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'There's an awful lot of coffee in - Vietnam'

Rich, robust and rewarding - that was to be the flavour of coffee production in Vietnam. The country has made an astonishing leap in production in the last few years but, for some, there's a bitter taste in the dregs as they struggle to survive disintegrating world prices.

Coffee has been grown in Vietnam since it was introduced by French missionaries in the mid 19th century. Not even in their wildest prayers could they have imagined that, within 150 years, Coffee beans in open sackVietnam would have become the second largest exporter of coffee in the world after Brazil. From 5,000 tonnes twenty years ago, to over 600,000 tonnes harvested from the 2000/01 crop, there is now an awful lot of coffee in Vietnam. This would be fine were it not for the fact that, with production up and demand down prices for robusta coffee are at a thirty year low.

Like its near neighbour and competitor, Indonesia, it is robusta coffee that Vietnam principally grows, the most productive region being the Central Highlands close to the borders with Cambodia and Laos. Harvesting takes place between November and February and, because it is the dry season, the cherries can be spread outside on the ground to dry. Much of the production is by farming families owning between 1 and 2 hectares. They rely on the sale of their coffee beans for the bulk of their income and have been hit hard by the drop in prices.

Coffee trees take three to five years to begin producing, and maximum yield occurs when they are between five and fifteen years old. Thereafter yields tail off, although the trees can live for forty years. It is this slow production cycle that precipitates the pricing problem. When prices are high, because production is low, there is a rush to burn off and grub out natural forest, as has happened in Vietnam, and plant young coffee trees. The Central Highlands is a region in which the government has encouraged settlement by 'under-employed' lowland Vietnamese who were happy enough to take the opportunity of a hectare of land with the expectation of a future brightened by red coffee cherries. Any resentment felt by the indigenous hill people at this intrusion and destruction of their native forest was ignored. But, five years later, production is in full swing but its value has plummeted. Environmental degradation, debt and social disquiet are the inevitable consequences.

For some small scale coffee farmers in Vietnam, the crop which should have sustained them for a generation, is hardly worth picking - unless world prices pick up. Vietnam has earned itself both the right and the responsibility of a world player in the coffee market. As such it agreed earlier this year to retain 170,000 tonnes of exportable coffee as part of an international scheme to boost market value. Brazil, whose exports of coffee are double those of Vietnam, has been retaining 20% since July last year to the same, so far unrealized, end.

No doubt the cycle of price and production will continue to revolve. Vietnam's coffee competitors are just as vulnerable, if not more so, and the country now has many hectares of young trees and many young coffee farmers with little choice but to stick it out and hope for a better return on their production. The bottom of the cup may not be so bitter after all.

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