Establishing an RA-compliant international tea brand

The 2023 tea crop has recently concluded its harvesting season, and local farmers are focusing their efforts on pruning and caring for the fields in preparation for the 2024 production cycle. According to tea farmers, despite the increased prices of fertilizers and labor, businesses are purchasing fresh tea buds at prices 20 to 30% higher compared to that of the same period in 2022, resulting in high economic efficiency.

Ms. Nguyen Thi Lien from Son Kim 2 commune, Huong Son district, shared that her family has 10 sao of industrial tea production area, with the primary crops being the LDP2 and PH1 varieties. Thanks to a focus on applying technical measures and improving product quality, the tea farm exhibited strong growth in the 2023 crop, with numerous young and green tea buds.

"At an average selling price of 6,500 Vietnamese dong per kilogram for fresh tea buds, our family's tea farm brought in a profit of over 120 million Vietnamese dong per kilogram this year, which is 20 million Vietnamese dong higher than last year," said Ms. Lien.

Ha Tinh province currently has 850 hectares of tea production area developed in association with businesses, which span across the districts of Ky Anh, Huong Khe, and Huong Son. Within the first ten months of 2023, Ha Tinh Tea Joint Stock Company exported over 1,740 tons of dried tea, with an export turnover of over 4 million USD. The company primarily exports to countries in the Middle East, including Afghanistan, Pakistan, and Saudi Arabia.

Mr. Nguyen Hong Sanh, Director of Tay Son Tea Company (under Ha Tinh Tea Joint Stock Company), reported that by the end of November 2023, the company purchased over 4,800 tons of tea, marking an increase of over 700 tons compared to 2022. Additionally, the company's processing and export volume reached over 1,100 tons of dried tea, with an estimated revenue of 39 billion Vietnamese dong.

"Despite the increased production volume, the company's operational efficiency is facing significant challenges due to the influence of the global market, rising input material prices, and escalating labor costs.

In order to ensure a stable income level for 1,060 households in the communes of Son Hong, Son Tay, and Son Kim 2 in Huong Son district, which are the company's primary collaborators, we are willing to reduce our profits to a minimum, thereby increasing the purchasing price of fresh tea buds. The highest purchasing prices range between 7,100 and 7,200 Vietnamese dong per kilogram. However, these high price points will require farmers to strictly comply with the safe tea production process," Mr. Sanh emphasized.

According to him, Tay Son Tea Company implemented a policy to support tea farmers with the cost of transporting manure from their households to the fields. Namely, the policy supports up to 150,000 Vietnamese dong per ton of manure. This initiative aims to encourage farmers to utilize organic fertilizers for increased soil fertility and enhanced clean tea quality. Consequently, the volume of organic fertilizer used by tea farmers has increased from 400 tons per year in 2019 to over 2,000 tons per year in 2023.

In addition to demand stimulation from support policies, the company also firmly refuses to purchase fresh tea products from households using chemical fertilizers. Notably, the company actively sprays pesticides to prevent diseases, at a frequency of three times per year, with 300 liters of biological products per spray. This approach also helps to eliminate the ineffective and arbitrary spraying of pesticides.

Tay Son Tea Company and Ha Tinh Tea Joint Stock Company are aiming to fully utilize the EU-Vietnam Free Trade Agreement (EVFTA), with a focus on developing a RA-compliant tea brand to expand into the EU market.

According to Ha Tinh Tea Joint Stock Company, the company must fulfill 119 criteria in order to achieve a RA certification. Accordingly, several criteria pose a significant challenge, such as the conservation of the ecosystem within the production area, the preservation of wildlife in the buffer zone, the management of waste and chemicals used within tea production area, and the fulfillment of food safety requirements.

Ha Tinh Tea Joint Stock Company will invest in developing an organic raw material area, and implement production processes in accordance with international standards to enhance the competitive value of their products and expand their target markets towards developed countries.

Mr. Vo Ta Nghia, Deputy Director of the Ha Tinh province's Department of Industry and Trade, believes that the EVFTA stands as a significant opportunity for exporting businesses as well as agricultural exporters as a whole, with an emphasis on tea products.

Accordingly, the Department of Industry and Trade is coordinating with relevant agencies to promote the benefits of the EVFTA, in order to ensure that local tea products are qualified to enter the EU market. Furthermore, the Department is actively supporting and resolving difficulties with regards to documentation and procedures for local businesses. On the other hand, the Department is implementing synchronized solutions to gradually guide local production practices towards food safety and environmental protection, thereby meeting the increasingly strict requirements imposed by developed markets around the world.