The food unit of PepsiCo Vietnam willbuy all of the products from around four dozen potato farmers in the Central Highlands under a sustainable potato farming model pursuant to a recently-signed memorandum of understanding, Pepsico Asia Pacific announced Tuesday.
PepsiCo Foods Vietnam Company (PFVC) has signed an MoU with the Department of Agriculture and Rural Development and the Phivang Collaboration of Farmers in Lam Dong Province to introduce the sustainable contract model to local potato growers, Pepsico Asia Pacific said in a press release.
The MoU, the first of its kind between the parties, will benefit around 50 small-scale farmers in the Central Highlands province, known as a hub for clean, fresh veggie products.
As part of the MoU, PFVC will agree to a fixed price for the purchase of potatoes from the Phivang Collaboration of Farmers at the start of each growing season.
This assures farmers that they have a buyer for their potatoes at a price that is not subject to market fluctuations.
The Lam Dong agriculture department will provide financial assistance for members of the co-operative to purchase seed potatoes and other inputs for the growing season.
The Phivang Collaboration of Farmers will unite farmers to negotiate a secure and stable contract with PepsiCo and provide a forum for farmers to exchange growing techniques, according to PFVC.
PFVC, the maker of the popular Poca potato snack, will also provide technical agronomy support for the farmers by sharing the best practices to improve yields, save water, and promote sustainable agriculture.
Pepsico Asia Pacific said PFVC has a proven track record of assisting farmers in Vietnam in making their crop cycles more productive. Between 2011 and 2014, PFVC supplied agronomy support to farmers that enabled them to nearly double their average yields.
PepsiCo annually sources more than four million metric tons of potatoes from thousands of farmers across the globe, according to Pepsico Asia Pacific.
“Our success depends on securing sustainable supply chains for our key raw materials," PFVC general manager Nguyen Huy Duc said in a statement.
"Along with our partners, we want to use our combined experience and know-how to work with potato farmers in Vietnam and to play a positive role in the success of sustainable contract farming across Vietnam."
A deputy director from the Lam Dong agriculture department expressed his belief that the MoU is mutually beneficial to all parties involved.
“Phivang farmers are guaranteed a fair price that isn't subject to market fluctuations for their crop and PepsiCo will receive a stable supply of potatoes," he said.
"Our plan is to replicate this model throughout Lam Dong Province to ensure sustainable production of potatoes, and other vegetables, and to provide security to farmers against market price fluctuations."
PFVC leads the fruit and vegetable working group of 'Grow Asia,’ a World Economic Forum-backed initiative that promotes inclusive and sustainable agricultural growth in Vietnam.