Half a Million Vietnamese Coffee Farmers Can’t All Be Wrong

Ask the next five people you meet to name, off the top of their heads, the world’s top 5 coffee exporters: bet you anything nobody mentions Vietnam.

Yet there it is, sitting pretty at number two, on the back of an enormous boom that has gone under the radar because it’s focused on cheaper, hardier robusta beans rather than the fancier arabica stuff you’ll see marketed in foufy coffeeshops worldwide.
What’s remarkable is that Vietnam’s coffee export boom isn’t a plantation-based affair. It’s a smallholder boom, with average coffee-farms in the 2-3 acre (1-1.5 hectare) range.

Talk about dynamism in smallholder agriculture can sound fluffy – like just the kind of kumbaya-discourse Boring Development is allergic to. But, in Vietnam, fast rising rural incomes have been a key under-reported feature of fast growth.

The impact on livelihoods has been profound. It’s hard to get recent numbers, but from 1993 to 1998, the poorest fifth of Vietnam’s rural households saw their real incomes rise by 46%, and more than two-thirds of that gain came from increasing cash-crop production, nearly all of it coffee.

So sneer all you want at Nescafé; the market for crappy instanc coffee has enormously raised incomes for hundreds of thousands of rural families in Vietnam, all without any need for any NGO, aid initiative or celebrity ambassador.

In fact, smallholders in Vietnam’s coffee sector have seen their productivity grow so fast, the problem these days is a supply-glut that has seen some farmers hold much of their 2013 harvest back:

“I still have some coffee left from the old crop but I don’t want to sell,” said Nguyen Van Tap, a farmer who owns about 2.5 acres (1 hectare) in Dak Lak province, which supplies 30 percent of the country’s harvest. “Prices aren’t good and I don’t need the money right now.”

Anyone working on African smallholder agriculture will have had his mind blown by that. I mean, imagine: a guy farming 1 Ha. with the financial resources to wait for better prices before rushing to market. That’s is development right there.

Are there sustainability concerns arising from Vietnam’s coffee boom? Of course there are. But those are concerns that face farmers who have the income to face up to them, and who have enough to lose to have powerful incentives to avoid self-defeating practices. The real, first and sine qua non requirement for sustainable agriculture is having an activity worth sustaining in the first place. Vietnamese coffee farmers very definitely have that, and so are able to invest in the kinds of knowledge-intensive biotech efforts that most African smallholders can only dream of. .

Talk about dynamism in smallholder agriculture can sound fairly fluffy – like just the kind of kumbaya-discourse Boring Development is allergic too. Partly that’s because it’s hard for people to call up a mental picture of how rural economic dynamism fits into an overall development strategy. But in Vietnam (as in South Korea and Taiwan 50 years earlier) fast rising rural incomes fueled by strong productivity gains among smallholder farmers have been a key, under-reported feature of the growth experience, helping create a counterpull that moderates trends towards fast urbanization.

Empowered coffee farmers don’t need to stampede for the cities. They don’t create unmanageable slums. If they do go work in town, they do so out of choice, not utter desperation. That’s balanced development. And it starts with a dynamic, productive smallholder farmer class.

7 thoughts on “Half a Million Vietnamese Coffee Farmers Can’t All Be Wrong”

  1. I followed you, Francisco…. and I have a comment.

    First of all, Israel struck it rich after in the 40’s and 50’s in the Agriculture Business, when white collar workers who immigrated as refugees from the holocaust found no jobs, except in agriculture as kibbutzniks. In fact, those agricultural communes that were based on idealized communist principles became major exporters to Europe, and transformed themselves to Irguns (city based communes) that entered the manufacturing and high technology market.

    Second of all, there is an economic strength among small farms with their “intensive care” strategies that produce superior yields over large industrial strategies of corporate farms that are largely mechanized and depend more on chemicals, automation and employed labor.

    Thirdly, these farms have seed stock that are fully adapted to their localities… this is a huge advantage.

    Lastly, these farmers are seasoned. They have business skills that have been nurtured by a highly mature culture.

    There are many intercultural factors at play that profoundly effect the relative successes of farming in various places on the globe. This blog introduces this topic well, as agriculture is the basic foundation of an economy.

    1. Thanks for coming over Gordo!

      I’m sorry to say there’s a lot of idealized non-sense in this message, though. There’s a very old Western tendency to project some kind of mystical connection with the land on the part of very poor farmers. (Again, that’s tiers mondisme in action). Sad truth is, there’s an enormous amount of evidence of very widespread hunger among smallholders in Africa and South Asia, and ascribing ancestral wisdom to people doesn’t fill their stomachs.

  2. It helps, but in most cases doesn’t do the job. As you probably recall, I lived in Africa for several years. One of the most interesting experiences I had was when I stumbled on a village where everyone seem to be riding bicycles! I discovered that the Chinese has installed a small bicycle factory that was designed in China for Chinese villages that had no electricity or other conveniences. It was obviously very successful, and I was shocked by how profound the technology was in filling a need with a solution that was adaptable to the village’s meager circumstances! It’s a model that should probably be applied in agriculture and elsewhere. Solutions that are immediately adaptable, and are easily adopted, but fill a need.

  3. Very interesting! I agree with you this sounds like a sort of Balance Development. However, I think it doesn’t reflect the reality of Vietnamese farmers. At least this is my opinion after recently watching a documentary on the BBC.
    In South Vietnam where most of the coffee is grown, no body there has really been trained on how to produce coffee. As a result, the farmers tend to overuse fertilisers and water, and the land is exhausted. What’s more, there isn’t any pan to help the farmers. Therefore, I don’t think in the long term this is sustainable. Besides, inequality is striking, while some farmers are becoming rich, others are just making ends meet.

    1. Maybe I sounded a bit pollyannish, which isn’t good. But real development is always like this: it’s chaotic, it’s anarchic, people make mistakes. Some people succeed while others flounder. There’s nothing neat about it.

      What you do have, though, is enough money reaching and flowing through rural communities to give them a fighting chance to overcome these problems.

      You have to contrast this with agriculture in Chad, say, where there is no inequality because every smallholder is bone poor, and there’s no problem with fertilizer overuse because nobody has access to fertilizers. Perspective!

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