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Report Feasibility study organic bitter tea Cao Bang - Helvetas

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<strong>Feasibility</strong> Study Organic Bitter Tea in <strong>Cao</strong> <strong>Bang</strong>: 2007<br />

visit. Furthermore, the flow of produce from individual producers is under greater control<br />

with centralised marketing as a group (IFOAM, 2004).<br />

Several ICS have been set up in Vietnam already, for example by the <strong>tea</strong> company Ecolink.<br />

This ICS includes over 200 farmers as well as a processing unit and several warehouses for<br />

<strong>tea</strong> storage. One staff of Ecolink is assigned to manage the ICS, while the ICS inspectors<br />

are government staff (from PPSD or extension service) that do the ICS inspections on a<br />

part-time basis. However, Ecolink is responsible for arranging training for these ICS<br />

inspectors. Some NGOs in Vietnam, such as ADDA, can provide training and assistance in<br />

setting up an ICS.<br />

6. COST BENEFIT ANALYSIS<br />

6.1. Costs of external certification<br />

The cost of certification generally consist of two parts, the first is the certification fee<br />

(based on the kind of certificate needed) and the second the actual cost for the inspection. If<br />

several certificates are required (for example, both EU and JAS) it is most economic to<br />

select one certification body that can issue both certificates through one inspection visit.<br />

Recently, a regional CB (ACT Thailand) set up collaboration with a well-established<br />

European CB (ICEA Italy), which offers a very interesting menu of certification options to<br />

operators in South East Asia, i.e. IFOAM Accredited and BioSuisse certification through<br />

ACT as well as EU, NOP and JAS certification through ICEA.<br />

The cost for certification though this arrangement ranges between 350 and 450 Euro,<br />

depending on the certificate required. The two partners also give a discount if more than<br />

one certificate is requested. Based on the certificate needed there could be some additional<br />

costs, for example for samples to be analysed for chemicals (300 Euro per sample). Total<br />

cost for three certificates: EU (direct) 400 Euro, JAS 440 Euro, Korea (through ACT<br />

private standards) 350 Euro. Total: 1190 Euro - 20% = 950 Euro, plus 300 Euro for the<br />

sample. Total costs 1250 Euro.<br />

Inspection fees are 150 Euro per day per inspector, plus all local and international travel<br />

and food and lodging. With 100 producers there are 10 producers to be inspected plus the<br />

processing unit (3 days), plus 1 day for ICS check. Adding 2 days for travelling to <strong>Cao</strong><br />

<strong>Bang</strong> makes a total of 6 days or 900 Euro (6 x 150 Euro). Finally, we need to add the travel<br />

from <strong>Bang</strong>kok (300 USD) as well as food and lodging for 6 days (240 USD, 6 days @ 40<br />

USD/day).<br />

Adding the costs for certification (1250 Euro or 1750 USD) and the inspection (900 Euro<br />

or 1260 USD) and the travel, food and lodging (540 USD) gives a total of 3,550 USD.<br />

(Please note that the current exchange rate of Euro to US dollar is quite unfavourable.)<br />

6.2. Costs of operating the ICS<br />

There are initial funds required for setting up the ICS and training producers, ICS<br />

personnel and inspectors. However, since most of the costs, including for trainers, are local,<br />

total funding needs are not high. An estimated initial expenditure of 500 - 1000 US dollar<br />

may be needed, which could maybe be requested from <strong>Helvetas</strong> or provincial funding.<br />

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