**5.3 Labor input for coffee production**

*Coffee - Production and Research*

and purchasing land use right [42].

coffee commercialization.

**5.2 Capital formation**

able interest.

agriculture land, refers to the areas that can be brought for cultivation with soil, water, and climatic suitability. Pingali and Rosegrant [17] noted that "Agricultural commercialization means more than the marketing of agricultural output; it means [that] the product choice [s] and input use decisions are based on the principles of profit maximization" (n.p). Therefore, the land is a determinant factor of agriculture product inputs, acquisition of use or ownership rights to large areas of land for production of agricultural commodities, by farmers has recently attracted consider-

Land use for coffee commercialization at the Bolaven Plateau, southern Laos consists of two forms, local own, and foreign private own. The former form is mainly smallholder coffee commercialization, who are local people, in which land use is only approximately 1–2 ha for coffee plantation. Based on the FATE household survey in 2015, the average land use for smallholder who could commercialize their coffee is 2.64 ha with a minimum of 0.10 ha, and the maximum land size is 20 ha. The majority of the farmers, about 45% owned land of 2.0–4.9 ha of agriculture land and 51% of these coffee land is used to plant Arabica coffee. There shows correlation between coffee commercialization and land use at a significant level. Access to cultivated land by the smallholders in the plateau is by three approaches including *Chap Chong* (Lao word means free land acquisition), land inheritance,

The latter form, land use for coffee plantation is by foreign private ownership. After the economic liberalization policy has been applied under the NEM, the government of Laos (GoL) gives the permit to foreign investors to allow for land concession to various industries also for coffee plantation. The rapid proliferation of land concessions has been granted by the GoL to investors who are seeking to capitalize on the plateau's agriculture, forestry, hydropower, and mineral commodity chain potentialities [43–45]. The first agriculture land concession for a foreign private company to coffee planter was granted to Asia Tech in 1991 about 12,000 ha. A plenty number of smallholder coffee producer turned into the host of coffee concession, 37 of 84 villages in the Bolaven Plateau hosted at least one coffee concession in the administrative village; while 10 villages hosted two or more concession projects [46]. Today, the idea of land concession is still debatable in the institutional level; whereas, agriculture land concession demonstrates primarily to

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

**100**

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 labor demand for coffee production is declining.

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

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 nonseasonal periods.

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 number of women participating in this coffee community as well.

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

Although, there is a variety of labor employment pattern that shifted within the coffee production at the Bolaven Plateau; a significant factor affecting labor mobility is the cycle of the temporary and permanent worker during the farming season. The temporary worker based on payment as known for wage employment usually increased in the farming season. Whereas, permanent worker based on types of work, in a small farm producer or a large company is small proportion. Therefore, the rate of permanent employment relied on the size of the land (for small farm producer) and the payment or benefits (for the large company producer).

Seasonal farmworkers were mainly migrated from nearby provinces, districts, and villages who come for different farm works including coffee tree plantation, fertilizing, clearing, and harvesting. The major account of the farm employment was general/clearing weeds (28.2%) and followed by harvest only (16.9%) [50]. However, many types of work are required to be done by wage labors from the same village, including planting seed and weeding, whereas some processes are required to be done by wage labor migrated from nearby village or district, specifically during the harvesting season. Furthermore, during the harvest season, the rate of wage labor slightly increased because labor demand is high during the peak season.
