New Agriculturist
Focus on menu

Vietnam coffee industry - learning from the past!

Coffee flower
credit: J. von Enden

Vietnam is blamed for flooding the world market with low quality Robusta coffee, fuelling overproduction and being responsible for plummeting prices on the international coffee markets. And, unfortunately, the present world wide overproduction of around 800,000 tons matches well with the production of Vietnam.

It appears that the villain on the production side has been found - and is being slaughtered by the traditional coffee countries. Admittedly, the coffee quality of Vietnam is not up to scratch: high amounts of foreign matter is being claimed by international buyers as well as exceedingly high moisture content of beans. However, is it not a little too easy to put all the blame for the low prices on Vietnam while neglecting the widespread internal political problems in other coffee producing countries in South America and Africa that make coffee production more difficult and expensive? Vietnam succeeded in boosting coffee production at times of high prices in a way that other countries can only dream of. This success has been due to favourable policies as well as to the farmers who have had the determination to improve their lives through the production of a cash crop.

Even national coffee institutions and ministries did not expect such a huge production as that experienced in 2000/1. The internal structure of Vietnam had not been able to monitor the quick expansion and policy makers had to accept that coffee has been planted in areas which have not been designated for coffee production. Furthermore, compared to 10 years ago, the price situation has changed dramatically and coffee prices in marginal areas of the central highlands in Daklak are not paying farmers their production costs. In reaction to this, 10,000 hectares of Robusta plantations have been cleared already and replaced with other crops. Farmers have reacted quickly to the situation they were facing. The result of the quick adoption is a decline of total Vietnamese coffee production from 900,000 tons in 2000/1 to an estimated amount of 600,000 tons in 2002/3.

coffee farmer, Vietnam
credit: J. von Enden

What are the lessons learnt? And what is the plan for the future development of the Vietnamese coffee sector? Vietnam clearly sees that the only way out of the present price dilemma is integration into the international coffee community. Vietnam joined the International Coffee Organisation (ICO) which sets out the quality standards that producer countries should meet. In addition, Vietnam joined the Association of Coffee Producing Countries (ACPC) and ratified decisions on holding back low quality coffee to ultimately boost prices and improve coffee quality. At a national level, Vietnam pursues the way of "Quality not Quantity". Robusta plantations in marginal areas are continuously replaced by other crops such as cashew, cocoa or subsistence crops. In suitable areas, i.e. high altitudes, the government promotes the careful and slow expansion of Arabica plantations and washing stations. The ultimate goal for 2010 is to have a stable production at 600,000 tons, consisting of 70% Robusta and 30% Arabica.

Vietnam should not be underestimated and assumed to be a "low quality" producer of coffee. Quality improvement measures will be taken up at the same speed as coffee cultivation 10 years ago. As long as labour costs remain low and coffee processing know how and technology continues to improve, Vietnam has a bright future. However, it is also important to mention that Vietnam coffee will not be able to reach the qualities of Kenya, Columbia or other traditional high grown coffees. The international coffee sector is being reshaped at the moment and it is likely that farmers attempting to grow coffee in marginal areas all over the world will be forced to give up their plantations. This painful situation will have to be faced by farmers in Vietnam as elsewhere.

Coffee farmers on less favourable land will need support to find new ways of production. Let us hope that coffee farmers in other producing countries have the same flexibility as Vietnamese farmers to adapt to new situations!

For further information see www.venden.de
This article was submitted by Jan von Enden in response to a news item in New Agriculturist 02-5. Mr von Enden is a consultant, currently working in Vietnam with GTZ, on a project to improve the production and quality of Arabica coffee.

Back to Menu

WRENmedia