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, making coffee second only to rice in value of agricultural products exported from Vietnam.
History
It is believed that the coffee plant was first introduced to Vietnam in 1857 by French missionaries, but the first coffee plantations were only set up in 1888 at the Ninh Bình and Quảng Bình provinces of Tonkin. Early coffee production was mainly of the Arabica variety.
The height of coffee production occurred in the early 20th century as small-scale production increasingly shifted towards commercial plantations. In the 1920s, the French decided to open coffee production zones in parts of the Central Highlands, mainly in Đắk Lắk Province.Doutriaux, S., Geisler, C. and Shively, G. 2009. Competing for Coffee Space: Development-Induced Displacement in the Central Highlands of Vietnam.Rural Sociology. 73(4):528–554. An estimated total of 1,500 tons of coffee was produced for export each year by 1930; that amount increased to 2,000 tons per year by 1940. The first instant coffee plant, Coronel Coffee Plant, was established in Biên Hòa, Đồng Nai Province in 1969, with a production capacity of 80 tons per year.
The Vietnam War disrupted production of coffee in the Buôn Ma Thuột region, the plateau on which the industry was centered.Fortunel Frederic, Le café au Vietnam, Harmattan, Paris, 2000 Although seldom involved in conflict, the area was a crossroads between North and South and was largely depopulated. After the North Vietnamese victory, the industry, like most agriculture, was collectivized, limiting private enterprise and resulting in low production.
Following Đổi mới reforms in 1986, privately owned enterprise was once again permitted, resulting in a surge of growth in the industry.
Cooperation between growers, producers and government resulted in branding finished coffees and exporting products for retail. However, by the late 1970s, economic and social reforms led to labour shortages in the Central Highlands, thus creating opportunities for migration into these less populated regions, compared to the overpopulation and poverty experienced in the lowland areas. It is likely that between four and five million people migrated to the Central Highlands after 1975.
Impacts of coffee production
Fluctuations in the coffee economy
In 2023, Vietnam exported 1.62 million tons of coffee. Vietnam is the second largest producer in the world after Brazil, with Robusta coffee accounting to 97 per cent of Vietnam's total output. However, coffee farmers in Vietnam have always experienced cycles of boom and bust since the 1980s, making the industry a highly volatile one. Despite the fluctuating global coffee prices, importing countries continue paying a steady price while coffee farmers from exporting countries experience the daily price range.
This pattern saw the production of coffee in Vietnam at 29.3 million bags in 2017, nearly 600,000 bags lower than the USDA estimate for that year, due to losses caused by late rain. The USDA Foreign Agriculture Service has correctly predicted the increase in production in 2018, as shown in a Bloomberg report and forecasted a further increase in 2019 due to better land management, higher replanting rates, more efficient storage and significant private sector involvement. According to Deputy Prime Minister Vuong Dinh Hue, Vietnam expects this growth in 2018 to beat the Government's target of 6.7%, matching 2017's economic growth of 6.8%. However, the extent to which the Government promotes growth at the expense of social inequalities and environmental degradation should also be looked at.
When the global price of coffee dropped in 2001, many farming households had to reduce their daily meal, changed their diets or relied on food donations from the authorities. While the boom allowed children of medium to low income households to attend school and for families to purchase household goods like television sets, the declining coffee prices reversed this; children were forced to quit schools and self-employed, subsistence farmers had to find wage labour work.
Poor management might recall the 2013–2014 coffee boom when a bumper harvest of 29.5 million bags (from 17 million the previous year) added to the global oversupply of beans and plummeted coffee prices. This led to nearly half of the 127 local coffee export firms to cease trading due to their inability to repay loans. The amount of non-performing loans or debts in the coffee sector likely to go unpaid stands at 8 trillion dong (US$379 million), which is around 60 percent of all loans for the coffee industry in Vietnam.
In March 2025, as U.S. Coffee C Futures prices reach an all-time high, Vietnam's coffee production is projected to total 26.5 million bags. This marks a decline of approximately 2% compared to the 2023–2024 season, primarily due to adverse weather conditions.
