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Shan Tea Feasibility Study (final draft)

Household shan tea trials, including technical requirements for developments at Phia Chang, Na Con and Na La Villages, Son Phu Commune, Na Hang District

Farmers in Na Hang planting Shan Tea on sloping land

PARC Project VIE/95/G31&031 Creating Protected Areas for Resource Conservation using Landscape Ecology

October 2000

Shan Tea Feasibility Study

This report is prepared for the Government of Viet Nam, within the framework of the GEF and UNDPfunded project VIE/95/G31&031 Creating Protected Areas for Resource Conservation using Landscape Ecology (PARC). The authors are Do Thi Ngoc Oanh and Phuong Thi Nam. Citation: Do Thi Ngoc Oanh and Phuong Thi Nam, 2000, Shan Tea Feasibility Study, PARC Project VIE/95/G31&031, Government of Viet Nam (FPD) /UNOPS/UNDP/Scott Wilson Asia-Pacific Ltd., Ha Noi.. The Global Environment Facility (GEF), United Nations Development Programme (UNDP) and the Ministry of Agriculture and Rural Development Forest Protection Department, Ministry of Agriculture and Rural Development United Nations Office for Project Services (UNOPS) Scott Wilson Asia-Pacific Ltd., The Environment and Development Group, and FRR Ltd. (Site Manager: L. Fernando Potess) Forest Protection Department, Ministry of Agriculture and Rural Development

Project Funding: Implementation: Executing agencies:

Copyright: Available from:

The report reflects the personal points of view of the authors and does not necessarily represent those of the United Nations Development Programme, or those of the Forest Protection Department, or those of their employing organisations. This is an English translation of the original report written in Vietnamese. Due to the large inputs required to proof-check all reports submitted through the PARC Project, some inaccuracies and errors may occur in the translations. In case of doubt, please refer to the original Vietnamese version of this report. This internal report of the PARC Project was written to support project objectives. It is provided as a reference on components of the landscape ecology approach taken by the project. As a result of project progress, some of the issues and activities within the report may have been superseded at the time of its electronic publication. Reproduction of this publication for educational or other non-commercial purposes is authorised without prior written permission from the copyright owners provided the source is fully acknowledged. Reproduction of this publication for commercial purposes is prohibited without prior written permission of the copyright holder.


Shan Tea Feasibility Study

Table of Contents
Foreword.................................................................................................................................. 3 Summary.................................................................................................................................. 4 1 2
2.1 2.2

Introduction ..................................................................................................................... 5 Study method.................................................................................................................. 6

Time and places of study.......................................................................................................... 6 Team of study and used methods ............................................................................................ 6

3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9

Findings .......................................................................................................................... 7
An overview of present shan tea production in Phia Chang, Na Con and Na La villages ....... 7 A description of district and provincial government plans for development of the shan tea as forest species under the 661 program ......................................................................... 10 Economic feasibility ................................................................................................................ 10 Environmental aspects ........................................................................................................... 12 Marketing aspects................................................................................................................... 13 Geo-physical characteristic of the target area and physiological requirement for shan tea cultivation.......................................................................................................................... 13 Policies regarding the maximum allowable tea plantation size .............................................. 14 Production information on local production of shan tea harvest............................................. 14 Silvicultural requirements for shan tea production in both form (Tea garden and Tea forest)...................................................................................................................................... 15

3.10 Seed and seedling preparation:.............................................................................................. 16 3.11 Knowledge on tea production that local people need to have: ............................................... 17 3.12 Design for tea trials ................................................................................................................. 17 3.13 Marketing strategy for shan tea production in Son Phu.......................................................... 18 3.14 List of special training requirements for success of shan tea production and processing equipment and techniques requests....................................................................................... 19

4.1 4.2

Conclusions .................................................................................................................. 20
Advantages of producing shan tea in Son Phu ...................................................................... 20 Challenges.............................................................................................................................. 20

References............................................................................................................................. 21 Appendix 1: Establishment and management cost for 1,000 m2 of tea garden in the first 3-year..................................................................................................................................... 22 Appendix 2: investment for soybean Intercropping with in 1,000 m2 of tea garden............... 23 Appendix 3: Net profit from 1,000 m2 of tea garden in Year 4, 5, 6 and later years............... 24


Shan Tea Feasibility Study

The project Creating Protected Areas for Resource Conservation using Landscape Ecology (PARC) is a joint effort of the Socialist Republic of Vietnam (Ministry of Agriculture and Rural Development-MARD) and the United Nations Development Programme (UNDP). The United Nations Office for Project Services (UNOPS), implements the project in collaboration with the Forest Protection Department (FPD) within MARD. Field implementation is carried out by a Sub-Contractor consortium of Scott Wilson Asia-Pacific Ltd., The Environment and Development Group, and Forest Renewable Resources Limited, in cooperation with provincial, district, and commune government officials, protected area staff, and local communities. The PARC Project is co-financed by the Global Environmental Facility (GEF) and UNDP/TRAC, and falls under the GEF operational strategy for conservation of biological diversity. The PARC Project seeks to develop an effective demonstration model for conserving Vietnam's considerable biological diversity heritage through habitat protection. Using a landscape ecology approach, which links a variety of land uses into a matrix of strict protection, buffer, and forest rehabilitation areas, the project will help alleviate threats to biological diversity through integrating conservation and development objectives. Two locations have been chosen to test the PARC Project model. The first site is located at Yok Don National Park, in the Central Highlands region. The second site corresponds to Ba Be National Park (Bac Kan Province) and Na Hang Nature Reserve (Tuyen Quang Province) in Northern Vietnam. A focus of the PARC Project is on implementing tangible conservation and development programs through a participatory approach involving local communities as well as concerned government officials. Therefore, the implementation of program activities is used as a tool to build local capacities. Given the need to strengthen the organization of the Ba Be National Park and Na Hang Nature Reserve, the project emphasizes the building technical, managerial, and field operational capacities of protected area staff. Particular attention is given to all planning and implementation aspects of ecological monitoring, conservation operations, and community extension services, including alternative income generation. Local communities play a vital role in all project activities. All project programs, therefore, follow a participatory approach, whereby local people are encouraged to express their needs, expectations, and concerns about project activities, and are thus able to participate in project planning and development. This Document This report on the Feasibility of Shan Tea production has been produced for the PARC Project site at Ba Be National Park and Na Hang Nature Reserve. The document constitutes the Mission Report, and feasibility study result, from the PARC Shan Tea Forest Products Specialist (Do Thi Ngoc Oanh Thai Nguyen University and Phuong Thi Nam Song Lo Tea Enterprise, Tuyen Quang). Recommendations presented herein should be seen as general guidelines for marketing and development of non-timber forest products available in the Ba Be and Na Hang regions. It is likely that PARC Project strategies will include guidelines and recommendations provided herein. However, some of the guidelines provided may change in scope, timing, or implementing strategy. Reasons for possible modifications include the biodiversity conservation priority of the PARC Project, the sustainability premise in all PARC Project activities, and the likely changes of local biophysical and socioeconomic settings resulting from PARC Project activities. Site Task Manager PARC Ba Be/Na Hang

