Case study Jatropha Development in Vietnam

Transcription

1 Case study Jatrpha Develpment in Vietnam Grwing alternative energy n waste lands a case f win win fr a bifuel cmpany and smallhlder farmers Writer: Nic Janssen Sectr: Smallhlder Cash Crps (SHCC) January, 2009

2 The cntext/challenge In rural Vietnam there are still hundreds f thusands f husehlds wh are struggling t get ut f pverty. Mst f these husehlds have t farm n pr quality sils with limited skills r access t services and finance. At the same time the wrld is lking fr new energy surces as the fssil fuel reserves are quickly drying ut, with prices f a barrel f crude il setting new recrds in 2008 (befre falling dwn again as a result f the credit crunch). Amidst all the cntrversy surrunding bi-fuels, fd supply and fd prices, the Vietnamese gvernment has recgnised the need fr develpment f alternative energy t substitute its dependency n fssil fuels and has develped a visin & strategy n alternative bi-fuels. Part f this is t recver s called waste lands (degraded r lw-fertile) thrugh the prductin f Jatrpha il seeds. This has the ptential t bring a stable incme fr tens f thusands f rural farmers, especially in the castal areas f central and suthern Vietnam. These waste lands are currently left idle r bring very little returns t farming. Whereas 1 hectare under Jatrpha cultivatin culd earn a farmer arund US$ 800 net prfit per year, which is expected t increase in the future as research and develpment will result in better prducing varieties. Green Energy Vietnam (GEV), in a jint venture with Australian JatOil, is the ne pineer cmpany in Vietnam that has started with the cultivatin f Jatrpha n infertile lands in Ninh Thuan, Quang Tri and Thua Thien Hue prvinces. Fr Jatrpha agrnmics they have frmed partnerships with leading institutins in Vietnam, Suthern Africa and India fr the selectin f the best varieties suited t the cnditins in Vietnam. Green Energy Vietnam apprached SNV t supprt them in the develpment and set-up f a new cmpany business mdel thrugh which they can secure feedstck prductin frm smallhlder farmers. Leading in this business mdel will be t adhere t internatinal sustainability guidelines as they are currently being develped by the Rundtable fr Sustainable Bifuels. Essential elements in that are, access t land fr the smallhlders and scial and envirnmental sustainability. Elements which cnnect very strngly t SNV s crprate values. The client Green Energy Vietnam is a fr prfit enterprise engaged in the prcessing and prductin f bi-fuel. They started as a used vegetable il re-prcessing cmpany, using cking il frm htels and restaurants t prduce bi-diesel. Since early 2008 they have als been engaged in the prductin and future prcessing f Jatrpha il seeds as feedstck. The cmpany has the business skills and plan but lack the capacity and experience t engage with lcal gvernments and smallhlder farmers t get access t prductive resurces, engage in mass-grup cntracts and develp micr-finance schemes fr its cntracted farmers. 1

3 They apprached SNV if a jined activity culd be develped where SNV wuld advise them, as well as lcal authrities and farmer representative bdies n the creatin f strng and sustainable business linkages. Bth GEV and SNV have the strng belief that the establishment f cmmercial smallhlder plantatins f Jatrpha ffers a win-win situatin t create prfit fr the cmpany and its sharehlders as well as reduce pverty by creating incme and emplyment fr smallhlder farmers living n sils with pr sil fertility. There is gd added value in wrking tgether as GEV can benefit frm the lcal netwrks and expertise that SNV has built up in the last decade with regards t rganisatin f smallhlders, micr-finance, CDM and pr-pr plicy develpment. On the ther hand, SNV as a develpment rganisatin can benefit frm the private sectr dynamics that GEV bring int the cllabratin. With the advisry supprt f SNV, GEV will have, by the end f 2010, intrduced a smallhlder business mdel fr Jatrpha farming t arund 10,000 hh in 3 prvinces (Ninh Thuan, Quang Tri and Thua Thien Hue) with a functining prfessinal supprt netwrk f abut 14 trial statins and ne agr-statin. Other stakehlders invlved & their rles: Jatil: Australian Investr with whm GEV has a jint venture Centre fr Frestry Develpment wh d research n Jatrpha in partnership with GEV fr selectin f best varieties and agrnmy practises VICOPSME Quang Tri: Cperative Alliance wh supprt GEV in business license negtiatins in prvinces Department f Frestry f Ministry f Agriculture and Rural Develpment: GEV prvides data fr plicy develpment n Jatrpha. The methd / SNV interventin Initially, SNV had an agreement fr arund 6 mnths t mediate between lcal authrities and GEV t build cntacts and trust and allw GEV t negtiate business licenses with their preferred prvinces. Twards the end f 2008, this resulted in a new 2-year Memrandum f understanding with abve mentined gal. In these 2 years SNV will prvide advisry services regarding the develpment f a smallhlder business mdel in line with RSB standards. SNV prvides direct advisry t the cmpany, reviewing and cmmenting their farmer cntract systems, imprving their farmer extensin materials etc. SNV, in cllabratin with lcal ca- 2

