TẠP CHÍ CÔNG THIÍ0NG
THE ENVIRONMENT IMPACTS
OF PRODUCTION AND BUSINESS ACTIVITIES AND ENVIRONMENTAL REQUIREMENTS FOR COFFEE ENTERPRISES IN VIETNAM
• NGUYEN THI HONG MINH - DO XUAN Due - NGUYEN BAO THOA - NGUYEN THI THU TRANG
ABSTRACTS:
Coffee production has made a hugecontribution to production outputs, exports and jobcreation in Vietnam, at the same time it has had negative environmental impacts on biodiversity conservation, use of pesticides and other dangerous materials, soil conservation and fertility, waterconservation, waste management, energy consumption. Coffee production has also caused other issues relating to greenhouse gas emissions. International free trade agreements that Vietnam has signed and international environmental requirements highlight the role of envfronmental standards and regulations in coffee production and processing activities in Vietnam’s trade chains as well as international trade chains. In addition, corporate social responsibility towards theenvironment is an increasingly concernedissue and it hasbeenwidely recognized one of the rules and standards in business activities. Hence, it is necessary for Vietnam’scoffee industry to develop appropriateenvfronmentalprinciples, standards and code of conduct to meetnational standards and related provisions of the free trade agreements which Vietnam has signed.
Keywords: coffee, envfronment impacts,responsiblebusiness.
1. Introduction
Vietnam is the second largest coffee growing country inthe world,accounting for 17.6% of the total global coffee output. Each year, Vietnam’s coffee industry attracts about 600,000-700,000 employees. Cuưently, Vietnamese coffee has been exported to over 80 countries and territories.
ranking the world’s second biggest exporter of coffee beans and the world’s first largestexporter of Robustabeans. The coffee industry has greatly and increasingly contributed to the country’s socio-economic development and global coffee value chains.
However, the coffee industry also hasnegative
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effects on the environment in terms of biodiversity conservation, use of pesticides and other dangerous materials, soil conservation and fertility, water conservation, waste management, energy consumption. It has also caused other issuesrelatinggreenhousegas emissions.
Coffee production has direct impacts on the area ofmountainous forests. Meanwhile, coffee preliminary processing activities create a large amount of solid waste causing air and water pollution. The coffee production poses occupational health risks duetoexposure tonoise and chemicals used in the processing activities.
Coffee production requires a large amount of packaging, thus discharging solid waste into the environment.
This researchaimstoexaminethe status quoof environmental impacts in Vietnam’s coffee industry. The research also presents the environmental requirements in trade agreements which Vietnam has signed, standards and international certification for coffee production and trading. Based on the research’s findings, some policy recommendations for Vietnam’s coffee industryare made.
2. Researchmethodology
In order to conduct this research, the authors employed thefollowing methods:
Firstly, the historical research method was conducted to investigate the formulation processof policies and regulations for Vietnamese coffee industry, then we compared these policies and regulations to international standards and requfrementsof free trade agreements(FTAs) that Vietnam has signed, such as the European Union- Vietnam Free Trade Agreement (EVFTA, 2020) and the Comprehensiveand Progressive Agreement 'orTrans-Pacific Partnership (CPTPP, 2018).
Secondly, the desk research method was conducted to makea literature review and to study current situation of environmental impacts in Vietnam’s coffee industry, the environmental requirements of trade agreements which Vietnam I as taken part in aswell as international standards and certification for coffee production and trading.
Finally, an interview was conducted to gather opinions from 10 coffee production and business entities (enterprises, cooperatives and farm households) on environmental impacts and measures to protect the environment in Vietnam’s coffee industry. Primary data is collected via questionnaire-based interview. Interviewees are diversified from a number of provinces in the CentralHighlands (Dak Nong, Dak LakandLam Dong) and Northwest Vietnam (Son La).
