Viet Nam: Quality and Safety Enhancement of Agriculture Products and Biogas Development Project

Sovereign Project | 39421-013 Status: Active


ADB is supporting Viet Nam’s drive to promote food safety in the agricultural sector. The project will help improve food regulations and quality control systems to meet both domestic and export standards. It will put up facilities to support safe food products and biogas plants to reduce health hazards from livestock waste. The project covers 16 provinces that produce fruit, vegetable, and tea.

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Project Name Quality and Safety Enhancement of Agriculture Products and Biogas Development Project
Project Number 39421-013
Country Viet Nam
Project Status Active
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan 2513-VIE: Quality and Safety Enhancement of Agriculture Products and Biogas Development Project
Asian Development Fund US$ 95.00 million
TA 7251-VIE: Strengthening Project Management and Developing Strategies and Options for Biogas Development Program Expansion
Technical Assistance Special Fund US$ 1.50 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Sector / Subsector

Agriculture, natural resources and rural development - Agricultural policy, institutional and capacity development

Gender Equity and Mainstreaming Effective gender mainstreaming

The Project will (i) create effective regulatory institutions for state management of agro-product safety and quality systems to meet domestic and export requirements; (ii) accelerate the development of agroproduction, processing, and marketing to ensure the safety and quality of vegetable, fruit, and tea products for domestic consumption and export; and (iii) improve the quality of physical environment for quality and safety by reducing environmental pollution and greenhouse gases from livestock waste in agricultural areas through increased utilization of biogas technology. It will have four main components: (i) a regulatory framework and fully operational quality and safety system for agro-products; (ii)

infrastructure and facilities for safe, quality agro-products; (iii) improved safety and reduced health hazards from livestock waste through support for development of biogas plants by small livestock farmers; and (iv) project management support for effective and timely implementation of project interventions. The Project will cover 16 provinces in Viet Nam that have significant fruit, vegetable, and tea production.

Project Rationale and Linkage to Country/Regional Strategy

Consumers in Viet Nam's major population centers require that certain quality and safety standards be met in the fruit, vegetable and tea products they consume, but poor regulatory management, unsafe production environments, and excessive levels of agro-chemicals and fertilizers, including application of pesticides by Viet Nam's farmers, are major hindrances to achieving the required standards. This will affect the longterm growth prospects of these crops in a competitive production and trading regime. Viet Nam has one of the highest input use rates among countries in the Asia and Pacific region. In the absence of management and regulations, these high input levels are affecting product quality and safety. In addition, unsafe disposal of livestock waste in densely populated areas has contaminated soils and the water used for agricultural products. Consequently, improved livestock waste disposal and promotion of technologies for effective waste treatment and management is a prerequisite to enhancement of the quality and safety of agro-products.

These issues are not being effectively addressed due to the lack of a domestic "safe food" supply framework and/or strategy, and will have continuing negative impacts on the environment and public health if not addressed. Increasing integration of Viet Nam's agricultural production, processing and marketing with international markets makes it critical that

improvements in product quality and food safety be made, if Viet Nam is to maintain and/or increase its international market share. Improving global competitiveness will require strengthening of the capacity of concerned institutions at all levels of government to address the following issues, all of which constrain further growth in the agriculture sector: (i) numerous small and fragmented agricultural production units, (ii) low product quality and safety, (iii) inefficient marketing, and (iv) weak bargaining power. These cause inefficiencies in product marketing and input procurement, and increase the costs to the Government and the private sector of providing agricultural support services.

The Government acknowledges the urgent need to improve agricultural production and marketing quality and food safety to a level comparable with neighboring countries and trade competitors. The Government is gradually introducing measures to improve the performance of state-owned enterprises under the State-Owned Enterprise Law, but constrained access to financial and other resources remains a serious obstacle to the promotion of viable private business opportunities in Viet Nam.

The proposed Project is consistent with the ideals of the Government's strategies and policies, including the Government's Socio-Economic Development Plan (SEDP) 2006-2010, which seeks to achieve middleincome status for Viet Nam by 2010 through improvements in the quality and safety of agricultural and processed products that meet domestic and

international requirements.

Impact The expected impact is sustainable and equitable growth of the agriculture sector through increased livelihood opportunities and improved human health.

Project Outcome

Description of Outcome The expected outcome is quality and safety improvements in Viet Nam's agricultural outputs, which thereby meet domestic and international requirements.
Progress Toward Outcome

The Project was able to establish of a comprehensive regulatory framework that was a high priority under the action plan for food safety, 2008-2012. Regulatory framework for tea, fruits and vegetables are harmonized and institutional responsibilities for certification, monitoring, inspection and enforcement have been clarified. Water and soil testing capacity of the 6 laboratories have been strengthened. The project provinces are effectively implementing the CFSMS and provincial food safety index to ensure benefits are realized.

