VIETNAM

Enabling poor rural people to overcome poverty

Developing Business with the Rural Poor Programme (DBRP) Cao Bang

Hmong cattle farmer tends cow in Ha Quang district, Cao Bang province.

Programme Rationale
Cao Bang is a largely mountainous province in the north west of Viet Nam, 286 km from Hanoi. About 79% of households are unemployed due to limited economic activity and low skill levels. Transportation is limited by poor roads, rail and water routes. Many roads are unusable during raining season. Some communes at high elevations lack electricity and water supply. Water shortage is a serious issue during some months of the year. Rural people here have restricted access to markets, production and marketing expertise, credit to finance investment, business services and training to upgrade their skills. The population is low at 512,000, of whom eight ethnic minorities account for 95%.

Programme Objectives
The goal is a sustainable reduction of rural poverty in Cao Bang province. Farmers would benefit from improved market participation and earn higher incomes from their farms; poorer and landless people would also earn more; and enterprises along value chains would become more efficient and profitable.

International Fund for Agricultural Development

IFAD VIETNAM

>>

DDRP Cao Bang

>> 1

Programme Area and Target Group

Enabling poor rural people to overcome poverty

The Programme covers ten districts in Cao Bang. Communes within these districts would have the highest incidence of poverty, as measured by the Province Departments of Labour, Invalids and Social Affairs (DOLISA). Better off communes would be included if market linkages with the poorer communes were required to achieve an impact on poverty reduction, or the capacity of the commune cadre is high enough to ensure success in the first year and achieve a demonstrative effect for other communes. The target groups are: rural households with small land holdings and limited productive assets; ethnic minorities; and women.

Programme Strategy
The focus would be on building value chains while building capacity within the public sector to deliver relevant services to rural households. The programme would develop a wider private sector investment base to increase investment in agribusiness. A strong poverty focus would mean: (i) geographic targeting within the provinces; (ii) designing activities to help the poorer market their produce; and (iii) ensuring the poorer have access to programme services opportunities.

Programme Components
Improving the business and investment environment Rural business development services Increased market access and participation for the rural poor Programme management with efficient coordination structures.

Programme Cost and Financing

Total costs for the programme are estimated at USD 25.766 million (VND 436.216 million). Costs are spread as follows: IFAD: USD 17.2 million (loan), VBARD: USD 1 million, Private sector investors, beneficiaries and co-financiers: USD 4 million, The Government of Vietnam (GoVN): USD 2.5 million (this would be in the form of duties and taxes either foregone or to be returned to province and national revenue agencies).

Benefits and Impact

The main beneficiaries are rural poor people who would increase their incomes by improving current enterprises, adding new enterprises and by earning higher wages or gaining employment. The Programme would benefit others along value chains with commercial links to farmers and enterprises providing business development services. More than 55.200 Cao Bang families should benefit in some way. Value chains analyses for Cao Bang included short-term investments in growing corn and soybean, medium-term investments in corn trading, improving collection methods for bamboo and establishing village pre-processing of bamboo and long-term investment for growing bamboo. All models showed apparently acceptable profitability.

Contact details
Atsuko Toda Country Programme Manager Asia and Pacific Division International Fund for Agricultural Development (IFAD) Unit 304, UN Apartment Building 2E Van Phuc, Kim Ma Str, Ha Noi, Vietnam Tel: 0084- (4) 3823 7231; Fax: + 84 (4) 3823 3819 Email: at.toda@ifad.org Skype: atsuko.toda Website: www.ifad.org.vn

International Fund for Agricultural Development

IFAD VIETNAM

>>

DDRP Cao Bang

>> 2