Farmers’ hopes once climbed high on pepper vines in the Central Highlands; today, they are entangled in debt and misery.
As the monsoon season ended in the Central Highlands, Lac packed up his belongings and embarked on a southward journey.
Leaving behind his grass-covered fields, a tractor that has not been touched for months and a couple of goats that no one wanted to buy, he would work as a security guard for a restaurant in Saigon.
Lac has to undertake this journey to save his house from being seized by the bank. His family has been unable to pay their bank loan’s interest for months as the pepper vines that they’d invested all their money in now stand shriveled.
Vui, on the other hand, has remained at home in Chu Puh District. She shares Lac’s fate. The pepper vines that had borne the hopes and expectations of her family have now buried her in debt.
Unlike Lac, she has stayed behind to wait for the fruits of her last gamble: over 100 pepper vines in her farm have survived the monsoon season, and her family has poured all their remaining money and effort into them.
However, the end of the monsoon season can also mean a return of plant diseases, and Vui has already spotted a few of her pepper leaves turning yellow. This can eventually spread to the entire vine, and engulf the garden as a whole.
“When it (disease) happens, they die fast, as though they’ve been watered with boiling water,” Vui said recalling vividly the scene of 20,000 dead pepper vines last year. Soon after, most of the furniture in her house had to be sold to service the family’s debt.
“If this batch of pepper dies, my whole family will have to live on the street,” she said, predicting the grim future that loomed in front of her and her family.
In the district, the fields in the distance are gray with abandoned pepper vines and locals’ fear as their debt repayment dates approach. Along the streets, many houses have their doors shut, and there are “house for sale” and “farmland for sale” signs outside.
Every few days, stories surface of yet another family that left in the middle of the night to escape debtors. No one truly knows where they went. Some say they moved to work in factories in the southern province of Binh Duong while others say they’ve fled to Laos or Cambodia.
This is the sad plight of Gia Lai Province’s Chu Pah District, which just a few years ago was celebrated as the pepper capital of the world.
The pepper fever
In the 1980s, Vui and her family moved from the central province of Thanh Hoa to Gia Lai as part of a scheme to kickstart the Central Highland region’s economy.
She remembers the Central Highlands of old as a fertile land where any plant would flourish.
“Even weak pepper saplings or those that people gave out for free out of pity survived and grew quickly without any fertilizer or chemical. After just three monsoon seasons they were ready for harvesting. A kilogram of pepper then could be traded for several kilograms of rice,” Vui recalled.
From exchanging pepper for rice, the people of the Central Highlands soon realized that pepper vines planted on their red soil could be exchanged for houses, cars and even new lives. It was the golden age of pepper, the king of all spices.
According to data from the International Pepper Community, pepper’s FOB price increased by more than four times in the 1990s. Vietnamese farmers responded by continuously expanding their pepper farms throughout the decade, and the country officially became the world’s largest black pepper exporter at the turn of the century.
Farmers in the Central Highlands fondly remember the following years. The monsoon season of 2011 saw pepper prices reach VND120,000 per kilogram ($5.2 per 2.2 pounds), more than double the price in the previous year.
All of Vui’s relatives and neighbors wanted her and her husband to come and bless them whenever they had weddings or build new houses, in hope of receiving a share of her family’s luck with pepper.
Her family managed to build two houses and buy another plot of land in just one year, all thanks to their pepper farms.
Taking a tour around the district after harvest day, one could easily spot new multi-storied houses with wood and stone-paneled walls rising up, each with a spacious concrete yard for drying pepper. On the roads and farms, the loud noise of tractors could be heard for days.
Lac’s tractor back then frequently transported tons of pepper from the farms back to his yard. He and his neighbors even had to compete for a parking place in front of the agricultural product buyer’s shop.
Chu Puh farmers were on a high, unaware that new lows lay in wait.
The monsoon season of 2015 saw pepper prices peak at VND270,000 ($11.7) per kilogram. It was also during that season that diseases started spreading among the pepper vines.
Few farmers however paid any heed to this, and simply replaced the dead trees with new ones. Pepper fetched prices five times that of coffee and were still rising, so their profit could still overcome any setback, they thought.
And it was with that thought that Vui decided to pour all her profits from previous harvests and money borrowed from the bank into expanding her pepper farms to 10 hectares (24.7 acres).
What she and her neighbors did not know was that the pepper fever had spread beyond the borders of Vietnam. At that same time, a Times of India reader could come across articles about Indian pepper farmers that had become successful by learning from their Vietnamese peers.
While Indian farmers traditionally cultivated pepper by intercropping which gave low yield, in 2015, concrete pillars specially made for pepper vines to grow on, which became known as the “Vietnamese model,” started sprouting up across India.
The monsoon season of 2016 eventually came, and pepper price in Gia Lai suddenly fell to just VND180,000 per kilogram. Many pepper vines also became diseased, reducing yield by up to 60-70 percent, with some farms even having no pepper to harvest.
Vui however was still optimistic that pepper prices would bounce back again the next year, and she could still make profit even if half of her vines died.
She still had no idea that there were hundreds of thousands of other farmers in India, Sri Lanka and Indonesia that were also dreaming of a better life from cultivating pepper.
As the oversupply hit, Vietnamese pepper’s export prices went into a free fall from the peak price of $9,577 per ton in 2015 to just $5,201 per ton two years later. Even then, Vietnamese pepper farmers remained oblivious of pending disaster and continued to expand their farms.
The monsoon season of 2017 saw pepper prices in Gia Lai drop to just VND80,000 (currently $3.44) per kilogram, less than a third of the price two years earlier. At the same time, nearly 20,000 pepper vines in Vui’s farm died from disease, and her debts started piling up.