A total of 178,780 ha of SAZ schemes have been identified for safe agricultural production for tea, fruit and vegetables for the period 2010-2020 in the 16 project provinces. Significant infrastructure investment support is needed to implement SAZ models. As the regulatory and institutional framework for safe agriculture production is in place, continued and additional investment support beyond what can be provisioned under the Project to expand SAZ models is needed as it would generate significant positive economic, social and environmental impacts. In addition to health benefits, the SAZ models are expected to generate significant other benefits such as increased production of tea, fruits and vegetables (20-60% increase in productivity on average) due to land consolidation and improved infrastructure, reduced post-harvest losses, increased value of agriculture production due to even quality and food hygiene and safety, and increased employment opportunities for unskilled labors. However, the impact of project interventions is constrained by limited resources, which are distributed over so many provinces.

The Project financed the cost of VietGAP certification for beneficiary farmers. To ensure the sustainability of SAZ models, products generated from these areas need to be certified under VietGAP. Benefits of these certifications need to be communicated and realized to motivate farmers to absorb this additional cost. Demand for certification will depend on the level of fees, market opportunities (e.g., steady buyers), level of consumer knowledge on safe food production.

The biogas development support under the Project has generated important lessons learned for the biogas development activities funded by ADB. These include the compatibility of the size of the digester to the heads of pigs/cattle in stock, so that all the animal manure can be treated by the biogas digester. Close monitoring of livestock population fluctuations will be needed to mitigate the risks associated with potential unmanaged surplus biogas (small size digester compared to the numbers of heads), which could harm the environment. The utilization of bio-slurry is influenced by the conditions of each household's set up; where households having agriculturally productive plots adjacent to their houses are able to more effectively utilize bio-slurry as organic fertilizer. For households who do not have large plots near their house, constructing additional facilities for bio-slurry storage (or compost pits) attached to the digester is necessary to avoid overflow of bio-slurry in the surrounding areas and/or discharging to the water body.

Implementation Progress
Description of Project Outputs

1. Improved regulatory framework and fully operational quality and safety system for agroproducts.

2. Infrastructure and facilities for quality and safety of agroproducts.

3. Biogas development for clean energy, improved agroproduct safety and reduced health hazards from livestock wastes

4. Effective project management support established at central and provincial levels.

Status of Implementation Progress (Outputs, Activities, and Issues)

Completed. To date, 54,993 biogas-users that constructed biogas units, have received training from the project.

30,461 households have been technically accepted and received financial assistance. The BPMU and PPMUs have conducted 2,178 various training courses for 63,336 participants, among who include managers, technicians, builders, and biogas works users. Female participants accounted for 29.9%. Households were trained on the safe construction, operation, and maintenance of biogas digesters.

During implementation, the Project realized that the locations of SAZ models for crops are not necessarily compatible with where livestock farms are situated. Application of bio-slurry to crop production at the identified SAZ models is also not straightforward due to complicated logistic arrangements in safely transporting the bio-slurry and the corresponding costs required. The Project supported the household level biogas digester construction only. A possible linkage between SAZ and medium to large biogas digesters can be assessed under the LCASP. Therefore, the ADB Review Mission agreed to drop this indicator.

Pilot demonstration of 40 medium and 10 large biogas digesters is included in the ADB financed Low Carbon Agriculture Support Project (LCASP). Preliminary discussions have been made in carrying out a market study to assess the demand for medium- and large-scale biogas plants in the five provinces that overlap with Loan 2968-VIE: Low Carbon Agriculture Support Project. The terms of reference for that study have been developed and are under ADB's review. To avoid overlapping, the Mission agreed with the CPMU to remove this indicator from the Project targets.

Pilot demonstration of 40 medium and 10 large biogas digesters is included in the ADB financed Low Carbon Agriculture Support Project (LCASP). A market study to assess the demand for medium- and large-scale biogas plants in the five provinces that overlap with Loan 2968-VIE: Low Carbon Agriculture Support Project has been conducted under Loan 2968. To avoid overlapping, the Mission agreed with the CPMU to remove this indicator from the Project targets.

The CPMU reported that 14,256 HHs received loans from VBARD (5,619) and CoopBank (8,637). ADB has disbursed a total of $11.27 million to finance biogas credit issued to HHs (92.5% of the loan allocation); approximately $1.4 million of this amount as outstanding advances to the FIs' imprest accounts. It is estimated that approximately $1.2 million will not be disbursed and will be returned to ADB.

993 staff in relevant agencies under MARD and DARDs departments are trained in food safety and quality certification system; 35.5% of whom are women.

Review on 24 existing decrees, policies, and strategies for ensuring safe and quality agro-products in Vietnam is completed.

Fourteen(14) regulatory documents on food safety (including technical regulations and standards) have been issued.

On June 2010, MARD issued a decision to establish a steering committee to apply VietGAP in producing vegetable, tea, and fruit under the chairmanship of Vice Minister Bui Ba Bong.

Units for food safety control have been established in NAFIQAD, DCP, and in each DARD of the 16 participating provinces.

