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Deforestation-free supply chains in Vietnam rely on working with small scale farmers (commentary)

  • Almost all of the forest-based commodities produced in Vietnam are destined for other countries, which through their market requirements and laws, have a growing sway on deforestation-related trends and practices.
  • Recent studies have found that nearly 70% of the tropical deforestation related to such commodities between 2013-2019 was illegal.
  • Smallholder farmers play a vital role in producing these commodities, so for the sector to be sustainable, they need fair and equitable access to export markets: governments and businesses in consumer and producer markets have vital roles to play in this regard.
  • This post is a commentary. The views expressed are those of the author, not necessarily Mongabay.

At a global level, the rate of deforestation is increasing year after year, driven by demand for products like timber, rubber, palm oil, cattle and coffee. Growing and cultivating these forest-risk commodities, or ‘FRCs’, also provides livelihoods for 600,000 coffee growers, 1.4 million tree growers, 325,000 rubber growers and 300,000 sugarcane growers in Vietnam.

Almost all the FRCs produced in Vietnam are destined for other countries. These countries – through their market requirements and laws – have a major influence on how we produce FRCs, meaning that they have a growing sway over deforestation practices. Recent studies have found that between 2000-2015, 60% of tropical forest loss was driven by the production of FRCs, and nearly 70% of the tropical forests destroyed for FRCs between 2013-2019 were done so illegally. This staggeringly high proportion of illegal FRCs tells us that both global forest legality frameworks and existing market approaches are not working. Something needs to change.

Smallholder farmers play a vital role in producing FRCs, but for this production to be sustainable, they need fair and equitable access to export markets. Governments and businesses in consumer and producer markets have vital roles to play in promoting sustainable FRC production across the supply chain. This means reaching out to smallholders and working with them to meet higher sustainability standards, protect livelihoods and preserve forests. It’s time for all actors in FRC supply chains to step up and engage with smallholders.

See more of Mongabay’s coverage of sustainable business and supply chains here

Trieu Thi Chau practices a technique known as intercropping, where coffee plants are interspersed with other types of crop, Cu Sue Village, Dak Lak Province, Vietnam. Image courtesy of Quinn Mattingly/Panos Pictures/Unfold Stories.

In Vietnam, FRCs are booming. Vietnam is currently the world’s fifth largest timber producer, second largest coffee producer, and third largest rubber producer. Over the last 10-15 years, smallholder farmers have led a rapid expansion of acacia plantations, driven by a thriving trade in timber that accounts for over $12.4 billion in export revenue. Smallholders now make up the bulk of Vietnam’s coffee and rubber production, contributing $3 billion and $3.5 billion respectively to our economy each year.

Yet when the global price for these commodities increases, production increases too – and forests pay the price. In the 1990s the high price of coffee sparked a 15% annual expansion in Vietnam’s coffee production area. The same happened with rubber in the late 2000s. Forest cover in Vietnam dropped from 43% in the 1940s to below 28% in 1990, the level considered unsustainable by scientists. As natural forests have rapidly been replaced by FRCs, the expansion is coming at the cost of our forests, along with their precious ecosystems and biodiversity.

The expansion of FRC production and destruction of natural forests is notoriously difficult to regulate. While there are conversations going on between smallholder farmers about how to improve forest practices, these are uncoordinated, low-level and tend to go under the radar of the government. When there are laws in place to limit deforestation, there is low awareness around them and on the whole they’re not enforced. The Vietnamese government is acutely aware that strict regulation could cut off vital trade routes and risk smallholders’ livelihoods.

The solution is for governments, businesses and other stakeholders in the supply chain to work more effectively with smallholders.

Rubber produced by smallholders in Vietnam can go through 7-8 different stakeholders, such as traders who buy natural rubber and sell it on to small-scale processors before it reaches a processing or export company. For many smallholders in Vietnam, their only relationship with the export market is their relationship with the next stakeholder in the supply chain. Given the large number of smallholders and traders in these upstream stages, it is very difficult for businesses and governments to track the flows of FRCs. This problem is exacerbated by flows of illegally-imported rubber from neighboring Cambodia and Laos, which merges into domestic trade and further complicates supply chains. To improve transparency and stop the thriving trade in illegal products, these supply chains need to be shorter, simpler and better-coordinated.

Everyone in the supply chain benefits from smallholder FRC production. That’s why all actors involved in the supply chain have a duty to work with smallholders to raise their voices in the debate, understand their socioeconomic situations and motivations, and prepare them to move towards fairer and more sustainable FRC production – without impacting their livelihoods. This will require concerted action from the whole supply chain, especially from governments in producing and importing countries. Some companies are already trialing this approach, with good results.

Vietnam’s coffee market provides a livelihood for over 600,000 smallholder farmers. Image courtesy of Quinn Mattingly/Panos Pictures/Unfold Stories.

IKEA is working with smallholder tree growers in Vietnam to get their plantation timber certified by the FSC. The company has helped the smallholders form a cooperative, then supported members of the group to get their timber FSC-certified. The smallholders now sell this timber to IKEA for a higher market price. In this way the farmers make more profit, IKEA can ensure a dependable stock of sustainable wood, and more forests are protected. We’re also seeing large companies such as Yulex and Corrie McColl beginning to work with smallholder rubber growers with the aim of acquiring sustainably-produced rubber for their high-end markets. These are all steps in the right direction, but we need to move faster.

The Vietnamese government also has a major role to play in connecting smallholders to global markets. It can raise the voices of smallholders via the formation of smallholder cooperatives, provide clarity on land rights and land ownership, and support smallholders to increase crop productivity. To do this, the government will need technical and financial support from donors, businesses and NGOs, as well as access to essential information on market demand, legality and sustainability requirements. Crucially, these messages must then be effectively communicated with smallholders.

Many countries that import FRCs now have mandatory legal and sustainability requirements. The EU, UK and the US are developing ‘zero-deforestation’ or ‘illegal deforestation-free’ legislation, but these aren’t being heard and adopted by smallholders in producer countries. With such an important role in the supply chain, it’s vital that smallholders engage and comply with these standards. For this to happen, all stakeholders in the FRC supply chain should work with smallholders to understand their needs and motivations, improve legality and sustainability standards, and protect their livelihoods. Only then can we truly protect Vietnam’s forests and make global commodity chains work for all.

Phuc Xuan To is a Senior Policy Adviser at Forests Trends, based in Vietnam.

Related audio from Mongabay’s podcast: Agroforestry is an ancient climate change solution that boosts food production and biodiversity, listen here:


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