3. Research results
3,1. Anoverview ofthe coffee industry
There are currently about 75 coffee growing countries, primarily in South America, Africa and Asia with about 10 million workers involved in coffee production. The global total land area used for coffee isabout 10 million hectareswith annual output of about 8 million tons, bringing income to about 100millionpeople. Currently, there are 56 coffee exporting countries (Truong Hong, 2018) the production is concentrated in 10 countries including: Brazil which accounts for 35.3% of global coffee output, followed by Vietnam (17.6%), Colombia and Indonesia (7.4% and 7.9%, respectively), Ethiopia (4.4%), India and Honduras (3.6%), Uganda and Mexico (2.4%), Guatemala (2.3%) (ico.org, 2017). In 2019/2020, the coffee demand in Asia and Oceania was estimated to increase from 3% to 37.84 million bags (International Monetary Fund, 2019).
In Vietnam, by the end of 2019, the coffee growingarea was 688,300 hectares, with average yield at 2.6 tons / hectare and the coffee bean production in 2018 estimated at 1,623 milliontons.
Coffee plants are currently cultivated in 20 provinces, most ofwhich are grown in Dak Lak with nearly 210,000 hectares, Lam Dong with 170,000 hectares, Dak Nong about 130,000 hectares (VietnamBiz, 2019). According to the Vietnam Coffee - Cocoa Association (Vicofa), each year the coffee industry attracts about 600,000 - 700,000 employees, in three months of harvesting,the figure can be 800,000.InVietnam, there are 97 coffee bean processing facilities with a capacity of more than 1.2 million tons,
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8 large-scale instant coffee processing factories with a planned capacity of over36,400tons/year and the actual capacity is nearly 98% of the planned capacity. Currently, Vietnamese coffee has been exported to over 80 countries and territories, rankingthe second in theworld and the first in Robusta beans export.
3.2. Negative environmental impacts of coffee industryin Vietnam
3.2.1. Conservation ofbiodiversity
The coffee industry has impacts on biodiversity conservation in areas where forests are replaced by coffee plantation. In Vietnam, according toNgo Dinh Que, Nguyen Thu Huong, Nguyen Thanh Tung, Ta Thu Hoa (2010), after deforestation to plant coffee, the forest layer declined from 3-5 layers to only 1-2 layers.
Canopy cover decreased significantly from 0.6- 0.7 to 0.2-0.3. The cause of the forest decline in the period1982 - 2002wastheencouragements of the land exploitation for coffee cultivation (Ngo Dinh Queel al, 2004) The total natural forest area of Vietnam in 1943 was 14.3 million ha, with a coverage rate of 43.8%, abovethe safety level of 33%, butin 1999 itwasonly 10.88 million ha, with a coverage rate of 33%.The reason for the decline of the forest areain this period was theprocessof reclaiminglandfor industrial crops such ascoffee trees(baovemoitruong.org.vn, 2020)
3.2.2. Use of pesticides and other hazardous materials
Common coffee tree pests and diseases are pseudococcus risso, boisduval scales, stem borer, hypothenemus hampei, dry branch disease and dry fruit disease, nematodes causing yellowing leaf and root rot diseases. These diseases harm and reduce significantly the yield and quality of coffee. Thus, using insecticides on coffee plants impacts the environment. For example, the excessive use of plant protection drugsmakesthe yield and quality of coffee unstable while the production environment is degraded. Coffee plants are subjected to expose to dozens of plant protection drugs; Unregulated use of plant protection drugs createsthe risk of pollution of the
soil, water, and air environment and harms the health of users (Mai Phuong etal, 2020).
3.2.3. Soil conservation and fertility
Coffee problems negatively impact soil conservation and fertility due to:
- Soil moisture in natural forests and coffee gardens differs significantly, on average, 60% - 65% compared to natural forests. The physical clay content decreasesfrom 1% - 10%, the humus content decreases sharply, making the nitrogen content in the soil decrease.
- Soilmoisture in coffee gardens is only60% - 65% on averagecompared to natural forests.
- The ability to return nutrients to the soil is lower thanthat of other plants because the amount of falling leaves of the coffee garden after 6-9 years old is only 1.6- 2.5 tons/ha, an average of only 1/3 compared to thelevel of4.5 - 9 tons/ha of poor secondary forest, the forest group has been exhausted and hasnot been recovered.
