The main activities focused on assessing the capacity of ICARD in agricultural market research and refining the project objectives to best meet identified needs. This reassessment was conducted in consideration of parallel projects being funded by the French and Danish governments, and by AusAID. A review of market outlook services undertaken by government institutions in other countries was conducted, and in this context ICARD's current outlook activities were assessed and capacity-building needs identified. The French project is building capacity in short-term outlook yet the main capacity-building priorities identified by ICARD were in modelling the agriculture sector for medium-term outlook and policy analysis. A workshop aimed at identifying modelling training needs was conducted in Nov 2003 and a forward work program was developed.

Case studies: In the context of ongoing activities associated with the other donor projects at ICARD the choice of case studies for the current project was reassessed. The new AusAID CEG facility has resulted in a case study of the livestock sector being undertaken in collaboration with ICARD so the livestock marketing case study was deemed to be less urgent. An initial review of experience in the marketing of canned pineapple revealed that SPS issues were not of primary concern at the present time. For these reasons, and in order to benefit from the collaboration with scientists in ACIAR's Postharvest program, it was decided to focus the case study component on a single study, of stone fruit marketing in the northern provinces. This will allow a more in-depth analysis of economic issues affecting the supply chain (with the benefit of technical input from the postharvest study), whilst also allowing an analysis of demand/supply issues at the aggregate level. The case study presents a classic example of the tendency to emphasise increased production at the provincial level whilst not considering market opportunities for the produce. A field trip was conducted in Nov 2003 and it was planned to conduct field work in the coming 2004 harvest. However, depending on the timing of the related project, field work activities may be delayed until the following season to maximise project synergies. Mr Thang attended the ACIAR-funded workshop on Supply Chain Management in Bali.

International comparison: The main focus of the international component of the study was a field trip to China in October 2003. Three staff from ICARD (one funded by DANIDA) visited China with Dr Donna Brennan. The purpose of the visit was to study the structure and functions of agencies in China that have a similar mandate to ICARD. The market outlook and research activities undertaken by the Chinese institutions, and the structure and management of each agency, including personnel and financial management in a centrally planned economy, were examined. Agencies visited included the Ministry of Agriculture's Department of Market and Economic Information; the Chinese Academy of Agricultural Science's Institute of Agricultural Economics; the Research Centre for Rural Economy; and the Chinese Centre for Agricultural Policy. This agency was of particular interest because of its innovative design, which provided incentives to attract the best Chinese researchers; and because of its strengths in information management. CCAP maintains a database of farm costs and income (similar to ABARE) and has developed an agricultural sector model that is maintained and used regularly for quantitative policy analysis. The visitors reported back to the MARD about the design of this institution because the Vietnamese Government is interested in developing a similar 'economic think tank' for agricultural policy in Vietnam. In addition to agency visits, two field trips were undertaken to examine institutional innovations in marketing: these were to the Xinfadi Wholesale Market in Beijing and the One Dragon Head company (Hovill) in Gansu.

Also under the international comparison banner were literature reviews, one on marketing cooperatives and the other on contract farming, which were subsequently presented at ACIAR workshops. A seminar program on these topics is planned at ICARD in the coming year. In addition, a review of ICARD's outlook activities was undertaken, and compared to international practice.

The main activities in the past year were focussed on training in quantitative analysis, development of modelling capacity and institutional design.

Case studies: Field work on fruit marketing in the northern mountainous regions is scheduled for March 05, following the participation of project personnel in the associated PHT project initiation workshop. The draft survey questionnaire and data collection strategy will be finalised after the interaction with scientists at this workshop.

International comparison for institutional design: This project is largely completed. After the trip to China, a paper entitled "Chinese Centre for Agricultural Policy: A vanguard in the Research System of China" was published by Pham Quang Dieu as part of the Policy Briefing Series. Considerable interest has been shown in this paper by senior policy makers, as it deals with institutional reform in a government research organisation in China. It is anticipated that high ranking officials from 4 Ministries (Agriculture, Science and Technology, Finance and Internal Affairs) will go to China with Dang Kim Son to further study these innovations in the Chinese Research System, to be funded by the Vietnamese Govt. It has been proposed that the new Institute for Agricultural Economics - which is where the Vietnamese project team is now based - will be modelled on the structure of the Chinese Centre for Agricultural Policy, and will represent a "pilot project" of Institutional reform in the state research system. The ACIAR project made this exposure to Chinese institutional reform possible not only because it funded the original trip to China, but also because it provided access to ACIAR's network of research organisations in China.

