Spice of Life - Leveraging the Spice Sector for Poverty Reduction in northern Vietnam

Spice production plays an important role in the social and economic development of the Northern mountainous region of Vietnam. In the last few years, spice products have made a significant contribution to increasing incomes, leading to poverty alleviation for more than 80,000 households in some of the poorest communities in the area. Both authorities and communities consider spice products as a primary means to improve the local economy and reduce poverty. By becoming involved in the world market the Vietnamese spice sector has new and favorable economic opportunities for companies, co-operatives and households.

Throughout the world, the demand for spice products (for use in food processing, medicine and as aromatics) has been growing, creating excellent chances for the Vietnam spice sector to develop and supply this demand. The ‘Spice of Life’ project aimed to improve income security and livelihoods of poor ethnic minority smallholder producers by increasing productivity, sustaining spice production, and encouraging the development of mutually profitable relationships with processing and trading companies.

The project, funded by the Swiss Agency for Development and Cooperation (SDC) and Cordaid and implemented between August 2013 and May 2016, directly targeted 12,000 minority smallholder farmers working in cardamom in Lao Cai, Ha Giang and Yen Bai provinces; cinnamon in Yen Bai and Ha Giang provinces; and star anise in Lang Son province.

SNV applied a value chain approach to benefit poor, ethnic minority smallholder producers and micro enterprises in the Northern regions of Vietnam through an improved spice value chain. The project focused on the following activities:

• Market development - Establishment and capacity building of the Spice Association to strengthen connections between actors in the sector. Encouragement of private sector investment to improve the sustainability of the spice sector. Identification and development of new markets that include value adding to raw products (which brings higher returns).

• Sustainable production - Improved drying ovens and other value adding activities. Agricultural Extension Centre staff have been equipped with sufficient knowledge and skills to carry on activities. The Quality Assurance Protocol and Community-based Sustainable Cardamom Management regulation have high potential for sustainability because both address the needs of spice growers and traders as well as have support from the government.

• Enabling business environment –increased awareness, knowledge and supporting policies and ensured cooperation between the public and private sectors who will continue to lead the development of the spice sector.

After almost three years of implementation, the project shows the following results:

• 10,162 spice production households now apply a sustainable spice production system and quality standards which were set by spice traders/processors, which increased the annual income of the production households with 14.5%;

• 210 Farmer Production Groups have been established and supported with the participation of 10,162 spice production households;

• 50,000 ha (equivalent to 50% of the total spice production land) of forest is used sustainably for spice production.