Yen Bai is a mountainous province, placed in a centre of Northeast and Northwest of Vietnam. The forest and forestry land area cover more than 62%.  About 79%  of the province's population live in rural areas, depend on forestry and agriculture. There are 12 indigenous peoples living together in Yen Bai province, such as: Kinh , Tay , Dzao ,  H’Mong , Thai, Muong , Nung, San Chay, Giay, Kho Mu, Hoa, Phu La. Dao Thinh Commune, Tran yen District, Yen Bai province is one  of communes of FFF project site.

The VNFU project management unit first visited Dao Thinh Commune, Yen Bai province in 2015. At this time, Dao thinh had 858,71ha  of  forest, in which   about 123 ha of natural forest,  504 ha of cinnamon trees , 178  ha of acacia and  remaining areas for other various timber trees and tea.. Most of forest plantation households grew cinnamon and forest trees and were selling their products individually for middle men and traders. They did not have market information, negotiation power, so the price depended on traders and buyers. There were a few cinnamon grower groups. But those groups consists of family relative members, they did not have collective actions, sometimes they worked together for news seedling plantation or and technique sharing. They produce conventional cinnamon with chemical fertilizer and pesticide.

FFF Management Unit in their field visit to cinnamon cooperative

 
The prices were low and not stable – and the cinnamon growers often get less income because the cost for chemical fertilizer and pesticides is high and they had little knowledge of the market or processing options, no contract farming, no partnership clients. None were operating or registered as a business.
Following the activity work plan of FFF, as a main partner, VNFU  has carried out many activities of FFF in Viet Nam on capacity building for  forest farmers, and leaders of farmers organizations on organic cinnamon  production and doing business, helping  the forest farmers to  be well organized, to increase their numbers, strengthen their knowledge on organic farming, market  and business, organic farming knowledge improvement  and  cooperating with private sectors in value chains.

Facilitated discussions among forest farmers and some informal farmer groups led to their recognition that farmers should be well organized. The collective  farmer group could help them to share market information and organic practices, aggregate their supply and hopefully negotiate better prices for their high quality product. This crucial early FFF-facilitated trust-building work led to the formation of four collective groups of cinnamon production. The members of collective groups started doing collective actions, they understood the benefit of group work on  organic production, problem solving and selling products  (locally called To Hop Tac -THT).

The next step was to select leading entrepreneurs within the groups to participate in an FFF-funded training process on Market Analysis and Development (MA&D). This built knowledge of five main areas of business (natural resource management, economy and finance, technology research and development, institution and legality, and socio-cultural integration). The process involved proactive investigation of each knowledge area between the iterative training events  and coaching– culminating in the development of an enterprise development plan.  After learning MA&D training and some other training course on communication, policy advocacy, project writing, timber and non timber processing… and exchange visits to the cooperatives and companies in other provinces (Lao Cai, Hưng Yen, Bac Giang, Quang Ninh, Hoa Bình, Ha Noi), 4 Cinnamon collective groups recognised the strength in numbers and the need to organization for business. They decided to associate with each other to become an inter-collective group with 39 members and  have 135 ha of cinnamon. The Inter- Collective group worked out the business plan, made market study, looked for potential buyers, companies, introduced their cinnamon products in agriculture fairs and actively went to look for markets. Beside of doing business activities, the group started learning and applying organic cinnamon growing to improve quality of cinnamon and planting herbal trees under the forest.

At the same time the FFF project management unit facilitated a series of Round table discussions(RDs) between group members and local government agencies – including both the commune, district and provincial Farmers Union and People’s Committee, Government’ officers of relevant sectors, the banks and  private sector actors. Through RDs, some problems of forest farmers and forest and farm producer organizations (FFPOs) had been solved. The local authority approved organic cinnamon development strategy which was mentioned in the local socio-economic development plan and supported the inter-collective group to build up nearly 2 km of cement forest roads.  During that process of RDs at commune and district level, a leader of a potential  company/ big buyer was invited to participate in RDs to discuss how to develop organic cinnamon  and he also had interest in enhancing the quality and range of organic cinnamon products, produced by  collective groups or cooperatives.

By the end of 2016, most of members of cinnamon inter- collective group wanted to establish a cooperative to expand their production, organic cinnamon processing and business with legal status accordingly Cooperative Law.  With support of Yen Bai Farmers’ Union, the leaders of the inter-collective group reached an agreement with local Government authority on the lease of land for a processing plant. A total of 23 household members (out of an initial group of 39) were willing to put their own money into a joint business for organic cinnamon processing. Bank loans (both individual guaranteed by land certificates – and group loans backed by VNFU agreement with an agricultural bank) together with the buyer who was willing to invest – on the condition that the group would register more formally as a cooperative.
Recognizing the role of collective groups and cooperatives; building up sustainable agro-forestry production models; building up linkage and cooperation relationship between enterprises with fforest and farm producer organizations (FFPO), starting from the area of ​​1.7 hectares of organic cinnamon production, at the moment organic forest farmers produce more than 500 hectares of organic cinnamon in this commune. With the effective support activities of the FFF program, Dao Thinh cinnamon  inter-collective group  has formed a new direction on the development of organic cinnamon production with strong and effective linkages between farmer collective groups and enterprises. The Vietnam cinnamon and star anise cooperative was born from the described process between cinnamon inter-collective group in Dao Thinh commune and the Vietnam Samex exporting company, the private investor.

Cooperative registration then happened and launched formally with the name “ Viet Nam cinnamon and star anise cooperative “  on 17^th April 2017, The Cooperative has as strategy to produce organic cinnamon and get organic certification to be able to supply the global market.
With that process complete, the local authority allowed the cooperative to lease more than 9900 m2 land for processing factory building, the newly established cooperative moved to mobilise their finance for organic  processing factory in  Dao Thinh commune.

 In May 2019, the formerly disorganised group was now a formally registered cooperative marketing various washed and dried grades of organically certified cinnamon to a range of national buyers and importers from EU and Japan. In addition to the 23 founding cooperative members, more than 500 associate members are supplying organic cinnamon to the processing plant. The incomes of associate members have increased, because the price of organic cinnamon is higher than conventional cinnamon (about  30%) and the cooperative has signed contracts with organic cinnamon households since season beginning with stable price. Besides that, the Cooperative often organizes trainings for member households and applies internal control system (ICS), so it helps forest  and farm farmers to understand and practice organic farming, reduce chemical fertilizer and pesticide use in forest and agriculture, diversifies crops, mulberry,  organic herbal forest trees and protect environment.

At present, the cooperative creates jobs and salary for about 70-100 people, most of them are women in this commune and  more than 500  forest farmer household have been trained on organic farming and they apply in there commune with organic farming regulation.

With the new found confidence in business, with support of Commune Farmers’ Union, two further collective groups has been established within the commune to diversify its organic production base:  one intending to grow and market four different organic Herbal Plant Remedies, and the other already establishing mulberry for a Silk Worm collective group and they will use PGS for their  forest non timber organic products.