Lao farmers reaching for global, organic coffee markets

Consumers are increasingly concerned about the products they drink and eat – whether it is safe for their health or the environment. And the same applies to coffee. As a big market, the European Union (EU) represents nearly half of the world’s coffee imports. In 2019, the total coffee import was 3 million tons, worth €7.5 billion. Between 2019 and 2020, Lao PDR’s coffee and tea exports to the EU has almost doubled, from €16 million to €29 million.

According to the Lao PDR Ministry of Agriculture and Forestry, coffee is one of the country’s top three agricultural crops with the highest export value. It is only natural that the country aims to increase its coffee production to one million tons by 2025. Locating in southern Lao PDR, the Bolaven Plateau is ideally placed for producing high quality coffee and potentially compete in the market for specialty and organic coffee, products that carry premium prices.

Despite these opportunities, Lao coffee sector faces many challenges, such as low farm-level productivity, lack of minimum quality standards, high logistical costs, as well as low capacity for research and commercialization, among others. To address these challenges, the International Trade Centre and local partners of the country’s Ministry of Industry and Commerce along with the Lao Coffee Association jointly organized a training on how to start organic coffee farms. The training offered Lao farmers, cooperatives, and small businesses an opportunity to strengthen their knowledge regarding the organic production, processing and marketing of coffee.

"This training is one of the solutions offered by the Coffee Export Roadmap, which the Lao Government has recently endorsed, to help Lao farmers and small businesses secure their spots in the global, sustainable coffee market", said Xaysomphet Norasingh, Director General of the Department of Trade Promotion at the Ministry of Industry and Commerce.

“It’s a win-win partnership between the Lao Government and development partners in the coffee sector. We love coffee, and Lao people produce great coffee, so the European consumers are ready to pay a higher price for a cup of coffee which is organic, respectful to the environment, provide decent jobs and make a positive impact in the community,” said Vincent Vire, Head of Cooperation at the European Union Delegation in Lao PDR.

Amongst the 70 participants who joined virtually from across Lao PDR, Phaengsy Daoduangdee, the owner of Duangdee Coffee Farm, said: “I was able to gain a deeper understanding of organic farming and the process of applying for organic certification. In addition, I learned different organic ways to eliminate coffee pests, particularly coffee stem-borers, which have been a big issue for us, farmers, for some time.”

In addition, the manager and support staff of the Vanmai cooperative in Northern Lao PDR, where the United Nations Office on Drugs and Crime (UNODC) has been supporting 383 farmers to grow coffee since 2016, participated in this training. The UNODC project aims at assisting beneficiaries in the communities who want to transition from opium crops, while building a financially sustainable and resilient cooperative. The farmers have planted around 400 hectares of coffee and established their own cooperative to independently process and commercialize coffee for premium international markets. A transition to fully organic production and obtaining an organic certification is an important part of the long-term strategy of the Vanmai cooperative, and participation in the training provided valuable inputs for this transition process.

This training was the first in a series. Next trainings in the coming months will focus on organic marketing and certification and improving sensory and cupping skills for specialty coffee. In fact, Phaengsy has already applied for the second training, and she is looking forward to more practical learning opportunities.

The training formed part of the EU-funded initiative, the ASEAN Regional Integration Support to Lao PDR (ARISE Plus), which supports sustainable agricultural value chain development in Lao PDR, especially those based on organic production and fair trade – and ultimately, promoting inclusive economic growth, climate change resilience, mitigating vulnerability and job creation in Lao PDR.

About ITC: The International Trade Centre is the joint agency of the World Trade Organization and the United Nations. ITC assists small and medium-sized enterprises (SMEs) in developing and transition economies to become more competitive in global markets, thereby contributing to sustainable economic development within the frameworks of the Aid-for-Trade agenda and the United Nations' Sustainable Development Goals (SDGs).