PPP – Commodities Group Update

Hanoi, April 14, 2015

Objectives of PPP Commodities Group

Overall objective An increase of 30% production of corn in key regions in 3 years (2014 -16) Up farmer’s profit to over 30%

This objective is achievable through 3 priority strategies 1. Seeds

Conventional Hybrid Biotech Trait

2. Production Agronomic practices advancement Post harvest services improvement

3. Increase added-value in corn trading 4. Alignment with Crop Restructure program initiated by Government

Target: 83,000 ha of rice-to-corn conversion in Mekong Delta by year 2020

TT TỉnhDiện tích ngô 2012

2013-15Diện tích

chuyển đổi dự kiến

2016-20Diện tích

chuyển đổi dự kiến

Tổng diện tích đến

năm 2020 (dự kiến)

1 An Giang 10.7 3.0 10.0 23.7

2 Đồng Tháp 4.6 7.0 6.0 17.6

3 Trà Vinh 5.5 2.0 6.0 13.5

4 Long An 4.0 3.0 4.0 11.0

5 Sóc Trăng 3.8 1.0 6.0 10.8

6 Tiền Giang 4.6 1.0 5.0 10.6

7 Hậu Giang 2.2 4.0 3.0 9.2

8 Vĩnh Long 1.5 2.0 2.0 5.5

9 Cần Thơ 1.1 2.0 2.0 5.1

10 Bạc Liêu 0.1 1.0 3.0 4.1

11 Kiên Giang - 3.0 1.0 4.0

12 Bến Tre 0.9 1.0 2.0 3.9

13Cà Mau 0.5

- 3.0 3.5

 Tổng số (‘000

ha) 39.5 30.0 53.0 122.5

Source: MARD

MKD produc-tion

CMB import 2013 total 2014-2020 growth in MKD

+ CMB

Add'l from 83,000ha

conversion

2020 total

108

192 300

182

581

1,062

Mekong Delta Corn grain supply trippled, reach 1mil. MT by year 2020

Note: MKD = Mekong Delta, CMB = CambodiaSource: GSO, trader interviews

Basis GSO data 300-800 tons/day (low-high season) pass through Khanh Binh, which is ~70% of imports

10% growth p.a. from Cambodia with better agronomy & seeds

Converting Spring-Summer crop to corn @ 7 ton/ha

Corn grain volume, ‘000 tons

Production South East - 2013: 1,313,450 MT , increase 5% per year. Feed Mill production 2013: 4.481 Mil MT - 800 MT for aqual feed - corn used 40%. Corn import from Cambodia forecast 200,000 MT in year 2013 increase 10% per year.50% of Highland production move to South East, production 2013: 1,303,700 MT

Source: GSO, trader interviews

South East absorb grain supply from Mekong, import reduced

1,016,000 tons from Highlands

455,000 tons import from

other countries

MKDdemand

MKDsupply

868

1062

194 kton excess

312,000 tons from

Cambodia

Volume growth fill demand-supply gap, currently import from US and Brazil

India (Kharif)

Brazil (first)

US

Mekong

Oct-Nov

Mar-Aug

Aug-Nov

Nov-Jan

Source: Bunge, 2014

Harvest Period

Aug-Nov

Sep-Nov

Jan-Jun

Sep-Oct

Arrival in Vietnam

Mekong Delta & South East: 39+ feed mills interested in local corn grain

province Feed millsFeed prdn(MT, 2013)

Grain Need

(MT/year)

Mekong

Delta

Long An Cargill, Japfa, Anova, Kyodo Sojitz, ANT, Thien Bang, Phuoc Thanh, Greenfeed, MB, CJ Vina, Nong Lam & Cao Phong

1,159,921 231,984

Tiền Giang CP, Sunjin, Chan Nuoi and Binh Minh

410,847 82,169

Vĩnh Long Anco

211,539 42,308

Cần Thơ Cargill, CPP, Proconco and Phan Bon

155,091 31,018

Đồng Tháp Guyomarc'h, Vina, Viet Thang, VIC and New Hope

122,239 24,448

An Giang Afiex

26,300 5,260

Bến Tre Thanh Hung, Tan Loi and Thien An 9,320

1,864

Hậu Giang Viet Long 1,130 226

Cà Mau Giong NN 253 51

South East

Bình DươngProconco, ANT, Greenfeed, Sunjin, EH, CP, Cargill, Vina, Anco, Thanh Binh, Sao Xanh, Woosung, Gold Coin, & others

2,507,855

802,514

Đồng NaiEmivest, Guyomarc'h, Tien Dat, Thanh Loi, Thanh Dat, CP, Nutifarm, Ngoc Long, Ha An, Lai Thieu, De Heus & others

