Sustaining Development of Coffee, Fruit and Vegetable

10:54:54 AM | 28/4/2021

Coffee, fruit and vegetables have great potential for export and expansion. However, to seize this opportunity, it is necessary to quickly change production methods, and improve product quality in alignment with sustainable development to meet market standards.

Strategic sectors

The world organic fruit and vegetable market is forecast to grow 9% annually in the 2019 - 2024 period, but organic fruits and vegetables are still undersupplied due to high production costs. North America is the largest market for organic fruits and vegetables, followed by Europe and Asia-Pacific.

Foreseeing this demand, Vietnam has stepped up growing and processing vegetables and fruits for export. By 2020, the country had about two million ha of vegetables and fruits, including more than 1 million ha of fruit trees that produce over 12 million tons a year, or up to 25 million tons if vegetables and fruits are counted. The country currently has about 145 large-scale fruit and vegetable processors with a total designed capacity of 800,000 tons of products a year (71 processors in the southern region alone) and thousands of small-scale processing facilities. The country’s fruit and vegetable export is expected to rise by 5-10% year on year to US$3.42-3.58 billion in 2021.

Vietnam is the second-largest coffee producer and exporter in the world after Brazil and the largest Robusta coffee producer and exporter. This is also an important crop for the people of the Central Highlands and makes up about 30% of the region’s GDP. At the same time, the coffee industry has made a great contribution to economic growth, created about two million jobs, serving as breadwinner for 600,000 coffee growers. This crop importantly helps political, social and economic stability in the Central Highlands and mountainous provinces. Vietnam currently has about 100 coffee bean processors capable of processing more than 1.5 million tons for domestic and export markets. Vietnamese coffee has been exported to over 80 countries and territories in the world. In the 2018-2020 crop, Vietnam shipped over 1.4 million tons of coffee worth over US$2.4 billion to the world market.

However, despite being strategic products, environmental impacts over the past time have inhibited the Vietnamese coffee and fruit and vegetable sectors from boosting their strengths and enhancing their value chains. Coffee, fruit and vegetable production in Vietnam has seriously affected the natural landscape where the ecosystem is weakened in addition to other issues such as biodiversity conservation, soil fertility conservation, water resources, land, landscape and nature conservation and energy use. This requires minimizing the impact on the environment and sustainable development for the industry.

Sustainable development aligns business with environmental responsibility

Vietnamese and international standard systems/regulations, the EU - Vietnam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) show the importance of environmental standards and regulations in coffee, fruit and vegetable production and processing for national and international trade chains. Furthermore, sustainable, ecological, safe, organic coffee, vegetable and fruit production, climate-adaptive production, circular economy and green economy are becoming megatrends in the world and in Vietnam. Corporate social responsibility to the environment is increasingly widely recognized and becomes one of the major production and business rules and standards for enterprises.

Regarding the benefits of minimizing the impact and doing responsible business for the environment, experts say that when enterprises achieve certifications, importers can pay an extra amount in addition to normal selling prices while building their images and brand name in the international market. For example, the European market, which accounts for over 42% of Vietnamese coffee exports, encourages and adds “scores” for environmentally friendly production processes. Consumers are willing to pay a higher price for coffee produced under an ecologically certified process. In Russia, consumers have high requirements for food safety standards. Australia, which accounts for 1.23% of Vietnam's coffee exports, also imposes biosafety regulations on coffee imported into Australia.

Conducted by the Vietnam Rural Industries Development and Research Institute (VIRI), the Vietnam Coffee - Cocoa Association (Vicofa) and the Vietnam Fruit and Vegetable Association (Vinafruit), the project “Promoting environmentally responsible business for coffee and fruit-vegetable sectors in Vietnam” aims to boost environmentally responsible business, support coffee and fruit - vegetable businesses to get ready for international integration and free trade agreements. The project is funded and technically supported by UNDP Vietnam and the Swedish Government. According to Dr. Nguyen Bao Thoa, Director of VIRI, the project, carried out from November 2020 to July 2021, builds the two Codes of Conduct for environmentally responsible business for the coffee sector and the fruit and vegetable sector.

"These codes of conduct are based on international standards and adapted to Vietnamese-specific conditions," said Dr. Thoa.

By Ngo San, Vietnam Business Forum