Shan Tea Feasibility Study

Shan tea is native species in forest of Na Con and Phia Chang villages. Villagers collected shan tea seedling from forest to plant in their home garden. Tea area of the villages was very small because tea planting was for household demand only. Tea production in these villages was very poor in term of production and technical aspect. These villages have good conditions to grow tea such as soil, climate and existing native shan tea. Shan tea growing in these villages has promising future as it has economic feasibility and strong market demand. Provincial and district government had planned to improve shan tea production in Na Hang and Son Phu commune. Two tea trials were designed to establish demonstration in villages. However, villagers need training on tea production techniques. Shan tea growing was a need of people in Na Con, Phia Chang and Na La villages. Native shan tea in surrounding forest was one of evidence that shan tea can be grow in these village. However, feasibility study is needed to make sure that shan tea planting will meet conservation objectives of PARC project and generate income for local people to cover food shortage period.


Shan Tea Feasibility Study

1 Introduction
Shan tea (Cammellia sinensis var.shan) is considered as valuable source of Vietnam. It is a native and evergreen species in the northern mountainous area of Vietnam. Shan tea has high quality and yield. Shan tea is preferable, because it is considered as organic product of tea. To protect environment and improve income of mountainous people shan tea was recommended as one of forest species to be planted. Recent PRA and VDP exercises in the Son Phu Commune - Na Hang District have pointed the possibility of commercial production of shan tea in Phia Chang and Na Con villages. Shan tea is native species in the jungle forests surrounding these villages. The markets have strong demand on shan tea but the shan tea production in Son Phu and local knowledge are very poor. Shan tea development would help achieve conservation objectives of the PARC Project if the crop is produced in an environmentally sustainable manner. There are several reasons for that such as Shan tea would replace maize and rice on upland areas of these villages when soil fertility is too poor to grow food crops. Thus, local people have more choice to supplementary income to cover food shortage period. They do not have to go to forest to collect forest products for their survivors. Tea is a permanent crop once it is grown in bush form on uplands is considered as good manner to protect soil erosion. Objectives This study was carried out to: 1. Collect sufficient information on available markets, environmental issues, socioeconomic opportunities, and government policy and regulations, to allow PARC Project to determine the feasibility of intensifying shan tea production in Phia Chang, Na Con and Na La villages. 2. Provide PARC Project with a breakdown of silvicultural and management recommendations to initiate trials of shan tea production, if the economic feasibility proves positive.


Shan Tea Feasibility Study

2 Study method
2.1 Time and places of study

Times: The study was carried out from 13 to 19/10/2000 and from 26/10 to 6/11/2000 Places: Three villages: Phia Chang, Na Con and Na La in Son Phu Commune, and functional departments of Na Hang district, and Tuyen Quang province. 2.2 Team of study and used methods

RRA method was used to collect information for this report. The working team consisted of two tea experts: 1. Mrs. Do Thi Ngoc Oanh - Thai Nguyen Agriculture and Forestry College - Team leader 2. Mrs. Phuong Thi Nam - Song Lo Tea Enterprise, Tuyen Quang Province List of offices which had discussion with study team:
Provincial Forest Protection Department Investment and Planning office Forestry office of Provincial Agriculture and Rural Devel. Dep. District Forest Natural Reserve and Forest Protection Department District Agriculture & Rural development Department District People Committee People Committee of Son Phu Commune Na Hang Forestry Enterprise Village Chiefs Phia Chang, Na Con and Na La Households who have shan tea in villages Tea interest group in Na Con village Shoppers in Na Hang town and in villages Tea producers in Nang Kha commune, Na hang

Meeting with tea interested group in Na Con Village Meeting with district officers On the last day of field work we had a meeting with District officers, Vice Chairman of Son Phu commune and project staffs to discuss on proposals and feasibility for tea production in three villages. List of participants is provided in the annex.


