Vietnam back to mulling macadamia nuts as cash crop

The Vietnam Macadamia Association has recommended once again that more farmers cultivate macadamia nuts as an alternative agriculture cash crop due to its relatively low input capital and high earnings potential.

Macadamia production has a relatively low upfront capital outlay, the Association told Minister Nguyen Xuan Cuong of the Ministry of Agriculture and Rural Development, in making the recommendation.

It is also a highly drought resistant crop and perfect for arable land where water is in short supply due to mother nature or lack of irrigation systems due to insufficient finances to fund their construction, said the Association.

Production is ideally suited for five Central Provinces and three northern provinces in Vietnam where the year-round temperatures range between 15-26 degrees Celsius.

The Association noted Macadamia nuts grow on large bushy trees which start producing after four or five years from planting. The trees will be in full production after six years and continue producing indefinitely thereafter.

Macadamias are ideally suited to a mildfrost-free climate where rainfall is distributed evenly throughout the year, said the Association, roughly the same climate suitable for growing coffee. Both species will grow well in many areas of Vietnam and can even be grown in large pots.

However, many farmers in the Central Highlands say this is the same tired recommendation made a few years ago, which hopes faded after the trees they planted failed to bear fruit even after seven years.

At that time, Huynh Ngoc Huy, chair of Lien Viet Post Bank, the founder the Vietnam Macadamia Association, said every hectare of macadamia had the potential to produce roughly three ton of nuts annually, earning farmers after all expenses a disposable income of US$9,000.

He touted a global demand that outstripped production four-fold, saying the time was ripe for Vietnamese farmers to jump headfirst into the market.

However, despite all the hype, farmers say they failed to make a penny, most ended up losing everything but the shirts on their back and in the final analysis wound upcutting down their trees and moving on to other more promising crops.

Huy put the blame for the failure squarely on the back of illiterate farmers failing to follow the cultivation practices promulgated by the Ministry of Agriculture and Rural Development. Among the many shortcomings, he noted that farmers purchased inferior plants and did improper soil analysis.

For those who are not familiar, all macadamia trees grown for commercial purposes are grafted and there are approximately 600 different varieties. Experts advise farmers to always cultivate a mixture of varieties scattered evenly throughout their orchard to ensure adequate pollination after careful selection based on proper soil testing.

There is little doubt that Huy’s criticism has some validity given farmers in the country routinely disregard VietGap good agriculture practicesand the recommendations of the Ministry.

Huy noted that farmers back then chose grafts that cost US$1 when the going rate for high quality plants was US$3.00-US$3.50 each and that was the root cause of why the plants never bore fruit.

Huy also blames the Ministry in part for the past failure of the segment to get off the ground, saying it didn't offer enough support to local farmers. Before the plans fell through, the Ministry had announced plans to increase the cultivation of macadamia to 10,000 hectares by 2020.

Most of the hectarage was planned to be interspersed among other crops such as coffee and tea.

So now the Association has come full circle and is back to peddling the same recommendation it made a few years ago with pretty much the identical storyline.

There’s a gold mine in growing macadamia nuts, says the Association, underscoring that positive net cash flows can be achieved by farmers cultivating macadamia nuts in just six years with low initial start-up costs if they just follow VietGap.

Returns could be upwards of 200%, says the Association, if farmers commercially produce high quality nuts and listen to their advice.