**5.2 Capital formation**

Capital input is another significant productive resource of coffee commercialization in which farmers have to have some capital to start farming as a running cost such as for planting, nurturing, processing, and marketing. In order to process all of these farming activities, farmers have to accumulate the capital from various sources and spend for those activities. Smallholder coffee producers seek their ways to find the capital to support their coffee production. Access to capital can be approached in several ways, including through rural development fund, banking institutions, private money lenders, relatives, and friends [42]. However, the study found that the production of coffee holds an average cost of production, representing as fixed and variable costs. Therefore, capital input in this context will consider all the cost of production, both fixed and variable costs. The study showed that the production of coffee cost about 9.13 million kips per hectare, 0.04 million kips per hectare as a fixed cost, and 9.09 million kips as variable cost. For the variable cost, tools and equipment using in the process of coffee production are including, which take about 19.59% of the total cost of production. Petroleum gas cost the highest with an average of 19.55% of the total cost of production; while the cost of

**101**

seasonal periods.

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

production, and other administrative costs about 15.82%.

wage labor was only about 22.57%, fertilizers cost about 22.47% of the total cost of

In demographic change, the total population of Lao was only 7.13 million people, and 53.93% are below the age of 25, in 2017 [19]; however, the core of the rate of contribution in labor force still considers low. The agriculture sector contributed 62.46% of the GDP growth in 1990 and started to decline in 2017, and recently contributed only 18.55% of the total GDP growth rate (Lao Statistic [47]). While the number of labors participating in agriculture has been fell from 71.3% in 2011 to 65.2% in 2015 [48]. Therefore, the major paradigm of labor input in relations to agriculture development came into attention, specifically in coffee production because it increased from 52.01 tons in 2011 to 99.78 tons in 2015 [19], which means

Hence, labor as a mean of productivity, engaging in every process of production shows relatively correlation with one another, including surplus and earning. Traditionally, the use of household labor in farming production is important as the part of labor market and production input as well. The study noted that in general, the rate of self-employed farming took about 91% of the total category of occupa-

Hence, there is no surprise to the pattern of employment where the wage of selfemployed (per month) took the second place of highest salary after the wage salary (per month). It is possible to conclude that working in the coffee farming tends to reach a higher sense of stability; wage labor becomes more specialized and gained expertise through working experiences from years to years as wage labor already carries some fundamental skill working in agriculture or coffee planting. In the past, people always exchanged one another with labor, weed and harvested coffee. To focus on labor input in the coffee production community, first understand the pattern of labor mobility. During the process of coffee plantation, nurturing and harvesting process are the most significant steps that requires quite numerous of labor; therefore, coffee producers required to hire wage labors to work in the coffee garden all year round particularly in production seasons. As a result, wage labor in coffee production has been shifted around during seasonal and non-

Labor demand is determined by the cultivation land or the size of the farm. Coffee production is labor intensive; thus, labor is required in different process of coffee plantation. Hence, the greater number of labor results in increasing productivity; similarly the minimum number of labors used in the nurturing process also leads to a decrease in productivity. Therefore, in the process of coffee production, both household and wage labor represent a complex pattern, this also includes the

The pattern of employment in the coffee farm at the Bolaven Plateau seemed flexible in term of hiring pattern. There show four patterns of employment including wage employment, non-farm self-employment, a permanent worker for farm, and seasonal worker for the farm. Wage employment takes major account of the offfarm employment (56.4%), where local people still contribute to the employment in different occupation mainly agricultural work, public sector, and private work. Seasonal farm employment shares a larger account than permanent work for the farm. The major work for seasonal employment is an agricultural worker (general/

Although, there is a variety of labor employment pattern that shifted within the coffee production at the Bolaven Plateau; a significant factor affecting labor

number of women participating in this coffee community as well.

clearing weeds) accounted for 28.6% and harvest only about 17% [49].

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

**5.3 Labor input for coffee production**

labor demand for coffee production is declining.

tion; where was correlated to the number of lands owned.

wage labor was only about 22.57%, fertilizers cost about 22.47% of the total cost of production, and other administrative costs about 15.82%.
