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Vietnam’s coffee faces new challenges
Coffee – Vietnam’s key export item – is facing big challenges.
The challenges
According to the Vietnam Coffee – Cocoa Association, the current 500,000ha of coffee comprises three kinds.
The first is coffee planted prior to 1988, totalling 86,400ha, accounting for 17.3% of the total area. These coffee trees are very old and need to be replaced.
The second is trees grown from 1988 to 1993 on 139,600ha, making up 27.9%. Many trees are growing old and their productivity is declining.
The third kind is trees planted after 1993, with around 274,000ha or 54.8%. These trees are yielding high productivity. In the next few years, Vietnam’s coffee output will depend on this section of coffee.
In the next 5-10 years, around 50% of Vietnam’s coffee area will enter the ineffective period and these trees must be replaced. As a result, coffee output will fall and it will be very difficult for Vietnam to maintain the current output of 1 million tonnes of coffee beans.
In recent years, coffee prices have increased highly so farmers have tried to expand coffee areas, regardless of the warnings of experts, local authorities and banks’ restrictions of loans.
According to statistics, farmers in the Central Highlands grew more than 20,000ha of coffee in 2007, including 5,200ha in Dak Lak, 4,800ha in Lam Dong, and 4,000ha in Dak Nong and Gia Lai provinces. It is estimated that the new area of coffee in this region will be 22,000ha this year.
Le Van Linh, Deputy Director of the Department of Agriculture and Rural Development of Gia Lai province, Gia Lai presently has 76,080ha of coffee, exceeding the plan set for 2010 by more than 6,000ha.
Available land was used so farmers destroyed forest to grow coffee, Linh said. Because of this, the environment has been destroyed and this harms the existing coffee areas.
According to Luong Van Tu, Chairman of the Vietnam Coffee – Cocoa Association, 80% of coffee areas are managed by farmers, the remaining area belongs to state-owned enterprises. Actually, this area is also managed by farmers because enterprises allocate coffee gardens to farmers.
Coffee is grown densely in some regions, but actually, coffee plantations are small scale, with each family having 0.5-1ha of coffee on average. Despite the small or large coffee gardens they own, each family equips themselves with pumping machines, vehicles to transport coffee beans, grinders, warehouses, etc.
Investment rate/one tonne of coffee beans is high, economic value is low, especially in the current circumstance when prices of inputs are rising very fast.
Because of small-scale and unprofessional production, the quality of Vietnamese coffee is low.
Of the total volume of coffee from Vietnam classified by the International Coffee Organisation (ICO) in 2007, up to 66% was under-standard. According to IOC, Vietnam is slow in applying new quality standards.
For sustainable development
For the first time Vietnam exported more than 1 million tonnes of coffee in 2007, earning $1,529 per tonne on average, raising the total export turnover from coffee to a record high level – $1.6 billion.
In the first half of 2008, export revenue from coffee hit $1.18 billion, from over 570,000 tonnes of coffee.
On this momentum, Vietnam may obtain more than $2 billion from coffee exports this year and coffee will become one of the top export items of Vietnam, only inferior to crude oil, textiles and garments, footwear and seafood.
According to the Central Highlands Institute for Agricultural and Forestry Science and Technology Development, to maintain the position of coffee, the state and the agricultural sector need to encourage farmers to replace old coffee trees with new, robusta trees and replace coffee trees that are grown in unsuitable soil with other trees of higher economic values.
The Institute also suggests issuing criteria on planting, caring for, harvesting, processing coffee to improve coffee quality, effectively and sustainability; put an end to the habit of selling low-quality coffee in the international market; and not offer coffee for sale on a massive scale during harvesting time.
To realise the above suggestions, it is necessary to create new relations between coffee farmers and traders based on equal, open, and transparent benefit sharing. While this relationship remains unestablished the sustainable development of coffee trees in Vietnam remains in doubt.
Coffee farmers should be grouped into cooperatives to apply sci-tech advances to raise coffee quality, output and to lower production costs.
VNN
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