Social inequality
Ethnic Kinh v. indigenous minorities
The robust Vietnamese coffee industry which is sustained by global capitalism has been built at the expense of indigenous Montagnard peoples, the original inhabitants of the Central highlands. According to researcher Seb Rumsby, the abolition of indigenous autonomous zones by the Vietnamese Congress in 1975–1976 reflects Kinh chauvinism and craving for economic developments, with regions such as the Central Highland deemed more attractive to foreign investments due to their rich natural resources and suitable lands for farming coffee. The exponential growth of the coffee industry has also had severe environmental consequences due to its rapid deforestation and land encroachments, enhancing climate change and directly impacting the entire region.
With businesses shutting down due to debt, smallholder coffee farmers also bear the brunt of falling prices. However, the effect is not uniform across the producers, exacerbating existing social inequalities.
The ethnic inequality narrative has been prevalent in literature written from 2003 to 2013 producing ethnohistorical and developmental analyses situating the coffee industry's risks at a very real, lived experience level. In a study of the household income of Kinh and the minority Ede coffee farmers, it was discovered what initially seemed counterintuitive: despite having larger farms and planting a larger share of coffee than their Kinh counterparts, the Ede farmers still had a lower household income.
Data from a 2003 survey of 209 smallholder coffee farmers suggested that higher household dependencies and the use of family labour on the coffee plantations could account for the Ede's lower household income as these forms of unpaid work (usually by uneducated women and children) could translate to lower yields as a result of less technical know-how and productivity. It further postulates that the Kinh, due to their smaller families, are low on manpower and hire labour (usually other Kinh) who might already be familiar with coffee cultivation. The researchers caution however that this labour hiring "is as much a result of high household income as a cause of that income".Doutriaux 2008, p. 545
In a similar study, smallholder from four communes of Ea Tul, Ea Kpal, Ea Pok and Quang Phu were surveyed from 1999 and 2003. This study went further by examining the differing household responses between the Kinh and Ede to falling coffee prices, and how this affected their income. Kinh households were more likely to borrow money or engage in off-farm work than the Ede. While the Ede, who have larger farms, were actually buffered from their reliance on coffee as they could change crops or shift cultivation. However, this did not mean that the Ede would fare better and they were in fact their conditions were made worse by their lack of access to short-term loans or by leaving their family farms for too long to seek employment elsewhere. Researchers have recommended that existing macro policies should help diversify income without basing this on the diversification of crops, as the case with the Ede.
Migrant networks While both these studies identify that human dislocation are associated with inadequate macro-level policies, it does shift the responsibility of solutioning only to the government. Ironically, while these studies focus on the micro-level impact of the coffee boom and bust, it offers little insights into the motivations or support systems between these farmers in offering alternative employments or even directing each other to sources of loans. While Kinh farmers seem to enjoy better prospects than their ethnic minority counterpart, inequalities also exist within this group.
Thus, migrant networks provide an intra-regional perspective to uncover the ways that coffee farmers draw on resources including labour power, financial capital and social support. This happens both at the destination and also back home. For example, Kinh emigrants rely on family to look after their children and plots of land back home which ensures that the district authorities do not reallocate the land. Parents and spouses of migrants can sometimes also take loans using these lands to support farming investments up in the highlands. As such, these linkages between the uplands and lowlands are essential to understanding the Central Highlands especially in the context of future risk management.
However, such a rosy picture of emigration should prompt critical inquiry. Historically, the post-colonial Vietnamese government had succeeded in mobilizing millions of lowland farmers into the highlands where the French had previously failed. This was however not without the initial resistance of these farmers.Hardy, Andrew (2003). Red hills: migrants and the state in the highlands of Vietnam. Copenhagen, Denmark: Nordic Institute of Asian Studies. It was only in the 1980s and 1990s that we see a shift to self and economic driven motivations when success stories of coffee farmers in the highlands became a dominant narrative. While family/village networks were a tool aiding this movement, relatives often offered help for migrants to settle in exchange for work. Even the benefits that was mentioned about familial help back home needs to be situated in what can be considered ‘negotiated reciprocity’ involving both ‘mutual aid and mutual exploitation’.Hardy (2003), p. 271 An alternative resource to familial networks that migrants also took advantage of were the colonial employment opportunities offered by the French during the colonial period and later by the Vietnamese state under their mobility programme.
Environmental degradation