An analysis the value chain of fresh milk in the North of Vietnam : the case study in Sonla

Vietnam locates in the most active region (Asia), where gains the highest economic
growth rate and highest milk consumption in the world. Milk growth rate is higher than
almost other agricultural products in the past 10 years in this region (Nancy, 2008). Vietnam
is also one of the highest milk productivity in the Asia. Milk consumption in Vietnam is
increasing rapidly (Nancy, 2008). However, the dairy industry in Vietnam is currently able to
meet only 22 percent of domestic demand; the remaining amount has been imported from
overseas suppliers and producers (VOV News/VNA, 2008). In addition, the linkages among
the actors and stakeholders in the value chain of milk in the North of Vietnam are very weak.
It leads to low effective in the production of the whole chain. This paper based on semistructure,
standard questionnaires and PRA method to collect data of dairy farms in Sonla
province, of milk collecting centres, of dairy plan and of milk distributors in 2008-2010. The
findings show that dairy plan is the most powerful actor in the chain and it drives the whole
chain. The value added of the chain is distributed unequally among determinants in the bias
orientation to the non-farmer (non-producer). Opportunity cost of land, capital, and family
labor in farm does not include when they calculate their benefits, thus it is not reflect the real
situation and their value added would be much lowers. Weak linkages among participants in
the chain with stakeholders and insufficient supports discourage farmers to develop their
production.