Expanding organic cinnamon production in Lao Cai

Vietnam ranks third worldwide in cinnamon production after Indonesia and Sri Lanka. Cinnamon from Vietnam is exported to India, the Middle East, Japan, Korea, the US and the EU.

Lao Cai is now the second largest cinnamon growing area in the country with total cinnamon cultivation area of up to 27,000 hectares in 2017. There are three distinct value chains for cinnamon – bark, oil and wood. Cinnamon bark is generally peeled, graded and packaged for export market. The bark may be used as sticks or ground to make cinnamon powder and used in cooking. Cinnamon oil is made from the leaves of the cinnamon tree as is reputed to nourish the skin, alleviate aches and stiffness in the muscles and joints. The wood from the cinnamon tree is used for furniture and in the building industry.

Although cinnamon production has a long history in Vietnam, it has not reached its full potential. Key challenges include ensuring quality standards as 90% of the product is exported, developing stronger links between companies and farmers including provision of technical assistance and investment in warehousing and value-added processing within Vietnam. For example, with cinnamon oil it is necessary to undergo further processing to make it safe as can have a blood thinning effect.

GREAT is supporting a number of cinnamon initiatives including a project by Son Ha Spice & Flavourings Company that includes Nam Det 1 Village. The project will support the expansion of organic cinnamon production through connecting farmers to Son Ha’s new processing facilities in Lao Cai and training to increase productivity and meet organic standards. The project has a target to increase income for 1044 women (953 from ethnic minorities).

The project will enable more remote communities to participate in the company’s value chain. Through working with Son Ha, local extension services and government agencies will have improved capacity in the provision of technical assistance on organic production. Given the scale, the project will help build Lao Cai as a production hub for organic cinnamon with the potential to attract additional private sector investment.

GREAT is also supporting a project by Vinasamex Joint Stock Company and the Netherlands Development Organisation (SNV) in collaboration with the Lao Cai Agricultural Extension Service Centre that will help grow the sector and bring benefit to ethnic minority women in Van Ban and neighbouring districts.

The Gender-Responsive Equitable Agriculture and Tourism (GREAT) Program is an AUD 33.7 million (equivalent to VND 600 billion) investment from Australia’s Department of Foreign Affairs and Trade (DFAT) in Vietnam to promote gender equality and women’s economic empowerment, with a specific focus on ethnic minority women.

The Program aims to improve the socio-economic status of women living in north-west Vietnam through increased participation in, and incomes derived from, growing agriculture and tourism markets. It is implemented from 2017 to 2021 in Lao Cai and Son La provinces with the aim of empowering local women, promoting inclusive bussiness partnerships and improving sector governance and policy./.