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Chopping for Chips an Analysis of Wood Flows from Smallholder Plantations in Vietnam

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Chopping for Chips an Analysis of Wood Flows from Smallholder Plantations in Vietnam WORKING PAPER Chopping for chips An analysis of wood flows from smallholder plantations in Vietnam Nguyen Quang Tan Working Paper 65 Chopping for chips An analysis of wood flows from smallholder plantations in Vietnam Nguyen Quang Tan Working Paper 65 © 2011 Center for International Forestry Research All rights reserved Tan, N.Q. 2011 Chopping for chips: an analysis of wood flows from smallholder plantations in Vietnam. Working Paper 65. CIFOR, Bogor, Indonesia Cover photo: Manuel Ruiz Perez CIFOR Jl. CIFOR, Situ Gede Bogor Barat 16115 Indonesia T +62 (251) 8622-622 F +62 (251) 8622-100 E [email protected] www.cifor.cgiar.org Any views expressed in this publication are those of the authors. They do not necessarily represent the views of CIFOR, the authors’ institutions or the financial sponsors of this publication. Table of contents Abbreviations v Acknowledgements vi 1 Background 1 2 Introduction to the study sites 2 3 Methodology 3 3.1 Study approach 3 3.2 Data collection 3 4 Description of the wood market chains in the study sites 4 4.1 Wood market chain in Phu Cat district 4 4.2 Wood market chain in Van Canh district 7 4.3 Wood market chain in Doan Hung district 9 4.4 Wood market chain in Phu Ninh district 12 5 Distribution of costs and benefits along the market chains 14 5.1 Distribution of costs and benefits amongst actors in Phu Cat and Van Canh 14 5.2 Distribution of costs and benefits amongst actors in Doan Hung 17 5.3 Distribution of costs and benefits amongst actors in Phu Ninh 20 6 Concluding discussion 22 7 Suggestions for further research 24 8 References 25 List of figures and tables Figures 1 Location of the study sites in Vietnam 1 2 Market chain of plantation wood from Thuan Phong, Phu Cat 4 3 Market chain of plantation wood from Tan Quang, Van Canh 8 4 Market chain of plantation wood from Thon 5, Doan Hung 10 5 Market chain of plantation wood from Khu 4, Phu Ninh 12 Tables 1 Costs and benefits for a tree grower in Phu Cat and Van Canh 14 2 Costs and benefits for a local collector in Phu Cat and Van Canh 15 3 Costs and benefits for a woodcutter in Phu Cat and Van Canh 16 4 Costs and benefits for a trucker in Phu Cat and Van Canh 17 5 Summary of benefit distribution amongst actors in Phu Cat and Van Canh 17 6 Costs and benefits for a tree grower in Doan Hung 18 7 Costs and benefits for a local collector in Doan Hung 20 8 Summary of benefit distribution amongst actors in Doan Hung 20 9 Summary of benefit distribution amongst actors in Phu Ninh 21 Abbreviations BBPM Bai Bang Paper Mill CCA Company collecting agent DHLC Duc Hai Limited Company NPV Net present value PLLC Phuc Lam Limited Company QNPC Quy Nhon Pulpwood Company VHLC Vinh Hien Limited Company VND Vietnamese dong Exchange rate: US $1 ≈ VND17 500 at the time of study (November 2008–January 2009) Acknowledgements This working paper is part of a research project entitled ‘Strengthening Rural Institutions to Support Livelihood Security for Smallholders Involved in Industrial Tree-planting Programmes in Vietnam and Indonesia’ funded by the German Federal Ministry for Economic Cooperation and Development (BMZ). I would like to express my gratitude to everyone who has contributed to make this market study possible. Special thanks must go to all informants in the four study sites and to the industrial companies in Binh Dinh and Phu Tho. I am indebted for the support from colleagues in Binh Dinh and Phu Tho provinces, as well as those at the Forest Science Institute of Vietnam during the course of the fieldwork. Last, but not least, invaluable comments from Thomas Sikor on earlier versions of this paper are gratefully acknowledged. 1. Background This working paper is part of the research project ‘Strengthening Rural Institutions to Support Livelihood Security for Smallholders Involved in Industrial Tree-planting Programmes in Vietnam Phu To and Indonesia’, implemented by the Center for Province International Forestry Research (CIFOR), the ¢ University of Göttingen and the University of Hanoi East Anglia, in collaboration with the Forest Science Institute of Vietnam (FSIV) and Bogor Agricultural Institute. The project’s aim is to advance livelihood security and achieve a sustainable reduction in poverty amongst rural smallholders involved in industrial tree-planting programmes in Southeast Asia. Its outputs will support improved governance of rural institutions, development of innovative partnerships, more effective planning and coordination, and enhanced market access for households and communities participating in industrial tree-planting initiatives in Vietnam and Indonesia. Binh Dinh Province