Coffee farmers embrace regenerative agri-practices for better incomes: Nestle

Improved incomes, increased use of regenerative agricultural practices, and integrated approaches have been adopted by coffee growers in Vietnam and other key coffee-supplying countries, Swiss food and nutrition giant Nestle said.

The global group detailed its view via this June’s first progress report on its Nescafe Plan 2030. The scheme was published in October 2022, through which it is aiming to source 20% of its coffee from regenerative agricultural methods by 2025, rising to 50% by the end of the decade.

In the plan, Nescafe of Nestle said it would invest over $1 billion for the goal, focusing its efforts in particular on the seven key coffee growing regions from where Nescafe sources 90% of its coffee, namely Brazil, Vietnam, Mexico, Colombia, Ivory Coast, Indonesia, and Honduras.

“Of the seven priority countries, Brazilian and Vietnamese farmers typically have earnings above living income levels, reflecting high coffee yields and farming efficiencies in larger mono-crop farms in Brazil and small, highly productive, diversified farms in Vietnam,” the progress report said.

In Southeast Asia, Nescafe’s analyses show that for Vietnam, an important feature that has benefitted local coffee growers is income diversification, which enhances the country’s economic resilience.

“There, net coffee cash incomes increased despite slightly higher production costs and a minor decline in yields per hectare due to lower coffee density driven by intercropping implementation,” the study said.

Another positive development for regenerative agriculture is the decline in the use of agrochemicals – herbicides and pesticides – in Vietnam, Indonesia, India, China, and some other countries, from 2018 to 2022, according to the report.

While this is partially due to the rising cost of these inputs, Nescafe also partly attributed it to the distribution of leaf rust-resistant coffee plantlet varieties, as well as agricultural training in safer weed and pest management techniques.

The rejuvenation of coffee trees is key to improving yields. Nescafe said that in 2022, it distributed 23 million disease and drought-resistant, high-yield coffee plantlets to help rejuvenate coffee plots, increase productivity, and reduce the use of agrochemicals.

Philipp Navratil, head of Nestle’s coffee strategic business unit, said in a release: “The Nescafe Plan 2030 Progress Report shows the potential of regenerative agriculture to help make coffee farming more sustainable over the long term. We are supporting coffee farmers to make this transition and are giving them the know-how and tools they need to increase yields and income while helping reduce carbon emissions at the same time.”

In addition to the seven key countries mentioned above, other countries that Nescafe sources from dedicated projects include China, India, Kenya, Rwanda, Thailand, the Philippines, and Uganda.

Vietnam expects its coffee exports to hit a record high this year as global production falls short of demand, driving higher prices on account of El Nino-induced weather conditions.

El Nino conditions in the second quarter have raised fears of reduced production in Vietnam and Indonesia, Fitch Solutions said in a research report on May 24. Brazil and Colombia, also large producers, will also be negatively impacted.

As coffee prices rose in response to tighter global supplies, Vietnam's coffee exports jumped 28.5% year-on-year in May to $418 million, according to Fitch Solutions. Vietnam will review its coffee plantations and cap national cultivation at 60,000 hectares to focus on high-quality coffee under the government's sustainable coffee plan. Vietnamese Robusta coffee hit a high in the past three months earlier this June to VND61,800 ($2.6) per kilogram after expanding 25% in the first three months from the end of 2022.

Buon Ma Thuot town in the Central Highlands province of Dak Lak – Vietnam’s largest coffee-producing region – has put plans in place to become a global coffee hub with a distinctive identity to place it on the world map for lovers of the popular drink.

Buon Ma Thuot is known for its coffee products with exquisite and flavorful blends that are highly favored worldwide. Particularly, the ecological and agricultural conditions have helped the province produce Robusta coffee of higher quality than many other Robusta coffee-growing countries.

Coffee was first cultivated in Vietnam in the 19th century. Dak Lak province has the largest farming area of around 210,000 hectares with an annual output of more than 520,000 tons, according to provincial data. In addition, Buon Ma Thuot is home to some of the finest coffee products in Vietnam.