Shan Tea Feasibility Study

3 Findings
3.1 An overview of present shan tea production in Phia Chang, Na Con and Na La villages Shan tea is native species


Shan tea is native species in the jungle forests surrounding surveyed villages. It appears in forests named Phia Hooc, Phia Khau and Khuoi Tau. In Phia Hooc we saw tea tree of average 5-8 m high and 20-30 cm in diameter. It is said that 3-4 years before in Phia Hoooc forest there were tea trees with circumference of circle more than 150 cm. In about 40 minutes in Khuoi Tau forest we found three big tea trees. The circumference of a circle of the biggest tea tree is 270 cm. It is about 11 m tall. The tree has four main-stems. Their circumference at 1.3 m high from ground surface is 100 cm; 110 cm; 90 cm and 65 cm. The tree was pruned to have more tea shoots and leaves for harvesting. Our guider, Mr. Trieu Phuc Vuong (Na con village), said that about 20 years ago, 12 peoples claimed up this tree at the same time to collect tea shoot and leaves. Each person plucked about 5 kg of tea shoots. The circumference of two others trees were 160 cm (at 40 cm high) and 180 cm (at 1 m high). They were about 10 and 11 m tall. About 20 years ago when villagers did not plant tea in village they collected tea from forest for household consumption. 3.1.2 Tea production in three villages Tea area is very small To avoid long traveling to forest for collecting tea villagers planted tea and saved native tea trees on their field during forest opening for agriculture. Thus tea in the villages can be found in home garden, uplands and fallow fields. The tea area is very small because it is used for household consumption not for sale. There is low demand on tea that villagers did not pay attention on tea production. About 20% to 30% of households in these villages have tea in their home gardens. Each household had 7-15 tea plants that are planted by wild seedling. Tea was planted about 1520 years ago. Tea has been unattended crop. The sources of seedlings were different in three villages. Phia Chang and Na Con people collected seedlings from Khuoi Tau and Phia Hooc forest, border area of Tuyen Quang and Bac Kan province. Na La people collected seedlings from Sinh Long (their previous village). It means tea genotypes are high diversity. On upland field and fallow fields, native tea plants are left to grow. They are about 5-6 m high and 10-15 cm in diameter. Tea grown for household consumption only Villagers planted tea for household consumption only. It is a reason they have very small tea area. On the other hand their tea quality was too low to sale. The "biggest tea producer" is in Na La village - Mr. Truc Y Thong. He has about 15 plants. In 1999 he sold about 10 kg of dry tea with price of about 20.000 VND/kg. He said it was very difficult to sale because of low quality tea. Before August 2000 (when Phia Chang and Na Con received new tea processing dryer form PARC) nobody in Phia Chang and Na Con had tea to sale. The reason of low quality tea was because of poor processing techniques. Now tea quality improved as a result of using new tea dryer and new processing techniques. Villagers are happy with this improvement.

Shan Tea Feasibility Study

Villagers have been drinking tea in three types: 1. Fresh tea: boiling fresh and mature leaves 2. Dry tea: panning, curling and drying. 3. Dry young flower tea: panning and drying The fuel wood consumption implication did not seem a problem in the villages. In other words, fuel wood consumption for tea processing was small in comparison with fuel wood using for heating. People do tea processing two times per year with small amount per household. One of the "heavy" tea drinkers in Phia Chang said his family consumed 2 kg of dry tea per year. Means that about 6 kg of firewood was needed for processing. In present, it was estimated that the total tea production of three villages was about 150 kg fresh tea or 30 kg of dry tea. If current fuel wood consumption was twice as much as consumption of new dryer the estimated firewood for processing above 30 kg of dry tea could be need 90 kg firewood/year. (See more detail in Table 4) Tea grows well even without any input Most of tea trees grow vigorously even without input. Tea trees have dark green color and vigorous branches. The common plant type was single plant. Plant had branches at about 1.5- 2 m high. Its average diameter was 10-15 cm. There are 3 main shan tea species. Tea plants in these villages can be classified as shan tea because they have deeply serrated and long leaves; and long and white, hairy shoots. They are 3 different species as follows: 1. Dark green, deep serrated and thick leaves, and long shoots; high density of shoots 2. Light green leaves, and light violet shoot; low density of shoots 3. Yellow green and thin leaves, low density of shoots For planting one should collect seeds from the first species because commonly this type has good taste and harvest. Tending regimes and harvesting As mentioned above, each household planted few tea trees for household consumption. The distance between trees is 2 x 2 m. There is no input on tea production. Tending consisted of weeding and pruning only. People do pruning and weeding for plants that has high yield. Tea was harvested two times per year in April and September. Because tea was not pruned regularly people have to clime up to a tree to do plucking. There were two ways. If tea tree was not pruning or has long stems people cut down stems and then picked tea shoots. If tea tree was pruned they stood on tea tree and plucked tea shoots. The picking part consisted of 2-4 young leaves with about 20-25 cm long of shoot. Tea yield was 2-3 kg fresh tea/plant/picking time. A big plant can provide 5-6 kg/time. This is high potential yield. Tea processing was a problem in these villages. Quality of tea in these villages was very low because of poor processing techniques. The common method of tea processing in the villages as follow: Harvesting tea was cut in to 2-3 parts Panning Curling by hand; Partly drying on pan or fully dry With partly drying tea: dry on a bamboo frame above cooking place.


