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Vietnam

Supplying the world with garden furniture, small forest owners in Vietnam could help end deforestation

Story by WWF August 23rd, 2017

In Thua Thien Hue Province in the foothills of the Annamite mountains in Central Vietnam hundreds of smallholders are joining forces to produce sustainable acacia used in outdoor furniture around the world – with most of the country’s 2.7 million hectares of plantation forest owned by individual households, expanding the approach and making the business case for sustainability may be the best chance for saving forests in the Greater Mekong.

Seedling Science

“It all starts with the seedlings!” says Le Thi Thuy Nga, Manager of Tien Phong Forestry Company. “All of ours are propagated from the ‘mother tree’ kept by the Academy of Forest Sciences in Hanoi. With a 99 per cent survival rate they effectively double overall plantation productivity.”

Le Thi Thuy Nga, the nursery manager at Tien Phong Forestry Company, Huong Thuy town, Central Vietnam.

Located in Huong Thuy in Thua Thien Hue Province, Tien Phong’s nursery is all about the science of maximising growth. Its propagation room sparkles with intent.

Thousands of tiny green acacia seedlings snug in rows of gel-lined tissue culture jars are matched by as many lights urging forth new life.

In business since the end of the war, Tien Phong’s nursery supplies many of Vietnam’s acacia plantations and is part of the architecture of economic development that has flourished since the country’s 1986 free-market reforms.

Known as Đổi Mới (Renovation), they have produced consistent annual GDP growth of 6-8 per cent.

The seedling nursery at Tien Phong Forestry Company, Huong Thuy town, Central Vietnam.

The price of growth

Growth has come at a price. Vietnam’s forests, significantly damaged by war, have now been degraded or destroyed by logging and agricultural land clearance to the point where there is almost no untouched primary forest left.

And the wider Greater Mekong region is predicted to be one of the world's hottest 'deforestation fronts' over the next 15 years if nothing is done.

Vu Nguyen, Sustainable Acacia Manager, WWF Vietnam.

Reforesting degraded areas with natural species and enriching plantations with natural ‘buffer zones’ is part of the solution and can provide vital corridors for wildlife.

Reducing dependence on foreign imports that drive deforestation is also critical. Ultimately, tackling deforestation relies on making the business case for sustainability – especially for Vietnam’s 1.5 million smallholders who own most of its plantations.

“We realised that small forest owners could help shape a sustainable forest sector – but only if they could supply the international market”, says Vu Nguyen, Sustainable Acacia Manager, WWF Vietnam. “That means helping them improve the quality of their product.”

Yet delivering conservation, improving livelihoods, expanding supply and market integration are not always compatible.

An aerial view of an acacia plantation in Phu Loc district, Central Vietnam. The plantation is owned by a number of smallholders.
Natural forest is separated from plantation forest land by a ‘buffer zone’, Central Vietnam.

On the plantation

Donning bright orange vests and shiny hard hats, and expertly wielding bushwhackers, Ho Da The and two fellow acacia farmers, Ho Duc Luc and Ho Duc Ngu, make their way through The’s acacia trees on a muggy afternoon in the Phu Loc district in the foothills of the Annamite mountains around 40 kilometres south of Hue City.

Oblivious to the biting midges, the trio prune and thin as they go, checking all is well in the plantation.

Ho Duc Luc, Ho Duc Ngu and Ho Da The, FSC certified acacia smallholders in Phu Loc district, Central Vietnam.
Ho Da The rides to work on his FSC certified acacia plantation, Phu Loc district, Central Vietnam.

A beneficiary of government programmes derived from Đổi Mới, The is from Hoa Loc village in the Loc Bon commune.

A smallholder with 4.91 hectares of acacia plantation, he heads up the village smallholder group.

Together with Luc and Ngu, he’s lived here all his life but working formally as a group is relatively new – the result of involvement in WWF’s regional Sustainable Bamboo Acacia & Rattan Project (SBARP).

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Barriers to entry

In collaboration with WWF corporate partner IKEA, the project promotes Forest Stewardship Council (FSC) certification as one way of driving sustainable production and drawing smallholders into the international market.

In Vietnam, it also matches the government target of certifying 500,000 of the country’s 6.7 million hectares of production forest by 2020 in a bid to meet increasing market demand for sustainability and reduce reliance on imports.

But achieving certification is not easy for smallholders.

“When we were provided with information about FSC certification, we were really perplexed. Our ability to complete various documents such as a sustainable management plan was limited”, says The. “We were actually embarrassed.”

“We realised forest owners would have to work together with suppliers, the government and local administrations”, says Vu Nguyen. “Hoa Loc village group belongs to a larger association of 241 small forest owners in Thua Thien Hue Province – the Forest Owners Sustainable Development Association (FOSDA).”

