By George Munene
In one generation Vietnam has gone from 92,000 tonnes in 1990 to 1.7 million tonnes in 2019, far beyond the total African production of 18,514 (thousand 60-kg bags).
The Southeast Asian nation controls more than 10 per cent of the global coffee market, second only to Brazil in volumes exported. In the same period, the total market share of African countries has either significantly reduced or stagnated under the same market conditions.
Vietnam has exhibited an extraordinary annual increase in coffee export volumes despite the global industries’ elastic price regimes that has seen coffee production in African countries such as Ethiopia and Kenya stagnate or decline.
The exponential growth of the coffee industry in Vietnam is attributed to the successful development in people, policies, resources, and technology.
The study ‘Vietnam’s Coffee Story: Lessons for African Countries’ draws crucial lessons for African countries looking to improve the volume and profitability of their coffee sectors.
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The report points to proactive government policies, investments, and actions across all phases of the value chain, contributing to the success of Vietnam’s coffee sector. The reforms employed have been applied to production advancement, policy incentives, land policies, institutional governance, and value-addition investments which are all explained in detail within the document.
These proactive policies and investment approaches deployed in Vietnam and mistakes made so far can provide African countries with a great learning opportunity.
According to the Department of Crop Production of Vietnam, the total land area of coffee is 664,000 ha, of which 93 per cent is Robusta and 7 per cent Arabica.
To its national economy, coffee contributes 1.5 per cent of the export revenues; hence, presenting three per cent of the GDP and making it the second most valuable agricultural commodity.
The export value of the coffee sector in 2015 was estimated at $2.67 billion, with Germany and the USA as the largest importers.
Learning to avoid the mistakes that Vietnam made in the process is also as crucial. These include mainly the fact that while the ‘90s saw an almost 277 per cent increase in coffee exports, the expansion of the coffee industry has had ecological and environmental ramifications.
Ecologically, Vietnam’s comparative coffee advantage was premised on the production of low-quality beans produced through high-productivity, high-input methods, thus requiring large doses of chemical fertilisers and irrigated water. There are, therefore, some ecological consequences of this path dependency.
These include (i) Increased use of synthetic fertilisers and the attendant consequences of pollution, biodiversity loss, and emissions; (ii) A 19 per cent decline of forested area in the central highlands of Vietnam; (iii) Soil erosion due to rapid expansion of plantations into sub-optimal highland areas.
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In the African context, increased production rates have caused negative environmental externalities within coffee chains such as deforestation, greenhouse gas emissions, and pollution.
African countries can tremendously benefit from agroforestry, certification, and zero deforestation commodity measures currently applied globally, including Vietnam, to ensure
sustainable tree commodities beyond coffee. But more importantly, African countries can draw from the creative policies, incentives, and strategies that Vietnam deployed to enable its rise to the top of the global coffee market.