Vietnam is the world's second largest producer of coffee. While yields are high, production has issues like inefficient fertilizer use, aging trees, and expansion onto unsuitable land. This threatens long-term sustainability and forests as farmers switch crops or encroach. Alternative sustainable models exist but lack financing. UN Environment works with partners to scale practices that maintain production while reducing pressures, through providing capital for farmers to transition to intercropping which offers income protection but has high startup costs. The goal is to better align stakeholder interests in sustainable cultivation.

1. FINANCING SUSTAINABLE LAND USE
FOR PEOPLE AND PLANET
Coffee production in
Vietnam: aligning
interests towards
sustainability
Emelyne Cheney, Regional Coordinator Forests & Climate
Change, UN Environment Asia Pacific
22-May-19 1

2. 12/05/2019 Financing Sustainable Land Use - UN Environment - Geneva 2
1Sustainable land use finance

3. Coffee
production
in Vietnam
22-May-19
Financing Sustainable Land Use - UN Environment - Geneva 3

4. 2Coffee production in Vietnam
Productivity gains have been
generated at the expense of the
environment and of the long-term
sustainability of production
Financing Sustainable Land Use - UN Environment - Geneva22/05/2019 4
o World’s second largest
producer of coffee
o Vietnam’s coffee yields are
well above international
norms…
o … but have progressed little
over the last decade
A rapid development over the last 30 years

5. 22/05/2019 5
Coffee production in Vietnam
Key production issues affecting supply
The spread of
coffee
plantings onto
less- suitable
or un-suitable
land
Various episodes of drought
Inefficient and
excessive use
of fertilizer,
pesticides,
herbicides and
other inputs
Climate change
Increasing soil
acidification
and soil
hospitability
to nematodes
and plant
diseases
Aging tree stock

6. The impact on forests
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7. Farmers are switching to other crop cultivation, driven by
volatility, and encroaching into the forest
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• Farmers have switching to other crops such as black pepper, avocado,
and passion fruit in order to generate higher incomes.
• Reducing areas under coffee cultivation especially in Dak Lak, where
arable land is limited. In other provinces like Dak Nong and Lam Dong,
where arable land reserve is still available, the new arable land is used
more for growing black pepper and avocado.
• In short, coffee production is facing strong competition from black
pepper production and this ongoing situation is impacting the expansion
of coffee planted area in Dak Nong and Lam Dong.
• Poorest farmers without formal land ownership are encroaching into the
forest to supplement their income
Coffee production in Vietnam

8. 3Transitioning towards sustainable
practices
Financing Sustainable Land Use - UN Environment - Geneva22/05/2019 8
Alternative
models already
exist, but
uptake is slow
due to lack of
capital

9. 3An opportunity to align the interests of stakeholders
towards sustainable cultivation practices
UN Environment has been working with
a coalition of organizations to scale up
alternative cultivation practices that
can support the long-term
sustainability of the coffee sector, by
reducing the pressure on the
environment while maintaining
production volumes
Financing Sustainable Land Use - UN Environment - Geneva22/05/2019 9
o Reducing production risk for
smallholders
o Helping local and provincial
governments achieve their
environmental and forest cover
targets
o Reducing supply risk for
agribusinesses

10. 3Mobilising finance to support alternative
production models
• Intercropping model is an effective way to offer protection against coffee price
volatility, but the initial investment required for conversion to intercropping is prohibitive
for most farmers
• There is a need for affordable / easily accessible capital to support farmers in their
transition to sustainable production models
• Financial and non-financial factors limit investment in sustainable production
models, contributing to high transactions costs and the perception of risk
• We are supporting first movers with de-risking and risk sharing products that can
partly mitigate the costs of transitioning, and demonstrate to others that change is
possible!
Financing Sustainable Land Use - UN Environment - Geneva22/05/2019 10

11. FINANCING SUSTAINBLE LAND USE
FOR PEOPLE AND PLANET
THANK YOU
Emelyne Cheney
cheney@un.org