FAO PPLPI, MARD CAP IPSARD and DLP MARD, Hanoi, Viet Nam 3 April 2009

1. Developing Certified-safe Supply Chains (CSC) that are Inclusive of Smallholder Livestock Producers in Viet Nam: The Case of Poultry FAO PPLPI, MARD CAP IPSARD and DLP MARD, Hanoi, Viet Nam 3 April 2009

2. Context • Goal: strong growth and modernization of the Viet Nam livestock sector • Components of the sector: • Commercial farms and industrial systems, linked to industrial feeds, and industrial processing • Rapidly adaptable to modern technology and processes • Can rapidly internalise bio-security & food safety measures • Smallholder systems, linked to wet urban markets (‘Cho’) through informal market chains • Comprises the larger proportion of livestock output, and employment (household labour; informal marketing services)

3. Context (2) • Rationale for special concern with smallholders • Not for the sake of keeping them ‘alive’ at all costs • They have to compete under the changing market conditions • Some will have to exit (change to other opportunities) • Some will be able to modernise, adapt and compete • Particular smallholder systems have a comparative advantage in responding to domestic consumer demand and preferences for specific types and quality of livestock products (local breeds of livestock species) that require farm resource-based feeding regimes, and labour-intensive husbandry • These systems, with systematic organization and a little investment, can be transformed into certified food-safe supply chains (CSC)

4. Source of Material: Poultry Certification for Pro-Poor HPAI Risk Reduction by: J. Ifft, J. Otte, D. Roland-Holst, and D. Zilberman Funded by: DFID Implemented by: FAO Pro-Poor Livestock Policy Initiative, RVC, RDRC-UC, IFPRI and ILRI in collaboration with: MARD Viet Nam

5. Location and Respondents of Study, Hanoi, 2008 • Farm level production (n=35 small-scale farms; 50-300 birds/farm) • Dong Anh District • Traders • Wholesale and Registered Slaughterhouses • Bac Thang Long • Vendors in Ha Noi Markets • Cho Hang Da • Cho Thang Cong B • Cho Ngoc Ha • Cho Mo • Consumer Households (n=1,200 HHs) • Residents in ‘catchment’ areas near the 4 ‘Cho’s’ above

6. Distribution of Household (HH) by purchases of chicken, by breed Local chicken = 77%

7. Where HHs buy chicken as well as other meat

8. Where HHs buy their chicken, by breed

9. Form in which chicken is purchased by HHs, by location

10. Consumer Preferences and Purchasing behaviour • Type: meat of local chicken or crossbreds (breed) • What is special about local or crossbred chickens that they are preferred to industrial chickens? • Form: fresh / fresh-chilled whole or parts; live • Not frozen • Preferred seller: ‘Cho’ vendor (regular supplier) • Why not the supermarket?

11. Consumer Attitudes to Food Safety and Other Attributes of Chicken Meat

12. Consumer importance given desired attributes of chicken meat, by category

13. Consumer importance to Quality and Safety

14. Consumer importance given to Animal health, Hygiene, Price, and Other attributes of chicken

15. Consumer Preferences • Quite sensitive to the Quality of meat • Freshness • Texture (not soft) • Source of feed used (feeding regime) • Flavour (breed) • Concerned about Food Safety • Concerned about the health of the chicken • Mindful of hygienic market conditions • Do not mind very much about the price, if they are satisfied with the desired attributes

16. Actual Consumer Purchasing Behaviour on Current ‘Food-Safe’ Products in the Market Safety-branded chicken Government-certified safe chicken

17. Percent of HHs purchasing of Safety-branded or Government-certified chicken, by type

18. Buyers: Reasons for buying Safety-branded chicken

19. Non- or Ex-buyers: Reasons of HH for not buying Safety-branded chicken

20. Reasons for not buying Government-certified chicken

21. Levels of consumer trust on institutions in ensuring safety of chicken

22. Consumer attitudes and purchasing behaviour • Consumers value ‘food safety’ but are not willing to buy the product if it does not satisfy the ‘taste’ quality attribute • Consumers will not go all the way to buy the ‘food safe’ chicken if the location of the market is not convenient (e.g., supermarket) • Consumers will not buy the ‘certified-safe’ product if they have LOW TRUST on the certification (lack CREDIBILITY)

