President of Unifarm and the story of packaging and preserving agricultural products

One morning in early June, I received a phone call from Mr. Nguyen Phuc Nguyen - General Secretary of the Vietnam Fruit and Vegetable Association - asking to support output for a Laba banana cooperative in Lam Dong. I was surprised to know that a specialty banana like Laba also faces challenges in consumption. We were willing to help Lam Dong agriculture so the Unifarm team hit the road once more.

Welcoming us was Ms. P, head of a banana cooperative with many members and over 50 hectares of bananas in the full harvest season. She took us to visit the field while lamenting: "Bananas are almost ripe in this field, but no trader will come to purchase".

And just as we expected, most of the banana growing area here is not properly tended for; some households seem to have learned about the techniques of planting and taking care of banana trees, but have not yet applied them adequately.

On the other hand, similar to most areas where bananas (and many other agricultural products) are grown in the provinces where I have researched and consulted, the growing area is large but there is not a single packaging facility with a cold storage for basic agricultural products.

She answered my concerns: "A few years ago, traders came to harvest bananas by the bunch and transport them away, there was no need for a packaging facility". She was surprised when I explained that the optimal timeframe technical-wise for a banana bunch from harvest, preliminary processing to  packaging in cold storage is only 4 hours; afterwards the bananas must be preserved with a temperature of 14 Degree Celsius and a humidity above 85% until consumption in the market. That is why cooperatives must have a packaging facility to preserve bananas in the growing area. She pledged that once her cooperative is "rescued" by Unifarm, she will invest for better results next season.

Unifarm has a plan to "rescue" the aforementioned cooperative, however, the statement that I often repeat at agricultural workshops or on media is that: if you want to make profit, start investing in a packaging facility with a standard cold storage system first.

Knowledge of farming techniques and product standards for each market are imperative before deciding which plants to invest in production, but without a packaging facility, not much can be done. Imagine, a farmer can grow a beautiful melon or a bunch of spotless bananas, but without a packaging facility and standard cold storage for preliminary processing, packaging and preservation, how would his products reach domestic and foreign consumers?

There was indeed a time when Chinese merchants would visit Vietnamese farmers' fields to purchase, package and transport away for consumption, but that only happened because the goods were scarce and this market was less strict. And now, that is ancient history.

I was reminded of a question from a veteran journalist of Vietnam Agriculture Newspaper: "Do you think it is difficult for localities to issue growing area codes and packaging facilities codes, that many farmers have to 'borrow' packaging facilities codes to export their products.

The answer is much less complicated than it seems: the issuance of codes is the responsibility of the local agricultural management agency, so it is not difficult at all, but the problem lies in the reality that not many farmers actually own packaging facilities to be issued a code.

Just visit the big banana growing areas from Trang Bom - Dong Nai to Xuyen Moc - Vung Tau and the issue seems clear: in thousands of hectares of banana growing areas, how many farmers actually own a packaging facility? That is why Chinese traders buy bananas from this area but have to "borrow" packaging facilities codes from other areas. That has become the norm in many areas.

The story of agricultural products rescuing is not new, but nevertheless it remains topical, taking place here and there every once in a while. Usually in each rescue, local governments hold workshops to find solutions, and organize supply-demand matching programs with the participation of Vietnamese supermarket chains.

In these workshops, local managers insist on the idea that: deep processing factories must be established to create added value for agricultural products, as well as preserve them for a long time to solve the unprofitable harvest problem. The supermarket chains are committed to supporting farmers in purchasing agricultural products. Statements and commitments are made, and yet the trend of agricultural products rescue remained on the rise.

And the reason for that? The unique characteristic of the agricultural product processing industry is that it always prioritizes the use of products with simple designs and low input costs (due to the extremely high consumption norm of raw materials in the agricultural products processing industry, for example, it takes 6 kg of fresh bananas to make 1 kg of dried bananas). After production, these products can be preserved for a long time, so although processing businesses play an important role in the agricultural sector, they usually only deal with 30% of below grade 1 agricultural products, while 70% of grade 1 products still have to be preliminarily processed, preserved and sold fresh for farmers to make profits.

As for supermarket systems, although they commit to buy and are willing to keep that commitment, in order to sell goods to supermarkets, agricultural products must meet safety standards, as well as a standard packaging system, a logistics system for door-to-door delivery to stores, and an accounting system to track and reconcile debts. How many farms or households are able to fulfill such requirements?

Whenever I am invited to speak at these forums, I always repeat that growing areas need packaging facilities and cold storage to preliminarily process, sort, package and preserve agricultural products. With the help of the logistics system, farmers will be able to conveniently and cheaply bring goods from the farm to the market for consumption. It's a simple task that determines whether fresh agricultural products can be sold at high value or not.

Of course, the construction of packaging and preservation facilities must be planned in a master solution on pre-harvest farming, understanding of the specifications and product standards for each market, post-harvest technology, logistics and so on.

In the immediate future, Vietnam's agricultural sector expect good news such as Vietnamese durian can soon be exported to China, Vietnamese longan to Japan. These are excellent opportunities for domestic farmers to export fresh products to these countries at high value. However, we need to be well prepared to seize this opportunity.

Namely, the proper cultivation and harvesting of agricultural products is a certainty. But there is also the matter of what technology we can use to classify, package and preserve.

Businesses, farms and farmers need to focus on preliminary processing, sorting, packaging, preserving, handling and transporting agricultural products according to product characteristics and market needs. Delicious fruits without the appropriate preservationtechnology can cause difficulties in outputs, especially when the markets are gradually becoming stricter.

These seemingly trivial tasks are easier said than done. Like Unifarm, it took them 1 year with several billion dong to research the solution to export melons abroad.

In the process of transferring agricultural solutions to farmers from districts in Binh Duong province such as Phu Giao, Dau Tieng, and Ben Cat to other provinces such as Dong Nai, Lam Dong, Can Tho, Hanoi, and Ha Nam, everywhere I visit, I see shortcomings and the need for investment related to preliminary processing, packaging and preservation. Accordingly, large farms can invest on their own, while small-scale farmers can link to invest through their cooperatives or through appropriate local agricultural management agencies. 

Recently, Hanoi Agricultural Development Center had an idea to support the investment of a banana packaging and preserving facility for a banana farm in Ba Vi, Hanoi after hearing my comments. This is a positive signal that my opinion has been listened to by State agencies. I hope to see other localities consult and replicate with the motto: a good agricultural product must be preserved to reach the market.