- The total microorganism content in coffee growing soilis always 10% - 20% lower than that of natural forests and the number of microorganisms is also differentin each soil type.
- Increased acidity and changes in the concentration of mediumandtrace substances in the soil such as s, Cu, Zn, etc. due to excessive use of inorganic fertilizers (NgoDinh Que,2018).
3.2.4. Water conservation
The increasein the coffee growing area has a negative impact on the waterconservation above dueto the following problems. Firstly, the water demand for coffee is high, on average, it needs from 300 to 400 liters ofwater per stem / time.
Secondly, exploiting drilledwells toget water for coffee irrigation leads to laminar flow, declining groundwaterdue to improper exploitation (Cong Ly el al, 2010); Coffee processingrequiresa lot of water; The process of pre-processing and processing coffee creates a lot of wastes that pollute the surface water and groundwater.
Thecausesto these problems are:
- Irrigation water plays a decisive role in the yield and quality of coffee plants;
- Biologicalcharacteristics ofcoffeetreeswith
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root mainly concentratedinthe topsoil layer (from 0 to 30 centimeters), the coverage of the root system varies from 0 to 50cm, so there is a very highwater demand (chungfarm.com, 2020).
- In Vietnam, the largest coffee-growing regions are concentrated in the Central Highlands’provinces.However, due tothe impact of climate change, the weather in the Central Highlands’ provinces is complicated and irregular, especially inthelongdryseason, drying rivers, small streams and reservoirs. To have irrigation water for coffee, people intensify digging wells, exploiting groundwater (nhandan.vn, 2020).
- Thecoffeepreliminary processing requires a lot of water because coffee processing establishments in the Northwest and Central Highlands of Vietnam use wet processing methods including the following stages: rubbing the berries toremove the peel;soak for themucus fermenting itself and then sunder; washed and dried to have parchment coffee. The wet processingmethod is fairlyexpensiveandusually only used for high quality Arabica beans. In the Northwest, small coffee processing facilities are often concentrated in the watershed area, so surface water pollution becomes a major environmental problem for the surrounding residential areas and downstream areas. In the
season of preliminary processing, coffee processing causes environmental pollution and water source pollution(Nguyen Nga. 2019)
- Coffeeprocessing generates wastewaterthat affects the water environment at the following stages: rough washing, shell grinding, enzyme immersion, rinse, sanitary wastewater, and c omestic wastewater (xulymoitruong.com, 2020).
3.2.5. Wastemanagement
The preliminary processing and processing of cpffee beans in Vietnam creates solid wastes including coffee husks; liquid wastes including wastewater from preliminary processing, processing and production; emissions including diiist from preliminary processing, processing, and production.
Solid waste generated by coffee husks is caused by coffee preliminary processing of establishments using wet preliminary processing, creating a large amount of solid waste, hence, pollutingthesurroundingenvironment.
Wastewater is generated from coffee preliminary processing, processing and production. In the Central Highlands and Northwest regions, coffee production and processing establishmentsarespontaneous, small, scattered, and lack technology to treat waste and wastewateraccordingto standards; theawareness of coffee production and processing households and establishments about environmental protection is still limited, they often discharge waste directly into the environment, hence, polluting water sources.
For emissions, the process of preliminary processing ofcoffee by wet method and the last stage is drying. In this stage, establishments usually use electricity to dry, creating a large amount ofemissions; at the same time, the coffee roasting process also generates a largeamount of emissions.
3.2.6. Energy consumption
Energyis consumed in all stages of the coffee supply chain. In which, the production phase includes planting, preliminary processing, and processing coffeebeans.Thesestages consume a lot of energy. For example, coffee planting soil machine consumes petroleum and oil; lawn machines consume petroleum and oil; aircraft spraying pesticides on coffee trees consumes electricity or petroleum; water pump for coffee irrigation consumes electricity; coffee harvesters consume large amounts of electricity and petroleum; coffee peeling machine highly consumes electricity or petroleum; coffee packagingmachine using electricity or petroleum;
coffee dryers and coffee roastersconsume alot of electricity. The problem ofenergy consumption in coffee production tends to increase due to the increasingly common use of machinery and equipment in coffee growing, processing and productionin Vietnam.
