STiR coffee and tea magazine

Volume 4, Number 6

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46 STiR tea & coffee industry international / Issue 6, 2015 (December/January) By Frank J. Miller HANOI, Vietnam Vietnam was a minor player in the coffee industry. In 1957 it produced a mere 6,000 metric tons of coffee. Then, in the 1990s, as the result of reforms initiated by the gov- ernment, coffee production grew at the rate of 20-30% per year – year after year, after year. By 2012 coffee production stood at 1.5 million metric tons. Vietnam has since replaced Columbia as the No. 2 coffee exporting nation, the first non-western country to reach that position. Vietnam provides 20% of the world's ro- busta, making it No. 1 in that market. It is also No. 1 in cashew nuts and peppercorns; No. 2 in rice. Should Vietnam be congratulated or criticized for this success? Some hold that overproduction of an export commodity is similar to "dumping" resulting in supply- demand distortions that hurt everyone. Others argue that any blame is misguided and misplaced. The almost supernatu- ral growth of Vietnam's coffee industry was due to reforms that led to tremendous production and economic gains at the farm level, the reduction of rural poverty, job creation and national integration, following two decades of war and upheaval. It is gen- erally believed the government did not anticipate the extent to which the Vietnamese farmers would embrace the coffee enterprise. On the farm Vietnamese coffee farmers mainly grow robusta. The largest farms are in the central highland provinces of Gai Lai, Bak Lak, Lam Dong, and Dong Nai where about 1.25 million acres (500,000 hectares) are under coffee. Lam Dong is the traditional center of arabica cultivation, with recently added acreage in the north, in Son La, Lai Chau, Ha Giang, and Nghe An. Arabica is now grown on 125,000 acres (50,000 ha). For every arabica tree there are 10 robusta trees. Most of Vietnam's coffee trees were planted from seed more than 30 years ago. A third are over-age and in serious decline reducing overall quality when mixed with the fruit of younger trees. Ninety percent of Vietnamese coffee farmers are smallholders on 1-2 hectares or less; many of these 500,000 farmers only recently secured land use rights and the free- dom to operate a family business. They may be small, but these farmers have the world's Vietnamese coffee growers are some of the most productive in the world. Vietnam's Transition Social reforms in the 1990s unleashed Vietnam's entrepre- neurial zeal elevating the country from a minor supplier to the world's second largest coffee producer. Growers there are the most productive on earth.

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