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Vietnam is the world’s second-largest coffee producer, but has been plagued by erratic weather extremes in recent years. A severe drought—the worst in almost a decade—impacted consecutive harvests between 2022 and 2024. Last year, 13 major storms hit Vietnam, which left some farms inundated with floodwater.
The climate whiplash makes it hard for farmers to plan. “Some years, we don’t have enough water for irrigation,” Tran Thi Lien, a farmer in Dak Lak province, told Bloomberg in 2023. “And some years, there’s too much rain.”
At the same time, production is increasing amid high commodity prices and growing demand. In 2025, Vietnam exported $7.6 billion worth of coffee, up from $2.7 billion in 2020. Altogether, coffee accounts for 3% of the country’s gross domestic product.
It makes sense that the government would want to both help farmers and mitigate and respond to the effects of climate change. To that end, on Jan. 29, it announced the launch of a $102.4 million green investment initiative in partnership with the International Fund for Agricultural Development (IFAD) and the Green Climate Fund (GCF).
Known as RECAF, the project will “combat rising greenhouse gas emissions and protect vital forest ecosystems where rural people depend on coffee production for their livelihoods,” according to an IFAD press release. The initiative aims to combat one of the key drivers of global greenhouse gas emissions: land-use change through deforestation and agricultural expansion.
Over six years, IFAD says RECAF seeks to “reduce 6.68 million tonnes of greenhouse gas emissions,” as well as “restore and improve” 145,000 hectares of agroforestry land, and protect half a million hectares of natural forest.
The RECAF project will impact 420,000 people directly, according to IFAD, and over a million more indirectly. “By integrating forest protection with sustainable farming, RECAF will help farmers increase their incomes while safeguarding forests for future generations,” said Nguyen Thien Van, Vice Chairman of the People’s Committee of Dak Lak Province.
Studies have shown that investing in agroforestry coffee projects, where coffee is grown under forest canopies or beneath shade trees, can both improve biodiversity and soil health. It can also benefit farmers economically by diversifying income streams, for example, by creating shade with fruit trees. Research published last year found that protecting existing forests is more effective than planting trees at reducing carbon emissions.
“IFAD is proud to support this project, which places farmers and forest communities at the centre of solutions that build resilience, protect natural resources, and create sustainable economic opportunities,” said Frew Behabtu, IFAD’s Vietnam country director.
Read more on the coffee climate fund from Global Coffee Report here.
