Value chain analysis for acacia products and feasibility assessment of PEFC and FSC group certification in Vietnam

Value chain analysis for acacia products and feasibility assessment of PEFC and FSC group certification in Vietnam

The Thua Thien Hue Cooperative Alliance (TTHCA) provides marketing and production services and manages the development of 256 cooperatives. 128 of the cooperatives own mainly acacia forests and produce woodchip, which is mainly sold on the domestic market after which it is exported to China, Taiwan or other Asian countries. TTHCA and its members risk a reduction in income because of the increasing sustainability requirements of the international market for forest products. However, the cost of accessing forest management certification is a big financial barrier for small forest owners (on average owning 1-3 ha of plantation forest). Group plantation forest management certification could be a potential solution for forest owners to improve their market position. To be able to assess the benefits of group certification, TTHCA and its members first want to gain insights in the current value chain of acacia products.

ESFIM supported TTHCA with a value chain analysis of acacia products. Based on its results, it has been assessed if group certification by different forest certification schemes (Forest Stewardship Council, FSC, and the Programme for the Endorsement of Forest Certification, PEFC) are financially viable. The research activities were conducted by the Centre for Climate Change Study in Central Vietnam (CCCSC Vietnam). The results of the research are used to improve the awareness of TTHCA members and other actors in the value chain to understand their own role and to identify potential bottlenecks. The feasibility assessment is used as input for the decision-making by TTHCA about whether to apply for group certification and if so, which certification scheme is the most advantageous. The results also served as an example for other cooperatives and groups of small scale forest owners.

Conclusions

  • Acacia is the most common and preferred species for smallholder land owners, producers and traders.
  • Intensive cultivated plantations can get higher benefit than extensive model.
  • With the cooperation inside the chain, forest owners can get more profit because of higher price.
  • The acacia value chain has many actors and traders play an important role linking producers and processors.
  • There are 3 channels: Channel 1 and 2 both start with acacia logs with a diameter greater than 13 cm, same actors but different end users (local users or exported). Channel 3 commences with acacia wood of less than 13 cm diameter.

Proud of

  • Acacia timbers with larger diameters of over 13 cm have higher added value. However, long rotation also brings more exposure risks for farmers.
  • Group CoC certification are necessary to strengthen the cooperation and improve profit for actors in the chain.
  • Trees are grown for at least 6 years to take advantage of the log volume.

Lessons learnt

  • Conduct more research in future to assess exposure risks relating to long rotation combining with thinning practice, and how beneficial the certification is to evaluate the efficiency of this plantation model and certification.
  • Determine the demand of 4 groups of actors for CoC certificate, and which system of certificate they want to involve in (FSC or PEFC) and also analyse and compare what would be the case if these products have been certified against the no-certification scenario.