Lesson 2: Connecting production and consumption, promoting processing to increase the value of agricultural products
From clearly seeing the important and decisive role of production linkage in agriculture in particular, with the attention, direction and support of the province, in Nghe An localities, production and consumption linkage models are increasingly vibrant to meet the high requirements of modern agriculture, towards sustainability; as a basis to promote the development of the processing industry, increase the value of agricultural products.
Thu Huyen - Hoai Thu
31/07/2024
Con Cuong mountainous district is one of the localities with potential for precious medicinal resources in Western Nghe An. Promoting the economic value of medicinal herbs, bringing stable and decent income to farmers, and at the same time raising the level of local products, although currently not commensurate with the potential, has formed sustainable ways and directions for both farmers and agricultural product consuming enterprises.
For nearly 5 years now, from April onwards, right on the hottest days, people in village 2/9 of Chau Khe border commune (Con Cuong) have been busy going to the fields to harvest Solanum procumbens. Solanum procumbens is a medicinal plant with many medicinal properties that are good for health. When there was no business to purchase the product, Solanum procumbens is highly adaptable and grows wild, so few households planted it. People only planted small areas or picked wild plants to serve their family's needs. Since Pu Mat Medicinal Materials Joint Stock Company, along with the state's policy of encouraging the production and processing of medicinal materials, people, under the guidance and connection of local authorities, have agreed to sign a contract to plant, care for and supply fresh Solanum procumbens to the Company. Also from this contract, the lives of dozens of households in village 2/9 have begun to improve...
Previously, in village 2/9, sugarcane was the main crop, with more than 130 households, almost every household grew sugarcane. However, compared to sugarcane, Solanum procumbens brings much higher economic efficiency. For each hectare of Solanum procumbens, people initially invest about 2 million VND in fertilizer, 600 thousand VND in plastic bags to cover against weeds and retain moisture, about 1 million VND in seeds for the first year and keep the roots for 3-5 years without investing in seeds; after 6-8 months of care, the yield will be about 3-4 tons of fresh plants. With the current purchase price of about 4,500 VND/kg of Solanum procumbens, people earn 12-15 million VND/ha/crop; each year harvests 2 crops, earning an average of 25-30 million VND/ha. In village 2/9, households that grow little also have about 2 sao, households that grow a lot from 4 - 7 sao like Mr. Nguyen The Dung has 6 sao, Mr. Nguyen Van Ha grows 5 sao...
Thanks to that, "from the initial 3 hectares of experimental plants, now the people of village 2/9 have developed the medicinal herb area of Solanum procumbens to 10 hectares, bringing in much higher income than other agricultural products grown before", said Mr. Nguyen Van Ha - Deputy Head of village 2/9. Mr. Nguyen Van Ha said that in the contract signed to purchase products with the purchasing company, there are provisions on ensuring green and clean quality, not allowing pesticide residues, diseases, or organisms harmful to human health. The Pu Mat Medicinal Herbs Joint Stock Company that purchases products regularly takes samples for quality testing, and any household that violates the contract will have its contract terminated. When agricultural products do not ensure quality, it will not only affect the income of the violating household, but also the reputation of the community; Therefore, right from the beginning of planting this new tree in village 2/9, participating households have set up regulations to "cross-monitor" each other regarding compliance with the organic, green, and clean planting process.
In the 2023 Solanum procumbens crop, the raw material purchase price between Pu Mat Medicinal Materials Joint Stock Company and the people of Village 2/9 decreased from 7,300 VND/kg fresh according to the product consumption contract to 4,300 VND/kg fresh. It is worth mentioning that the purchase price fluctuated strongly, but the connection between the farmers here and the product consumption enterprise still maintained the "loyalty" as the original contract commitment. Explaining this, Mr. Nguyen Van Ha - Deputy Head of Village 2/9 said that he has only been growing Solanum procumbens for 2 years now with more than 5 sao; he is both a direct grower and, together with the Village Executive Committee, connects people to supply raw materials for the product consumption enterprise.
When the Company reduced the purchase price, although it announced the reason was due to slow consumption, many people were still very upset. The Village Management Board went to the Company to ask for the reason and also witnessed that there were a lot of products extracted from Solanum procumbens in stock...”.
Mr. Nguyen Van Ha - Deputy Head of Village 2/9, Chau Khe Commune (Con Cuong)
Mr. Nguyen The Dung, in village 2/9, grows 6 sao of Solanum procumbens, said that Solanum procumbens plants give each household an average income of over 100 million VND/year when the company's purchase price is maintained at 7,300 VND/kg. When the price dropped to 4,500 VND/kg, many households were upset. However, the people did not overreact to the company. Moreover, the company also proactively announced and went to the village to meet with the people, clearly explaining the reason for the reduction in purchase price, so the people also shared the burden with the company.
Mr. Nguyen Van Ha expressed: “Mr. Phan Xuan Dien - Director of Pu Mat Pharmaceutical Joint Stock Company at the meeting with the people growing Solanum procumbens in village 2/9 explained that due to the impact of the Covid-19 epidemic for more than 2 years, the amount of goods sold has been small, with a large backlog, causing the company to suffer losses. There were months when the loss was 700 - 800 million VND. However, the Company still tried to purchase raw materials for the people as per the contract, but the company also hoped that the people would share the difficulties with the business... Understanding the problem, we, the people, also learned about the reality and shared with the business, accepting the purchase price”. Thanks to that sharing, the connection between farmers and businesses in Chau Khe (Con Cuong) has overcome the "stormy" period, maintaining the interests of both sides, helping the raw material area develop sustainably. On the business side, Mr. Phan Xuan Dien also affirmed that thanks to transparency and benefit sharing, businesses have stabilized production and gradually overcome difficult times.
