Les Vergers are seeing their supply chains threatened. The challenge is to shift fruit cultivation further inland, where there are more freshwater resources. In addition, the cultivation of pineapple, guava and other fruit varieties, which promise a significantly higher income compared to rice cultivation, is to be promoted in areas where rice has been predominantly planted until now. This improves the economic prospects of small farmers in rural areas. Les Vergers benefits from the establishment of reliable supply chains with high-quality products. This allows it to respond to the increased demand in the region and to further expand its processing capacities.

In order to improve the income and yields of fruit farmers and establish a reliable supply chain with high-quality products, the project partners implemented the following measures between 2016 and 2019 as part of develoPPP in Vietnam, with a total budget of close to 400,000 euros:

  • Training programmes for 50 fruit farmers in agro-economics (including crop selection, use of organic fertiliser)
  • Establishment of fruit collection points to improve logistics
  • Introduction of a transparent traceability system (WeTrace App) to 755 fruit farmers
  • Support for Vietgap certification.

Les Vergers contributed its expertise in establishing international supply chains in agro-economy as part of the project. DEG provided advice with experts on site.

By working on fruit traceability, we promote sustainable agriculture. We use both traditional and scientific knowledge to enhance the health of the agricultural system in Vietnam.
Jean-Luc Voisin, Chair of Les Vergers du Mékong
Smallholder harvests fruit on a tree
Les Vergers du Mékong was able to increase the amount of fruit processed and the quality. Photo: Les Vergers du Mekong
Two smallholders laughing
More than 2000 smallholders were given career prospects in the fruit industry. Photo: Les Vergers du Mekong

Within three years, the project activities succeeded in offering more than 2,000 smallholders, most of whom had previously cultivated rice, job prospects in fruit farming in the Mekong Delta in Vietnam. They all managed to increase their yields over the course of the project and earn higher incomes. Since the investment, Les Vergers du Mékong has been able to increase its processed fruit volumes and improve their quality. This has included the introduction of a transparent traceability system (WEtrace) to close to 755 fruit farmers.

  • 755 fruit growers use the WeTrace app
  • 413 fruit growers trained in organic fruit cultivation
  • 2,000 smallholders with higher and more regular incomes
  • 30,000 fruit trees planted between 2017 and 2020
  • 100,000 fruit trees to be planted between 2021 and 2023

Development successes

Higher income and economic perspective

Carbon dioxide emissions reduced thanks to the planting of fruit trees (replacing rice)

Business successes

Increased production

Expansion of reliable supply chains

Greater consumer confidence as a result of healthy products

develoPPP Classic

develoPPP Classic is aimed at medium-sized and large companies that want to invest sustainably in a developing or emerging country and expand their operational activities locally. Suitable projects receive technical and financial support of up to two million euros in public funding.

Les Vergers du Mékong

Founded in 2000, the company focuses on a strong local supply chain, processing of natural products and direct sales in Vietnam and Cambodia.

DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH

The KFW subsidiary specializes in the complex financing arrangements in developing and emerging markets and has extensive expertise in long-term investment financing. DEG finances and supports manufacturing companies, agribusinesses and companies in the infrastructure and financial sectors.

Jean-Luc Voisin Chairman Les Vergers du Mékong
Alexandra Neuwirth Project Manager develoPPP Deutsche Investitions- und Entwicklungsgesellschaft mbH