Coffee vs. Cacao

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Coffee vs. Cacao: A case study from the Vietnamese Central Highlands.

World Food and Fiber – PSSC392
Case Study #1 Final Report

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). 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...
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