Report Feasibility study organic bitter tea Cao Bang - Helvetas

SUMMARY
Feasibility Study Organic Bitter Tea in Cao Bang: 2007
Bitter tea (Ilex kaushue) is an evergreen tree species that grows in the natural forests in Cao
Bang. Because of its potential as a healthy and unique beverage, the Cao Bang provincial
authorities started a bitter tea plantation project program and set up the Cao Bang Bitter
Tea Company (BTC) for bitter tea processing and marketing. In 2006, the Cao Bang bitter
tea market chain was assessed using the Rapid Market Appraisal approach (RMA) as part
of a project supported by Helvetas. One of the topics of the action plan identified by the
RMA is to focus on product diversification. Since some foreign companies, mainly from
Korea, have shown interest in organic bitter tea, Helvetas and the BTC agreed to carry out
a feasibility study of organic bitter tea production in Cao Bang. An external consultant
specialised in organic agriculture and certification and one Helvetas staff conducted the
study. The study included a document review and a field trip to Cao Bang (November 6-10,
2007). The results of this study should then be used by the decision makers to decide if it
would be worth to start a certified organic production for specifically identified markets.
Technically there do not seem to be any obstacles for organic bitter tea production.
However, a number of measures have to be taken to conform to the organic standards.
Although there is no immediate demand for organic bitter tea (since the Korean buyer is
more interested in "low chemical" than organic) it would be useful to consider conversion
to organic at an early stage. Since some chemical inputs are being used in the current bitter
tea production, a conversion period of two years has to be considered before the product
can be sold as organic.
Organic bitter tea should be seen as part of the diversification process of the BTC so that a
larger variety of clients can be reached. It would therefore not be recommended to convert
the entire production of the BTC to organic. It would be easiest (and most simple to
manage) if for example a certain area will be converted completely and a processing unit
set up there which is dedicated to the organic products. Since the processing of bitter tea is
relatively simple and no expensive machinery is being used, the investment for this second
processing unit would be rather low. A good area for organic production would, for
example, be The Duc commune of Nguyen Binh district.
In terms of certification it would be easiest to select one certification body that could
provide all necessary certificates through one inspection visit. To further reduce costs a
certifier with local or regional inspectors should be chosen. To eliminate the need for an
inspection visit to all organic producers (and thereby greatly reducing the certification
costs), a group certification system should be set up. This would require an Internal Control
System (ICS), which, if managed by the BTC, would have the added advantage of
providing a good tool for managing the organic supply chain and the training of farmers.
Furthermore, the responsible staff of the BTC should develop a good understanding of
concepts related to food safety and certification requirements. This would include organic
production and certification but also GAP, HACCP, etc. Secondly, the existing overseas
contacts, particularly from Korea and Japan, should be approached to find out what their
requirements are in terms of adherence to specific standards.
To develop a market for organic bitter tea it is essential to develop some organic
production. This will allow potential clients to check the product and its specifications.
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