A truck loaded with acacia leaves the plantation. Phu Loc district, Central Vietnam.

Together possible

The Minh An processing company in the town of Phu Bai near Hue City only uses FSC-certified acacia as requested by its customer, Scansia Pacific.

A Vietnamese supplier to IKEA, Scansia produces the home furnishing giant’s Äpplarö range of outdoor furniture.

It’s a market link that’s been instrumental in enabling Phu Loc’s smallholders become certified.

Nguyen Thi Thu Ha, Vice Director, Minh An Co, Huong Thuy district, Central Vietnam.

“We really had difficulties sourcing certified material at the outset”, says Ha. “So now we support forest owners in Thua Thien Hue and Quang Tri provinces with [certification] assessment costs. The relationship is closer now. We feel happy creating value for local people. It’s is a win-win deal.”

Acacia being processed into parts for garden furniture at Minh An Co.
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Working with Minh An, Scansia and IKEA, and adopting a pioneering group approach to certification through which they share costs and responsibilities has radically changed how The’s Hoa Loc village smallholder group do business.

Supported by WWF, it belongs to a larger association of 241 smallholders in Thua Thien Hue Province – the Forest Owners Sustainable Development Association (FOSDA). Working together has delivered a lot.

In 2016, the FSC issued a certificate for more than 4,000 hectares of acacia in Thua Thien Hue province, 951 hectares of which belong to FOSDA members.

What Minh An and Scansia are doing is in turn shaped by IKEA: using all of the certified wood from the project’s small forest owners is part of its wider sustainability strategy, including an ambitious commitment to obtain all timber from more sustainable sources (FSC certified or recycled) by 2020 – something already achieved in Vietnam.

On to a good thing

Better business planning and longer harvest cycles produce more valuable timber, and commitment from buyers like IKEA mean a better price. Seven to eight-year-old acacia for furniture commands more than twice what a five-year-old harvest used as woodchip for pulp and paper can.

“Before, acacia production was just a way for people to survive – now it’s becoming a professional commodity that’s market-driven”, says WWF’s Vu Nguyen. “And smallholder incomes and social standing are improving.”

The, Luc and Ngu now make over VND 30 million ($1,250) profit per hectare per year from FSC-certified acacia timber – about twice as much as what they would earn from non-certified acacia for woodchip. It’s enabled them to carry out house repairs, renew equipment, and invest in the next business cycle.

“Instead of getting VND 80 million ($3,300) per hectare, farmers can get VND 200-250 million ($8-10,000), which is two and a half or three times higher than what they normally get from a forest with a three-year-old rotation”, says FOSDA’s chairman, Vo Van Du.

Ho Duc Luc collects his son from school in Loc Bon commune, Phu Loc district, Central Vietnam.
Ho Duc Luc eating with his family in Loc Bon commune, Phu Loc district, Central Vietnam.

Market integration

Tackling deforestation can’t be addressed only by working with big players.

Rapidly increasing uptake of sustainable production by small-scale producers and international market integration is necessary if multinationals and governments are to achieve much vaunted commitments to end deforestation like the New York Declaration on Forests.

Companies like IKEA that recognise this are key, yet while certification goes some way to addressing small-scale producer sustainability, it has limitations, especially if fails to be inclusive.

“We lack skilled staff members who can provide training on sustainable forest certification in Vietnam. In addition, the evaluation cost for sustainable forest certification is high relative to Vietnamese conditions,” adds Quach Dai Ninh, Vice Director of Vietnam’s Forest Development Department.

Scaling up

According to WWF’s Impact in the Forest report, deforestation-free enterprise remains in its infancy.

While the total FSC-certified area in Vietnam stood at 229,717 hectares as of March 2017, that’s less than half of the government’s 2020 target with just 5.4 per cent of the country’s 2.7 million hectares of plantation currently certified.

“The challenge is scaling up”, says Vu Nguyen. “Larger areas need to be certified to meet market demand. And investment at landscape and jurisdictional levels is needed to end deforestation. Companies like IKEA can help drive regional change but farmers and communities remain central to success.”

While it’s accepted that multi-nationals should create sustainable supply chains and deliver on the Sustainable Development Goals, our future prosperity may be in the hands of the millions of smallholders around the world who work the forests, plantations and fields that underpin the global economy.

How they go about producing core commodities could determine our fate.

Ho Da The putting on a gloves, safety gear is required to meet the FSC certification standards. Phu Loc district. Central Vietnam.
Fires burn at a non-FSC acacia plantation in Central Vietnam. FSC certification disallows burning due to its negative environmental impacts.
A local FSC-trained acacia harvester at work in Phu Loc district, Central Vietnam.
FSC acacia timber at Minh An Co processing factory, supplier to Scansia Pacific and IKEA.
Footnote: Photos by James Morgan, words by Justin Woolford.