Chapter 5 from Using Food Science and Technology to Improve Nutrition and Promote National Development,Robertson, G.L. & Lupien, J.R. (Eds), © International Union of Food Science & Technology (2008)

Village Level Processing: Empowerment Through Enterprise SkillsDevelopment in Lao PDR, Myanmar and Viet Nam

Alastair Hicks BSc(Hons) MEngSc PhD FAIFST FIAFoSTFormer Senior Regional Agroindustries and Postharvest Officer

FAO Regional Office for Asia and the Pacific, ThailandAdjunct Professor in Food Technology, Mae Fah Luang University, Thailand

E-mail: alastairhicks@gmail.com

BACKGROUND

In Laos, Myanmar and Viet Nam the agriculture sector is the primary source of income for most of theworking population in these countries. There is an urgent need to diversify and create additional on-and off-farm incomes as the current income to rural households is regularly disrupted, often fallingbelow expectations, as the rural poor in the countries deal with the vagaries of agriculture. In each ofthe three countries there is a clear need for enterprise development, marketing skills and a means ofcoordinating households/communities into collective action groups.

The capability in these countries to develop and operate rural businesses needs strengthening butthere is little tradition of households working together. In Lao PDR for example, there is a need forrural industrialization and crop diversification programs, which are only now starting. In Myanmar, anentrepreneurial spirit is present, though people need the necessary skill sets to be able to take fulladvantage of rural income diversification and to form groups to work together.

In contrast, a key feature of Viet Nam’s rural industry base is the presence of Occupational CommunityVillages or (OCVs) in which many households work together to produce one product. This collectiveapproach allows groups to develop some degree of economy of scale and greatly improves theirsustainability and efficiency. Despite the success of OCVs in a national setting, they are not yet fullyequipped to move into higher value (quality) markets and do not always have the resources and skillsto evolve into small- and medium-scale enterprises.

Using Viet Nam as a model, and by combining the lessons learnt from successful OCVs with skill setand entrepreneur development training, it should be possible to create focal villages in Laos andMyanmar that can be used as reference sites for further replication throughout each country. All threecountries are in transition to market economies. The selection of high quality markets will requiretraining in marketing skills. Their future entrepreneurs will require training in skills such as marketresearch, presentation and calculating marketing costs. Providing only technology or even finance isinsufficient to prepare the rural entrepreneur to undertake business. Interventions are required thatalso develop the necessary skill sets enabling rural entrepreneurs to create viable micro-enterprisesthat can compete in high-value crop markets.

Training interventions that are needed should be focused on-the-job, involving skills trainingprograms composed of (a) management-oriented or ‘business’ training (in such skills as costing,accounting, and bookkeeping,); (a) production-oriented or technical skills training; and (c)entrepreneurial development training (focusing on the motivational, attitudinal, and behavioralaspects of entrepreneurship). All these are needed, in addition to training on the skill sets involvedwith the use of food science, preservation technology and nutrition, to enable processing ofagricultural raw materials into marketable food products.

INTRODUCTION

A UN Food and Agriculture Organization (FAO) Technical Cooperation Program (TCP) project ‘VillageLevel Processing - Empowerment through Enterprise Skills Development’ was launched in February

2

2006 with a budget of US$379 000. This TCP project was prepared in accordance with the nationalgovernment priorities on agriculture and rural development in each of the three countries. Its aim wasto provide packages of skills necessary for farmers/rural entrepreneurs to coordinate group activitiesand develop food products that are acceptable to consumers. The products made in a cost effective andefficient way would have the potential to compete in higher-value markets. The project was designedto be compatible with existing regional, technical and finance-orientated initiatives, with the ultimategoal of alleviating food insecurity, while preserving good nutrition among rural communities andindividuals, and adding value to foods, thus providing stable incomes to rural households.

OBJECTIVES OF THE PROJECT

OVERALL OBJECTIVES

1. To promote household income generation through improvement of micro-enterprise innovation,management and marketing skills.

2. To promote rural employment opportunities by fostering inter-household cooperation to achieverelative economies of scale and clustering group activities to achieve supply chain integration anddiversification.

