Multinationals and local smallholders join forces for sustainable forestry in Vietnam
From global to local
This market link, from global market to local sources, has been instrumental in enabling smallholders in Phú Lộc (a district 40km south of Huế City) to become FSC-certified.
Forestry products underpin a large portion of the global economy. While some multinationals, like Ikea, strive to create more sustainable supply chains, our forests’ future may really be in the hands of the millions of smallholders around the world. The road to sustainability requires effective collaboration across the multi-layer production chain.
Photo 1. Working with Scansia Pacific has helped Phú Lộc’s smallholders to become FSC-certified.
The road to sustainability
Photo 2. A truck travels through the plantation in Phú Lộc.
Vietnam is one of the world's largest exporters of wood and wood products. Overall exports in 2016 were valued at nearly $7 billion. Yet its forests, ravaged by war and degraded by logging and land clearance, contain almost no untouched primary forest.
The Greater Mekong region as a whole, with only 13 per cent of its primary forest remaining, could become one of 11 global 'deforestation fronts' if nothing is done.
Reforesting degraded areas with natural species and enriching plantations with natural buffer zones is part of the solution and can provide vital corridors for wildlife. Vietnam’s 1.5 million smallholders who own most of its plantations play a vital role in this solution.
Ho Da The, from Hoa Loc village in the Lộc Bổn commune, is amongst these 1.5 million. He owns a 4.91 hectares acacia plantation thanks to government programmes, and heads up the village smallholder group.
He has lived in the area all his life, but working formally as a group is relatively new and is the result of their involvement in the WWF’s regional sustainable bamboo acacia and rattan project (SBARP).
The project encourages responsible production by small-scale producers in the Greater Mekong, promoting Forest Stewardship Council (FSC) certification as a way to drive sustainability and draw smallholders into the international market. In Vietnam, it also matches the government target of certifying 500,000 of the country’s 6.7m hectares of production forest by 2020 to meet increasing market demand for sustainability and reduce reliance on imports. But achieving certification is not easy for smallholders.
“When we were provided with information about FSC certification, we were really perplexed. Our ability to complete various application documents such as a sustainable management plan was limited,” says Ho Da The.
Photo 4. FSC-certified acacia small holders in Phú Lộc.
Working with Minh An, Scansia and Ikea, and adopting a pioneering group approach to certification through which they share costs and responsibilities, has radically changed how Ho Da The’s smallholder group does business.
Supported by the WWF, it belongs to a larger association of 241 smallholders in Thừa Thiên-Huế province – the Forest Owners Sustainable Development Association (Fosda). This collaboration has delivered a lot and in 2016, the FSC issued a certificate for more than 4,000 hectares of acacia in the province, 951 hectares of which belong to Fosda members.
“We really had difficulties sourcing certified material at the outset,” says Nguyen Thi Thu Ha, vice director of Minh An processing company. “So now we support forest owners in Thừa Thiên-Huế and Quảng Trị provinces with [certification] assessment costs. The relationship is closer now. We feel happy creating value for local people. It’s a win-win deal.”
Photo 5. Acacia is processed into parts for garden furniture at Minh An. The factory processes 100% FSC timber supplying only Scansia Pacific, Ikea’s supplier.
Better business planning and longer harvest cycles produce more valuable timber, and commitment from buyers such as Ikea mean a better price. Seven- to eight-year-old acacia for furniture fetches more than twice the price of a five-year-old harvest used as woodchip for pulp and paper.
“Before, acacia production was just a way for people to survive – now it’s becoming a professional commodity that is market-driven,” says Vu Nguyen, Project Manager for Sustainable Bamboo, Rattan and Acacia, WWF-Vietnam. “And smallholder incomes and social standing are improving.”
Ho Da The’s village smallholder group now makes more than 30m VND ($1,320) profit per hectare per year from FSC-certified acacia timber – about twice as much as what they would earn from non-certified acacia for woodchip. It has enabled them to carry out house repairs, renew equipment, and invest in the next business cycle.
The challenge ahead
“The challenge is scaling up,” says Vu Nguyen. “Larger areas need to be certified to meet market demand. And investment at landscape and jurisdictional levels is needed to end deforestation. Companies such as Ikea can help drive regional change, but farmers and communities remain central to success.”
Photo 6. Natural growth forest is separated from plantation land by a buffer zone.
All photographs: James Morgan/WWF