Shan Tea Feasibility Study

In 1999 Mr. Trieu Phuc Tien in Na Con tried to sell tea in Na Hang town but nobody bought. Villagers knew that they could not sale their tea because of low quality tea. In August 2000 PARC project provided new tea processing dryer and training on tea processing. Now by these enforces Phia Chang and Na Con villages produce much better tea than that before. This change was recognized by villagers, Na Hang district officers and other drinkers. After that some offices in Na Hang town order tea but villagers could not offer because the amount of tea was too little they want to save for their own consumption. It was hardly for us to find 1 kg of tea with price of 30.000/kg (higher price than in Na Hang town) in Na Con where the new dryer installed. Propagation ability: Tea area can be extended by local source from seeds and vegetation propagation. The number of tea plants in homegarden of Phia Chang and Na Con was about 200. Mr. Dang Van Quy in Na Con collected 10 kg seeds from one plant. If each plant provides 10 kg of seed means the source of seeds would be 2000 kg. But note that if plant has a lot of seed means its potential shoot and leave yield is low. Therefore, plants with less seed and vigorous vegetation grow is the good one to collect seed from for propagation. Vegetation propagation can overcome seed limitation but it required trained techniques. In bush form vegetation propagation ability is 10 times as much as that of seed propagation. Less seed and vigorous vegetation plants are good for cutting stock. Changes of local attitude on tea production Villagers have been happy with the improvement of tea quality as a result of using new tea dryer and processing techniques. By that they changed their attitude on tea production. We met villagers who wanted to invest on tea production. We found about 10 households in Phia Chang and Na Con collected tea seeds to extend their tea area. It could be good ideal to select these households to do tea trials. One shopper in Phia Chang wanted to buy her own dryer for renting. Mr. Trieu Phuc Minh in Na Con wanted to borrow 1 million VND from PARC project for his tea group to by fresh tea for processing. Some peoples do weeding for tea on fallow maize field like Mr. Dang Tien Thong in Na Con. The ideal of providing new processing technique accompany with new tea processing dryer were excellence ideal to encourage people to grow more tea. It is good ideal if the project offers Mr. Trieu Phuc Minh's wish because by this encourages villagers pay more attention on tea production and know more about potential of tea production and they can replace food crop on steep land by growing permanent crop such as tea. These were positive signs that people recognized promising future of tea production. We had meeting with tea interest group in Na Con. The findings from this meeting were: Villagers wanted to plant tea to gradually replace rice and maize on degraded land. Because, in the next few years if they do not find any potential crop to grow on rice and maize field villagers will face more hunger. Some people prepared seeds to grow tea in the end of 2000 or begin of 2001 but they did not know how to plant properly. They wondered if forest protection department allow them to grow tea on steep land or not. (Forest land was not allocated in these villages) Each household can grow about 500-600 m2 tea in bush form and 2000-3000 m2 of tea in tree form (under 661 program). Fuel wood could not be a problem because they can use grass for tea processing. The amount of tea production will not be big. Thus there will be not a big deal on fuel wood. (See more detail in page 15).


Shan Tea Feasibility Study


Limitations on tea production in these villages Lack of techniques in tea production from planting to processing and storage Low knowledge in farming such as using and making manure, soil degradation protection... Steep land Land tenure: forest land was not allocated Free grazing Lack of fertilizer Low income and food shortage Poor infrastructure


A description of district and provincial government plans for development of the shan tea as forest species under the 661 program

Shan tea is considered as forest species under reforestation program at national and local levels. Provincial, district and commune authorized agencies all have policies on growing shan tea under the 661-reforestation program. Announcement of The Provincial Communist Party dated Mach 2000 wrote that: Tea can be planted as forest species in Sinh Long, Hong Thai ... Na Hang district. October 2000 Provincial People Committee approved the proposal of The Na Hang forestry enterprise. This was proposal of reforestation by shan tea in Sinh Long commune. Shan tea will be planted in: Protection forest: on barren hills with slope degree from 25 to 400. It can be pure forest of shan tea with forest shading species; Regeneration forest: with density of shan tea is 1,100 plant/ha; and interval between trees is 3 x 3 m. Resolution of the District Communist Party on November, 2000 pointed: From year 2001 to 2005 Ha Hang will plant 1,500 ha forest of shan tea. 3.3 3.3.1 Economic feasibility Growing tea provides more income than growing corn, cassava and rice

In these villages tea can be grow in three forms to make: agroforestry tea garden (bush form), tea forest (tree from) and tea hedgerow (live hedgerow to control erosion). The difference between three forms as follows:
Tea in bush form TEA GARDEN - intensive grow with fertilizer application and intensive tending high density of tea early and high harvest Tea in tree form TEA FOREST natural grow low density of tea late and low harvest Tea hedgerow TEA HEDGROW -scatted row of tea on upland fields -bush form -additional income

(See more detail of planting techniques on page 17)

Agroforestry tea garden (TEA GARDEN): tea in bush form intergrows with native species. The objective of agroforestry tea garden is generating income so it requires
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Shan Tea Feasibility Study

fertilizer application; yearly pruning and monthly harvest. The density of tea is 17000 plants/ha whereas the density of native species is 200 plant/ha. Agroforestry tea garden will be planted at 1/3 of hill at bottom part, native species leaves to grow at 2/3 of top hill. The estimates yield will be 300 kg fresh tea/1000 m2 in the year 4 (more detail on table 2) Tea forest (TEA FOREST): tea in tree form will be planted under reforestation program. It is mixed forest in which tea density is 2500 plants/ha and native species density is 200 plants/ha. If it is needed (on barren land) native fast-growing species will be planted. The main objective of tea forest is conservation. But it provides income in the year 6 with the yield of 120 kg fresh tea/ 1000 m2. Tea hedgerow: two rows of tea in bush form to make live hedgerow. The distance of tea will be 0.3 x 0.5. The objective of tea hedgerow is erosion control. It will provide the yield of 150 kg fresh tea/10002 of tea hedgerow in the year 5. If tea planted in bush form in the same area of land income from tea growing is 3 times as much as that of rice, corn and cassava.