1,821,285

582,811

Achievements in Mekong Rice-to-Corn in collaboration with MARD

MARD-Monsanto Conference, 27-28 October 2014, Dong Thap:• Biotech corn can significantly reduce cost of labor

and chemical.• Mechanization solution on corn is not enough and

should be further developed.• Sustainability and scale-up possibility to be

carefully studied• Province give support for post harvest: grain

collector, drying service• Cooperation relationship Government – Farmer –

Scientist - Company to be clearly defined• Required solution for side products: cob, leaf,

husk, stem • Required media communication: forum, TV

technical show

Achievements in Mekong Rice-to-Corn in collaboration with MARD

• Monsanto Protocol of growing corn on rice farm in Mekong delta

• Land preparation, water management• Density• Hybrid seeds• Crop protection, nutrient management

and others

• Technology transfer to >4,000 farmers through demo farms and farmer meeting

• Tools for land preparation, seeding, fertilizer application

• Engage grain collectors (Tai Loc, Hiep Quang, Adeco, etc. ), and machinery companies for mechanization solution

Profit comparision: Rice vs. Corn

Farm size 1.7haValue in VND

Corn DK6919 Rice OM4900Land preparation 2.550.000 1.540.000

Seed (Corn 43 kg; Rice 260kg ) 4.730.000 3.120.000

Seeding 2.500.000 560.000

Herbicide 850.000 1.190.000

Fertilizer 24.700.000 11.050.000

Pesticide & Fungicide 3.910.000 6,800.000

Irrigation 1.700.000 3.400.000

Harvesting 4.250.000 2.550.000

Shelling 3.360.000

Labor for chemical spraying 1.700.000 2.040.000

Other labor 1.700.000 3.060.000

Total cost (VND) 51.950.000 35.310.000

Total harvest (metric ton) 20,03 8,2

Selling price (VND/ 1 ton) 3.600.000 6.000.000

Revenue 72.108.000 49.200.000

NET PROFIT 20.158.000 13.890.0000

Demo field by farmer Đinh Văn Thê, Tân Lập ward, Tân Thạnh District, Long An province, Summer Autumn 2014, farm size 1,7 ha. Sowing date 03/5/2014, harvest day 20/8/2014.

Profit comparision: GM Corn vs. Conv. Corn

Monsanto internal data from field trials

Cost or Value (VND/ha) GM Corn Conventional Corn

Land preparation 1,200,000 1,200,000Seeding labor 1,000,000 1,000,000Seed 2,304,000 1,280,000Herbicide 320,000 320,000Labor for weeding 400,000 1,800,000Fertilizer 7,000,000 7,000,000Pesticide 0 500,000Labor for harvesting 1,200,000 1,200,000Drying 1,000,000 1,000,000Shelling 1,000,000 1,000,000A. Total Cost 15,424,000 16,300,000Yield (dry grain, kg) 12,000 10,000Selling price (VND/kg) 5,800 5,800B. Profit 54,176,000 41,700,000

GM Corn vs. Conventional CornProfit increase by 12,500,000 VND/ha

(or 30%)

Plan in year 2015

1. Seeds Developing conventional hybrid portfolio GM corn seeds: commercialization of insect resistance and herbicide

(glyphosate) tolerance Study and launch socio-economic impacts of biotech corn in Vietnam (in

cooperation with ISPARD)2. Production

Activities for education and technology transfer to farmers Engaging post harvest stakeholders

3. Increase added-value in corn trading Feasibility study for Central

4. Alignment with Crop Restructure program initiated by Government Rice-to-corn rotation in Mekong, Mountainous areas Rice intensification in Red River Delta

Plan in year 2015 (details in Mekong)

• Continued current activities:• Technology transfer though demo

and farmer meeting• Stake holder engagement

• Support VAAS in large farm demo plan in 6-8 key provinces in Mekong delta

• Large farm demo with GM corn in Summer/Autumn season, key provinces: Hau Giang, Vinh Long, Tra Vinh

Activities in Mekong delta

Sowing corn on rice farm & fertilizer application tool Sowing corn on rice farm & fertilizer application tool

Activities in Mekong delta

Conventional corn demo GM corn demo, sowing April 2015

Suggestions

1. Development of legal framework for plant variety registration

2. Simplifying/functioning registration process (i.e. Circular 20/2014)

3. PPD to fasten registration of glyphosate on herbicide tolerance corn

4. Crop restructure: Clarification of way-of-working amongst stakeholders (MARD – Local Authority – Private)

Q&A

THANK YOU