Global-local interactions: socioeconomic and spatial dynamics in Vietnam's coffee frontier.(Report)

Introduction

During the 1990s, Vietnam progressed from being a relatively insignificant coffee producer to become the world's second largest exporter of coffee and the single largest exporter of the Robusta variety. This extraordinary development has been primarily based on the conversion of frontier forestland to farmland in the four provinces of the Central Highlands (de Konninck 2000), especially in Dak Lak Province which alone has generated 55% of Vietnamese coffee (de Fontenay and Leung 2002). Correspondingly, Dak Lak has experienced exceptionally high immigration by settlers from all over Vietnam resulting in new unplanned as well as planned settlements. Relatively modest volumes of the coffee are nationally consumed (about 10%) and the Dak Lak coffee producers, who are primarily smallholders, are highly dependent on price fluctuations on the global coffee market (World Bank 2004; Ha and Shively 2008). The boom in coffee prices in the mid 1990s was followed by a collapse in coffee prices in the late 1990s which had serious repercussions for the Vietnamese coffee sector. In particular, this 'boom and bust' in the coffee frontier had a critical impact on smallholder livelihoods in Dak Lak (Ha and Shively 2008). In this paper we explore the ways in which this impact has varied between households living in four settlements in the coffee frontier of Dak Lak.

Frontier development is generally characterised as being the inclusion of 'unexplored regions' or 'undeveloped space' into the national economy (Cleary 1993). The recognition of the role of frontiers in development stems from the frontier thesis on American development put forward by Fredrick Jackson Turner in 1893 (Turner 1986; Barbier 2005). A simple definition of a frontier is 'the outer edge of settlement within a given area' (Mikesell 1960, 62), although the frontier is usually represented by an image of resource abundance. The inclusion and conversion of frontier land is seen by some to lead to a sustained economic boom (often referred to as the Turner-Webb model of frontier development), while others challenge this optimistic view arguing instead for boom and bust scenarios (Barbier 2005). A range of factors contribute to the latter viewpoint. Endogenous factors related to agro-environmental dynamics, like the gradual depletion of soil fertility and limited access to land and labour as the frontier region matures, have been highlighted (Ruf 1995). It has also been shown how agricultural commodity production has a limited ability to generate positive spin-off effects on capital accumulation, investments and regional growth (Barbier 2005). Exogenous factors are also important as frontier dynamics are affected by fluctuating world market prices for particular agricultural commodities (Geary 1993). Recently, this simplified boom and bust approach has been challenged by Ha and Shively (2008) who argue that socioeconomic groups of smallholders may respond to price fluctuations differently according to their ethnic background and access to resources.

In a similar vein, this paper shows how, while broad development trends on frontiers can be identified, the processes operating are far from homogenous and their impact on settlements can vary widely (1). Building upon detailed analysis of livelihoods in coffee-producing settlements located in four communes in Dak Lak Province, and linking these to the global value chain for coffee, the paper provides a more nuanced version of the simplified boom and bust approach to frontier development. The paper starts by outlining the history and formation of the coffee frontier in the Central Highlands, identifying the main actors and dynamics of the Vietnamese coffee sector. The methodological approach adopted in the paper is outlined before turning to analyse the varying ways in which livelihoods and coffee trading in the four settlements have evolved. The reasons for the heterogeneity of livelihood strategies in the coffee frontier are discussed before summarising the main findings and indicating some policy implications in the concluding section.

The formation of the Vietnamese coffee frontier

Vietnam's recent economic and social history is generally divided into three broad periods: 1954-1975, diverse (North and South Vietnam) and war-time policies; 1975-1985, strong unification and collectivisation policies; and 1986 onwards, Doi Moi economic liberalisation policies characterised by de-collectivisation and the opening up of market relations (Hardy and Turner 2000). The nature of these three periods and their implications for coffee expansion in the Central Highlands will be detailed here. It is important to bear in mind, however, that modern frontier formation in Vietnam has not only been initiated for economic purposes. Several political issues have been at the forefront of government frontier policies: first, the need to reduce population (and agricultural) pressure in the Mekong and Red River Deltas as a demographic safety valve; second, the geo-political need for land occupation in order to incorporate border areas into the nation; and third, the integration of Vietnam's ethnic minorities (De Koninck 1996 2000).

Migration for permanent settlement in the Central Highlands was limited until the 1950s (Hardy 2003). Prior to this, however, French missionaries and explorers entered the area during the nineteenth century. From around the 1930s-I970s, the Central Highlands was considered strategically important to a number of competing groups, including the French, Japanese, American, and Vietnamese nationalist groups, which affected settlement processes (Salemink 2003). In both northern and central Vietnam, the 1950s was the turning point in a move to occupy not only the lowlands but also the highlands. Frontier policies consequently developed under two different government regimes in North and South Vietnam (De Koninck 2000). Land development centres were established by the Ngo Dinh Diem administration in South Vietnam, in particular to resettle refugees from the North. Economic development initiatives in frontier areas were also adopted, such as the Dinh Dien policies in the Central Highlands, which aimed to cultivate land through re-settlement of the Kinhs from the crowded Central Coast provinces (Tan 2004). Initially, the aim was to transform the forests into rice fields but plantation farming was also introduced as much of the land was more suitable for cultivating perennial crops than staples (Doutriaux et al. 2008). In North Vietnam (the Democratic Republic of Vietnam), the communist government developed New Economic Zone (NEZ) policies of 'inviting' people from the plains (in particular the Red River Delta) to settle and cultivate the northern Highlands. It is estimated that more than one million people were moved to establish a new home in the northern Highlands between 1954 and 1975 (Hardy 2003).