Lack of effective formation of value chain

Despite standing at the top position in coffee export, Vietnam is placed in the lowest coffee price group. The main reason is due to approximately 85% of the country’s coffee volume is produced by farming households. With each household comes a difference in variety, farming procedures. The coffee quality is therefore uneven and limited.

There are cases of households forming several linkage models which operation seems to have certain efficiency. However, they are small in numbers and scale, highly dependent on factors in the supply and service sector. Coffee farmers have their focus on production and business activities but have not yet voiced out their position in the business itself.

Mr. Nguyen Tri Sau, Director of Sau Nhung Agricultural Production and Trading Cooperative (Dak Ha district, Kon Tum) said that the cooperative’s current biggest problem lies in the lack of capital and qualified human resources.

The members’ capital contribution is mainly from registering coffee gardens as an asset of value. The qualifications required to approach new methods are very limited. This results in a demand for synchronous investment to sustain a closed and high-tech production procedure.

The Covid-19 outbreak has also greatly affected output as they cannot sell their products. Broken supply chains and high production costs make production even more difficult.

Must join hands for future development

With the goal of sustainable development for the coffee industry, Mr. Huynh Van Thon, Chairman of the Board of Directors of Loc Troi Group, believed that it is essential to perfect the coffee varieties for production organizing as well as output and coffee standards for the market.

Farmers must together form cooperatives and grand farms to represent their interests and access resources for production, ensuring their livelihoods. They can minimize intermediary stages between buyer - factory - growing areas when a close linkage system has been secured.

Minister Le Minh Hoan emphasized at this workshop that the Ministry of Agriculture and Rural Development (MARD) will continue to implement the VnSAT project along with several other projects to develop coffee sustainably.

MARD chose the Central Highlands to set up logistics infrastructure for the coffee industry. The goal is to create more refined products and add more value to coffee beans through a commodity chain in order to improve the income of coffee producers.

Minister Le Minh Hoan said, “EVFTA opens up great opportunities for us. But due to many reasons, Vietnam’s agro-products in general and coffee in particular still account for a small proportion in the European market. Every year we work with international organizations and Vietnam’s diplomatic missions in Europe to find a better way to make full use of EVFTA.

“We will develop a separate scheme on agro-products exportation to Europe in the near future so that Vietnam's agricultural products have a foothold in this meticulous market.

”There is a need to put Central Highlands coffee into reconsideration in all stages (harvest, processing, production, etc.) following global climate change and green consumption. Only then may Central Highlands coffee reach further to the world market.”

Translated by Samuel Pham