Coffee vs. Cacao

Coffee vs. Cacao: A case study from the Vietnamese Central Highlands. World Food and Fiber – PSSC392 Case Study #1 Final Report Introduction Dak Lak is the largest province in the Central Highland region of Vietnam. Due to its perfect climate, soil and topography for coffee production, Dak Lak’s economy is once based in agriculture and forestry with coffee cultivation the dominating industry. Despite signs of a long-term collapse in coffee prices, temporary profitable returns to coffee production and government schemes have encouraged many new coffee planters in the early 1990s (Ha & Shively, 2005).

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Large areas of forest land have been destroyed and converted for new coffee plantations. In addition, temporary price rises in coffee have attracted further expansion of existing coffee farmers. Yet, the destruction of forests, rapid expansion of coffee plantation, and intensive drainage practices have led to soil erosion and serious water shortages (Doutriaux, Geisler, & Shively, 2008). After a brief economic success, coffee prices crashed and dropped because of an inflow of coffee into the economy since the Vietnamese government has been fostering its production.

As a result of collapses in coffee production due to drought or flood and dramatic fluctuations in the world coffee prices and demands, the Dak Lak’s economy and growth patterns have been negatively impacted. Thereby, along with the village council Mr. Nam, villagers from Dak Lak have decided to search for possible alternatives to coffee in hopes that they would thrive again and make a profit off their harvests (Ha & Shively, 2005).

This case study report will detail more facts about Dak Lak and its persisting problem, will identify several decision makers and their goals as well as solutions, will evaluate each possible solution, and will continuously monitor the condition after a solution was chosen and implemented. Facts Pertaining to the Case The environment in the province of Dak Lak has a tropical climate that has a relatively high temperature and humidity level in addition to soil with a fine texture, a high water absorption level and high fertility (Ha &

Shively, 2005). This type of climate is suitable for farming many types of different crops; however it also requires additional herbicides, pesticides and fungicides to be used more often on these crops. In addition, many of these crops, including coffee, can eventually lead to an ecological imbalance (Castella, Boissau, Nguyen, & Novosad, 2004). For example, in the past twenty years, on average, Dak Lak has lost thousands hectares of lands annually to public, commercial or private use (Ha & Shively, 2005).

Such large amount of loss of land has caused the soil to erode, thus generating more intense flooding and water shortages. With Dak Lak rests on hill tops with high slopes, making the village less suitable for coffee plantation, thereby forcing the farmers to burn and clear more natural forest land to make way for plantations (Doutriaux, Geisler, & Shively, 2008). Massive forest destruction eventually has caused serious erosion and flooding concerns; yet, few lawful regulations were in action to prevent such destruction from happening.

The farmers/planters of the village are seen as the origin of the economic chain in the Dak Lak province; they export their crops, thus introducing an outside capital that supports the rest of the village’s economy. However, with the collapse of the coffee prices, their crops can no longer bring in sufficient incomes to support the economic chain, thus putting Dak Lak into a financial pitfall. In addition, since the crops they grow have a tendency to destroy the potential for future earning by altering the surrounding environment significantly, such harm to their economy ultimately becomes permanent.

Villagers have to realize and recognize that coffee, once as cash crop or so called “dollar tree,” is no longer the greatest source of income to fuel the economy (Doutriaux, Geisler, & Shively, 2008). With coffee no longer as the greatest option, this brings the question of which crop(s) would be a better choice for the farmers to plant for profit. The villagers and the council, Mr. Nam, search for alternatives and discover that cocoa can be an achievable possibility/alternative. Yet, alike many crops or plants, cacao also has its advantages and disadvantages.

Positively, cacao, as a crop, is suitable for the environmental and ecological conditions in Dak Lak (Ha & Shively, 2005). Cacao typically requires less water than coffee does, thereby water usages significantly decreases. In addition, cacao can tolerate wind, thus making cacao an ideal crop to plant in a forested area, like Dak Lak (Ha & Shively, 2005). Advantages of cacao plantation can further encourage farmers to replant some domestic trees that they have removed to expand their coffee crops. While being intolerant to wind, cacao is shade-tolerate; thereby making cacao an ideal crop in a heavily wooded environment.

Cacao thrives extremely well with humidity and requires only natural soil. In term of profit, farmers would not have to search for buyers for their harvested crops because a foreign exporter has guaranteed to buy large quantities of cacao from them. However, each plant or crop has its advantages as well as disadvantages. As a biggest drawback, cacao requires multiple usages of fertilizers throughout its life cycle; this can become costly to many farmers. Alike coffee, herbicides are required, as well as hand weeding.