Table 1: Comparison of income from tea, rice, corn and cassava in 1000 m2/year (VND) Indicators Yield/1,000 m2 (kg) Price (VND) Income (VND)
Note: Fresh tea yield/year is calculated for the first harvesting year (after planting 3 years). It could be 7 to 10 crops/year. Tea yield will increase in the following years. Corn, cassava and rice yield taken form PRA report (3/2000) Price: current price in Tuyen Quang town and Na Hang

Tea (TEA GARDEN) 300 2,000 600,000

Rice 135 1,500 202,500

Corn 200 1,200 240,000

Cassava 810 250 202,500

Income from tea on 1,000 m2 can buy 400 kg of rice (which needs 3,000 m3 if growing rice), which is enough for one person per year. On the other hand with the current farming practice (no fertilizer and no erosion protection) in the next 2-3 years villagers cannot grow rice any more (because of degraded land, no harvest). Villagers recognized this problem and they wish if they could find any crop to replace upland rice. Mr. Quy in Na Con village said if they could not find any crop to replace upland rice they will face more hunger in very near future. 3.3.2 Benefit of growing agroforest tea garden (TEA GARDEN)

The objective of growing agroforest tea garden is generating income; whereas the objective of growing tea in tree form is conservation thus we make cost benefit analysis for the first fives of growing tea in bush form. In the first three years tea plant is small so it cannot fully cover soil surface. To generate income, reduce weed, soil erosion and improve soil fertility soybean will be planted between rows of tea (the area of soybean is 1/3 of tea area = 300 m2). Two rows of soybean will be planted between two rows of tea.

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Shan Tea Feasibility Study

Table 2: Cost benefit analysis for 1000 m2 of tea in bush form intercrop with soybean (year 1-6)


Investment for Tea Soy bean 150.0 150.0 150.0 0.0 0.0 0.0 450.0 Total 595.0 396.6 416.6 426.6 468.6 497.3 506.5 3,307.2

Income from Tea 0.0 0.0 0.0 0.0 1500.0 1752.6 3000.0 6,252.6 375.0 375.0 375.0 0.0 0.0 0.0 1,125.0 Soy bean Total 0.0 375.0 375.0 375.0 1500.0 1752.6 3000.0 7,377.6

Net profit
(Thousand VND)

Establishment Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Total

595.0 246.6 266.6 276.6 468.6 497.3 506.5 2,857.2

-595.0 -21.6 -41.6 -51.6 1031.4 1255.3 2493.5 4,070.4

Note: Tea forest will be harvested at 6 years after planting.


Environmental aspects Control erosion Save forest. There is no threatening to forest because growing tea by using new processing equipment firewood is not necessary. Firewood for processing will not be a problem because by using new tea dryer grass can be used instead of firewood. On the other hand tea production will not big. When villagers collect grass (lau and lach) from forest trees will grow better because of less competition with weed. People in Tan cuong commune -Thai Nguyen province used grass instead of firewood for tea processing. Grass are lau (Sacchrum spontaneum) and lach (Miscanthus chinensis). Firewood requirement to process 10 dry tea by new dryer in Tan Cuong, Thai Nguyen as follow. 30 kg of grass lau (Sacchrum spontaneum) and lach (Miscanthus chinensis). or 15 kg of firewoods (branches with diameter of 3 cm)

Table 3 : Estimated fuelwood consumption to dry tea of 1000 m2 (in agroforestry tea garden)

Dry tea (kg) Grass (kg) Firewood (kg)

Year 4
60 180 90

Year 5
90 270 135

Year 6
100 300 150

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Shan Tea Feasibility Study

It is estimated that in year 6 when tea garden gains 6 ton/ha and tea in tree form gains 1.2 ton/ha there will be bigger amount of tea production. If every household in 3 villages (150 households) plant tea the estimated fuelwood consumption for tea by using new tea dryer as follow:
Table 4: Estimated fuelwood consumption for tea processing in year 6 in three villages

Items Tea garden area fresh yield dry yield fuel by + grass + firewood Tea forest area fresh yield dry yield fuel by + grass + fuelwood 3.5 Marketing aspects

1 household 600 m2 360 kg 72 kg 216 kg 108 kg 3000 m2 360 kg 72 kg 216 108

150 households 9 ha 54 ton 10.8 ton 32 ton 16 ton 45 ha 54 ton 10.8 ton 32 ton 16 ton

Tea markets in Tuyen Quang and Na Hang town have two main types of tea. They are Trung Du tea and Shan tea. Trung du tea is locally produced, but shan tea is imported from Ha Giang province. Shan tea is considered as "high class" tea because it has better quality and more expensive in comparison with local tea. Shan tea is preferable tea. It occupied about 80% tea market in Tuyen Quang (CECI, 1998) In 1999, one shop in Tuyen Quang town sold 600 kg of shan tea/month with average price of 25,000 VND/kg. The shopper said it is very easy to sale shan tea because Trung du tea had bad reputation on pesticide residual. In Chiem Hoa town one shop sold 600 kg tea/month. In Na Hang town, there are about 6 shops that sell tea. Each month they sold about 240 kg dry tea (or 3 tons/year). More than 50% of tea was Trung Du tea even though people prefer shan tea. In October 2000 price of Trung du tea was 17,000 VND, whereas price of shan tea was 25,000 VND. Tea price was changed from 20,000 to 30,000 VND in a year. 3.6 Geo-physical characteristic of the target area and physiological requirement for shan tea cultivation

Na Hang located in Viet Bac - Hoang Lien Son tea production area that is classified by Tea Research Institute. This area is important tea production area of Vietnam. Its climate conditions are tropical moon soon with high humidity. They are suitable for tea production.

