Page 94 - Agricultural innovation

5.12.3. Opportunities and challenges
The model of contract farming between dairy companies and farmers has solved the shortcomings
in the transition from state farms to joint stock companies and employees have worked on former
state farms. This form of contract farming has created conditions for old farm workers to have jobs
and incomes and help workers’ families to settle down and be able to live with previous occupations.
Therefore, this model can be applied to other areas with similar conditions such as coffee farms,
sugarcane plantations, etc.
However, this form of contract assignment must have an agreement on sharing benefits as well as
responsibilities of the parties, especially the company must ensure favorable conditions for production
and especially product consumption. The norms of contract, fee collection and sanctions for breach
of contract must be discussed and agreed upon by the parties. In particular, this contract must have a
long enough term for people’s investment in the growth cycle of livestock and plants.

5.12.4. Conclusions
In order to improve effectiveness of landuse some localities have recovered farmland to contract
enterprises to improve production efficiency according to the model of “large fields”, facilitating
mechanization and investment in science and technology. This job brings benefits to businesses,
creates jobs for a part of local workers, but vice versa in many places, it has had a negative impact on
livelihoods and lives of people in the region due to lack of jobs. Therefore, Moc Chau Milk’s model of
household contracting is an innovative, creative and effective form of association because the company
allocates land to people to produce animal feed by themselves. Cows are left to farmers to take care
of themselves, dairy products are owned by the people with a company that guarantees them all, and
support and insurance mechanisms help farmers to invest in production with peace of mind. Thus,
this model has harmoniously solved the interests of businesses, farmers, and socio-economic problems
in the locality. This is also the model to increase effectiveness of state land.

5.13. Model of Artichoke Tea Production Alliance in Lam Dong province
5.13.1. General information
Ngoc Duy Tea Co., Ltd. was established in 1990. This is the first enterprise in Vietnam to process the
raw materials from artichokes (leaves, flowers, stems, roots) into tea bags by Nguyen Thi Loc–business
owner, who is credited with giving birth to the artichoke bag tea industry in Vietnam.
Ngoc Duy is a small-scale private enterprise, a member of the Association of Young Entrepreneurs
and Producers of Lam Dong Province. Basically, the form of operation of the company is to purchase
farmers’ artichokes, then take technical measures and apply science and technology to classify, produce,
process and pack. The products of Ngoc Duy company has been sold widely in different distribution
channels in Vietnam.
In addition to the main product, artichoke tea bags (accounting for 75% of total sales), in the
process of development, Ngoc Duy Company also processes other tea products such as bitter gourd
tea, Chamber bitter/leafflower tea, Multiflorous Knootweed tea, Crinum latifolium tea, etc. The raw
materials for the production of the company’s teas are all high-value medicinal plants grown and
developed in Lam Dong province.
The company’s main consumption market is the domestic market, accounting for 75–85% of total
revenue. The company has set up more than 1,000 agents nationwide and consumming in many big cities
and big supermarkets. The company’s market share of artichoke tea bags currently accounts for about
30–35% of the domestic market share. For the international market, the company’s tea products have
been exported to a number of countries such as France, Canada, Taiwan, Singapore, Laos, Cambodia...

Agricultural Innovation Review in CLV Countries 87