Why DNo Farm remains stable amid 'fuel price storm'?

No price rise amid cost pressures

Over the past month, fuel prices have fluctuated sharply, forcing many agricultural enterprises to face rising input costs. While most producers have had to increase product prices or cut certain operating expenses, Dak Nong Agriculture Company (DNo Farm), located in Dong Gia Nghia ward, Lam Dong province (formerly Dak Nia commune, Gia Nghia city, Dak Nong province), has remained stable, keeping its prices unchanged despite a decline in profits.

Thanks to methodical investment in a grid electricity system and renewable energy, without dependence on fossil fuels, and operating a closed production model with proactive input sourcing and optimized production costs, DNo Farm has been largely unaffected by the "fuel price storm." This has enabled the company to maintain stable output prices while most businesses have been forced to raise their prices.

"When fuel prices rise, logistics and input material costs also increase, pushing product prices higher. DNo Farm is no exception to these market dynamics. The company’s input costs have also increased, mainly due to transportation and certain raw materials. However, as the company has set a five-year price adjustment cycle and cost increases have not been significant, the prices agreed with customers in advance have remained unchanged. If we were to raise prices immediately in response to higher costs, customers would still accept it. Nevertheless, our customers, especially preschools and educational institutions, would face additional pressure, so we have chosen to share the burden," said entrepreneur Bui Thi Khanh Hoa, Director of DNo Farm.

According to Ms. Hoa, the company’s profits have declined by around 10%, which remains within an acceptable range. However, if the situation persists, it will increasingly pose challenges for the business.

Regarding DNo Farm's power system, Ms. Hoa noted that the farm uses 17 pumps with capacities ranging from 1.5 to 6 horsepower, all powered by grid electricity and solar energy. "From the very beginning, I invested in a comprehensive electric power system, including a transformer station, transmission lines, and equipment, with a total cost of over VND 300 million. It was a significant investment, but when carefully calculated, it is equivalent to roughly one year of the farm’s fuel expenses," Ms. Hoa said.

According to Ms. Hoa’s calculations, on a scale of more than 20 ha, daily irrigation costs with oil use could range from VND 800,000 to 1 million. On average, the company would spend around VND 25–30 million/month on fuel, excluding prolonged dry periods. By contrast, using electricity costs less than VND 100,000, equivalent to roughly 10% of the cost of oil.

A sustainable solution

However, the initial investment cost remains a major barrier for businesses and farms with limited capital. In addition, site conditions can pose constraints to the model. Ms. Hoa affirmed that this is a sustainable investment direction, offering both cost efficiency and environmental protection. Nevertheless, to operate an electric power system for large-scale agricultural production, enterprises must invest in transformer stations, transmission lines, and internal power distribution systems.

In the case of DNo Farm, the cost of installing the transformer station alone amounted to approximately VND 180 million, excluding transmission lines and other components. Without sufficient financial capacity, smallholder farmers find it very difficult to access this solution. Moreover, in some areas, electricity infrastructure remains limited. Local power grids may only meet domestic demand and lack the capacity for large-scale production. In such cases, investing in a dedicated transformer station is mandatory, resulting in significantly higher costs. From the practical experience of DNo Farm, reducing reliance on fossil fuels is not merely a short-term solution but a long-term direction for the agricultural sector.

In the context of unpredictable fuel price fluctuations, proactively securing energy sources enables businesses to better control costs while enhancing production stability. In particular, as climate change becomes increasingly severe, reducing reliance on fossil fuels and shifting to renewable energy such as solar power makes a significant contribution to environmental protection, moving toward the Net Zero target.

"Over the past month, oil prices have fluctuated strongly. If DNo Farm used fossil fuels, operating costs for the high-capacity pumps here would have increased by tens of millions of dong per month," Ms. Hoa said.

Moreover, the electric power system also enables real-time automation of irrigation processes. Crops are supplied with water at the right time and in the right quantities, helping save resources and improve productivity. While most businesses have had to adjust prices or cut costs, we have remained stable, which is a competitive advantage.

However, according to Ms. Hoa, for this solution to be widely replicated, policy support from the State is essential, particularly in encouraging investment in renewable energy through preferential loans and support for power infrastructure. 

In addition to its methodically invested electric power system, DNo Farm has implemented the most advanced production technologies, including automated irrigation systems, temperature control systems, and sterilization processes that meet Israeli and Japanese standards. The farm has also achieved GlobalG.A.P. certification.

Regarding the cultivation process, Ms. Hoa said the farm applies a closed model in which fertilizers are produced and composted from on-farm materials such as silkworm waste, fruits, and vegetables. Pest control preparations are entirely bio-products, self-fermented from ingredients like chili, lemongrass, and areca, completely replacing pesticides and chemical stimulants. Vegetables and fruits can be harvested and consumed right at the farm.

"Since its establishment, DNo Farm has pursued a sustainable development strategy, which is green and environmentally friendly. A key component is eliminating or minimizing the use of fossil fuels, replacing them with electricity, wind power, and solar energy. In addition to protecting the environment, this investment approach has helped us avoid the ongoing 'fuel price storm,' whose future trajectory remains uncertain," said entrepreneur Bui Thi Khanh Hoa, Director of DNo Farm.

* $1 = VND 26,357 - Source: Vietcombank