Effectiveness of Government Supported Policies in Vietnamese Coffee Industry Development

Vietnamese coffee has been exported since 1990, after the country reformed its economic management mechanism in 1986. Since 2000, Vietnam has been the second-largest coffee exporter in the global market. Annual foreign currency income from coffee exports has been around 3 billion US dollars. 600,000 small-scale farmers are the main coffee producers, whose production accounts for 95% of the total annual volume. Faced with difficulties, especially capital shortages, coffee growers tend to liquidate old coffee plantations because they do not have the means to renovate them. Although the government has many supporting strategies, they haven’t been truly effective in practice. According to research from 1990 to 2000, government policy has mainly been aimed at encouraging coffee processing plants without any support from the producers themselves. Since 2000, government policy has been aimed at supporting the capital investment of farmers in the renewal of coffee plantations, but many of them were not able to receive it due to the presence of inconsistencies and duplication in it, which reduced its effectiveness. Private and non-governmental producers’ coffee support policies were more effective than government policies. No research was done to evaluate the effectiveness of government-supported policies in the development of Vietnam’s coffee industry. Therefore, the purpose of this study is to examine the effectiveness of government support policies in promoting the growth and development of Vietnam’s coffee industry. The research findings indicate that coffee farmers and businesses do not receive any direct financial assistance from the government other than the tax on agricultural land. Coffee farmers primarily rely on non-governmental coffee companies and cooperatives for support, and they hardly destroy coffee to replace it with other crops. This demonstrates that adequate support for coffee production is extremely necessary, but government support policies for coffee producers aren’t being implemented in practice.