In addition, cacao trees on plantations may have issues with certain pests and diseases that survive well in many humid atmospheres; thereby the usage of insecticides becomes unavoidable. Although insecticide is a necessity, its effectiveness in tropical area remains unsteady and relatively low; thus, farmers must take the risk of having their plants die or harvesting less qualitative crops despite their best efforts and usage of those crops’ protectants. Its vulnerability to certain insects and fungi has caused the loss of “an estimated one-third of the world’s cacao crop” each year (Ha & Shively, 2005).

The costs for preventing those losses could become unaffordable to many farmers. The price of cacao has fluctuated and remained unsteady; farmers may be incapable of making through another round of low reselling-price of their harvested crops, particularly if they have already planned on borrowing additional money to restart their agricultural businesses. As growing cacao will require farmers to have additional sets of skills and knowledge, another drawback will be their lack of intellectual support which will negatively interfere with their cacao growing enterprises. Identification of Decision Makers

To decide whether switching from coffee to cacao or not, there are several people who can impact the outcome of such decision. As one of the members of the village council, Mr. Nam definitely has the greatest impact because he strongly believes what he has been researching is right for the village as well as its economy. His perspectives will be valued because he has done some traveling and researches on any possible options for Dak Lak. As a cacao expert, Dr. Hong can influence Mr. Nam’s decision; since Dr. Hong has been providing Mr. Nam with information about the cacao plantation. While Dr.

Hong will not be the final decision maker, his knowledge on cacao cultivation techniques will heavily influence the final outcome. Farmers from the village of Dak Lak are the final decision makers because they need be determined on whether they will invest more time and money in switching coffee to cacao or simply remain unchanged. A poor judgment can ruin their financial sources, which possibly or probably ruin the entire village’s economy. Goals of Decision Makers Mr. Name and the villagers have the same goals: they both desire a solution that will stabilize their economy which leads to long term prosperity.

Their goals involve finding and planting a crop(s) that will bring stable profit permanently. As decision makers, farmers must ensure their natural resources will remain intact and the chosen crop(s) will survive under their current environmental condition. Many farmers in Dak Lak are in debt from previous loans that they have borrowed earlier for planting coffee. With farmers as the main sources of bringing incomes into Dak Lak’s economy, village may not be able to thrive until famers can repay their debts and start generating money back into the economy.

Securing financial survival will generate good profits/capitals socially, economically and environmentally. More incomes generally signify less competition among the farmers for jobs and other social resources. Perhaps, with more capitals, Dak Lak can introduce more advanced environmental cleanup technologies to restore the destroyed forest, which will help Dak Lak to achieve long term prosperity. The village should also be searching from other possibilities and diversifying their investments, such as planting different types of crops that can ensure stability to the economy.

Alternatives 1. Planting different types of crops (coffee, cacao and possibly others) 2. Planting cacao only 3. Remain with coffee cultivation 4. Distribution of lands to farmers 5. Offer financial aids to eligible farmers Evaluation 1. Planting different types of crops, such as coffee, cacao, pepper, cashew, and rubber * Planting different types of crops could ensure the stability of the village because if one crop was able to thrive while the others were not; the village’s economic chain would continue with minimal drawbacks.

The consistency of incomes from other crops would secure the economy, thus providing financial stability to many villagers. * Planting different types of crops provides farmers with more options in deciding which crops will thrive best on their lands. This will lead to more farmers producing and exporting more products. However, as with many crops, the farmers can be at risks of not having the crops thrive well or simply the resell prices are too low to make any profits. 2. Planting cacao only * The cacao-only plantation may or may not affect the stability and prosperity of Dak Lak.

With the market price of cacao continues to fluctuate, yielding a reasonable profit, remains questionable, even though with a good harvest. When comparing to coffee, cacao may be pleased with the Dak Lak’s tropical environment because it thrives well on hills and in well-shaded environments. A drawback will be the usage of crops’ protectants, such as pesticides, insecticides, etc. * Planting only cacao puts farmers in jeopardy. Many farmers would need more money, thus taking on additional debt in order to switch from coffee to cacao.

Yet their future earnings remain uncertain due to many unpredictable market forces. Cacao may be better in maintaining the integrity of their lands and preserving their future earning potential, but farmers may require additional investments to keep their crops in better condition. 3. Remain with coffee cultivation * Many problems have occurred in the village from solely depending on coffee plantation. The environment of Dak Lak has changed, thus water shortages has become more intense and has occurred more often. Coffee does not thrive well in this village when compared to cacao.

