From opium to coffee: the remarkable resilience of small-scale coffee farmers in Laos
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Whisper it quietly, but Laos is fast making a name for itself among aficionados as a hidden gem growing some of Asia’s best coffee. That’s a big claim - especially with next door neighbour Vietnam already producing some of the world’s finest beans - but coffee from the remote Huapanh province in northern Laos is already highly prized in hipster cafes from Brussels to Budapest.
‘Our villages are near the so-called Golden Triangle, one of the main opium producing areas in the world,’ explains Vilayphone Phommasone, manager of the Fairtrade-certified Vanmai coffee cooperative. ‘Most of us have a recent history as opium farmers. We do not grow opium because we want to, but because we are poor and lack alternatives.’
Happily, times are changing for former opium farmers in Northeast Laos. Now they are part of a more lucrative - and legal - global trade: coffee. ‘In the end our communities decided to start the transition towards becoming coffee farmers,’ adds Vilayphone. ‘This is the land where generations of our families have learned to farm and grow food with love. We need a solution to make money but one that also keeps our land healthy and flourishing for our children.’
Development - but not at any price
That solution — a sustainable forest-based economy — is at the heart of the TICAF (trade, investment and connectivity in the agriculture and forestry sectors) initiative, launched by Team Europe in March 2024. With around two-thirds of the population living in rural areas, agriculture and forest development are essential to Laos’ economy - but development should not come at a cost to the climate or to biodiversity.
That’s where companies such as Mekong Timber Plantations (MTP) can make a significant difference. The jointly-owned, public-private partnership with the Government of Laos manages an FSC-certified tropical hardwood plantation covering 24,000 ha in central Laos, and another 18,000 ha of eucalyptus and acacia plantations in the districts of Paksan and Hinboun.
‘A major part of our work revolves around maintaining a responsible supply chain,’ says MTP’s General Manager Nico Strydom. ‘We know that the choices we make here have a ripple effect, which is why we’ve put so much effort into, and working closely with our partners, where we are helping them build their capabilities and align with our high standards for ethical and sustainable practices.’
MTP engages with local communities and young people to ensure Laos has a sustainable forestry sector in the future. In 2023, the company set up a local youth volunteer group and funded scholarships and internships for young people from local schools and colleges. ’We’re passionate about empowering the next generation to take the lead in sustainability. These programmes are all about giving young people the tools and inspiration they need to make a real difference in their communities,’ he adds.
Local jobs for local people
Young people are also crucial to the success of the Team Europe – Laos programme for Trade, Investment and Connectivity for Agriculture and Forestry (TICAF), which focuses not only on sustainable farming, but on raising awareness of climate change among the next generation of Laos’ farmers, coffee growers and forestry workers. However, given that Laos is a highly diverse country in South East Asia — 50 distinct ethnic groups, each of which has unique farming and livelihood practices — getting buy-in can be tricky. As the Stockholm Environment Institute noted in a recent report, ‘Local context is crucial, as smallholders in different countries in Southeast Asia can have varying cultivation methods, growing schemes and value chains for commodities that global regulations can fail to account for.’
It’s a challenge that TICAF is eager to embrace, especially since illegal logging has devastated much of Laos’ once-plentiful hardwood forests. As much as 80 percent of the country’s forests are now degraded, despite laws dating from 1999 which ban the export of unfinished timber and require all wood products to be processed inside the country. As long ago as 2015, an official government report admitted that Laos exported up to 1.4 million cubic metres of timber a year to Vietnam and China — more than 10 times the country’s official harvest. Yet the forest communities whose local resources are so ruthlessly exploited rarely see any economic benefit.
One priority for TICAF is to improve forest governance by supporting a national Timber Legality Assurance System (TLAS) to ensure that all timber produced, transported and processed — whether for domestic or export markets — complies with the 1999 legislation. The proposed TLAS will also introduce new rules around compliance and transparency. Other Non Timber Forest Value Chains will also be supported.
‘We have a significant opportunity for the EU to help improve Laos’ forest governance,’ says Jochem Schneemann, a consultant with the EU’s Forests for the Future Facility (F4). ‘Forests are still critical for rural communities which make up two-thirds of the population — they provide livelihoods, fuel, food and medicine. But all too often their voices go unheard. Programmes like TICAF are real opportunity to develop sustainable forest-based value chains while at the same time restoring and conserving natural forests.’
Sustainable forest supply chains
However sustainably harvested however logs and other forest products require transport to domestic processing plants and then on for export. That’s why the TICAF also provides practical support, such as funding for upgrading the notoriously dilapidated National Road 2, which links Laos, Vietnam and Thailand. The EU Global Gateway project brochure notes: ‘The road is prone to damage from climatic hazards such as washouts, landslides, erosion and flooding during rainy season.’