3. To develop at the national level a core support base consisting of a demonstration site, trainersand support persons providing entrepreneurial assistance to rural enterprises.

4. To link production or technology-based projects to market opportunities through creation of arural-based entrepreneur culture making technology transfer recipient driven as opposed todonor driven.

Figure 1. Local trainers and FAO team in Lao PDR.

IMMEDIATE OBJECTIVES

1. To train national focal persons in a portfolio of skills required to stimulate and sustain ruralenterprises.

2. To upgrade popular traditional food products for identified markets within the regional touristsector.

3. To develop safe, hygienic practices based on traditional processes and upgrade packaging, supplyand distribution.

4. To establish in each country a pilot site, functioning as an active, sustainable enterprise andcollectively harnessing the output of a number of households.

5. To add value to on-going technology transfer or credit-orientated projects.

3

OUTLINE OF PROJECT ARRANGEMENTS

This technical assistance was supported by the FAO Technical Cooperation Program Project “VillageLevel Processing – Empowerment through Enterprise Skills Development” jointly with the Ministriesof Agriculture in Viet Nam, Myanmar and Lao PDR. Each country arranged for an office and staff tooperate this Regional Project.

Viet Nam located the project in the Viet Nam Institute of Agricultural Engineering and Post HarvestTechnology (VIAEP) as their regional and national training site; Myanmar provided their CentralAgricultural Research and Training Center (CARTC), and Lao PDR their Crop Multiplication Centre(CMC) as their training sites.

The project was coordinated by the FAO regional office in Bangkok, and an agroindustries expert fromThailand was recruited as an international consultant and project Team Leader. The Team Leaderrecruited additional international and national consultants under the project in the following areasand disciplines:

International Consultants:Food Product Development.Food MarketingFood Micro- Enterprise

National Consultants:-Viet Nam:1. Product Development2. Micro-Enterprise

- Myanmar1. Product Development2. Micro-Enterprise

-Lao PDR1. Product Development2. Micro-Enterprise

RESULTS

Regional Training on Village Level Processing - Empowerment through Enterprise Skills Developmentat Viet Nam Institute of Agricultural Engineering and Post Harvest Technology (VIAEP), Hanoi,Vietnam.

Between 2nd - 20th October 2006 the Regional Training Course on ‘Village Level Food Processing –Empowerment through Enterprise Skills Development’ was held in Hanoi, Viet Nam, at VIAEP. Inattendance were eighteen participants from Vietnam, Myanmar and Lao PDR, consisting of twelveFocal Point Persons and six National Consultants. There were also two volunteers, one each fromCambodia and Myanmar, who attended at their own expense.

Regional Training Course Topics

The regional training course consisted of the following topics:

Marketing : Theory and Exercise 18 hoursMicro-Enterprise : Theory and Exercise 18 hoursCommunication and Group Work 14 hoursFood Processing Theory 11 hoursFood Processing Practicals 40 hours

4

Marketing Survey Exercise 10 hoursVillage visits in 2 villages (Occupational Community Villages OCV)(to inspect confectionary & noodle production)Training at the village level: 12 villagers in 1 village(which is making dehydrated onions)

Considerable time was spent in addition to the above hours stated, in group networking,communication, as well as translation and traveling to the various sites for field activities.

National Training of Trainers on Village Level Processing – Empowerment through Enterprise SkillsDevelopment in Vietnam, Myanmar and Lao PDR.

CONCLUSIONS AND OUTCOMES

1. Training Resources

Rapid rural enterprise sub-sector assessments were made of selected OCVs in Viet Nam, detailingsuccess criteria of the agribusiness in terms of raw material production, product flow from rawmaterial through producers and ultimately to the consumer. This material was later used in trainingresources to be applied in Myanmar and Laos by the trainers and trainees.

2. Trained Core Team of National Focal Persons

Selected focal persons were trained in a range of rural enterprise development and skills, activitieswill be action-focused using examples from the selected OCVs in Viet Nam and employing a SuccessCase Replication (SCR) procedure.

