Dak Lak Coffee Production Looking toward Sustainable Development

Dak Lak is regarded as “home of Vietnamese coffee” with biggest coffee area and output. However, the industry is facing numerous challenges. To ensure sustainable development of coffee with higher quality and efficiency is the highest priority of the province now and the years to come.

The coffee area of Dak Lak increased from 3,700 hectares in 1975 to 15,000 hectares in 1985, 76,000 hectares in 1990 and now 183,000 hectares. Annual output is 400,000 tonnes of coffee bean, over 15,000 tonnes of processed coffee and over 1,000 tonnes of instant coffee. Dak Lak has exported coffee to 56 countries and territories including up-markets such as Japan, USA, Germany, EU, accounting for over 40 % of GDP and nearly 81 % of export value of the province.

 

Alongside with the expansion of coffee area, the application of technical measures has increased the output and quality of Dak Lak coffee. The coffee yield has increased from 800-900 kilograms of coffee bean per hectare in 1990 to 18,500 kilograms in 1994 and 25,000 kilograms today, 35,000-40,000 kilograms in some areas and even over 50,000 kilograms in some households. With average yield of 25,000 kilograms of coffee bean a hectare, the farmers can get a net profit of VND25-30 million per hectare and their income is exceeding the average. Evidently, coffee has changed the face of Dak Lak, making it a province of high economic growth rate in Vietnam.

However, Dak Lak coffee remains with shortfalls and challenges. The industry is unorganized from planning to harvesting, processing and exporting. Consequently, each farmer losses billions of VND each crop due to poor coffee quality. According to some survey, only 142,000 out of 183,300 hectares of coffee meet technical standards and the remaining area is not suitable to local conditions. In addition, 85 % of the area is under unstable management of households. When the price falls, thousands of hectares of coffee were cut down to plan other crops instead. On the contrary, when the price rises, farmers increased coffee area without planning and disregarding warning from managers and experts.

 Due to the expansion of coffee area without planning, almost 80 % of new coffee trees are unqualified causing low yield, small coffee bean and poor quality. The quality control is almost neglected in the processing and transactions. The trading is mostly by intermediaries causing losses and difficulties for farmers.

 

 Furthermore, the four-party cooperation (the State – scientist – farmer – business) has not been clearly defined. State-owned enterprises are unstable and failing to keep up with the world price.

 

Under these conditions, both coffee quality and competitiveness have been reduced in the world market. To ensure sustainable development of coffee, Dak Lak should re-plan both the coffee planting at three levels: province, district and commune as well as processing plants and maintenance facilities. In addition to choosing the best strain to ensure good quality and high yield, the province should disseminate good strain to plant in larger area, supply farmers both strains and technical service, develop specialized planting areas and cooperation among households, improve coffee harvesting and processing.

 

Besides, the province should encourage investments in coffee production and processing, connecting planting areas with processing plants, increasing export turnover, expanding markets especially traditional partners and important markets such as China, Russia, Japan, thus making Dak Lak coffee more attractive to the world.