Vietnam Home Deco & Textiles Vietnam has achieved impressive economic progress since the dpi moi (renovation) process was launched in 1986. Since, 1993, real GDP growth has averaged 7.5% per year and the poverty rate has been reduced significantly over the period 1993 to in 2010. Growth has been driven by accelerated international integration, market liberalisation and job creation in the private sector. However, persistent inequalities and poverty remain, particularly in rural areas where more than 90% of the poor reside. In many areas, the income generated from farming is not sufficient for smallholder farmers to reach an income level above the national poverty line.

The handicraft and furniture sector in Viet Nam employs about 1.35 million people in more than 2.000 rural craft villages. Being a major source of income for smallholders farmers/landless poor, the sector has high potential to alleviate poverty. In many areas, the income generated from farming is not sufficient for smallholder farmers to reach an income level above the national poverty line of 400,000 VND (about 0.63 US$/day). The collection and processing of natural raw materials from forest areas and the production of handicrafts, mostly undertaken at times when farm work slows down, constitute the most important sources of additional income for farmers, and often determines whether a household income earnings fall above or below the poverty line. Depending on the province and value chain, between 65-80 per cent of the farmers/craft producers are women and ethnic minorities residing in remote areas, who are disproportionately affected by poverty. Handicrafts have been made a development priority by the Vietnamese government in order to promote human resource development, sustainable production and increased entrepreneurship in rural areas.

Against this backgroundfive UN organisations and 2two local organisation have joined forces to increase income and employment opportunities for about 4,800 poor farming and craft-producing households in four northern provinces of Viet Nam. Within the four targeted provinces, the programme focuses on five value chains, namely, : (1) bamboo/rattan, (2) sericulture and weaving, (3) sea grass, (4) lacquer ware, and (5) handmade paper. The programmes approach is to develop better integrated, pro-poor, and environmentally sustainablegreen value chains, enabling poor growers, collectors and producers to improve their products and link them to more profitable markets.

The programme will also create linkages with some 50 companies in the provinces and Hanoi, and assist these companies to clean up production (e.g. reduction of hazardous chemicals, energy, waste and pollution), strengthen their entrepreneurial behaviour, find new buyers through various channels including trade fair participation, improve working conditions and comply with labour and trade standards and introduce improved technologies and sustainable designs. Increased sales by companies will increase the demand for handicraft production at household level, and, as a consequence, their income derived from it. It is estimated that an export order of US$ 100,000 will result in direct employment for 8-20 household producers, depending on their productivity."