Vietnam is a leading pepper producer and exporter in the world with an export volume of hundreds of thousands of tons per year. However, the production is still fragmented and unsustainable. The quality of black pepper in many places has not yet met export requirements, while the requirements for standards and quality of import markets are increasing.
(Black Pepper crop year 2022)
To support Vietnam’s pepper industry, the European Union has sponsored the Sustainable Trade Initiative (IDH), the Vietnam Pepper Association, and the European Spices Association to implement the project “Promoting sustainable production and trade of Vietnam’s pepper 2021-2023”.
Production is unsustainable
Vietnam is a major exporter of pepper accounted for about 60% of the total volume traded worldwide and about 45% of imports to the European market. Currently, Vietnam’s pepper is exported to more than 100 countries and territories around the world. The EU-Vietnam Free Trade Agreement (EVFTA) has brought great opportunities for businesses involved in the production, processing, and trade of Vietnam’s pepper.
A representative of the Vietnam Pepper Association said that Vietnam’s pepper volume in recent years has tended to decrease. In 2019, the output was about 290,000 tons and will be 180,000 tons in 2021. The pepper area of our country is about 131,000 hectares, concentrated in the Central Highlands and Southeast provinces. The reason for the decrease in pepper output is due to the impact of the Covid-19 pandemic, climate change, harmful pests and diseases, and increased input costs such as fertilizers. Along with that, the high cost of labor makes it difficult to hire in the harvest season, affecting income, so people are not interested in investing. In particular, the technical barriers of import markets are up, and the competition is fierce from major pepper-producing countries in the world such as Brazil, Indonesia, Cambodia.
Deputy Head of the Plant Protection and Cultivation Sub-Department of Dak Lak Province, Nguyen Hac Hien said: “With favorable soil and climate condition, Dak Lak has potential to develop industrial crops, including pepper. Currently, pepper is the province’s dominant tree with an area of more than 30,000 hectares. However, pepper in the area is still mainly produced on a small and fragmented scale with about 70% of the area under one hectare. Currently, about 25% of the province’s pepper area is planted in specialized farming areas, and 19% of the area is intercropped in coffee gardens. Therefore, the development of pepper in the area is still unsustainable.”
(Black Pepper Plantation in Dak-Nong province, Vietnam)
According to the Deputy Director of the Department of Agriculture and Rural Development of Dak Nong province, Nguyen Thi Tinh, the province’s pepper recently has been granted a geographical indication certificate by the National Office of Intellectual Property. Up to now, the province has nearly 30,000 hectares of pepper cultivation with an output of about 50,000 tons/year. The Provincial People’s Committee has recognized two high-tech pepper production areas with an area of over 1,500 hectares. Some cooperatives and cooperative groups have been established to associate production and consumption of pepper following organic direction, VietGAP.etc. However, the processing of pepper in the area is mostly preliminary and consumption is mainly dependent on traders. For now, pepper production in Dak Nong still has shortcomings such as unsustainable production, lack of administrative ability, less associated production, and quality standards associated with product consumption is unpopular.
Expectation from a project
To help the Vietnam pepper industry develop sustainably, the European Union has supported the project “Promoting sustainable pepper production and trade in Vietnam 2021-2023”. This project is co-organized by IDH Vietnam, Vietnam Pepper Association, and European Spice Association. It focuses on activities such as ability building and awareness-raising about sustainable farming for farmers. In addition, participating businesses will support training, monitor sustainable farming practices, and manage the use of agrochemicals, contributing to increasing pepper output to meet the standards of the import market, thereby, ensuring a stable income for people, contributing to reducing greenhouse gas emissions, heading to sustainable pepper development.
According to Ms. Mac Tuyet Nga, IDH project manager, the project is carried out in 3 provinces of the Central Highlands, namely Dak Lak, Dak Nong, and Gia Lai. The most important purpose of the project is to support production, trading enterprises, and pepper growers. Accordingly, there are 10,000 households directly benefited, increasing income for pepper growers, ensuring safe production in an environmentally friendly condition; improving the capacity of actors in the pepper supply chain in Vietnam to be able to meet the requirements of the import market; link, connect, strengthen control and supervision of the use of pesticides in the supply chain of pepper; supporting small and medium enterprises to access export markets; promoting the commitment of farmers in the application of pepper production in a safe direction, meeting the requirements of the European Union market. The target is that by 2023, the income of households privileged from the project will increase about 15%.
(Farmers harvest black pepper corn crop year 2022)
The European Union Delegation in Vietnam shared: “The project will support the supply chain and contribute to the sustainable growth of Vietnam’s pepper industry. The goal of the project is to improve the lives of farmers in the Central Highlands and help production and processing businesses increase their output sustainably. Now, Vietnam supplies nearly half of the pepper to Europe. The strong investment by the European Union and its members in the Vietnamese pepper supply chain will contribute to strengthening cooperation between the European Union and Vietnam.”
Deputy Director of Plant Protection Department Nguyen Quy Duong said: “In the complicated context of the Covid-19 pandemic, the requirements of the import market are increasingly strict, it is time for the pepper industry to switch from production by quantity to quality, that helps farmers have a sustainable income. This project will create new motivations and opportunities to increase exports to the European Union market as well as improve the quality of Vietnamese pepper products in the coming time. The project also acts as a bridge between domestic and European businesses reaching a common goal of developing a sustainable pepper industry.”