Unable to pay her bank loan’s interest of VND39 million (currently $1,678) a month, Vui had to borrow from black market lenders and the furniture in her house started disappearing.
For the monsoon season of 2018, pepper prices dropped to less than VND50,000 (currently $2.15) per kilogram.
Vui’s house is now almost empty, and signs claiming the house and farms for sale can be seen outside. But even with land prices falling, she has yet to receive any expression of interest for months.
The once-happy pepper millionaire of old now survives by selling vegetables in the local market every morning, not knowing when the bank will come and seize her house.
Lac did not invest as much as Vui did. However, after three years of losses, he also has no choice but to start selling his farms.
Chasing the pepper dream, he had cut down all his rubber trees and delayed repairing his rundown house to save money for pepper farms, saplings and fertilizer.
Lac is now heading to Saigon to work as a security guard for VND5 million ($217.39) a month. According to his calculations, after subtracting living expenses he would be able to send home nearly VND3 million each month, to help pay his family’s debt of VND200 million.
Who’s to blame?
Nguyen Van Khanh, head of Chu Puh District’s Department of Agriculture and Rural Development, says the main cause behind the pepper tragedy is that farmers ignored the authorities’ warnings and continuously expanded their farms.
“They even planted pepper in low elevation, flood-prone areas. We warned them multiple times but no one listened. The farms belong to them, so when the price was high, how could we intervene and stop them?”
However, Dang Kim Son, former head of the Institute of Policy and Strategy for Agriculture and Rural Development, meanwhile argued that the fault lies with the authorities, and they cannot blame it on the farmers’ wish for profit.
The main reason behind the tragedy, he argued, is information discrepancy between the suppliers and the market, as the greatest obstacle for farmers nowadays is no longer the lack of capital but the lack of information.
Most farmers only receive market information from merchants and agricultural product buyers, which is not enough for them to make appropriate investment decisions.
While authorities do draft plans for farmers to follow, the people do not trust these plans and the authorities have done little to change this.
“As long as accurate market information still cannot reach farmers, tragedies such as Gia Lai’s pepper will keep happening.”
Tragedy of errors
But even during the golden age of pepper, the dangers to pepper farmers were already present.
Similar to miners flocking to gold mines, when pepper price skyrocketed, thugs also flocked to the pepper capital to sell fake fertilizers or low-quality pepper saplings.
When Lac made the switch from rubber to pepper, his first two batches were both unsuccessful so he switched to using fertilizer from a company that openly advertised products “certified” and “recommended by experts” in his commune. However, just a month later, he discovered that the fertilizer he had bought was in fact made of clay.
Luong Thi Bich Phuong, another participant in the pepper fever at the time, still remembers traveling to neighboring Dak Lak Province to buy saplings from an agriculture institute, only to be tricked into buying low-quality ones from a random seller at the bus station.
The pepper tragedy is no longer exclusive to the Central Highlands.
The same Indian farmers that just two years ago were still looking to Vietnam as a role model are also struggling as pepper prices plummet.
They now consider Vietnam’s black pepper the source of their misery, and are demanding that the Indian government either impose a price floor on Vietnamese pepper or simply issue an import ban to save them.
For Chu Puh farmers like Vui, their hopes now lie in letters sent to the authorities and the State Bank Governor asking for relief, for their debts to be written off.
While many such letters have been sent, no farmer is yet to receive a reply.
Farmers are not the only ones directly affected by the pepper tragedy of the Central Highlands.
During the golden age of pepper, many businesses that sold fertilizers and bought agricultural produce also served as secondary banks for farmers. They loaned money and sold fertilizer at low prices to pepper farmers, and in return, got to buy pepper from their borrowers in a mutually beneficial deal.
Today, those businesses now stand side by side with farmers at the center of the debt storm.
Standing in front of a pile of book debts that stood nearly half a meter (1.6-foot) tall, the owner of Quang Mai Fertilizer and Agricultural Product Company admits that he might have to give up on collecting all that money.
Quang Mai’s peers in Chu Puh district had to go into hiding last month to escape from debts worth billions of dong that they owe both banks and black market lenders.
The children of Chu Puh farmers have also become victims of the pepper tragedy, as their parents can no longer invest in their education.
Dang Thi Phuong Thuy, a math teacher int the district’s Nguyen Thai Hoc High School, can’t count how many times she had to go to her students’ houses to persuade their parents to let them go to school, only to return empty-handed.
“Now only pepper vines can save our family, education is helpless,” a mother with a debt of over VND1 billion (currently $43,060) on her hands told Thuy.
Her daughter had to quit school to help the family pay their debt when she was just a term away from finishing high school, and many of the girl’s schoolmates have also gone south to work in Saigon or crossed the border to work in rubber plantations in Laos.
Standing under the shriveled pepper vines, farmers in the Central Highlands are once again planning to rebuild their lives.
30 years after leaving his home in the central city of Hue to start a new life in Gia Lai, Lac is leaving his home behind to find a new job in the south. Vui is returning to growing pumpkin.
Few people can believe that just a few years ago, these dejected farmers were the driving force behind a billion-dollar global playfield, capable of influencing even the policies of foreign governments.
Despite never finishing high school, they shouldered an entire industry and directly gambled with the global market.
It was a game with all cards on the table: information on the global market, total area and yield of pepper farms and the price of pepper are all available on the internet, albeit only in English.
Farmers like Vui and Lac did not know this.
Even in 2016, when her pepper vines started dying en masse, Vui believed that prices would bounce back and increase as it had done for over a decade.
She still remembers telling her son, to persuade him to stay and help with the pepper farm instead of leaving to seek another job: “Cultivating pepper is as easy as cultivating sweet potatoes.”