23. A Study on a Pilot Scheme for a Certified Safe Supply Chain for Smallholder Producers Scheme: Tag-Certification

24. Certified Supply Chain (CSC) using ‘Tags’ Consumer / HH Fresh, tasty, breed, safe, affordable Willingness to pay Cho Vendor Sanitary inspection Fresh, breed, safe, clean Reliable Registered Slaughterhouse / Wholesaler Independent Supply Chain Standards Monitor and Enforcer Reliable Breed, healthy, safe Trader Local vet supervision and ‘tagging’ Breed, feed, healthy, safe Reliable Selected Smallholder Producer (local chicken / crossbreds)

25. Revealed price premium of ‘Tag-certified chicken’ sales by Cho vendors over similar chicken sold

26. Ensuring that Supply Chains of Consumer-Preferred Products are Safety-Certified • Fundamental Elements: • Trust (credibility) – all throughout the supply chain • Identity and Uniqueness of the product • ‘Tag’: not easily copied by cheaper ‘fake’ products • Tasty (not just safe)

27. Establishing Certified Supply Chains (CSC) inclusive of Smallholders • Use existing government institutions (national & local) • Veterinary staff • Health inspection staff • Use existing market relationships through which smallholders course their products along the supply chain, up to final consumers • Based on trust and reputation (unreliable suppliers or buyers are expelled from the supply chain)

28. Strengthening a Certified Supply Chain (CSC) inclusive of Smallholders • Add innovative mechanisms • to further ensure that health and safety protocols are followed, and • that contracts / agreements between exchanging parties, as well as standards, are enforced.

29. Developing the Certified Supply Chain (CSC) at each stage Consumer / HH Fresh, tasty, breed, safe, affordable Willingness to pay Cho Vendor Sanitary inspection Fresh, breed, safe, clean Reliable Registered Slaughterhouse / Wholesaler Independent Supply Chain Standards Monitor and Enforcer Reliable Breed, healthy, safe Trader Local vet supervision and ‘tagging’ Breed, feed, healthy, safe Reliable Selected Smallholder Producer (local chicken / crossbreds)

30. Selection of Smallholder Farms (50 – 300 birds) • Enforce high standards for bio-security and safety • Cleaning and disinfection procedures on facilities, tools, equipment; chicken waste mgt. • Vaccinations for HPAI, NCD, Gumboro and Marek’s • Immediate reporting to local vets of any occurrence of disease (cell phone SMS) • Enforce high standards for product and meat quality • Securing of robust local breeds or crossbreds • Controlled semi-scavenging and semi-confinement • Controlled and limited use of concentrate feed

31. Use Existing Government Institutions at the Farm and Trader levels • District Veterinary Office • Commune veterinary staff • Vaccinations (HPAI, NCD, Gumbro, Marek’s) • Random farm inspection at least 1x/week • Plus: • supervising farmers on health & nutrition protocols • putting ‘Safety Tags’ on chickens 1 week before marketing • coordinate with Trader and Vet Inspector at wholesale market for the delivery of ‘Safety-tagged’ chickens to designated Registered Slaughterhouse

32. Innovative Mechanism: An Independent Supply Chain Inspector and Enforcer • At least one random visit to each participating farm • ensure that farm bio-security standards are being met • provide additional advise regarding both safety and nutrition practices to farmers • Communicate additional information and advise to local and district vets • Communicate additional info and advise to participating registered slaughterhouses • Adds CREDIBILITY to the entire mechanism (TRUST and CONFIDENCE)

33. Registered Slaughterhouses • Must be Formally Registered: following safety regulations • hygiene guidelines – supply clean water, use of approved disinfectants • disposal of slaughterhouse waste • use of quarantine cages prior to slaughter (separation mechanism) • Addition: Accreditation mechanism for slaughtering ‘tag-certified’ safe and high quality chicken • Vet Inspector to supervise slaughtering of ‘safety-tagged’ chickens • Separate batches and routes for ‘safety-tagged’ chickens

34. Using Existing Institutions at Wholesaler / Slaughterhouse level • Check certification by local authorities at point of origin for birds delivered • Check health certification by checkpoints for birds delivered • Inspection and certification of all meat and organs after slaughter

35. Cho Vendors • Screening and selection of Cho Vendors who agree to distribute ‘safety-tagged’ chickens by Slaughterhouse and CSC programme. • Keep refrigerators for delivered packaged and branded ‘safety-tagged’ fresh-chilled dressed chickens prior to disposal (not frozen) • Package to advertise true identify and breed of chicken (Ri, Mia, Other local breeds; Tam Hoang; etc.) • Promotion of ‘safety-tagged’ chicken to their own regular clients as well as potential customers

36. Food Safety Certification with Smallholders? “Yes we can!”