4 pacity builders als prvides training services n agricultural extensin fr cmpany staff and grup leaders. Lastly SNV advices n the applicability f carbn credits fr parts f GEV s peratin in line with the Kyt prtcl. GEV itself had already develped a netwrk f stakehlders befre it apprached SNV. Hwever SNV added its netwrk f lcal cntacts n the grund and its experience t rganise and facilitate the backward linkages alng the prductin chain f Jatrpha il seeds. In the negtiatins between SNV and GEV pr-pr develpment has always been n the frefrnt. Thrugh in depth analysis f the pprtunities fr Jatrpha it became clear very sn that it had gd pr-pr ptential as its prime prductin resurce is pr quality sils. The pr are, in this case in the frtunate psitin, t have access t this type f resurce. Especially in castal areas which are densely ppulated, vulnerable t harsh weather cnditins and have a high pverty rate. The utcme As a result f SNV advisry services GEV has nw btained its business license fr develpment f its prime prductin & prcessing area where it will d n site Jatrpha research & testing, farmer training etc. Next t that SNV has facilitated cntacts in 3 prvinces between cperatives, frest cmpanies r individual farmers t establish test plts fr Jatrpha. Based n the knwledge and experience gained thrugh the experiments n these initial plts, in 2009, GEV will rll-ut its cntracted plantatin t arund 2,000 ha f Jatrpha fields grwing t abut 8,000 ha in Recently, end f 2008, the Department f Frestry has apprached SNV and requested ur supprt in the develpment f a larger natinal Jatrpha actin plan which has a target f 300,000 ha f Jatrpha in Vietnam by 2015 eventually expanding t 500,000 ha by The impact Thrugh imprved client capacity and imprved enabling envirnment, SNV is cntributing t the fllwing results at the beneficiaries level: Increased prductin, incme and emplyment. S far it is quite early t speak f real impact has been the first year f Jatrpha planting and nly frm its 3 rd year serius harvest can be expected. Gd prgress has been made thugh n the plicy frnt where Jatrpha has been declared a nn-invasive species and classified as an NTFP s it can cntribute, thrugh its 3

5 planting and prductin, t refrestatin and reduced degradatin. It is estimated that arund 10,000 husehlds wuld benefit frm this interventin by the end f And, if the 300,000 ha jatrpha natinal actin plan was implemented with 50% f prducers being smallhlders, anther 150,000 husehlds wuld be directly invlved in jatrpha prductin. The lessns learned When wrking with cmmercial businesses we have t learn t adapt t a different speed. Fr them time is mney which is nt always the case fr SNV where prcesses tend t take up t much time. In this case, the business knws hw t d business. SNV knws hw t wrk n pverty reductin. This can be a perfect match. But we shuld nt pretend we knw hw t d their business. Respect and trust t each ther is the cre element. SNV prducts are well respected, even mre respected thugh is SNV s netwrking capacity, presence n the grund, capacity and skills f individual advisers and charisma. 4