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Shan Tea Feasibility Study

Table 5: The comparison of suitable characteristic of target area for tea cultivation

Average temperature - Max. temp. - Min. temp. Annual rainfall Humidity

18-25 C 40 C 60C 1,500-2,000 mm 80-85%
0 0

Na Hang
22 38 0-6 1,800 80

The above figures show that it is suitable to grow shan tea in Son Phu, Nahang. The evidence is native shan tea in forest of these villages. Besides, there are species, which are indicator for planting tea in these villages such as mua (Melastoma candidum), co cut lon, ferns etc. 3.7 Policies regarding the maximum allowable tea plantation size

We discussed with Mr. Phong in Planing and Investment Offices of the Provincial Agricultural and Rural Development Department of Tuyen Quang. According to him at household level, there is not maximum allowable plantation size. People can grow as much as they can. We discussed with Mr. Ngo The Kim, Vice-chairman of Nahang District People Committee regarding allowable tea plantation size. We received written answer from People Committee as follows: 1. People in Phia Chang, Na Con and Na La are allowed to grow intensive tea in agroforestry type on agricultural land of slash and burn fallow land which was identified in project's PRA report as follow: Phia Chang: Na Con: Na La: 14 ha 12 ha 13 ha

2. Planting sites are current farming land with slope degree more than 250. Tea has to be grown on 1/3 of the hill at the below part; whereas forestry species will be planted on 2/3 of the hill at upper part. 3. Growing tea as forest species in 661 program in areas closes to residential area and have good soil with slope degree from 25-400 4. The size of tea area depends on labor and land ability of a household. 3.8 Production information on local production of shan tea harvest

According to Do Ngoc Quy (1998) old shan tea plants are common in mountainous areas where ethnic minority such as Dao, H'Mong and Thai are living. The old shan plants appear on areas with elevation above 200 m from sea level. The biggest production area (produces 1,000 ton of dry tea/year) is Tay Con Linh, Ha Giang province (border of Tuyen Quang) and the second biggest area (produces 60 ton/year) is Suoi Giang, Nghia Lo province.

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Shan Tea Feasibility Study

Table 6: Shan tea yield in some areas (ton/ha)

Tan Trao enterprise (Tuyen Quang) Selected clones Ha Giang province Moc Chau enterprise

Bush form
8-15 4,5-9,5

Tree form

6 10-15

Tea planted in 1961, highest yield was 18 ton/ha which obtained in 1976; recently years: 8 ton/ha Vegetation propagation ability of selected clone: 70% survival seedlings. Density of 2,500 plants/ha; 4-6 harvesting/year; 6 ton/year/ha x 2,000 VND/kg = 12 million/ha. Labor forces for harvesting: 1.2 million/ha; weeding 0.5 million/ha and transportation 0.5 million/ha; profit 9.8 million/ha (Do Van Ngoc, 1998) The 39 ha of shan tea grown in 1962 in Moc chau had yield of 17 ton/ha in year 1999 (Do Ngoc Quy, 2000)


Silvicultural requirements for shan tea production in both form (Tea garden and Tea forest).

Table 7: Benefit comparison of tea grown in two forms Objectives Conservation Economic Tea forest (under 661 program) - Save more native species - Lager area of covering - Low investment - Longer establishment time to harvest (can be harvested at 6 year after planting) - Low yield (120 kg/1,000 m )

Tea garden Save native tea genotypes, Saving land for agriculture and forest - Higher investment - Sooner to harvest (harvested at 3 year after planting) - Higher yield: 300 kg/1,000 m2 - Have income in the first three years by Intercropping legumes

Table 8: Silvicultural requirements to grow shan tea (for 1,000 m2)

Planting site

Tea forest (under 661 program)

- slope degree 25 -400 - regeneration forest - barren land - near village

Tea garden (agroforest tea garden)

-plant on 1/3 hill (with slope degree more than 250) at bottom part - food crop production area - close to a house, home garden -relatively rich fertility soil -soil depth is more than 100 cm -slashing and in-row tillage (about 30% of field is cultivated) along contour line -save native tree species above 2 m tall -dig ditches along contour lines:

Soil requirement Site preparation

-relatively rich fertility soil - soil depth is more than 80 cm -partly weeding in planting place of 1 m2 size -save native tree species above 2 m tall - minimum soil preparation - 15 -

Shan Tea Feasibility Study


Tea forest (under 661 program)

-dig planting hole: 30 x 30 x 30 cm

Tea garden (agroforest tea garden)

30 x 30 cm 1,700 1.2 x 0.5 5.5 1 ton 2 ton 60 kg 1 ton 2 kg 2 kg/year 20 plants

Density Distance (m) Investment Seed includes 10% reserve (kg) - Fertilizer (kg): + Animal manure + Wild green manure + Phosphorus Mulching Shading species Legume seeds Shading tree species (if needed) either: xoan (Melia azedarachta), mo (Mangletia glauca) and doi(Michelia Planting material Planting time Tending regimes

250 2x2 0.8 None None None None None None 20 plants

By 10 month old seedlings September - Weeding around plant 30 cm after planting 1 month. After that weeding by slashing every 2 months

By seeds or cutting seedlings By seeds in Oct-Nov By seedlings in Mar or Sep - Weeding around tea plant 50 cm every month by hoe - Pruning every year - Fertilizer application

Seeds should be collected in vigorous plants, which have high yield. Seed selection criteria: pure, clean, ripe, big and heavy (seed should has 14 mm in diameter); water proportion from 28-30%, germination rate is more than 75%. Native forest tree above 2 m will be save as shading tree for tea. After that they will be pruned to have properly sunlight for tea. At mature stage it will have density of 200 trees/ha. Fast-growing tree species are recommended to plant as shading tree if needed. Shading trees will provide firewood or timber. 3.10 Seed and seedling preparation: Seed preparation: collect seed from good yield plants. Fruit, which has brown color, is ready to collect. When tree has 4-5% fruit opened, it is ready to collect fruit. Do not collect unripe ones. October is time to collect seed. Storing fruits in shading area avoiding direct sunlight and rain. Fruit layer is not more than 10-15 cm thick. After 2-3 days fruit opened itself. Seed selection: putting seed under water, remove floating ones. Sowing in October or November.
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Shan Tea Feasibility Study