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3.2.7. Climate impacts
Growing and production coffee have animpact on the environment by generating greenhouse gases such as
CH4, co2, CFC,
andco.
This process occurs in all stages of coffee production and processing. For about the residues of coffee plantsin branches, leaves, etc., if theyare buried, they will create CH4, or create co2 while the burning process of these parts of coffee tree will create co2. Irrigation often has to use energy from machines such as electricity, gasoline, etc.and it emits co2. Irrigation often has to use energy from machines such as electricity, gasoline, etc. that emits co2. Wet processing produces scrap such as fresh pods, in the decomposition process that emits CH4 gas.
Wastewater from wet processing causes pollution and CH4 and N2O emissions. Drying process requires fuels and electricity to run machines, which emit co2. Roasting requires using fuel, electricityto run roasting and grinding machines, which emit
co2
emission.The authors’ interview of 10 coffee production and business entities shows the importance of environmental issues for coffee production in Vietnam. More than 20% apply environmental assessment measures; 90% apply environmental protection measures; 40% apply international environmental standards related to biodiversity, pesticides, soil and water conservation, waste management, energy, greenhouses and adaption to climate change.
3.3. Relevant Environmental Regulations, Standards and Certifications in CoffeeIndustry
The environment issues discussed in part 3.2 have been regulated in the regulations of Vietnam, international standards as well as FTAs.
- Regulations of Vietnam: the Law on Environmental protection (2014), the Law on Biodiversity of Vietnam (2008), the Law on Forestry (2017), the Law on Plant Protection and Quarantine (2013), the Law on Water resources (2012), theLaw on Economical andEfficientuse of Energy(2010), Vietnam SustainableDevelopment Strategy for 2011-2020, National Strategy on
Climate Change 2011, National Green Growth Strategy for the period 2011-2020, TCVN ISO 14001: 2015, Criteria TCVN 11892-1: 2017, Criteria TCVN 11892-1: 2017, Criteria TCVN 6537:2007, Good agricultural practices in Vietnam VIETGAP (Criteria TCVN 11892-1:2017).
- International standards: 4C Standard. (Code of conducct.2018) UTZ Standard (UTZ Coffee Modulus Code of Conduct. 2015), Rainforest Alliance Sustainable Agriculture Standard (RA), (Sustainable agriculture standard. 2020), Fair trade coffee certification, Organic Food Development and Certification (OFDC) (Fair trade coffee.2020)
FTAs: the EU-Vietnam Free Trade Agreement (EVFTA); the Comprehensive and Progressive Agreement for Trans-Pacific Partnership(CPTPP).
4. Discussion and Conclusion
The environmentally responsible business in the coffee industry isone of the requirements of the customers as well as Vietnam's commitments in international trade agreements. Currently, coffee production enterprises that wantto export must strictly follow the certification requirements of importers. At the same time, enterprises that carryout the certification arepaid by the importer for acertainprice plusthenormal sellingprice, as wellas building the imageand brand name in the international market.
Exporting Vietnamese coffee to some certain markets needsto comply with strictregulations by environmental standards. In theEuropean market that accountsfor over 42% of Vietnamese coffee, environmentally, friendlyproductsareencouraged and get “plus points”. Consumers are willing to pay a higher price for coffee produced' under an eco-certifiedprocess (vnce.vn,2020). The United States is the second largest market for Vietnamese coffee consumption, accounting fon 8.49%. US consumers care about environmental factors related to products, businesses must commit to coffee standards such as Fair Trade, Organic,Rainforest Alliance / UTZ Certified and 4C (Dang Huy, 2019). Russia accounts for 4.76%
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of coffee exports, and Vietnamese suppliers get 49.9% of thecoffee market share in Russia (Dang Huy, 2019). Russian consumers are highly demanding with food safety standards. In Australian market that accounts for 1.23% of Vietnam's coffee exports, environmental regulations for coffee imported into Australia must meet Australian biosafety requirements (vietnamexport.com, 2018). International consumerstend to pay attention tocoffeeproducts with high environmental responsibility, friendly with the environment, natural resources conservation, ecological safety. Thus, the direct and active participation of coffee businesses in environmentally responsible production is not only beneficial for environmental sustainability butalso economic benefits.
