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STiR tea & coffee industry international 49 ter quality. In the last five years, the institute has developed 21 new coffee varieties (grafted seed- lings), and is distributing these to farmers at the rate of about 4 million a year. This addresses both re-planting and replacing aging trees. Another way to boost bean quality is steam processing which follows traditional processing. Developed in the 1930s, but seldom used in Viet- nam, steam softens and rounds out the coffee by balancing acidity in the robusta bean. A Small Producer . . . Mr. Thuy was born in Vietnam, but moved with his family to Houston, Tex., when he was 8 years old. He returned to Vietnam in 1998, aged 28 with, he says, $700 in his pocket. He and his wife (Thuan) started Thuy & Thuan Coffee Company (T&T) in Lam Ha District, Lam Dong province, in 2010. The modern, fully equipped factory, fea- turing machinery imported from Brazil, stretches over an area the size of two football fields, and produces more than 12,000 mt of coffee a year. T&T runs their wet mill in affiliation with Mer- cafe, Vietnam, which exports green coffee to its sister company, Mercon, Florida, in the US. Mer- con distributes to Starbucks and Illy Café, accord- ing to Mr. Thuy. The downward trend of coffee prices has been hard on T&T, as bank credit is tight. According to recent industry statistics, of the 127 coffee export- ers operating in Vietnam in 2012, 56 have either gone out of business or have had to reorganize. Their unpaid loans totaled $379 million. A conversation with Mr. Thuy revealed a frus- tration expressed frequently by Vietnamese cof- fee farmers. Even in cases where quality of green coffee is raised substantially and sorting and grad- ing done meticulously, much Vietnam coffee gets mixed with other origins and grades. The Viet- namese brand is still-born. "This is one of our big problems and frustrations," he said. . . . and two enterprising farmers Mr. Chou, 26, works two, newly-established, 6 acres (2.5 ha) arabica farms 11 kilometers apart in a mountainous region of Son La province, in northwestern Vietnam. His coffee is collected at the farm gate and taken to a local factory for wet processing. His biggest concern is the occasional frost in winter, which damages the trees and fruit. Mr. Va Hong Hanh, 43, is an enterprising cof- fee farmer who takes advantage of the latest in- formation and training available from the govern- ment and NGOs operating in his area, Di Linh District, Lam Dong. Hanh's three-hectare plot is located a good distance from his home. Secondary roads are unimproved, hard-packed dirt degener- ating to a narrow, deeply-rutted track. On the way to his farm he points out several coffee varieties, From the 1970s to early 1990s, most of the coffee produced in Vietnam was traded with the Soviet Union and other eastern bloc nations for industrial goods. Vietnam's economy was a state-controlled, command economy. The coffee industry was run by state-sponsored trade associations and state- owned enterprises. Then came the events of the big thaw, 1972 to 1990, when cold war political and economic thinking was turned on its head: Chinese economic reforms, known as "capitalism with a Chinese character" (Deng Xiaoping, 1978); "perestroika" or restructuring (Gorbachev, 1986); the demolition of the Berlin Wall (1989); and the vaporization of the Soviet Union, which had been Vietnam's mentor and major trading partner. These historical trends accounted, in part, for a tectonic shift that began in Vietnam in 1986 with the introduction of a package of liberal economic reforms known as Doi Moi, meaning renewal or revision. The focus was on opening up and re-energizing the Vietnamese economy, privatizing it, modernizing it and linking it to export markets. At the heart of Doi Moi was an ambitious, far-reaching land distribution program which gradually privatized land use (if not granting legal ownership), legalized family-run businesses, especially in the agricultural sector, eased credit facilities for farmers, lowered barriers to imported agricultural chemicals, encouraged planting of cash crops and high-volume production orientation toward export. Under this umbrella of reform, the government encouraged and aided coffee farmers to expand their acreage and increase output using modern methods and inputs. Low interest loans were freely given. Farmland gradually passed from government to private hands. In the late 1980s, virtually all coffee lands were under the government. By 2003, the figure was 5%. As luck would have it, coffee prices were also on the rise, spiking dramatically in the 1990s, providing impetus to coffee farmers already taking advantage of economic reforms. Volume from coffee farms rose to levels that even government planners could not have anticipated. Land reform was linked to government poverty reduction goals, as well as, rural agricultural production of food crops and commodities. The government not only turned over land for private use (though not necessarily granting ownership), it also earmarked agricultural land that would support coffee crops and promise high yields at low cost, which, in turn would find hot markets. As a result, a wave of immigration took place of landless poor to the fertile, coffee-friendly central highlands: Kon Tum, Gai Lai, Dac Lak, Lam Dong and Dong Nai, a process similar to the transmigration of ethnic groups from Java to outlying regions of Indonesia, a movement which peaked in 1984. This internal transmigration-cum-land reform program was so successful that Vietnam met its millennial poverty alleviation goals ahead of schedule. The Vietnamese program however, lifted many more ethnic Khin (Viet) farmers, the country's dominant group, than any of the other 53 recognized ethnic minorities. Another unintended consequence, Vietnamese cheap, low-quality Robusta poured onto the market, disturbing supply-demand equilibrium.