(CPV) - The first smallholder-owned and operated coffee washing station in Vietnam that funded by the Vietnam Challenge Fund and Dakman Vietnam has significantly increased the incomes for coffee farmers in Ea Kit cooperative, Dak Lak province.
This new business model, including a certification system, could be replicated by other farmer cooperatives, either on their own or in collaboration with coffee traders. The total project budget was just over 435,000 USD, of which the Vietnam Challenge Fund contributed just 160,000 USD.
“The project addresses one of the fundamental weaknesses in Vietnam’s coffee industry; that of poor processing, resulting in low and inconsistent coffee quality in the international market. Moreover, it has paved the way to play a leading role in the development of a significant new market segment for value-added Vietnamese coffee in the international market”, said Mr Buddhika Samarasinghe, chief consultant of the Making Markets Work Better for the Poor, Phase 2 (M4P2) project - funded by the UK Department for International Development and the Asian Development Bank.
Participating in the project, over fifty farmers in Ea Kiet have been certified by Fair-trade, while thirty jobs have been created at the coffee facility itself, and a further 100 seasonal “on farm” jobs have been created. In the first harvest season alone, almost 400 metric tons of Fair-trade semi-washed coffee was produced and exported.
Photo for illustration. (Source: http://giacaphe.com)
The price premium achieved for this Fair-Trade semi washed Vietnamese Robusta coffee was over 440 USD per metric tonne, resulting in a 2.5 times increase in the aggregate income of the householders participating in the project.
The increase of income in one season was equivalent to roughly 1.5 times the total investment by the farmers to the facility.
Besides, this project has been demonstrated the commercial viability of growing and processing higher grade Robusta coffee, including about 150,000 farmers growing coffee in Dak Lak province./.