Cost monitoring to promote the benefit for clam raising farmers in the Northern area of Vietnam Bui Thi Nga1,*, Tran Thu Hoai1, Tran Huu Cuong2 and Philippe Lebailly3 Department of Business Management, Faculty of Accounting and Business Management, Hanoi University of Agriculture, Trau Quy, Gia Lam, Hanoi, Vietnam +84 1 Department of Marketing, Faculty of Accounting and Business Management, Hanoi University of Agriculture, Trau Quy, Gia Lam, Hanoi, Vietnam +84 1 2 Department of Economics and Rural Development, Gembloux AgroBio Tech, University of Liege, Passage des Deportes 2, B-5030 Gembloux, Belgium + 32 3 CONTENT OF THE PRESENTATION 1 Introduction 2 Objectives and research questions 3 Methodology 4 Cost monitoring in clam farming 5 Conclusions 1. INTRODUCTION The economy of Vietnam has grown gradually. Since 2005, Vietnam become 2nd country in Asia has highest economic growth rate 2000-2011: Income increase 5 times High income growth rate stimulated high nutrition food consumption, including seafood 16 Milk consumption growth rate China Vietnam 14 12 10 8 6 4 NZ Asia 2 0 Phillippine US 0 2 4 6 India 8 Income growth rate 10 Source: Nancy, 2008, FAO, 2009, GSO, 2011 1. INTRODUCTION Since 2000s, significant changes in traditional production systems of coastal municipalities in Vietnam: rice and salt marshes farms converted to aquaculture production. Clam farming in the coastal provinces developed, generated high income, improved socio-economic development However: many clam raising farms facing difficulties of farm management, disease control, markets and systems of quality control. In addition, climate change is likely to significantly affect these areas particularly exposed to sea level rise. 4 2. OBJECTIVES Analyze the performance and efficiency of clam farming Research situation of cost management in clam farming in coastal provinces in the Northern VN. Analyze the basic factors affecting clam farming Suggest some solutions to improve income/profit for clam raising farms. RESEARCH QUESTIONS 1. How is the situation of clam farming in the recent years? 2. How is the cost management on clam raising farms? 3. What are the factors affecting cost management in clam raising farms? 4. How can we improve cost management in clam raising farms? 3. METHODOLOGY: CHOOSE THE STUDY SITE Vietnam has long coastal area, with 2 major areas of clam farming: Northern and Southern At farm level: not good performance. 3. METHODOLOGY: STUDY SITE Thaibinh and Namdinh provinces: Located in the Northern area, have the highest productivity and quantity of clam raising farms in Vietnam; Farmers in these two provinces have a longer experience in clam raising Clam is the key economic sectors, bring the major source of income for clam raising farmers Clam raising in these two provinces has to cope with challenges in sustainable development. 3. METHODOLOGY: SAMPLES + Structure questionnaire: 89 clam raising farms + Informal conversational interviews: In-depth interviews, Key informant interviews, PRA, Group discussions, Ranking, Observation 4. PERFORMANCE AND EFFICIENCY OF CLAM FARMING Indicators Unit Revenue Million VND Total output Tons Price Thousand VND/kg Intermediate costs Million VND Cost for seed Million VND Cost for material Million VND Cost for renovation pond Million VND and intertidal Other expenses Added value Million VND Million VND Wage Million VND Interest rate Million VND Land rent Million VND Gross profit Million VND Quantity % 492.48 revenue of 100.0 43.2 11.4 190 38.6 140.2 28.5 34 6.9 7.9 1.6 7.9 1.6 302.48 61.4 176 35.7 100.8 20.5 13.2 2.7 10 COST MONITORING IN CLAM RAISING FARMS Cost for seed After 21 months, farmers received only 12.48 million VND (583 USD) Gross profit accounted for only 2.5% total revenue Cost for material 3% 3% Cost for renovation pond and intertidal 29% 21% Other expenses 7% 36% 2% 2% Wage Interest rate Land rent 11 - 75% NUMBER OF FARMS FACED WITH THE SITUATION OF MASSIVE DEATH - MORE THAN ONE THIRD FARMS GOT LOST, ONE THIRD GOT BREAK-EVEN, ONLY ONE THIRD GOT PROFIT [CATEGORY NAME], [VALUE]% [CATEGORY NAME], [VALUE]% [CATEGORY NAME], [VALUE]% 12 Monitoring cost based on recording in clam raising farms Indicator Frequency Level (%) Usually 28 Often 18 Sometime 5 (%) Detail 10.7 Record main information 42.8 Time of Information record (%) record Every day 0 Weekend 0 When remember 39 Cost 53.5 Revenue 28 13 FACTORS AFFECTING THE FARMS’ ECONOMIC PERFORMANCE AND EFFICIENCY Farmers’ characteristics Age of farmers was high: had experience, accumulate capital big investment decisions. Old age for renovation, application new things: knowledge, scientific method, technology, etc. Almost farmers did not want to join course/training/applying new things in their farms (even without any fee). 56-60 years old 51-55 years old 46-50 years old 41-45 years old 36-40 years old % 14 0 10 20 30 FACTORS AFFECTING THE FARMS’ ECONOMIC PERFORMANCE AND EFFICIENCY Farmers’ characteristics Most farmers had primarily and secondary school (78.57%). None of them had higher degree or technical certificate. None of them was trained technical skill of clam raising or farm managing difficult to acquire sciencetechnology knowledge. High school, 21.43% Primary school, 35.71% Secondary school, 42.86% 15 MARKET Farmers: understanding of market mechanisms limited difficult to support for investment decision and marketing. Value chains did not equal distribute in the sector. Producers were exposed to high- price volatility: relative variability of supply, demand remained unstable, especially afterAND the problems product quality LOCATION AREA OFrelated CLAMto RAISING FARMS located in the coastal line, easily affected by pollutants from the use of agro-chemicals in the upstream area and from areas of habitat, the water quality, 16 climate change, cause natural disasters massive death 5. CONCLUSION Clam farming in the coastal provinces of Vietnam has notably developed and provides farmers a chance of getting high income parallel with high risk. Capacity of farm cost control; farmers’ experience, skill, technique and ability of risk control; unstable market and unsuitable market channel; and the area and location of clam raising were the four major factors affecting the performance of clam raising farms. Despite these difficulties, many surveyed farms still want to expand or will continue their production. 17 RECOMMENDATION Cost control of the farmers should be improved: Clam raising farmers should be trained to monitor and apply a cost monitoring in their farms to improve their performance situation and enhance their profit and benefit. Improve the ability of the farmers cope with the risk in their production and their lives. Government and local authorities support, create, maintain a stable market for clam raising farmers 18 THANK YOU FOR YOUR LISTENING!
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