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Katouad village coffee production group coordinator Samboun Sayboakeo inspects his coffee plants. Oxfam Australia has supported the group with training in plant maintenance and cultivation, which has improved the volume and quality of coffee they produce. Photo: Jerry Galea/OxfamAUS.
Dignity in a coffee cup
Just a few years ago, the small coffee farmers of Katouad, Laos, were in crisis. Now, they are enjoying high prices and a guaranteed export market. Editor Maureen Bathgate visited the village to learn the secrets of their success.
People could be forgiven for thinking that some divine intervention has taken place in the tiny Lao village of Katouad.
The predominantly coffee-growing community, nestled on the fertile Bolaven Plateau in Southern Laos, is undergoing an amazing turnaround.
When world coffee prices plummeted in 2001, the community struggled. Local prices fell below 1,000 kip per kilogram (AUD 13 cents), many farmers left their coffee crops to grow wild, children dropped out of school, unemployment was rife and household debts skyrocketed.
Fast-forward to 2006 and a very different scenario is occurring. Household incomes have increased, coffee plantations are being expanded, food shortages have reduced and coffee prices are higher than ever.
No, not divine intervention; just some funding, training, equipment and support from us, in partnership with the Lao Coffee Research and Experimentation Centre and the District Agricultural and Forestry Office, and a lot of commitment and hard work from the Katouad community.
Coffee was first introduced to the Bolaven Plateau in 1927 by French colonial authorities, which saw the region’s good climate, fertile soils and high elevation as ideal for growing high-quality coffee. Today around 95% of Laos’s coffee is grown on the plateau making it the area’s main agricultural crop.
In Katouad, coffee production didn’t start until 1959, but volatile market prices, coupled with outdated production and processing techniques, old and unruly coffee plants and high production costs, have made it highly unreliable source of income for the village’s smallholder farmers.
That’s where we came in. After the world coffee crisis of 2001–2002, we started working in Katouad and four other coffee-growing growing communities on a sustainable organic coffee production project with the aim of improving household incomes, reducing food shortages and maximising coffee yields, quality and prices.
We have helped the communities form self-managed production groups, provided training in management, accountancy, marketing and negotiation skills, introduced new coffee production and processing techniques to improve quality and yields and supported them to grow vegetables and ginger to diversify crops and reduce reliance on coffee as their sole income source.
In Katouad, 72 of the village’s 111 households are involved in the production group, with 29 households from neighbouring Beng village also taking part. They grow mostly Arabica coffee, both Typica and the more hardy and disease-resistant Catimor varieties.
In the project’s first year, 2004, the group sold 5,760kg of quality coffee to Japanese company Alter Trading Japan (ATJ) at a price of 15,000 kip/kilo (AUD $1.95), compared to the local market price of 5,000 kip/kg (AUD 65 cents). Proving it was no fluke, in 2005, they sold 6,770kg to ATJ at 14,000 kip/kg (AUD $1.82) for Catimor and 17,000 kip/kg (AUD $2.21) for Typica.
Group quality control officer Somboun Pheth (right) and coffee storage house manager Soulivong Nansay prepare coffee beans for roasting and grinding in the group's small coffee centre in Katouad village. Photo: Jerry Galea/OxfamAUS.
This year, they exported 13,620kg at 20,000 kip/kg (AUD $2.60) for Catimor and 24,000kip/kg (AUD $3.12) for Typica. They have also received interest from Singapore, Thailand and France and have sent samples to Australia, United States, Belgium and Germany.
By learning valuable marketing and negotiation skills through the project, the farmers are able to negotiate trade agreements and annual prices direct with buyers, rather than having to sell their coffee to corrupt local ‘middlemen’ who rig scales and pay the same low price regardless of quality. The group has signed a three-year deal with ATJ, with an agreed minimum price and an advance payment once annual supply volumes and prices have been decided. This pre-harvest payment helps families pay for food and other household essentials when funds are scarce.
It is the first time that Lao coffee has ever been sold to Japan and it’s all because of the high quality coffee that the Katouad farmers produce. Katouad coffee production group leader Somboun Sayboakeo says local farmers are now committed to producing high quality coffee using the skills they have learnt through the project. These skills have included everything from cherry selection, pulping, fermenting, washing and drying through to milling, grading and storing. They have even learned roasting and tasting techniques to test for coffee quality and, with our support, this year opened a coffee tasting centre in the village.
“Before this project farmers would go outside the district to work as labourers rather than stay here and maintain their coffee plants. They would pick all the coffee beans — both red and green — at once during harvest, rather than waiting until they were ripe; they would dry the coffee on the ground, rather than on racks and dry the whole cherry (dry-processing) rather than washing, pulping and fermenting (wet processing),” Somboun says.
“Now we work together in groups, not by ourselves. We do more maintenance of plants, more pruning; we cut down old coffee trees and replace them with new ones; we grow different types of coffee; we use organic fertilisers; we harvest the cherries two or three times so that we pick them at their biggest and ripest; we do selection and pulping and fermentation.
“We know [the new technique] is very difficult to do, but the quality is very good, we get a better price and we have a market for it. So we have more motivation to produce better quality coffee.”
The project has also brought other benefits to the community. A revolving community fund has been established so that community members can save money and access loans for things like health care, equipment, seed and rice.
“Apart from the revolving fund, farmers now grow crops such as ginger, cabbages or cucumber which they can consume, sell or exchange to bring in extra food and income between coffee harvests or while young coffee plants are maturing,” Sangouansak Sithisay, Oxfam Australia’s Southern Laos Program Coordinator says.
“People are now able to wait for a better coffee price for a little while, — unlike in the past when they had to sell the coffee just after the harvest at a very low price or go into debt so that they could buy food and other household necessities.”
While the program is still in its infancy and there have been problems with middlemen actively trying to discredit the project, farmers doubting the benefits of the new techniques, group leaders failing to share new skills and information and women not taking on group leadership roles, there is no doubt that the project has made a huge difference to the lives of Katouad villagers and opened up a whole new world of possibilities for them.
“The livelihood of the small farmer has improved since this project,” village leader Bouhlup Keomouagkhoua says. “Children can attend school now here in the town, every family has a bicycle and there have been 27 new houses built in last three years. We are moving forward.”
To find out more about our work in Laos visit www.oxfam.org.au/world/asia/laos
Support coffee farmers in developing countries by buying Fairtrade coffee from Oxfam Shops, selected supermarkets and cafes. For a full list of stockists visit www.oxfam.org.au/fairtrade