3. Identified Traditional Products Suitable for Sale to Local Consumers or Tourists

After developing an inventory of national traditional products in Laos, Myanmar and Viet Nam, a shortlist of items have been presented to local consumers (or tourists) for feedback. For each country, afood product has been selected for production and marketing, viz., pumpkin crackers for Vietnam,solar dried tomatoes for Myanmar and fried ripe bananas for Lao PDR.

Figure 2. Traditional food samples from Lao PDR.

4. Pilot Sites Operating in Each Country

5

Viet Nam has located the Viet Nam Institute of Agricultural Engineering and Post Harvest Technology(VIAEP) as their pilot training site, whereas Myanmar has used the Central Agricultural Research andTraining Center (CARTC) as their pilot training site and Lao PDR the Crop Multiplication Centre (CMC)as their pilot training site. The trained focal persons supported by technical assistance will work withhouseholds in their community to develop a full set of enterprise development skills and acollaborative mechanism enabling households to work together.

5. Value Addition

Many products have been demonstrated as having value addition to the agricultural raw material.Each raw material has been processed into at least three products. Trainers have adapted appropriateprocessing technology to suit the local demands. Throughout the project the villagers were able todevelop the ability to measure and record the value addition and increased income.

Figure 3. Dried chillies and mushrooms in Lao PDR market.

6. Capacity Building

The intention of the project has been to promote food processing and micro-enterprise developmentand entrepreneur skills of personnel in government, supporting institutions and villages, throughdemonstration and training. The following elements have contributed to the capacity building aspectof the project.

The initial group of focal persons undertook a Regional Training Course in Viet Nam. This group ofNational Trainers has translated skills developed in Viet Nam into their local context. The members ofthe group were then responsible for establishing a local pilot site in their back-home situation, where amodified entrepreneur skill set could be transferred to local extension workers from government andsupporting institutions, who in-turn would through their village level training courses, develop ‘VillageTrainers’.

Training materials have been prepared and/or adapted during the Regional Training in Viet Nam andthe establishment of the pilot sites. These contain details on food processing, micro-enterprisedevelopment, marketing, group formation and dynamics, use of savings and credit. They can be usedand modified jointly in consultation with trainees and trainers throughout the project.

6

7. Establishment of a Network of Family-based Micro-enterprises

The village level food processing training has been carried out to contribute to enhancement of incomegeneration, food security and nutrition for the members of the pilot site as well as the villagers to betrained. The approach has been centered on family-based micro-enterprise development, creatingeconomies of scale and greater independence through the development of production groups.

Figure 4. FAO village level training in Myanmar.

A group-based Success Case Replication (SCR) approach has been one of several options that was usedwhere appropriate and applicable, to introduce a sustainable mechanism for micro-enterprise skillstraining in the food-processing sector. In the selection process successful entrepreneurs wereidentified from vulnerable groups. Success case stories were documented and incorporated intotraining materials for groups.

The trained pilot site participants were expected to disseminate the acquired skills to othercommunity members and households, through existing farmer group and/or community basedlearning institutions. Capacity building would continue to be facilitated by close collaboration with theconcerned government Ministries of Agriculture, and their Extension Departments.

Figure 5. Village level processing in rural Lao PDR.

7

SUCCESS CASES FROM THE TRAINING

In Vietnam:

Two trainers have performed their work very successfully, both on Training Villagers and ProcessingPumpkin Crackers. They have trained 10 women from their communes in making potato chips andsweet potato chips, added-sugar crackers. Each day 200 kg of pumpkin crackers were processed andpacked in 1 kg plastic bags. One kg of fried pumpkin crackers can be sold for the equivalent of US$1.50,so in one day a producer could gross US$300. The product is supplied to restaurants and small shopsin bulk and this approach has helped in marketing. It is expected that there will be an expansion ofthese activities to other nearby communes.

Figure 6. Viet Nam food display.

In Myanmar:

A trainer started food processing to establish a viable enterprise. The products are tomatoespreserves, tamarind toffee, and banana chips. A modified, small solar dryer which cost about 20,000kyats (US$32) will be used to make products that have good quality packaging to attract the buyer.The products are sent to a broker in a larger town, and to snack shops in the village and nearby. Thetrainer has also trained ten village participants and one of them is going to start her own enterpriseafter the village training.