The lesson of maintaining close links and sharing benefits between farmers and product-purchasing enterprises is always useful and related to the survival of both sides.
In order for the agricultural processing industry to truly promote economic value and enhance the value of agricultural products, in addition to strengthening the connection between farmers (raw material areas) and processing enterprises (product consumption), the connection to the consumption market plays the final decisive role. In other words, what needs to be done is to combine the stages of processing and consuming agricultural products together. Production facility owners need to link into a tight system, so that any problems that arise can be handled immediately. If this plan is well implemented, it will help form many leading enterprises, the export, processing and consumption processes will also run more smoothly and save some costs.
At Pu Mat Pharmaceutical Joint Stock Company, in addition to maintaining a stable raw material area, this enterprise also invests in building a processing factory system and implementing market linkages through many diverse sales "channels", updating trends of the digital age. Mr. Phan Xuan Dien - Director of Pu Mat Pharmaceutical Joint Stock Company said that in addition to contacting and signing product sales contracts with supermarkets, the company also opens sales agents and introduces products in many provinces and cities across the country. In addition, sales channels through e-commerce sites are also effective in the digital age.
According to the State's policy of promoting digital transformation, our company is eligible for support in building an electronic information page for sales. We have completed the procedures, waiting for licensing and operation, helping to speed up the marketing and consumption of medicinal products.
Mr. Phan Xuan Dien - Director of Pu Mat Pharmaceutical Joint Stock Company
As mentioned in the previous part (part 1), with the same approach as above, many companies and businesses investing in agriculture and food processing in the direction of green agriculture and organic agriculture in Nghe An are also choosing to close the production value chain from planting to delivering products to consumers, such as investment projects of TH Group; Sunmart Organic Farm, Bud Hill Farm Model; Thien Son Company...
Thien Son High-Tech Agricultural Cooperative produces and trades agricultural products under the Thien Son orange brand. It is the first enterprise in Nghe An to achieve GlobalGAP Certification, which is a condition for the enterprise to be able to export oranges to all markets in the world.
Mr. Trinh Xuan Giao - Director of Thien Son Cooperative said that to be able to export oranges to "difficult" markets with strict requirements on traceability and quality of agricultural products is a long process for enterprises. And it requires large investment sources, persistent compliance with procedures and regulations in cultivation and quality control of agricultural products. And enterprises' proactive investment from cultivation to harvesting and connecting to consumption markets will help optimize investment costs.
Food safety is an important issue that consumers are very concerned about and is a factor that influences their purchasing decisions. Therefore, in addition to implementing green production steps, traceability for the entire value chain of agricultural products is an important factor in building consumer trust and building product brands.
In Nghe An as well as many localities across the country, the trend of combining production - processing - consumption is being aimed at by businesses as well as individual production and business households through the "push" of the One Commune One Product Program - OCOP. The development of OCOP products has exploited the potential and strengths of the locality's rich agricultural products and promoted the deep processing industry, gradually forming large enterprises in the agricultural processing industry.
In fact, many OCOP products, thanks to the effective promotion of the chain from production to processing and consumption, not only help businesses operate effectively, but also enhance local agricultural products, creating sustainable jobs for local workers. In the highland areas of Nghe An, before implementing the OCOP program, local people mainly raised livestock and grew crops to serve small-scale local consumption needs. However, thanks to the OCOP "boost", farmers in the highlands of the province were able to both consume agricultural products and develop new occupations and economic sectors, such as agricultural processing, tourism services, and marketing of products produced by themselves.
In Ky Son - the most remote border district of the province, the potential for local agricultural products is huge, including many plants and animals with high economic value such as black chicken, native black pig, ginger, Shan Tuyet tea, ginseng and thousands of other medicinal herbs... Currently, Ky Son has 14 3-star OCOP products.
“In the past, tea was grown only for family needs, never thinking about production and business. Now there is a cooperative producing tea as OCOP products, and we are ordered to grow tea, so my husband and I do not have to go far to work anymore, but taking care of nearly 1 hectare of tea also brings us a higher income than going to the company” - Ms. Lau Y Xi in Huoi Mu village, Huoi Tu commune (Ky Son) said.
In general, nowadays in the western districts of Nghe An, thanks to overcoming the "self-sufficiency" situation, promoting the development of local products such as black chicken, black pig, bamboo rice, beef jerky, Chinese sausage... into famous commercial products nationwide. Since then, the agricultural products produced by local people have been consumed as much as possible. Many households have escaped poverty and become well-off thanks to the combination of production, processing and marketing of agricultural products, such as the Que Hau beef jerky production facility, the Huong Son Agricultural Cooperative in Ky Son; the Cuong Hoai sour meat production facility, and the yellow flower tea processing facilities in Que Phong...
At the workshop "Developing value chain linkage and consumption of OCOP products in Nghe An province in 2024" held on June 27, 2024 in Vinh city, talking about promoting the advantages of OCOP products associated with processing and consumption linkage, Deputy Minister of Agriculture and Rural Development - Tran Thanh Nam emphasized: "It is necessary to promote the advantages and specific conditions of each region, determine which region grows what crops and raises what animals appropriately and effectively to have appropriate and effective development solutions. At the same time, do a good job of linkage, including linkage from each field, thereby creating linkages according to the value chain, having appropriate development solutions, developing OCOP products, contributing significantly to the restructuring of rural economic development".
(To be continued)
