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Laos Exports Are Growing and Quality Is Up

Cambodia - The ancestors of hundreds of princesses from Lane Xang, the name of an ancient kingdom dating back to the 14th century also called the kingdom of a million elephants, are still believed to live among the general public in today’s Laos.

A medium-sized country in the heart of former French Indochina, with a tiny population of about 4.5 million people, the socialist country Laos is slowly emerging from the aftermath of years of war, civil strife and economic turmoil.

But the mystique of the past cultures and fascinating history remains present in modern-day Laos, and the country and its people remain just as beautiful, intriguing, mysterious and exotic as the images of the Laotian name for their country conjures up.

As one of the poorest countries in the world, even as international coffee prices currently are trading at their lowest levels in history, hopes are high that coffee cultivation will help bring increased prosperity and development to rural and isolated provinces in the country where many highways still remain unpaved and western infrastructure still is a far cry of luxury for the majority of the people.

Since the Tea & Coffee Trade Journal first put Laos on the world map of coffee seven years ago following the country’s introduction of market reforms, coffee has been a source for a major boom in social and economic development in the southern highlands of the Bolaven Plateau, where French colonial powers first started cultivating coffee in the late 19th century.

“Now the farmers are richer than before. On the roads you used to have only 10 trucks passing in a day, and today there is 1,000 trucks going through the region a day. You have bigger houses and electricity, and this newfound wealth all come from the coffee,” said Bounlap Nhouyvanisvong, president of the Laos Coffee Exporters Association.

Coffee has indeed been good to the people of the Bolaven Plateau, which is comprised by the three southern provinces of Champasak, Saravan and Sekong, just north of the border with Cambodia, and west of the border with the highlands of central Vietnam.

On recent journeys back to Laos, the signs of economic prosperity thanks to the opening up of the coffee market to private exporters are indeed impressive all along the road from Pakse, the provincial capital of Champasak, to the coffee regions of Paxong,.

Shiny new houses, new concrete ware houses with large cement patios for drying, a new school and several new hotels, are a far cry from rural development witnessed elsewhere in the country. The old market in Pakse has got a much needed refurbishment and what used to be homes made out of clay or wood have now been upgraded to brick houses, some even with televisions and radios. Bikes have been replaced with motorcycles and some of the region’s most successful exporters and producers even own cars.

Development in Pakse has come a long way a lot faster than elsewhere in rural Laos, and is a far cry from the state of the capital Vientiane, which is still suffering desperately after the 1997 economic crisis in Asia.

From a total production in the early 1990s of about 5,000 tons (83,000 bags), Laotian coffee output has soared to 18,000 tons (300,000 bags) this past 2001/02 crop cycle, with most of the exports going to France. But is this an indicator that Laos will be the new Vietnam in the world market, and can we expect further 10-folds increases in the export volume in the next decade?

“No, no, no,” laughs Nhouyvanisvong, saying that although land is available for expanding the country’s total coffee production to about 100,000 hectares, which with average Robusta coffee yields of up to 2.0 tons per hectare could yield a harvest of up to 3.3 million bags, any major expansion is unlikely to happen.

“We have a shortage of manpower, even for a harvest of 16,000 tons (267,000 bags) we have difficulties to cope and the government has looked at bringing in ethnic groups from the northern areas to help pick the coffee,” he said, adding that with a small overall population, it will be difficult for Laos to expand the production beyond what a family can handle in a small plot of 1-2 hectares.

Total coffee output could however grow from increased productivity per yield, which for many farmers are still only about 500 kilograms per hectare, while physical coffee acreage has grown considerably over the last decade from some 20,000 hectares in production in the early 1990s to about 30,000 hectares today.

But rather than quantity, the Laotian coffee industry has increased efforts to raise the quality of the beans they produce, and are eager to see Laotian coffee being regarded as specialty or gourmet blends.

“The quality of Laos’ coffee is still not up to international standards and so we are trying to teach the producers how to harvest correctly, only to pick the red, ripe and mature beans, and also to dry the coffee on trays above the soil so that the beans don’t pick up an earthy taste.

“Many times the farmers will harvest just one time and will harvest everything - green, immature and ripe beans all in one - because they are lazy and want to finish quickly. But we try to teach them that 6,000 tons of good quality can pay more than 16,000 tons of bad quality coffee,” said Nhouyvanisvong.

All of the Laotian coffee is cultivated at the Bolaven Plateau, and although the Arabica share of the total output has been growing in recent years, more than 90% of the total production still consist of Robusta coffee, while a couple of individual farming plots grow the coffee species known as Liberica.

But as French agronomists and coffee experts from the French agricultural development agency CIRAD are running a quality improvement now close to completing 10 years in operations, still increasing amounts of the Laotian grown Robusta beans are processed as washed or semi-washed coffee, significantly improving the quality.

The specialty coffee industry may only have seen the beginning of the Laotian coffee industry’s recovery, but this small origin is eager to make sure it’s only a beginning, and much more is to be watched out for down the road.

Darjeeling Tea May Get Shot in Arm via WTO
There is an EU proposal that WTO should extend "enhanced protection" that is already provided to alcohol, to geographic-specific products such as Darjeeling tea, reported the Economic Times. recently. The report of a European Commission meeting in Brussels has mentioned this new development. Another EU initiative which was presented to WTO council proposed that a global register be created by the end of 2003 to guarantee the origin of high quality products. Currently the producers have to register their geographical location in every country where they want to market it.

According to the New York-based professor Randy Altman, who is currently advising the Darjeeling Planters' Assoication (DPA), Darjeeling can compete in the modern marketing realms, the new intellectual property regimes enforced by WTO, the EU and other global bodies.

"Darjeeling is also showing India that trendy software or highly-touted telecommunications need not necessarily be the only ones which are bringing in hard currency. India has much to offer in agricultural riches," Altman said.

Complimenting DPA's hard work in the area of promoting Darjeeling tea, he said the organization is helping to maintain regional brand-name recognition in the increasingly competituive arena of export globalization. However, adding a workd of caution he dais, the next step was vigilance against the infringement and willingness to take action. "The tool must be weilded to attain actual power in the global marketplace," he said. He said India has historically been slow to take advantage of branding of agriculture for export, whil software and other hi-tech itms have gained all the glory in the recent past. Now, Darjeeling is proving the old-industry backbones of India have brands that can increase currency inflows.



Tea & Coffee - October/November 2002
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