Finland/MTK/AgriCord started improving family forestry services in the Quang Tri province by a one year pilot implementation in 2010. Experiences of the first year are positive. The need for support has been confirmed and the twinning partners are working well together. Farmers are satisfied with the improved access to forestry services. Training has improved knowledge of sustainable forest management, collective procurement of seedlings and inputs have reduced costs by 20-30% and market price information has improved smallholders’ knowledge of the timber markets. Households have prepared their forestry management plans (including input requirements and harvesting quantities). The pilot cooperatives have consolidated member household forestry plans into long term cooperative forestry business plans. Smallholders are also well aware of forest certification issues. While the progress in the first year is good, longer term support is required for farmers to start collective marketing, which may develop into a replicable model for up-scaling. The project will continue in the initial two pilot agricultural cooperatives and include one additional pilot cooperative. The total direct outreach is 947 households. Capacity building aims at developing the agricultural cooperatives into efficient forest owners’ service organizations with the following expected achievements: • Replicable model of smallholder forest producers’ cooperation is created. • The forest producers’ organizations are feasible and financially sustainable with profitable business activities.

There are no smallholders’ forestry organizations yet in Vietnam. Forest policies are conducive for private commercial forestry and state lands are being handed over to smallholders on 50-year land use certificates. Timber furniture exports to USA and EU are booming. However, smallholders cannot capture value chain opportunities and potential profits are reduced by middlemen. The timber processing industry imports 80% of its raw materials while 90% of the smallholder timber production is sold for pulp. Smallholders would receive tangible benefits by developing effective collective services in forestry. The initial project of one year will focus on 2-3 pilot agricultural cooperatives to develop into efficient forest owners’ service organizations.

The objectives of the project are: • To stimulate the application of new techniques of production in the selected cooperatives' value chains to improve product quality and quantity thus generating more income and employment for their members; • To enhance business management of rural cooperatives by business management training and application of information and technology in business management in the selected value chains; • To entice service providers to develop new products designed especially to attend actual and potential market demand of the selected value chains; • To strengthen VICOPSME QT through the provision of a basic but fundamental service towards their members (Cooperative development fund).