Cost Benefit Analysis in the Sedge Value Chain in Ninh Binh Province

Sedge is a grass-like plant, cultivated in wetland and coastal areas, and mainly used as a raw material for handicraft such as mats, baskets or decorative items. Ninh Binh Province is the most important area for its cultivation, with export receipts from the crop amounting to US$ 10 million in 2006, and an important source of on farm and off-farm income for an estimated 25,000 poor households in the province. However, the sector had been in decline over a number of years, impacting negatively on employment, income and the traditional crafts from Ninh Binh province. This decline stemmed primarily from a shortage of high quality raw material. In order arrest this decline and develop a clear strategy for the sector, a thorough overview of the main issues in the sedge cultivation was conducted. A team of researchers (composed of representatives from local policy makers, researchers, sedge farmers and technical experts) supported by the Hanoi Agricultural University undertook a financial cost benefit analysis of the three main crops in the same coastal area, rice, shrimp and sedge production to understand the cost structures and lack of incentives in place to bring about improve in crop quality. The process took around 3 months to complete.

Outcomes of the research 

• The bottom up and participatory survey and planning methodology adopted by the researchers were an eye opener for stakeholders involved in the research study. It changed the mindset of the local government, by focusing its attention on improving the quality of the sector rather than the quantity, for which the government, until that point had clear targets.
• Ninh Binh province adopted many of the research recommendations in its 5-year master plan to support the sedge sub-sector which included an investment of 30,000 Euros for applied research to promote innovations at the production stage, skills development and the availability of finance to enable producers to invest in improving their production capacity.
• The research also brought together an initially fragmented approach characterised by often conflicting policies adopted by a number of different government departments responsible from supporting production to the development to the final use into a coherent policy with clear objectives and goals.
• The simple but effective research methodology was used by the Department of Agriculture and Rural Development (DARD) in Ninh Binh to conduct a similar participative planning process in 9 other poor communes. It provided inputs for a more coherent local government plan to support the income generation activities in these communes.

Key Success Factors

• The Hanoi Agricultural University was seen as a credible research partner by the provincial level authorities, with a research methodology that was easy to understand by all. 
• By involving DARD from the onset of the research process, the researchers were able to undertake policy advocacy right from the in initial design of the research methodology.
• The inclusion of both government and private sector representatives (3 leading sedge companies in Ninh Binh) in various exchanges during the study (field work, focus group discussion and validation workshop) was very important to ensure a shared understanding of real issues in the sub-sector, develop a vision for the future development of the sector and commitment in implementing the strategy.