Thesis Public Defense | VNP25 Trần Anh Vũ

Climate Change and The Global Coffee Industry: Factors That Promote Development in Coffee Production

Student: Trần Anh Vũ, VNP 25

Supervisor: Dr. Hồ Quốc Thông

Abstract:

Agriculture is one of the industries that depend heavily on the climate. Due to various reasons, climate changes lead to harmful phenomena, such as pests, drought, floods, affecting the agriculture sector. These phenomena not only cause destructive impacts on agriculture in general, but also it has some environmentally sensitive influences on particular crops. Coffee is one of the significant contributors to many developing countries’ GDP, such as Brazil, Colombia, Mexico, Vietnam, and Indonesia.

Previously, existing studies focused on the impact of climatic factors – i.e., rainfall and temperature on coffee yield. Some examined both environmental factors and socio-economic factors affecting coffee production. These studies focus on the scope of research in certain areas, whereas climate change happens across the globe

Firstly, this study focuses on the interaction between coffee production, climatic, economic, environmental, and geographic variables in the world’s six largest coffee producing and exporting countries. Multiple variables regression model is applied for evaluating the effects of these factors on coffee production in this case.. Data in the model is illustrated in panel data, including climatic data (temperature, precipitation), socio-economic variables, environmental and geographic variables of six countries from 1991 to 2016, which were collected from various secondary data sources.

The results achieved in this study are summarized as follows. The model shows that climatic variables such as temperature and precipitation are the essential climatic factors for coffee production as the results of previous studies indicate coffee’s sensitivity to seasonal temperature changes. The results show a significant effect of summer, autumn, winter temperatures on coffee production. In particular, the impact of average temperature in summer/autumn on coffee production is a negative effect, whereas the average temperature in winter has a positive relationship with coffee production. In terms of average rainfall, the results show that the rainfall does not seem to affect significantly coffee production except for winter precipitation. Although, in practice, rainfall is extremely important for the growth of coffee trees. In addition, some variables belonging to other groups of factors are also significant for coffee output. Specific results will be presented below.

Secondly, the research identifies the relationship of factors affecting the number of projects invested for development related to the coffee industry. Results from the Poisson model and Negative binominal model show that the factors: coffee harvested area, coffee inventory, CO₂ emission, GDP, fertilizer price, rural population are the factors that have significant impacts on the model. At the same time, these factors positively impact the number of projects related to coffee.

Thirdly, apply the multiplicative model to build prediction models for coffee production in Vietnam and Brazil based on historical data. The prediction model is based on a comparison of available observations and a predictive model of coffee yields in the two countries. The results of the Vietnamese model forecast are relatively good with deviations below 20%.

Finally, many solutions have been proposed to improve the coffee industry in the case of environmental climate changes, fluctuation of socio-economic factors, environmental and geographic elements. For example, developing information systems helps the producers monitor and manage climate changes and farmers’ production costs. Other methods are proposed, such as establishing a supply chain system to increase profits, developing a coffee industry, and building an effective commercial playground for this industry. Next, the producing and exporting countries need to have reasonable development strategies and policies to stabilize the markets. Alternatively, they can invest in research and development of efficient farm management services and systems. Besides that, the government should consistently implement regulations and policies to create a compelling and fair working environment that focuses on protecting the environment.

[/vc_column_text][/vc_column][/vc_row]