From Vietnam’s Thanh Nien News:
[Robusta] Coffee bean prices [recently] reached a 13-year high of … US$2.50 per kilo. As a result, the 434,000 hectares of coffee plantations in the Central Highlands, which produces 80 percent of Vietnam’s coffee output, is forecast to expand by more than 22,000 hectares this year.
The last peak [US$2.19 per kilo in 1995], also led to a boom in coffee farming in the Central Highlands. But a surplus of coffee sent prices to a record low of…US$0.25 per kilo four years later.
Indeed, this sad story has played out repeatedly over history. High coffee prices motivate farmers to plant more coffee, which takes three to five years to produce beans. Then the resulting glut in supply makes coffee prices plunge again.
Inevitably, not only does a substantial increase in coffee planting have the potential to depress prices, it can often mean the destruction of habitat and damage to the environment. The same article notes that expansion of coffee farming was threatening forests in the area. “Wherever coffee was grown, forests have disappeared,” said a former agricultural engineer.
This is tragic, as Vietnam is one of the most biologically diverse countries in Southeast Asia. The Central Highlands, with many important biodiversity hotspots, timber reserves, and watersheds, account for about 30% of Vietnam’s natural forest cover. Forest cover in Dak Lak province in the Central Highlands went from 90% to less than 50% in the late 1990s, mostly from coffee production . A portion of Dak Lak province is a designated Endemic Bird Area. Despite efforts to preserve land, Vietnam has been losing ground when it comes to protecting biodiversity.
Further, the article stated that local agricultural agencies have encouraged local people to stop expanding the coffee farming area and instead grow other drought-resistant crops, since coffee requires three or four times the volume of water of other crops – and the Central Highlands has experienced many droughts in recent years.
Much of what is being planted is low-quality seeds and seedlings, which will lead to low and poor-quality coffee yields. Vietnam has a chronic problem with quality, with 88% of the coffee rejected on the world market being from Vietnam. In response, the Vietnamese government developed new quality standards, which were set to go into effect in October 2007. The implementation was delayed, however, as the high world prices are expected to “override” quality concerns.
Where does this coffee go? This is overwhelmingly sun-grown robusta coffee; only 2.3% of Vietnam’s current production is arabica. This coffee is mainly used for low-quality blends and instant coffee; Nestlé buys 25% of Vietnam’s coffee. Other large buyers are Kraft and Sara Lee.
Discover Vietnam’s biodiversity through a slide show from American Museum of Natural History. Consider the fate of unique birds found only in restricted ranges of Vietnam’s coffee growing regions, like the endangered Collared Laughingthrush (right). Then decide if you really need to save a few minutes by purchasing instant coffee, or a few cents by purchasing cheap supermarket coffee (especially that not marked “100% arabica,” which contains this low quality robusta).
I think the choice is obvious.
 Thanh Ha, D. and G. Shively. 2008. Coffee boom, coffee bust, and smallholder response in Vietnam’s Central Highlands. Review of Development Economics 12:312-326.
Photo of a Vietnam coffee farm by Lanz.