Based on the guideline on pilot implementation of the crop food safety management system (CFSMS) developed by IPMU, 14 provinces are monitoring and reporting on food safety from their respective crop production through a provincial food safety index (PFSI) established under the Project.

23 certification agencies have been accredited for safe vegetables, fruits, and tea to operate nationwide.

Two national GAP standards and two technical regulations related to conditions for safe production and primary processing of fresh vegetables, fruits, and tea products have been issued.

Based on the approved SAZ planning schemes, 95 production locations under the schemes have been selected for investment in infrastructure and equipment for safe agricultural production. Completed and ongoing investments cover a combined area of 3,100 hectares. Infrastructure and equipment upgrades include among others; market access roads, access to electricity and safe water, waste disposal and packing/primary processing facilities, and suitable marketing infrastructure.

Certification services carried out by the Project for producers of vegetable, fruits and tea have been provided to 26,570 household-based producers.

307,101 participants have benefitted from training on GAP food safety system management and certification. 36.2% of participants trained are women.

A total of 95 SAZ models have been identified based on the soil and water quality testing to suit the crop production requirements. Civil works contracts to carry out these investments are at various stages of implementation.

The Safe Agricultural Zone (SAZ) planning schemes identified under the Project cover a total area of 182,510 hectares (ha) across all 16 participating provinces, accounting for 80.4% of the total agriculture area for tea, fruits and vegetables being targeted by the Project.

This project intervention was carried out in 10 of the 16 project provinces that produced tea and fruit; and covers a combined area of 15,230 ha. These expected outputs accounts for approximately 19% of the total area of tea and fruit production in need of new varieties (78,959 ha). Based on the updated indicator for this target (i.e., 14,000 ha), the activity is assessed to have been completed.

To effectively monitor, analyze, and certify agriculture products, the Project upgraded key regional laboratories with new laboratory equipment. Six laboratories were re-equipped and included those under the Department of Crop Production (1), Department of Plant Protection (1), and the National Agro-Forestry-Fisheries Quality Assurance Department (NAFIQAD) (3); which are spread across Viet Nam's northern, central and southern regions.

The Project M&E Consultants has been contracted and mobilized. They are tasked to assist the CPMU and other project implementation units with strengthening of the M&E system for the whole project, and at the same time perform baseline survey and assessment activities for preparing regular and monitoring reports as well as an end-of-project report (project completion report).





Geographical Location Bac Giang, Ben Tre, Binh Thuan, Da Nang, Ha Noi, including Ha Tay, Hai Duong, Hai Phong, Ho Chi Minh City, Lam Dong, Ninh Thuan, Phu Tho, Son La, Thai Nguyen, Tien Giang, Vinh Phuc, and Yen Bai

Safeguard Categories

Environment B
Involuntary Resettlement C
Indigenous Peoples B

Summary of Environmental and Social Aspects

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design Eleven consultation meetings were held, attended by a total of 81 people, or an average of 7 or 8 people per meeting. About 41% of the participants were women. Five of these meetings were conducted among ethnic minorities. One meeting was conducted among women.
During Project Implementation

Business Opportunities

Consulting Services tbd
Procurement tbd

Responsible Staff

Responsible ADB Officer Setboonsarng, Sununtar
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Environment, Natural Resources & Agriculture Division, SERD
Executing Agencies
Ministry of Agriculture & Rural Development (MARD)
Pham Quang Toan
[email protected]
Agricultural Projects Management Board
3rd Floor, Agricultural Exhibition Ctr
No.2,Hoang Quoc Vie Str.,Cau Giay Dist
Central People's Credit Fund
Implementing Agency
1 F Thai Ha, Dong Da
Ha Noi, Viet Nam
Viet Nam Bank for Agriculture and Rural Dev't.
Implementing Agency
No. 2 Lang Ha Street
Ba Dinh District, Ha Noi, Viet Nam


Concept Clearance 26 Sep 2008
Fact Finding 08 Sep 2008 to 19 Sep 2008
MRM 11 Nov 2008
Approval 18 Mar 2009
Last Review Mission -
PDS Creation Date 29 Oct 2008
Last PDS Update 29 Sep 2016

Loan 2513-VIE

Approval Signing Date Effectivity Date Closing
Original Revised Actual
18 Mar 2009 30 Jun 2009 26 Aug 2009 31 Dec 2015 30 Jun 2016 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 109.04 Cumulative Contract Awards
ADB 95.00 18 Mar 2009 89.50 0.00 96%
Counterpart 14.04 Cumulative Disbursements
Cofinancing 0.00 18 Mar 2009 91.68 0.00 98%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - - - Satisfactory

TA 7251-VIE

Approval Signing Date Effectivity Date Closing
Original Revised Actual
18 Mar 2009 15 Oct 2009 15 Oct 2009 30 Jun 2010 31 Dec 2012 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
1,500,000.00 0.00 300,000.00 0.00 0.00 0.00 1,800,000.00 18 Mar 2009 1,488,186.75
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - - - Satisfactory

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