Written by Mekong Institute  

The 2nd training on Agricultural Productivity and Natural Resources’ Management: Focus on Developing Agricultural Supply Chains in CLMV’ is under the pilot phase of the “Supporting ASEAN Equitable Economic Development: A project based on policy-oriented research activities and capacity building programs focused on Cambodia, Lao PDR, Myanmar and Viet Nam (CLMV countries)”.

The Asian Development Bank Institute (ADBI) co-organized this training in partnership with Mekong Institute (MI) and New Zealand Aid Programme from 18 to 22 February 2013. The five-day intensive training program on “Developing Agricultural Supply Chains in CLMV” is designed as a workshop, including interactive lectures, group discussion, structured learning visits and drafting analytical framework for 26 policy makers as well as 6 representatives of private sector from CLMV who basically work on agricultural productivity and agricultural trade issues.

The overall aim of this training is to reaffirm the importance, basis and scope of (rice) supply chain development to provide the backdrop/framework for assessing Discussion Papers (DPs) on supply chains under preparation for each CLMV member country – overview, structure, dynamics, future prospects and recommendations – subsequently, dove-tailed into a regional DP and Policy Brief for CLMV as a whole.

The transformation of traditional agricultural marketing to new supply chain management, supply chains models and diverse case studies were presented and discussed among participants and regional experts. Situation analysis of Supply Chains issues based on the framework of the ASEAN 2030 Study was drafted by each CLMV country’s participants comprising the following components:

• (i) a strengths-weaknesses-opportunities-threats (SWOT) analysis for the agricultural supply chains in each country;
• (ii) a set of aspiration targets for the seed industry to reach by the year 2015 and 2030 at national level;
• (iii) the identification of the primary and secondary challenges the countries will be facing in fulfilling their aspirations; and (iv) a set of policy options each country will need to consider introducing to address the challenges. Apart from case studies from CLMV and Asian countries, this training program arranged structured learning visits that enabled all participants and experts to crystallize the supply chains concepts learned during class work with practices from farm to table in selected Thailand case studies.

The discussion points of the training that should be clarified and well defined before any policy making are;

• The major challenges to promote agricultural supply chains are similar to the seed industry development which is; limitation of infrastructure development and environment for investment is not supportive for investors as yet. Hence, there is the need for public-private partnership to cope with these challenges.
• Regarding the old green revolution and the new ‘doubly green revolution’, a key challenge is how to recommend to policy makers or policy options to stop the improper practices of local producers, especially in the misuse of agro-chemicals in order to respond to global markets that are now increasingly demanding organic or green agricultural products.
• It is interesting to examine the production capacity to serve the global supply chain. In terms of electronics industry, macro policy is important to focus on factor (company) and find the way to support producers to absorb the technology and assist them to help themselves. In terms of agriculture, should also concentrate on any concrete initiatives to support producers or stakeholders along the chains to access global supply chains, for instance economic zones could be one model to apply for clustering the agricultural supply chain.
• CLMV countries are facing similar problem of investors prefer to deal with larger farms, while in the production side they are largely fragmented farms and it would cost a lot to coordinate them. In the case of Philippines, company complains about high cost of investment while producers complain low price of product. What they did in fact in the Philippines, they increase the price but they left maintenance of the road to the small growers. Also the government addresses this coordination issue to facilitate both levels in the chain.
• In SME supply Chains development, the market needs to be identified before production plan. However, in rural areas it is difficult to identify market and support them in terms of technology. Before identifying the type of product to promote as SME cluster, there is the need to study the market and also conduct the need assessment in the area. Chambers of Commerce should be active to identify the list for agricultural traders or producers. The objective of forming cluster is to identify who are producing what and where, in order to collectively organize them together to access the bigger markets in each CLMV countries.

Learning Methods on Supply Chain in this training:

• To complement and supplement our study, we provided insights surrounding other country’s (China, India, Bangladesh, Philippines, Thailand and further field) and region’s (GMS) as well as international agencies’ experiences, successes and exciting on-going initiatives, involving an array of crops and organic products by a select group of resource persons.
• There were also 2 field trips:
• Central Group CSR vegetables project -Central is a huge Thai conglomerate – with huge retailing presence (Central, Robinson, Tops, Big C and Quick Service Restaurants (GSR) like KFC, Pizza Hut, and Mister Donut). We will see vegetables supply chain (involving small growers) – from production, processing and linked up to modern retail outlets, TOPS supermarket, all in one day
• Betagro Group -fully integrated poultry (layers and broilers) and swine supply chains involving animal feed, animal health & vaccines, processing into various value-added products.

The major outputs and outcomes of this training are:

1. The National Level Studies will be coordinated and dovetail into a Regional Level Discussion Paper and Policy Brief on the development and management of agri-food supply chains focusing on rice in this Pilot Phase in CLMV countries, with the underlying rationale of using supply chains to facilitate agriculture as engine of growth to drive overall inclusive and sustainable development of the region.
2. The Regional Level reports will focus on (a) developing comprehensive rice supply chains, and (b) managing rice supply chains effectively to support regional trading networks and food security – increasingly involving border-trade and GMS orientation. It will examine (i) transformation of rice supply chains and connectivity , (ii) rise of supermarkets (iii) value-adding along supply chains; (iii) policy issues; (iv) country comparisons; and (v) regional and global considerations (including trans-regional border trade). It also identifies effective ways for developing and managing rice supply chains in CLMV, including:

• comparing and analyzing the set of maps of the rice supply chains and trading networks, as well as trans-border trade or supply networks for each CLMV country;
• identifying surplus and deficit areas and their extent within each country and between countries with a view of facilitating cross-border trade and investments;
• examine the development of supermarkets and the extent which the key stakeholders in the supply chain have benefited and areas where marginalization have occurred ;
• consider issues and weaknesses (and strengths) along the respective rice supply chains that are germane to all the CLMV countries and those which are peculiar to specific members; and
• coming up with a set of policy issues that need to be addressed holistically, complete with accompanying recommendations.