Setting up a provincial farmers' tourism center The history and context of the project:
The project aims to consolidate the achievements of the agro-tourism project which has been implemented by VNFU between 2007-2010 (project 5002). It is also a follow-up to the evaluation end of 2010 of the agro-tourism project of VNFU, which recommended to work directly at provincial level. As of the three provinces involved in this project An Giang FU was most successful, it was decided to only continue with AGFU in this agrotourism development. The proposal format is a business plan including market analysis, operational plan and finance plan, which is a concrete follow-up to the business planning training workshop to AGFU (and other Vietnamese partners) in April 2010. 

Summary of the proposed project:
The project aims to transform the existing agro-tourist office of the provincial union (AGFU) into a rural farmers’ tourist centre. The aim is to establish a viable Farmers’ Rural Tourism Centre at provincial level, which mobilizes the potential of farm households to host tourists and to generate income by agro-tourist services and job opportunities. The outreach is 15 communes and 100 households. 

An Giang province has a high potential for tourism. In 2009 3,000 tourists were received (500 through the agrotourism project office). In 2010 7,000 tourists were received (800 through the office). In 2011 an estimated 1,000 tourists are received through the office. 
The forecast is to grow from 5,500 domestic tourists in 2011 (and 120 international tourists) to 13,000 domestic tourists in 2014 (and 650 international tourists).

A variety of agrotourism activities will be offered, including participating in community activities (farming), experience local culture, dinner with farm household, stay overnight in homestay, guide through the village and scenery. Local handicrafts will be sold to the tourists.

Collaboration will be sought with travel companies and insurance companies. AGFU thinks it provides a niche product, as not many travel companies offer agro-tourims products and most are not aimed to generate income and jobs for farmers.

AGFU intends to create a separate management structure to manage the tourist center. The Centre for Agricultural Tourism will operate under the legal status of An Giang FU Centre for Farmer Supporting Services. The Centre has legal status in doing tourism business. 

Agriterra is requested to contribute in the costs of initial investment in the agrotourism centre, operational costs, marketing costs, trainings and investment in communities and households (max 25%).

Outline of the proposal:
The project will start on July 1, 2011 and will run for three years, until June 30, 2014.

Within AGFU an Agro-Tourism Centre will be established. This centre will work with 15 communes in An Giang Province further developing a variety of agro-tourism activities in these communes. AGFU distinguishes between international tourists (Europe, Japan) and national tourists (students, pupils, government officials/staff, members of farmers’ unions and other mass organisations). The centre will first focus on attracting national tourists.

Collaboration will be sought with travel companies and insurance companies. AGFU thinks it provides a niche product, as not many travel companies offer agro-tourims products and most are not aimed to generate income and jobs for farmers.

The project fits in team 2 on developing grassroots entrepreneurship and developing economic initiatives (in this case agro-tourism). 

AGFU intends to create a separate management structure to manage the tourist center. The Centre for Agricultural Tourism will operate under the legal status of An Giang FU Centre for Farmer Supporting Services. The Centre has legal status in doing tourism business. The role of the centre is to advise the farmer entrepreneurs in agrotourism, provide trainings, marketing promotion, and access to loans.

The project proposal foresees the following impact:
- Creating income for the localities by contributing enterprise income tax to the localities that is estimated at 120 million VND (€4,000) from year 4.
- Creating jobs for 200 households. 
- Increasing income for farmer households by 5 millionsVND/households (€165).
- Support access to markets in agro-tourism, by establishing collaboration with tourism agencies; from 5,500 domestic tourists in 2011 to 13,000 domestic tourists in 2014, and from 120 international tourists in 2011 to 650 international tourists in 2014.

Goals, output and impact with respect to team 2 targets:
• Membership increase: no foreseen membership increase, as basically all farmers are already member of the VNFU/AGFU system. 
• Increase of no. of organised local groups: no. of groups is proposed, 20 farmer households will be involved directly, to be increased to 100 households. 
• Production enhancement: Yes, agro-tourism activities.
• Market access: yes, marketing for agrotourism.
• Collaboration with other chain actors: yes, linkages with travel companies, transportation providers, insurance company, and banks.
• Access to finance: AGFU will facilitate agro-tourism entrepreneurs to get access to loans from the Bank.
• Business initiatives: agro-tourism centre will become the business wing of the AGFU. The current proposal is the business plan of this centre.

FFP-2 WA and deliverables:
WA4, deliverable 17, target 1 (business target), target 2 (training), target 3 (agreements with tourism companies), target 4 (agrotourism centre operational), WA4, target 3 (cooperation with financial service providers).

Estimated outreach of project:
There will be 20 model households directly involved in agrotourism. In trainings 600 farmers will be involved (20 per commune), 100 households will get support in upgrading the basic conditions in their households.
Involved staff is 12 in total, at provincial and district levels.

Financial aspects:
With advisory from mission 5731 of Nicole van Hoof and Jos Thijssen, the financial plan was substantially improved by AGFU. The financial plan is well elaborated with Break Even Point, investment costs, marketing costs, operational costs, variable (production) costs (of agrotours), training costs.
The contribution of AGFU and the farmers themselves is adequate. The requested financial contribution of Agriterra is 60% of investment costs (motorbikes, website, part of office interior upgrading), 60% of marketing costs, 34% of operational costs (not including salaries and office running, but travelling, audits and evaluation). Agriterra will not finance the production costs. Of training costs 97% is requested from Agriterra.

The break-even-point shows that the first and a half years will run with loss (Euro 7,000 in 2011 and Euro 6,000 in 2012), and from 2013 there will be be positive balance. BEP is therefore forecasted to be < 3 years.

Advisory services:
Elaborated in special service memo. Substantial advisory services needed.

To generate income and employment of rural households in agrotourism activities by establishing an agrotourism centre in AGFU which will provide services in marketing, training and access to finance/loans from the bank.