Capacity building in modelling: Four training courses were conducted in Vietnam over the past 12 months. Three of these were funded directly out of project funds, the fourth was funded by the World Bank. These courses were:
Farm level modelling - Ross Kingwell, Western Australian Department of Agriculture
Modelling in Excel for policy analysis - Donna Brennan, UWA
Demand analysis - Michael Burton, UWA
Advanced Econometrics for price forecasting - Greg Hertzler, UWA

The main activities in the past year were focussed on training in quantitative analysis, development of modelling capacity and institutional design.

Case studies: Field work on fruit marketing in the northern mountainous regions was completed, data was analysed and a report has been finalised. A final workshop for this case study was held in Lao Cai on April 21st, 2006, which was attended by Department of Agriculture and Rural Development scientists, district extensions officers, People's Committee officials, and several fruit farmers. The findings of the report including the policy recommendations were discussed in an open forum. A key conclusion from the discussion was to give more emphasis to markets when developing local policy, particularly with regard to policies aimed at supporting supply expansion.

International comparison for institutional design: A field trip to Australia was completed, involving visits to several economic policy research institutions, including ABARE, the Productivity Commission, and the Economics Division of the New South Wales Department of Primary Industries, as well as several Universities. In addition, several research funding organisations were visited and a visit to the Sydney Fish markets was undertaken. The trip provided exposure to a number of institutional design concepts that have been reported back to the Ministry through the trip report. Some of the key lessons included detailed insights into the structure and operation of ABARE and its link with policy makers; introduction to the concept of public inquiries into industry performance and public monitoring of government performance at the Productivity Commission; exposure to the farm level economic advisory services (gross margin budgeting) at the NSW Department of Primary Industries. These ideas are being incorporated into the design of the new Institute for Policy and Strategy for Agriculture and Rural Development.

Capacity building in modelling: A formal training course on general equilibrium modelling and trade modelling was given by Dr David Vanzetti and Dr Anna Strutt in Hanoi, which was attended by staff at the Institute along with economists from other government research institutes.
Three staff visited the University of Western Australia for 1 month to undertake intensive training on econometrics for demand and supply estimation, with Ass Prof Michael Burton and Dr Greg Hertzler, respectively. These training sessions built on the lecture series given in the previous year. During their visit, Mr Thang and Ms Giang were also worked with Dr Brennan on building a partial equilibrium model of fruit production and marketing for the Lao Cai case study. This was used to demonstrate the need for more emphasis on market potential when setting policies regarding supply expansion.
Mr Thang and Ms Giang visited the Maroochy Research Station in Queensland to discuss research links between the fruit marketing study and the ACIAR post harvest project. Dr Bob Nissen gave a lot of useful advice about plum productions systems that were used in developing hypotheses for econometric analysis conducted by Ms Giang.
Ms Quynh Chi commenced work with Dr Donna Brennan on developing a partial equilibrium model of the world coffee sector that took account of differences in varieties.

All of the planned formal training courses have been completed, which include a research exercise using the GTAP model to examine issues associated with trade liberalisation for the rice sector; development of a partial equilibrium model of world coffee production and marketing; and further training in AIDS demand modelling.

The coffee training activity resulted in a paper that was presented at IPSARD's inaugural Outlook conference, which emphasised the coffee sector, and was attended by policy makers and industry businessmen. The paper will form the basis of a journal article which is under preparation.

There are two outstanding research reports. These are the report on the case study of the rice sector, and the publication of the plum case study as a journal article. An extension to the final finish date was approved in order for these two exercises to be finalised. Part of the reason for the delay was that Donna Brennan has been in the process of moving to Hanoi and prioritised the completion of australian-based projects, in favour of working on the ACIAR project.

The group have been collaborating on the development of an ACIAR project proposal on policy reform and structural adjustment in Vietnam following trade liberalisation.