Nursery: it is better to establish a nursery for an interested group not individual. Depending on situation maybe one village has 2-3 nurseries. Nursery should have roof in the first few months. 3.11 Knowledge on tea production that local people need to have: 1. Soil erosion protection 2. Planting techniques: site preparation seed collection sowing 3. Tending of: replace dead plants intercroping weeding fertilizer application pruning plant protection 4. Harvesting 5. Processing 6. Storing 3.12 Design for tea trials TEA FOREST in barren hill. Planting site: relative fertile soil, soil is more than 80 cm deep; slope degree 25400, close to village Density: 250-plants/1,000 m2 with distance of 2 x 2m. Shading trees: By Saving native forest species above 2 m, or fast growing tree will be planted if needed. The trees will also provide firewood and timber for construction. At mature stage it will have density of 20 plants/1,000 m2 Land preparation: clearing along contour line (1 m width), save native forest trees above 2 m tall for shading. Digging hole size 30 x 30 x 30 cm. Weeding by hoe around a hole 30 cm width Nursery: sowing in plastic bag size: 8 cm in diameter and 16 cm high. Plant when seedling is 10 months old. Establish nursery near planting site to reduce transportation problems. Planting time: September - October Planting techniques: watering seedlings before planting; remove plastic bag; place seedling upright in the hole, filling up the hole. Scrape topsoil from the area around the hole and use it to fill it up after planting the seedling. Gently step on the soil around the seedling to tamp it down firmly. Tending of: weeding around seedling 30 cm after planting 1 month and 2 month. Then weeding every 3 months in the first 3 years.
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Shan Tea Feasibility Study

TEA GARDEN growing The agroforestry tea garden consisted: 1. Native forest species at 2/3 of top hill 2. Tea is grown at 1/3 of bottom hill 3. Native forest species mix with tea plants 4. Soy bean intercropping with tea during the first three years Objective: produce organic and high quality tea "special shan tea" to increase income for farmers to buy foods instead spending more land to grow food crops. Planting site: agricultural of slash and burn fallow lands; close to a house; fertile soil; soil is more than 1 m deep. Slope degree is more than 250. Growing tea on 1/3 of hill at bottom part. Forestry species will be planted or regeneration of native forest species at 2/3 of top hill. Density: 1,700 plant/1000 m2. Distance 1.2 x 0.5 m. Save native forest species above 2 m on planting site as shading trees. At mature stage shade tree will have density of 20 trees/1000 m2 Soil preparation: sowing Tephrosia candida in March -April on rows; distance between rows is 1.2 m. Before planting time 1 month dig ditches with size: 30 x 30 cm Fertilizer: 1 ton of animal manure; 2 tons of green manure; 60 kg of phosphorus. Put fertilizer right after finish ditches digging. Fill up ditches. Timing and sowing: sowing in October- November. Seed selection mentioned above. Digging hole with 3-5 cm deep, 5-6 seed/hole. Cover seed with soil. Mulching: using grass to cover soil surface to suppress weeds and save water. Mulching layer is 10 cm thick (after pressing); 30 cm width each size. Put grass between sowing rows. Weeding: around plant 1 month after it emerged. Intercroping: by soybean between rows of tea to generate income; improve soil fertility; and reduce weeds.

3.13 Marketing strategy for shan tea production in Son Phu Shan tea has good reputation in Vietnam Market demand on shan tea has been increased (Prime Minister decision, 1999) because it has good quality. Besides, it is considered as organic product. Shan tea is considered as "special tea" because of the following reasons: Good quality material (better than Trung du tea - common tea in Vietnam) It is product of mountainous people means low or free of chemical inputs. Thus, customers considered it as "organic product" - good reputation. Reasonable price.

CECIs study (1998) on green tea market found that shan tea of Ha Giang has considered as "special tea". Price and demand on "Special Tea" has increased. Some officers in Na Hang had tasted Na Con tea and Hong Thai, Sinh long (Na Hang) tea found that Na Con tea had better taste and smell than those of Hong thai. Once variety selection being done may create new good clone of shan tea from Son Phu.
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Shan Tea Feasibility Study

Marketing strategy for shan tea to be produced in Son Phu: Producing "special tea" to exploit ecological advantage, suitable conditions and available labors. Strategies are: Produce high quality of tea Production is not too large area but in household level to produce organic tea.

Customers of Son Phus tea will be institutional offices and well-of people in Na Hang, Tuyen Quang and others. According to CECI report (1998) the governmental offices are big tea consumers in Vietnam. A tea shopper in Na Hang estimated each month Na Hang district offices consumed about 40 kg tea. Provincial and Nahang customers consume Na Hang tea will save transportation cost. If 50% of agricultural of slash and burn fallow lands in three villages grow tea the villagers will have about 20 ha tea. With yield of 600 kg dry tea/ha/year (3 ton fresh tea/ha) the 20 ha of tea will produce about 12 tons of dry tea, or value of 150-180 millions dong (tea price of 25,000 dong/kg) which is equivalent of 10 tons of rice. Na Hang and Chiem Hoa will consume half of these products, the rest will provide for Tuyen Quang town markets. 3.14 List of special training requirements for success of shan tea production and processing equipment and techniques requests Training on: nursery making compost soil preparation and planting Caring of: fertilization, crop protection and pruning harvesting processing and storing dryer circling

Processing equipment:

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Shan Tea Feasibility Study

4 Conclusions
4.1 Advantages of producing shan tea in Son Phu 1. Climate and soil conditions are suitable (page 13) 2. Shan tea is native species (page 4) 3. Meet to local economic development strategy (page 8) 4. Meet to conservation and development objectives (page 9 to 11) 5. Land and labor available (page 8) 6. Shan tea demand increases (page 18) 7. Meet the needs of the villagers (page 8) 8. Shan tea production has economic and environmental feasibility (page 12 and 15) 4.2 Challenges 1. Lack of food, 2. Poor infrastructure and techniques 3. Soil degradation. 4. Land tenure: villagers are not clear if they are allowed to grow tea in certain areas (page 8)