That comes as no surprise to the remote communities who rely on decent connectivity to get products such as coffee to ports for shipping across the world. It’s hoped the €150 million upgrade - €8.5 million of which is EU funding - will be one more link to the global connection systems. In 2024, the Laos international railway opened for business, for the first time linking the capital Vientiane with Thailand to the south and China to the north - with the section from Kunming to Vientiane financed through Chinese loans.
Laos’ coffee sector may be booming - but the future for forests is less certain. Newly-released data from Global Forest Watch shows an alarming decline in the country’s tree cover of 4.81 million hectares - around 25 percent - from 2001 to 2023, accounting for 2.46 Gt of CO₂e emissions. This is mainly triggered by agriculture expansion at the cost of deforestation. The European Union Regulation on deforestation-free products (EUDR), now scheduled to come into effect at the end of 2025, aims to stop the imports of agriculture products that have caused deforestation and forest degradation - with the ultimate goal of significantly reducing deforestation and forest degradation worldwide. Direct exports to the EU of so called ‘deforestation-risk commodities’ (including timber, coffee, rubber, wood and cattle) are tiny, however coffee, timber and rubber are exported to neighbours (China, Thailand) for processing, so there are risks that the commodities are going to the EU markets.
Team Europe’s EUDR Engagement initiative, co-funded by the EU and Germany, aims to help five Southeast Asian countries - Indonesia, Malaysia, Laos, Thailand and Vietnam - transition away from unsustainable forestry to traceable, deforestation-free supply chains. From the start, the initiative focused on creating opportunities for small-scale farmers, indigenous peoples and local communities. In Laos, forestry supply chains include products such as bamboo, rattan, wood and rubber.
In a concerted effort to counter fears that the EUDR may harm other forestry product exports, the EU Delegation in Laos has been running a series of workshops with the European Chamber of Commerce in Laos (EuroCham Laos) and the Local Chamber (LNCCI) designed to increase understanding of the EUDR and to bring Lao government authorities, businesses, NGOs and forest communities together to get ready for implementation in 2025.
Working together
Back at the Vanmai coffee co-op, sustainability is already a way of life. ‘Our home in the beautiful mountainous region of Northeast Laos, is the land that has provided for generations of our families,’ says co-op manager Vilayphone. ‘It is the land where generations of our families have learned to farm and grow food with love.’
Vanmai - and the four other Fairtrade certified co-ops in Laos - are already well prepared to export to the EU when the EUDR enters in application by end of 2025. Their coffee bushes grow under shade trees which reduce the need for watering, while using natural manure and interplanting with other crops helps enrich the soil. One recent study found that small-scale farmers ‘are seeing the advantages of forest protection, including better microclimates, protection of water sources, more biodiversity, and animal protection’. However, concerns remain that EUDR could result in higher costs, for example, investing in geolocation or polygon mapping tools to prove trees are not cut down to plant more coffee bushes.
Coffee and other small-scale forest communities in Laos are also benefiting from programmes run by the EU in Laos including training in the sustainable use and conservation of forests or initiatives supporting environment protection and livelihood for communities. Such programmes include Ecosystem Conservation through Integrated Landscapes management in Laos (ECILL), working in three national protected areas, and empowering communities for becoming guardians, and providing sustainable solution for their livelihood, or Protection and Sustainable Use of Forest Ecosystem and Biodiversity (ProFEB), aiming to foster green, sustainable, and inclusive growth through increased domestic production, processing, exports, national revenue, and decent job creation in forest-based value chains.
They contribute to establish partnership between local communities and private sector operators and this year a new component will be added to TICAF to specially enhance application of labour rights and social protection. Part of the programmes activities are focusing specifically on the transition towards deforestation-free supply chains to protect forests, ecosystems, and biodiversity, by supporting national governments and the private sector in the introduction and implementation of the EUDR.
‘We have learned that growing coffee is hard work, and we know that it requires attention to details and technical procedures,’ reflects Vilayphone. ‘Vanmai is built on our shared understanding that no individual farmer in our remote area can independently access the markets, technology and knowledge that is necessary to escape poverty. Only by working together can we be strong enough to make a meaningful change to our situation.’
‘Working together’ could be TICAF’s slogan. ‘Partnerships between the EU, government, private sector, rural communities and CSOs are essential for restoring forests and biodiversity, strengthening resilience to climate change and extreme weather, for boosting incomes and improving human rights,’ reflects Jochem Schneemann.
MTP’s Nico Strydom agrees. ‘These efforts are not just about doing what’s right, they’re about ensuring that our impact is positive and lasting, both for our business and the planet.’
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