01.12.2017 · Category: BioTrade VN Vietnam

Ethical BioTrade improves livelihoods and natural resource management

Since its inception in April 2016, the SWITCH-Asia project has already supported 3000 farmers. (Source: HELVETAS Vietnam)

Returning to nature is an emerging trend in the world as well as in Vietnam. Customers are increasingly interested in natural products, especially when it comes to food, beauty and pharmaceutical products.
Lead by HELVETAS Intercooperation, the EU-funded SWITCH-Asia project Scaling Up Of Ethical BioTrade Initiatives Within Phyto-pharmaceutical Sector In Vietnam was launched in 2016 to help Vietnam solve the challenges of decreasing natural resources, put in place an effective model of genetic resources and biodiversity management, and balance out the economic benefits and social needs with the conservation needs.
Platycodon, artichoke, kumquat, cinnamon, star anise, bahupatra, gymnema, solanum, roselle, job’s tear, soybean, Ming aralia, female ginseng are just some of the herbal plants whose biotrade is being supported by the project.
In this set of interviews, partners and beneficiaries of the project share their experiences as well as the changes occurred in these industries about 20 months after the project's inception.

The project is working in cooperationg with SMEs to develop dozens value chains of natural herbs. (Source: HELVETAS Vietnam)

Rudolf Lüthi, Head of Agribusiness and Rural Development Department, HELVETAS Headquarters

Vietnamese people have always been taking pride in the thousands of year tradition of using natural herbs to cure diseases. In fact, there are more than 5000 plant varieties in Vietnam that can be used for medicine. People from every area of Vietnam have their own remedies with their local herbs to treat common diseases. All those make up a plethora of traditional knowledge in traditional medicine. However, the majority of native herbs are either underproductive or overexploited. As a result, resources of natural herbs are dwindling, manufacturers of herbal medicines have to import herbs (mainly from China) and since they can only afford low graded herbs, they cannot be certain of the origin or quality.

This reality is calling for action: herbals plants and traditional knowledge need conservation, consumers need access to good quality herbal medicines, and people in possession of the natural resource and the knowledge need to make profit out of what they have for them to protect it. And that is the very reason why our project is on point. We bring in the BioTrade concept that applies to value chains sourcing from nature. Criteria of BioTrade include conservation of nature, financial and social sustainability, fairness, and transparency. Although BioTrade is gaining popularity internationally, in Vietnam it's still fairly new. However, we believe the policy framework for it is already there. Vietnam became a member of the Convention on Biological Diversity in 1994 and of the Nagoya Protocol on Access and Benefit Sharing in 2014. Those are the basis for BioTrade.

Project Manager Cuong at the launching workshop of "BioTrade". (Source: HELVETAS Vietnam)

Cuong Vien, BioTrade Project Manager

In the BioTrade project, we aim at manufacturers of herbal medicines all over the country as they have the necessary resources as well as the motivation to develop sustainable value chains of herbs.
First, we offer them technical and financial support in growing/wild harvesting herbs in accordance to international standards, as well as standardizing their manufacturing establishment. This component will help them improve the productivity and quality of their production.
Next, we have a range of activities to help their products perform better on the market, from coming up with a marketing strategy that incorporates commitment to BioTrade to differentiate themselves, or redesigning the packaging, digital marketing, trade promotion, and so on.
And last but not least, we have the component of policy advocacy to help favor a BioTrade upholding policy framework.

I think it's worth mentioning that all of our interventions are carefully customized to the needs of companies. We don't do one-size-fits-all because each of our companies is at a different stage in the development toward sustainability, and have different objectives. Until now, we have established partnership with 29 small- and medium-sized enterprises to develop 38 value chains of natural herbs. More than 3000 farmers have benefited from these value chains: they received trainings on sustainable farming of herbal plants, they were supported with production materials, and engaged in long-term contracts with stable pricing for their herbs.

Ms. Hue on platycodon field, a herb used in cough medicines in Bac Ha. (Source: HELVETAS Vietnam)

Nguyen Thi Hue, Head of Agricultural Extension Center, Bac Ha district, BioTrade project's local partner

Back in 2010, when we first introduced herbal plants in Bac Ha, everybody was skeptical. People here are mostly ethnic and only used to growing rice and maize. Together with a company, we came to every family, talked to them, and persuaded them to try. We gave them seeds and seedlings, fertilizers, all materials and showed them how to grow herbs. Only ten families agreed to try back then, each family in half a hectare. But when the harvest came, those ten families got paid and after deducting all expenses, they made 3 -4 times more than growing rice and maize. They were in disbelief!

It has been a long way since then. Now there are more than 200 households in Bac Ha who are growing herbs. Through our agricultural extension network, the district's government now reserves annual budget to help people with materials. We also gained supply contracts with four national companies, and counting. The BioTrade project has helped us connect to some new companies, so we hope to expand in the coming years. The project organized various trainings for our farmers, so from the technical side we are confident.

Bac Ha set such significant example in the province that local district government is determined to make herbal plants one of the priorities for agricultural reform toward sustainability.

Tuyet Anh in the company’s laboratory. (Source: HELVETAS Vietnam)

Le Thi Tuyet Anh, Director of Vietroselle company, BioTrade project's beneficiary

It will come to a time when our Vietnamese customers will question every product they buy: did the making of this involve child labor or kill innocent animals? Did the people who made this get paid sufficiently? And that is exactly our added values with BioTrade. Because of our business, we are financially capable to conserve tens of native herbs that only grow in Vietnam or in Phu Yen province. And since working with us, our farmers have been making better money, two to three times better than growing rice, they can build more stable houses, send their kids to college. And what do we get? Our farmers are willing to work with us and treat us like their family. The local government looks to us as an example for sustainable business. And our customers trust us. They're willing to buy from us even though our prices are higher than market prices. Not just a little higher, some herbs are a lot higher. Diep ha chau (phyllanthus amarus) costs 25,000 (VND) per kilo on the market and our price is 125,000 (VND) per kilo. And we still have regular orders from pharmaceutical factories.

We used to sell ingredients only, so frankly speaking we are very inexperienced with retail market. But the project helped with developing a marketing strategy for our products, which was practical to our financial and personnel situation. I am a technical person, product quality is my priority. But I have come to learn that packaging and marketing are just as important to add more values to our products. I hope by this time next year, we will be able to launch our brand new product line aiming at retail market, nationwide.

Factory workers at Vietroselle, one of BioTrade's beneficiaries. (Source: HELVETAS Vietnam)

Author: Linh NGUYEN, BioTrade project
Editor: Silvia SARTORI, SWITCH-Asia Network Facility