Vietnam's coffee farmers in crisis

The boom in coffee prices in the mid-90s attracted many newcomers to Vietnam's coffee industry and production rocketed, quickly making Vietnam the world's number two coffee exporter.

The price drop has devastated its mainly small farmers.

The industry body - the Vietnam Coffee and Cocoa Association - says they are getting $450 a ton, where six years ago they earned more than $2,000.

Coffee remains in Vietnam's top 10 exports.

This year, the ministry of trade expects export earnings of almost $300m.

Hardships

But Oxfam says central highland growers are earning only 60% of their production costs.

They are struggling to buy food, medicine or to send their children to school.

The head of the coffee association, Doan Trieu Nhan, disagrees with Oxfam's argument that many farmers are on the brink of starvation.

He says the Vietnamese Government has stepped in to help farmers diversify their crops and get low-interest loans.

Vietnam also defends the accusation that its overproduction caused the world glut, pointing out that other countries also produce too much.

Inferior production

But the coffee crisis has highlighted the risk for developing countries of playing in the big league of world markets.

Vietnam has production problems in both quality and quantity.

There are inadequate marketing and agricultural services, and poor households don't have the flexibility to cope with global fluctuations.

Mr Nhan and aid workers in Vietnam say poor farmers will be helped if Oxfam's recommendations are implemented.

They agree that those whom coffee makes rich are getting richer, while farmers and consumers suffer, and that the best answer is a more humanitarian approach to stabilising world coffee production.