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Shan Tea Feasibility Study

CECI, 1998. Report on Tea Market analyses and channel of green tea distribution in Vietnam. District Communist Party, 2000. "Decisions of the District Communist Party for the 18th worked period" Do Ngoc Quy, 1980. Tea Planting. Agricultural Publish House - Ha Noi Do Ngoc Quy, 1997. Vietnamese Tea. Agricultural Publish House - Ha Noi Do Ngoc Quy, 2000. Report on survey on tea production in Moc chau Tea Enterprise Do Van Ngoc, 1998. Results on Survey and Selection of Camelia sinensis var. shan, in the mountainous area of Northern Vietnam and its Development perspective - Tea research results (1988-1997) Tea Research Institute Agricultural Publish House - Ha Noi Prime Minister decision, 1999. Prime Minister decision on tea production planning year 1999-2000 and tea development trend to period of 2005-2010 Song Lo Tea Enterprise, 1999. Technical guides for tea planting

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Shan Tea Feasibility Study

Appendix 1: Establishment and management cost for 1,000 m2 of tea garden in the first 3-year
Items I. Establishment Labor (Land preparation: 24 day, planting: 13 days) Animal manure Nitrogen Phosphorus Seeds Sub-total I II. Management cost in the first 3 years Year 1 Nitrogen Potassium Labor Capital interest 7 % of establishment/year Sub-total Year 2 Nitrogen Potassium Labor Capital interest 7 % of establishment/year Sub-total Year 3 Nitrogen Potassium Labor Capital interest 7 % of establishment/year Sub-total Sub-total II Total kg kg Man/day dong 17 17 15 595,000 2,500 2,500 10,000 kg kg Man/day dong 15 15 15 595,000 2,500 2,500 10,000 kg kg Man/day dong 12 10 15 595,000 2,500 2,500 10,000 Man/day kg kg kg kg 37 1,000 6 60 50 10,000 100 2,500 1,000 1,000 370,000 100,000 15,000 60,000 50,000 595,000 30,000 25,000 150,000 41,650 246,650 37,500 37,500 150,000 41,650 266,650 42,500 42,500 150,000 41,650 276,650 789,950 1,384,950 Unit Amount Price (dong) Cost (dong)

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Shan Tea Feasibility Study

Appendix 2: investment for soybean Intercropping with in 1,000 m2 of tea garden

Items Seeds Nitrogen Potassium Phosphorus Labor Total cost Income from soybean 4.2.1 Net profit

Unit kg kg kg kg Man/day kg

Amount 2 6 6 25 8 75

Price (dong) 10,000 2,500 2,500 1,000 10,000 5,000

Cost (dong) 20,000 15,000 15,000 25,000 80,000 155,000 375,000 220,000

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Shan Tea Feasibility Study

Appendix 3: Net profit from 1,000 m2 of tea garden in Year 4, 5, 6 and later years
Items Amount Price (dong) Cost (dong)

Year 4 Nitrogen (Urea) Potassium Labor (tending: 20; harvest: 3; fuel collecting (grass): 3 days Processing dryer deduction (30%) for each household Capital interest 7 % of establishment cost Total cost Income from tea Net profit Year 5 Nitrogen (Urea) Potassium Labor (tending: 22; harvest: 4; fuel collecting (grass): 5 days Processing dryer deduction (30%) for each household Capital interest 7 % of establishment cost Total cost Income from tea Net profit Year 6 Nitrogen (Urea) Potassium Labor (tending: 22; harvest: 5; fuel collecting (grass): 6 days kg kg Man/day 27 2,500 40 2,500 33 10,000
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kg kg Man/day dong dong kg

17 2,500 24 2,500 26 10,000 30,000 1,387,450 60 25,000

42,500 60,000 260,000 9,000 97,122 468,622 1,500,000 1,031,379

kg kg Man/day dong dong kg

27 2,500 40 2,500 31 10,000 30,000 155,000 90 25,000

67,500 100,000 310,000 9,000 10,850 497,350 2,250,000 1,752,650

67,500 100,000 330,000

Shan Tea Feasibility Study

Processing dryer deduction (30%) for each household Capital interest 7 % of establishment cost* 4.2.2 Total cost



9,000 506,500

Income from tea Net profit

* Farmer has money to pay all establishment cost already Note:




3,000,000 2,493,500

Dryer cost: 400,000 VND + 25,000 VND (stove covering ) + 25,000 (labour) + 150,000 (transportation) = 600,000 VND. One dryer cost will be shared for 20 households or 30,000 VND/household 1 labour day can process 20 kg dry tea Tea yield in: + year 4 is 3 ton fresh tea/ha or 60 kg dry tea/1000 m2 (5 kg fresh = 1 kg dry) + year 5 tea yield will be 4.5 ton fresh tea/ha or 90 kg of dry tea/1000 m2 + year 6 tea yield will be 5.0 ton fresh tea /ha or 100 kg of dry tea/1000 m2

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Shan Tea Feasibility Study


* ! *

* 2.0 - 2.5 m !

* !

* Tea plant

* !

* ! 2.- -2.5 m

* !

* 2.- -2.5 m

* Forest tree

* !

* !

* !

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Shan Tea Feasibility Study


Tea row 1.2 - 1.5 m 0.5 m

* * * *

Soybean will be grown in alley between 2 rows of tea in the forst three year for income generation

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Shan Tea Feasibility Study

Model of upland farming with tea (Using shan tea as live fence to control erosion and generation of income)


Live fence of tea surrounding the plot 0.4 m 0.4 m

* ** ** ** *

* ** ** ** *
Food crops as corn, soybean grown in alley 30m

Two rows of shan

* ** ** ** *
Food crops as corn, soybean grown in alley

* ** ** ** *
Food crops as corn, soybean grown in alley

* ** ** ** *
35-40 m

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