**1. Introduction**

Agriculture commercialization has long debated regarding commercialization and rural living standard [1], commercialization of subsistence agriculture in developing countries [2], process of commercialization to determine nutritional outcomes [3], smallholder agriculture commercialization [4–7], and commercialization and agricultural extension services [8, 9]. Some provide a background of concepts and theories of commercialization that marketable surplus as a concept and neoclassical theory of agricultural commercialization [8, 10]. Other examine case empirical studies of commercialization of agriculture [3, 5, 7, 9, 11]. Most of the empirical study take general cash crop and limited focus on coffee commercialization [12–16].

Generally, agriculture commercialization is the process of changing the path of putting agricultural production into the market. It is an approach to changing farmers' perspective on farming as a subsistence activity toward a profitable business, if economic sustenance in developing countries is to be achieved ([17], p.172). Other five decisive characteristics of agricultural commercialization apart from profit maximization are production for sales, fulfill the needs and preference of customers, business-oriented, and gaining success [8]. Some highlight agricultural commercialization "as an agricultural transformation process in which farmers shift from mainly consumption-oriented subsistence production toward the market and profit-oriented production systems" [7]. Therefore, agricultural commercialization has become the first priority to boost economy and development by enhancing food security and increasing crop productivity for export. However, commercializing agriculture is a crucial and challenging option when the core question is required to take into consideration of "how farmers can adapt and develop a subsistence farming into a profitable business and how to promote commercial agriculture". Besides this, the concern of food security also requires the commercial transformation of subsistence agriculture.

Agriculture is a strategic sector promoting economic growth, development, and sustainability in most least developed and developing nations including that of Lao PDR. It underpins food security, rural development, and export expenditure, which is the mainstay of economic contribution. Agriculture is also becoming dominant to livelihood activity of smallholder and large-scale farmers. Despite the fact that agriculture production in many least/developing countries tended to be lag behind and experienced a chronic problem causing the rise of poverty and food insecurity. However, with the growing integration of the global market, agriculture production tended to be increasingly integrated into the regional, national, and global market; while agricultural commodity tends to increase the export earnings.

Hence, least developed and developing nations have to confront many difficulties to develop and promote the agriculture sector, both internal and external. The internal difficulties include low productivity, lack of technical support, low skill capacity, poor infrastructure, and deficient institutional. Also, the external difficulties mean highly competitive within the market as the trend of globalization, liberalization, and particularly commercialization are leading to the growth of market integration. Therefore, transforming agriculture outputs from a subsistence economy to market-oriented is an option, called "agriculture commercialization."

Lao People's Democratic Republic or Laos has policy to support agricultural commercialization of cash crop products, including coffee. Lao's agriculture system was subsistence farming in the past. People produced a little surplus for exchange after household consumptions. In the last four decade, the country started agricultural transformation by introducing the New Economic Mechanism strategy (NEM) in the Fourth Party Congress in 1986. This strategy is aiming to commercialize agriculture by increasing cash crop production and encourage smallholder farmer to become integrated in regional and international markets. The transformation of agriculture through the commercialization process has been carried out with a strategy of "an open market economy." Various programs have been introduced by the government promotion of commodity production (PCP) and to support the transformation of commercialization by reviewing a significant issue related to the agriculture system of Lao PDR. Hence, agricultural production has been implemented under the PCP. Therefore, commercial plantations have expanded dramatically, including coffee.

Coffee plantations were first introduced to Laos around 1920s by the French Colonial Empire in the Bolaven Plateau, southern of Laos [18], which is a top commodity for export-led in Laos nowadays [19]. Today, about 99% of Lao coffee is

**95**

*Coffee Commercialization in the Bolaven Plateau in the Southern of Lao PDR*

tional markets [24] constitutes coffee commercialization.

