World Food Policy Volume 3, No. 2/Volume 4, No. 1, Fall16/Spring17 | Page 67

What shapes the governance of the dairy value chain in Vietnam? Insights from Ba-Vì milkshed (Hanoi) production and marketing. The collec- tion of fresh milk anchors on annual contracts or verbal agreements with fixed prices, or spot market exchanges. Out of 44 local collection points, IDP has the largest network (32 stations) and buy up 85% of total district out- puts. Most collection stations belong to private collectors who are supported by the companies for credit access and the provision of equipment and know- how. All private collectors are part of the IDP milk payment scheme, which gives premium to high quality milk. The companies grade the milk deliv- ered by producers through monthly quality analysis. The CFRC organizes its own collection network involving their contracted farmers 11 and then sells the milk to IDP. Semi-industrial processors also rely on collection points where they buy 6% of all the fresh milk produced locally. Business relations be- tween producers and semi-industrial processors stand on verbal agreements through those collection points. Most of the collection points are located along main roads to reduce time spent on transport from farms to the pro- cessing plants. rest is processed by small cottage pro- cessors. The semi-industrial and small processing units produce pasteurized milk, milk cakes, caramel cream, and yoghurts. Marketing and distribution of dairy products: Increasing income, rapid urbanization, changing diet habits have driven the increased milk consumption in Vietnam. The strong territorial identity of Ba-Vì (nature, tradition, culture, know-how) and quality label (certification trademark) spur the preference of consumers for Ba-Vì milk products. Industrialized products are sold by modern distribu- tion (supermarkets, convenient stores) and shops mostly outside the district, particularly in Hanoi, whereas the semi-industrial and artisanal prod- ucts are sold locally to tourists in small shops located along highways connect- ing Ba-Vì and Sơn-Tây town and to Ba-Vì national park. Family farming is still secure thanks to major constraints on access to land and capital, which precludes the development of large industrial farms. Landless and labor-intensive milk pro- Processing: Eighteen registered duction have allowed smallholders to milk processors operate in Ba-Vì. How- stabilize their business and guarantee ever, 93% of the milk is processed by two economic returns to family labor. Writ- industrial processors (IDP and BVM) ten contracts with milk collectors are who produce a wide range of industri- underlined in controlling price fluctu- al products. IDP is the only processor to use the UHT technology. Around ations and enforcing contractual link- 6% of the milk is processed by semi-in- ages between producers and processing dustrial processors (Ba-Vì Milk Cake companies. - BVMC, Ất-Thảo, Xuân-Mai, etc.), the 11 CRFC’s contracted farmers are those perform dairy activities based on rental leasing contracts. Some of their cows and all their land are leased from the CFRC. 67