the initiatives. Although the act of bringing together different cluster members is relatively costless, initiatives such as providing training are not. For example, when these initiatives
were introduced, they were dependent upon a Provincial Project grant. The nationwide ThaiGAP initiative has similar limitations. One of the first processes that its committee
highlights as important is to ask for budget support from the Office of Small and Medium Enterprises Promotion part of the Ministry of Industry Chuenprayoth, 2007, thus
indicating the inability for these clusters to act without external support. Additionally, although there is much sharing of knowledge between various members of the cluster, there
is also a high dependence on the agricultural department of Kasetsart University and bodies external to the cluster for knowledge inputs.
However, these weaknesses of the cluster initiatives do not necessarily undermine the cluster projects. This is especially true for funding in the short term. For instance, the ThaiGAP
initiative now has funding from the Office of Small and Medium Enterprises Promotion, the Thai Chamber of Commerce and the Thai Fruit and Vegetable Producers’ Association
GTZ, 2008. Moreover, as the cluster develops, one might argue that the dependence on external actors may decline as the capabilities of the cluster members are increased.
The cluster project overlaps with some donor backed initiatives. For example, GTZ has an active programme in Thailand aiming to enhance the competitiveness of SMEs in certain fruit
and vegetable subsectors through the promotion of technological advisory services. Through cooperation with institutions such as the Thai Chamber of Commerce and the National
Technical Working Group, GTZ has also explicitly aided and supported the development of ThaiGAP GTZ, 2008.
5.3 ROOT CROP PROCESSING CLUSTER IN DONG LIEU, VIET NAM
Dong Lieu is a peri-urban area around 30 km from Hanoi. Two-thirds of its 2 193 households are engaged in some part of the root crop processing value chain Peters et al., 2002. It is a
useful example of how clusters can contribute to the success of a product and the diffusion of innovation. It is also of interest as the cluster has developed largely endogenously.
5.3.1 The Dong Lieu root crop processing cluster: some figures
The main activity undertaken in the cluster is starch processing from cassava and canna roots. The increase in the production of these products can be taken as an indication of
the dynamism of the cluster. Cassava starch processing started in the region in 1978 with an average production of 0.05 tonneshouseholdyear. Today it has grown to 3 tonnes
householdyear. When canna starch processing commenced in 1960, the average production householdyear was 0.04 tonnes. Now it is 9 tonneshouseholdyear Peters et al., 2002.
The success of the cluster can be seen in other ways too. For example, the cluster has now moved into new markets such as textiles and pharmaceuticals innovating new products
such as refined dry starch and technologies in order to do so.
5.3.2 The structure of the cluster
The raw materials, fresh cassava and canna roots, are sold to individual household processors at a daily market. These households extract the starch through a process of grating, filtering
and sedimentation. These processes lead to the production of wet starch 30–35 percent moisture content. In some cases, other households purchase this wet starch and refine and
dry it. This produces a second product, refined dry starch, of greater value.
The households mentioned above form the core of the cluster, but there exist other important actors whose presence is dependent on the clustering of the firms. A local equipment
manufacture and repair industry has grown up to serve the increasing demand of the cluster. There are those who organize the sale of starch to markets further away but of higher value.
Figure 6. Map of Latin American fruit clusters
Root producers Root traders
Fishpig raisers Starch
traders
Candy manufacturers
Maltose processors
Communal engineer
Starch processors
Starch refiners
Consumers Fishpig
raisers Root traders
Residue collectors
Maltose users
Canna noodle makers
Residue collectors
Dry root graters
credit cash
cash and credit
Source: Author’s elaboration.
Other households use some of the wet cassava starch in the manufacture of maltose, which in turn is used by local candy producers or the majority exported. The manufacture of maltose
uses rice seedlings, produced within the cluster by certain households. Other activities within the cluster include the production of noodles and the collection of the residue from
the starch processing process in order to use it for pig raising both inside and outside of the cluster. There is also some fish raising. All these spin-off enterprises are a product of the
clustering of the core starch processing enterprises. The structure of the cluster itself can be seen in Figure 6.
5.3.3 The upgrading of the cluster