The regulations of Vietnam, international standards as well as FT As shows the role of environmental standards and regulations in coffee production and processing activities to national
and international trade chains. Production of coffee towards sustainable, ecological, safe, organic, climate change adaption, circular economy and green economy is becoming the popular trend over the world and in Vietnam.
Corporate social responsibility for the environment is increasingly concerned, widely recognized and becomes one of the rules and standards in production and business of the enterprise. Therefore, it is necessary to develop and apply an environmental code of conductin the Coffee industry in Vietnam in order to provide principles and standards suitable to Vietnam, to meet domestic standards, and related provisions of the two Free Trade Agreements of which Vietnam is a member (the EVFTA and the CPTPP). These industries are able to show their environmentally responsible business practicesto minimize negative impacts of production activities,becoming a guidelinefor businesses in thecoffee sector ■
'This article is the research result of the project “Advancing environmentally responsible business practice for the fruit and vegetable sector and the coffeesector in Vietnam ” fundedandsupported by the
United Nations Development Program (UNDP) andtheGovernment of Sweden.
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Receiveddate: July 6,2021 Reviewed date: July 25,2021 Accepted date: August 10, 2021
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Author information:
ỉ.Dr. NGUYEN THI HONG MINH1 2. Dr. DOXUAN DUC2
3. Dr.NGUYEN BAO THOA3 4. NGUYEN THI THUTRANG3 1 NationalEconomicsUniversity 2 Tay BacUniversity
3 VietnamRuralIndustries Research and Development Institute
TÁC ĐỘNG MÔI TRƯỜNG CỦA HOẠT ĐỘNG
SẢN XUẤT - KINH DOANH VÀ YÊU CÀU VE MÔI TRƯỜNG ĐÔÌ VỚI CÁC DOANH NGHIỆP CÀ PHÊ ở VIỆT NAM
• TS. NGUYỄN THỊ HỒNG MINH'
• TS.ĐỖXUAN ĐỨC2
• TS. NGUYỄN BẢO THOA3 :
• NGUYỄN THỊ THU TRANG3
1 Đại học Kinh tế Quốc dân 2ĐạihọcTây Bâc
3 Viện Nghiên cứu và Phát triển Công nghiệp Nông thôn Việt Nam
TÓM TẮT:
Sản xuất cà phê cóđónggóprất lớn vàosản lượngsản xuất, xuất khẩu vàtạo việclàm của Việt Nam, nhưng cũng cótác độngtiêu cực đến môi trườngvề mặt bảotồnđa dạngsinh học, sử dụng thuốcưừ sâu vàhóa chất độc hại,bảo tồn đất, bảo tồn nước, quản lý chất thải, tiêu thụ năng lượng vàcác vấn đềphátthải khác liên quanđến khí nhà kính. Cáchiệp địnhthương mại tự do quốctếmà Việt Nam đã ký kết, cũng như các yêu cầu quốctế về môi trường cho thấy vaitròcủa tiêu chuẩn vằ quy định về môi trường ừonghoạtđộng sản xuất và chế biến cà phê đôi với chuỗi thương mại quốc gia và quôctế. Đồng thời, trách nhiệm xã hội đối với môi trường củadoanhnghiệp ngày càng được quan tâm,thừanhận rộng rãi vàttở thành một trong những quytắc, chuẩn mực trong sảnxuất - kinhdoanh. Do đó,ngành Cà phê Việt Nam cần xây dựng và ápdụng bộ quy tắcứng xửvềmôitrường nhằm đưa ra cácnguyêntắc, tiêu chuẩnphù hợp với ViệtNam,đápứng tiêuchuẩn trongnước vàcác quy định liên quan của các hiệp địnhthương mại tự do mà Việt Nam là thành viên.
Từ khóa: càphê, tác động môitrường, kinh doanh có trách nhiệm.
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