The current coffee’s reselling price makes the production result in a failure, which many farmers can no longer afford. * Since coffee is less likely to yield any reasonable profit, planting only coffee can no longer be or remain as an option (Knowler & Bradshaw, 2006). Planting only coffee that requires wide-ranging usage of pesticides and large amount of water has become impossible in such tropical environment. Planting different crops that can be rotated and be used with several cultivating techniques will remain as the best option to preserve the land for future use. . Distribution of lands to farmers along with environmental regulations * The government should distribute land to any eligible farmers for plantation, while using those grants to implement environmental regulations. Lawful regulations offer two different benefits to the village. First, regulations can give farmers the rights to use their lands to their own financial benefit in securing loans and other funding helps; in turn, this can stabilize the village’s economic chain.

As those farmers become economically and financially secure, a steady and reliable flow of income is more likely to be maintained. By implementing environmental guidelines and regulations, lands of the village and their future earning potential are more likely to be preserved (Saint-Macary, Keil, Manfred, Heidhues, & Dung, 2009). If lands that farmers depend on happen to be destroyed and converted without restrictions, similar to unregulated forest destruction to make room for coffee plantation, the village’s future will be ruined. 5. Offer financial aids to eligible farmers The government should determine on whether they can provide aid to any farmers’ loans or provide them with reduced interest rates; thereby farmers can invest in crop(s) that may thrive well on their particular lands. Future Monitoring When Dak Lak chooses and decides to begin and plant different crops (alternative #1), a quantitative inventory of the crops that have planted and yielded should be accounted to assure that a mixture of crops have been chosen. Planting different types of crops will guarantee a stable economy for the entire village.

The village council should monitor continuously to ensure that farmers are neither changing crops constantly nor going back to a single-crop plantation. Continuous monitoring can also assure that farmers are becoming more knowledgeable about their lands, which crops will thrive, and the proper techniques for cultivation. In addition, the debt or loans amounts of the farmers should be monitored for the next several years after their changes/switches in plant production. Overtime, farmers’ debts should have decreased while their household incomes should have increased.

The Vietnamese government should be subsidizing the farmers’ loans and providing them with lower interest rates. The Vietnamese government should distribute any available public lands to farmers and in turn to establish environmental policies and regulations. To monitor the success of these regulations, samples of different soils should be taken and evaluated occasionally for their concentrations in moisture and mineral levels; then compared the samples to those taken from areas that are not being used. After years, the concentrations would become more similar rather than drifting in opposite directions.

Drifting in opposite direction signifies that policies/regulations are being followed incorrectly. The intensity and frequency of floods should also be monitored; because flooding can be a good indicator of an environmental change that may signify a drift from a natural state. Over time, the intensity and frequency of floods should have decreased, but this happens in a slow rate over a long period of time; such monitoring may take many years to be followed through. Conclusion When making decision about switching crops and planting techniques, a farming community has many considerable factors that need be evaluated.

Obviously, it is extremely jeopardizing to have only a single industrial economy. Like Dak Lak, relying solely on coffee, can eventually lead to a collapsed economy that leaves no room for recovery. Without a decent economic base, many social problems have unfolded, tearing the village into pieces that it can no longer function as a whole to solve the persisting economic problems. Again, without a decent base, villagers will pay no attention about the future because they are already overwhelmed with other occurring and persisting problems; and the main dilemma is being able to survive socially, economically and environmentally.

A possible option to economic stability and an increased quality of life for a community is to find a solution that works on all those different aspects. Solution can be best but never perfect, therefore a combination of possible alternatives may help in creating a much better reality. References Castella, J. C. , Boissau, S. , Nguyen, H. T. , & Novosad, P. , (2004, May), Impact of forestland allocation on land use in a mountainous province of Vietnam. Journal Homepage:www. elsevier. com/locate/landusepol, 23(2006), 147-160.

Retrieved February 13, 2011 from Science direct. Doutriaux, S. , Geisler, C. , & Shively G. , (2008, December), Competing for Coffee Space: Development-Induced Displacement in the Central Highlands of Vietnam. Rural Sociology, 74(2004), 528-554. Retrieved February 12, 2011 from Academic Search Premier. Ha, D. T. , & Shively G. , (2005, August), Coffee vs. cacao: A case study from the Vietnam central highlands. J. Nat. Resour. Life Sci. Educ. ,34(2005), 107-111. Retrieved February 13, 2011 from American Society of Agronomy. Knowler, D, & Bradshaw, B. (2006, January), Farmers’ adoption of conservation agriculture: A review and synthesis of recent research. Journal Homepage: www. elsevier. com/locate/foodpol, 32(2007), 25-48, Retrieved February 12, 2011 From Science direct. Saint-Macary, C. , Keil, A. , Manfred, Z. , Heidhues, F. , & Dung, P. T. M. , (2009, August), Land Use Policy: Land titling policy and soil conservation in the northern upland of Vietnam. Journal Homepage:www. elsevier. com/locate/landusepol, 27(2010), 617-626. Retrieved February 12, 2011 from Science direct.