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Fin Coffee
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Coffee production has been a major source of income for Vietnam since the early 20th century. First introduced by the French in 1857, the Vietnamese coffee industry developed through the plantation system, becoming a major economic force in the country. After an interruption during and immediately following the Vietnam War, production rose once again after Đổi mới economic reforms, reaching 900,000 tons per year in 2000. In 2009, Reutersreported Vietnamese coffee exports at "an estimated 1.13 million tonnes" for the previous year, stating that coffee was second only to rice in value of agricultural products exported from Vietnam
Robusta Viet nam
RobustaViet nam coffee inDustry structure
The production base of coffee in Viet Nam is now approximately 95 percent private run farms
with the remaining 5 percent being state farms, which are also being gradually redistributed to
small farmers. However, many of the collection, processing and export roles are still performed
by State Owned Enterprises (SOEs). There are a number of key stakeholders in the Viet Nam
coffee industry. A brief description of these are provided below;
• MARD: Ministry for Agricultural and Rural Development is the key ministry for coffee.
There are a number of research and development institutions under MARD such as:
- IPSARD: Institute of Policy and Strategy for Agriculture and Rural Development,
- Dak Lak agricultural extension centre.
- WASI: Western Agroforestry and Scientific Institute in Dak Lak.
- BRC: Bavi Research Centre, specifically set up for Arabica research in North Viet
Nam.
• VINACAFE: The Viet Nam Coffee Corporation is the SOE umbrella company under
MARD that manages 59 SOEs that cover a range of industries including 40 state farms
totaling 27 000 ha of coffee. These state farms work with 27 SOEs, including processors,
traders, and service providers providing credit, fertilizer, irrigation, research and roasting.
VINACAFE took over the supervision of the SOEs from MARD in 1995. It is now in
a process of liberalizing and privatizing these enterprises. At present the government
controls only 5 percent of the coffee production area in Viet Nam in the form of state
farms.
• VBARD: The Vietnamese Bank of Agriculture and Rural Development is the main form
of credit for coffee farmers, which is a government institution and has 1 600 branches in
rural areas. VBARD estimates that it has 75 percent share of the credit market for coffee
growers. In 2002 this market exceeded USD270 million.
• VICOFA: The Viet Nam Coffee and Cocoa Association (110 members which include 90
SOEs, 18 private companies and 2 scientific institutes). It was formed in the late 1980s
to help organize the coffee sector and help government develop coffee policy. It is
presented as an independent business association, but is in reality more of a government
affiliated organization representing Viet Nam in overseas forums and is financed through
its members and by government.
• Processors and Exporters: Viet Nam has over 100 registered coffee exporters, including
a number of joint-venture processing and export operations with international partners.
Most of the large multinational coffee businesses are directly represented in Viet Nam
through direct investments or joint venture companies.
• Private Business: A growing range of private businesses focusing on local coffee trading,
fertilizer importation, resale and general farm supplies.
• Private coffee farms. The majority of private coffee farms are smallholders which
make up the bulk of the producers in the Viet Nam coffee industry. It is estimated that
2 Viet Nam coffee industryDiversification by smallholder farmers: Viet Nam Robusta Coffee 3
85 percent of the 480 000 ha of coffee are small farms of 1 ha of less. This indicates
that more than 450 000 small farming families are involved in coffee production in Viet
Nam.
Viet nam coffee exports
Viet Nam exports coffee to over 50 countries. The United States and Germany are the major
markets with 10 percent to 15 percent going to each country annually. In the year 2004/2005,
Germany and the United States remained the top importers of Vietnamese coffee with Italy,
Spain and the Republic of Korea, completing the list of the top five buyer countries.
Table 5. Viet Nam’s top coffee buyers in 2004/2005
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