**2. Conceptualization of commercialization**

produced in the Bolaven Plateau, approximately 15,000 smallholder households or 69% of farms depend on coffee production as their primary source of income and harvest of green coffee about 28,000 tons in 2013 [20, 21] and with 1053 smallholder family farming produce organic coffee [22]. Coffee producers in southern Laos include private investors, farmers' cooperative, and individual farmers [20, 23]. The total coffee plantation accounts 86,763 ha; a portion of a coffee plantation in Bolaven Plateau is the largest highland area in the country that covers more than 70,000 ha [24]. Therefore, coffee is one of the most outstanding crops cultivated in Laos, mostly by smallholder farmers who live in rural areas, where it is aimed for rural development and sustainability effort. Commercialization of coffee has been promoted by the government and private sector under the NEM in the 1990s, particularly to export the potential markets, at satisfactory market demand, and fair price for farmers. About 95% of the total coffee sold in interna-

This chapter aims at discourse and shed light on some issues of coffee commercialization regarding their concept and theory of agricultural commercialization, nexus of commercialization and agriculture, rethinking of commercialization and agriculture, productive resources for coffee commercialization, process of coffee commercialization, and impact of coffee commercialization. The implication of empirical work of the FATE research project, a collaborative project of five countries: Laos, Nepal, Rwanda, Bolivia, and Switzerland during 2014–2020 is applied as a case study. The focus of the project is the feminization of employment in coffee production at the Bolaven plateau, the southern of Laos. The research project is mainly focused on how women are involved with agricultural commercialization, particularly in coffee commercialization process. The chapter is thus expected to enhance the novelty of knowledge in the field. The chapter, after introduction continues with discourse of literature in the field and follows with the empirical implication of the coffee commercialization, and ends with concluding discussion.

Commercialization has different meanings and concepts. Many scholars provide

that commercialization is to do with the production side, while others stress the importance of the marketing and distribution channels. Commercialization is thus a relation of the process of production, processing, transportation, and marketing of the product. Commercialization is involving several agencies to fulfill different tasks of production, processing, transportation, and marketing. Taking commercialization as a process, nature and rate of commercialization are concerned with a

Commercialization is defined by various disciplines. Over time, most literature on commercialization has operated the definition of commercialization in a number of ways; in most cases, commercialization has been found in the concept of development studies relating to agriculture. In common term, "commercialization" refers to the process and the proportion to finalize agricultural production into the market. It is a subset of the broader process of innovation that is driven by market and profit motives, with firms and others seeking to gain a positive return on investment and marketing, including through the creation of competitive niche markets ([25], p.37). Commercialization is thus a process to marketing, particularly high-value cash crops such as horticultural crops and primary food crops such as wheat [6]. However, others view commercialization not only for the marketing, but also commercialization should be profit maximization, response to the needs and interests of buyers, and fulfill the achievements of business [8]. Some scholars focus

group of farmers, peasants, whose livelihood is relying on agriculture.

*DOI: http://dx.doi.org/10.5772/intechopen.90105*

#### *Coffee Commercialization in the Bolaven Plateau in the Southern of Lao PDR DOI: http://dx.doi.org/10.5772/intechopen.90105*

produced in the Bolaven Plateau, approximately 15,000 smallholder households or 69% of farms depend on coffee production as their primary source of income and harvest of green coffee about 28,000 tons in 2013 [20, 21] and with 1053 smallholder family farming produce organic coffee [22]. Coffee producers in southern Laos include private investors, farmers' cooperative, and individual farmers [20, 23]. The total coffee plantation accounts 86,763 ha; a portion of a coffee plantation in Bolaven Plateau is the largest highland area in the country that covers more than 70,000 ha [24]. Therefore, coffee is one of the most outstanding crops cultivated in Laos, mostly by smallholder farmers who live in rural areas, where it is aimed for rural development and sustainability effort. Commercialization of coffee has been promoted by the government and private sector under the NEM in the 1990s, particularly to export the potential markets, at satisfactory market demand, and fair price for farmers. About 95% of the total coffee sold in international markets [24] constitutes coffee commercialization.

This chapter aims at discourse and shed light on some issues of coffee commercialization regarding their concept and theory of agricultural commercialization, nexus of commercialization and agriculture, rethinking of commercialization and agriculture, productive resources for coffee commercialization, process of coffee commercialization, and impact of coffee commercialization. The implication of empirical work of the FATE research project, a collaborative project of five countries: Laos, Nepal, Rwanda, Bolivia, and Switzerland during 2014–2020 is applied as a case study. The focus of the project is the feminization of employment in coffee production at the Bolaven plateau, the southern of Laos. The research project is mainly focused on how women are involved with agricultural commercialization, particularly in coffee commercialization process. The chapter is thus expected to enhance the novelty of knowledge in the field. The chapter, after introduction continues with discourse of literature in the field and follows with the empirical implication of the coffee commercialization, and ends with concluding discussion.