This market chain study aims to gain a better understanding of the wood flows from smallholder plantations to industrial buyers in Binh Dinh and Phu Tho provinces of Vietnam (see Figure 1). It examines the role of different actors, the value added to the wood at each stage of the market chain and the distribution of costs and benefits amongst these actors. The paper documents findings from the study. It provides an account of the wood market chain from smallholder tree growers in the study villages to industrial buyers in the main towns. The paper consists of seven sections. Following this introduction, Section 2 provides a short overview Figure 1. Location of the study sites in Vietnam of the study sites. Section 3 briefly discusses field data collection. Section 4 goes into detail about the wood market chains in four study sites and Section Section 0 provides a concluding discussion of the 5 discusses the distribution of costs and benefits study’s findings. Finally, suggestions for further amongst actors involved in these market chains. research are presented in Section 7. 2. Introduction to the study sites Binh Dinh province is located in the South Central Phu Tho province is located in the mountainous Coastal region of Vietnam, about 670 km from Ho Northeast region of Vietnam, about 80 km northwest Chi Minh City and 1060 km from Hanoi. It borders of Hanoi. It shares a border with Tuyen Quang Quang Ngai province to the north, Phu Yen province and Yen Bai provinces in the north, with Hoa Binh to the south, Gia Lai province to the west and the province in the south, with Vinh Phuc and Ha Noi Eastern Sea (also known in the Western Literature as in the east, and with Son La province in the west. South China Sea) to the east. The province has about Phu Tho covers about 352 000 ha and is inhabited by 1.6 million people and covers about 600 000 ha, of over 1.3 million people. Forest covers about 172 000 which 257 500 ha (40.4%) is forest. ha of the province (47%). Within Binh Dinh, the study covers two villages As in Binh Dinh, in Phu Tho two villages in two in two districts: Thuan Phong village of Cat Lam districts are covered by the study: Thon 5 village in commune (Phu Cat district) and Tan Quang village Ca Dinh commune (Doan Hung district) and Khu of Canh Hien commune (Van Canh district). Thuan 4 (also known as Xom Lam) village in Tram Than Phong village is about 80 km from Quy Nhon— commune (Phu Ninh district). Thon 5 is 80 km from the capital city of Binh Dinh province—where the Bai Bang Paper Mill—the main industrial buyer industrial buyers of the timber from the farmers’ of plantation timber. Khu 4 is about 35 km from plantations are located. It has about 405 households. the mill. Tan Quang village is 55 km from Quy Nhon, and has about 256 households. 3. Methodology 3.1 Study approach 3.2 Data collection The main approach employed in the study was This study was conducted based on participatory commodity chain analysis, using access mapping. rural appraisal carried out by the project in May– Following Ribot (1998), access mapping along a June 2008 and a household survey by the project in commodity chain provides two maps: distribution of September–October 2008. Fieldwork was conducted profit and mechanisms, and structures and processes in two segments: 23–29 November 2008 in Binh at work in the control and maintenance of that Dinh province and 5–10 January 2009 in Phu distribution. In more concrete terms, it consists of: Tho province. • identifying the actors involved along the commodity chain, from extraction, production, The main data collection tool used during the processing, exchange, transport and distribution fieldwork was direct interviews with selected actors to final sale and end use of the commodity; along the timber value chain. The interviews began • evaluating income and profit at each level of the with smallholder tree planters in the village – the commodity chain; starting point of the market chain – then continued • evaluating the distribution of income and profit with the actors involved in the next stage of the within each group along the chain; and market chain. Altogether, 36 people were interviewed • using the distribution of these benefits amongst in four sites. The names of people interviewed are and within groups to trace out, or map, the omitted to protect them. Interested readers may mechanisms by which access to benefits is contact the author for further information. In maintained and controlled. addition, direct observations (through village walks) and informal discussions with local people about the Originally, commodity chain analysis was used to plantations, processing and transportation were also analyse price formation of a commodity, from raw made during the course of the fieldwork to generate material to final product (Bernstein 1996).
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