In Lao PDR:

Processed banana chips from ripe bananas have been developed, and this product is different from thetraining given (using raw banana). This new idea gave very interesting sweet products. Up to 80 handsof banana could be processed per day and sold for 400,000 kips (US$42.32) per day, with a profit ofabout 200,000 kips (US$21.16) per day.

8

Figure 7. Production of banana chips.

TCP PROJECT RECOMMENDATIONS

SUCCESS CASE REPLICATION

After training, trainers have successfully carried out training for other women and many of them havestarted their entrepreneurship, which indicates that the training is a successful. In order to havesuccess case replication, Trainers have to continue follow up on their Trainees to assist them to besuccessful entrepreneurs.

VILLAGE FOOD PROCESSING TRAINING CENTRE

The Village Food Processing Training Centre in every country should continue to conduct nationaltraining by the National Project Directors, National Consultants and Focal Point Persons.

Figure 8. FAO team with local trainers and trainees in Myanmar.

9

FOLLOW-UP SUPPORT

The training has equipped the Trainers with the essential skills in food processing, economics,marketing, and business management. Practical exercises were lively and taken very positively by thetrainees. The success of the training is actually measured by how far the trainees have been able toestablish and operate their own enterprises and also conduct training for other villagers. In reality thetrainees normally encounter unanticipated complexities and challenges for which no class room orlaboratory-based training could have prepared them adequately.

KEEPING THE TRAINING CENTER ACTIVE IN WOMEN ENTREPRENEUR DEVELOPMENT

With strong policy-level backing, together with technical and moral support from the Ministry, theCenter may be able to earn its income by conducting training sessions, charging fees on the use of theequipment, and processing food for the markets. The details of cost and income sharing arrangementsneed to be worked out.

The Center should actively approach the market players such as wholesalers or the potential buyersfrom different companies or offices. A mix of products needs to be produced and marketed in responseto the demand mix for a number of products. This strategy opens up opportunities for low costproduction and distribution, and the utilization of seasonally-available raw materials. It also helps tominimize risks of market failures of particular products, and compensate the low profit margins ofsome products by high profit margins of others. Recently-trained village women can be invited to workfor wages on a part-time or full-time basis as per market demands and their time availability, furtheraiding to women’s employment.

ROLE OF NATIONAL PROJECT DIRECTORS

National Project Directors should make contact with local fruit and vegetable associations or alliedassociations for marketing support.

Figure 9. Pickled tea products from Myanmar. Figure 10. Lao PDR solar dryer.

10

ROLE OF THE GOVERNMENTS

The TCP Project strongly recommended that the governments should continue giving support to allparticipants to carry on their processing activities in the villages. Most participants have learnedenough to successfully perform food processing but they may need additional support on productimprovement, supply of packaging materials, micro-credit and marketing support.

It was further strongly recommended that the governments should try to find some funds for hiringadditional National Consultants and Focal Point Persons to enable them to develop further the positiveresults of this TCP Project.

ASSISTANCE FROM OTHER ORGANIZATIONS

This TCP Regional Project was a pilot project. With the successes of this pilot project, it is hoped thatthe results will lead to additional assistance from other international organizations (e.g. UNDP, ADB,World Bank, GTZ, EU and JICA) to continue the expansion and grow the activities. During and after thetraining, many organizations have visited the success cases and have shown their interest and gainedvery good impressions from these and other success cases. Of course, the ultimate success of suchactivities will be the development of viable and sustainable food processing activities that do notrequire outside assistance, and assure better food quality, safety and nutrition for producers andconsumers.

ACKNOWLEDGEMENT

The author would like to acknowledge the major contribution to the projects described in this papermade by Dr. Narin Tongsiri, Former Dean of Agroindustry at Chiang Mai University, Thailand. As FAOProject Team Leader, he identified the other international and national consultants for the project.Sadly he passed away in April 2008.

Figure 11. Team Leader Dr Narin trains village level banana chip makers.