Coffee Boom, Coffee Bust and Smallholder Response in Vietnam’s Central Highlands

Abstract This paper studies the recent boom and bust in Vietnam’s coffee economy. Data from smallholder coffee farms in the Central Highlands are used to examine responses to a drop in producer coffee prices. A multinomial logistic regression model is used to identify several factors associated with four specific patterns observed among coffee farmers: no response to price change, reductions in use of purchased inputs, changes in crop mix, and responses aimed at enhancing liquidity through off‐farm work or borrowing. Patterns of response are shown to have differed systematically across sub‐groups of smallholders. Policy implications raised by the findings are discussed.