Rubber: Costs or benefits to the Lao PDR?
Increased world rubber consumption and attractive prices has been the dominant driving force behind the current boom in rubber markets in New Asia, (China, India and the ASEAN Countries) that has resulted in the rapid expansion of the area of rubber cultivated. Great Mekong Sub Region - GMS countries are among the six top rubber producing countries in the world.
Rubber tree plantations were first introduced in Lao PDR in 1930 at Bachiang District, Champassak Province (Southern Part), but it never caught the attention of policy makers, traders, business groups and other stakeholders until the end of 1990s. The high income from latex sale in 2003 by small Lao producers marked a turning point in rubber production in Lao PDR. Starting in 2004, many foreign companies have been investing in rubber trees plantations in Lao PDR. While rubber cultivation is expanding rapidly in Lao PDR, policy, regulations, planning, institutional arrangements, and information that supports these enterprise has not kept pace with developments.
There have been few studies undertaken on rubber plantations in the country, most have focused on the impacts to socio-economic, environment, and livelihood of the local communities and on appropriate techniques. But there have been no studies using the spatial data, GIS and environment economics valuation tools in assessing the sustainability of rubber production.
The overall goal of this policy study is to promote rubber development and land use in a sustainable manner. The specific objectives are to: (i) assess the current
situation and trends of rubber development in Lao PDR; (ii) Identify existing relevant policies, legislation and measures in place, potential and existing socio-economic and environment impacts from rubber development, and the involvement of women in rubber development; (iii) analyze the costs and benefits and costs effectiveness of rubber development, compare them with those of NTFPs and cash crops (paddy rice, corn or banana, etc...) accordingly to the real situation of each targeted province and villages; (iv) investigate rubber plantation in the target areas utilizing GIS mapping; (v) learn from GMS countries experiences; and (vi) provide pertinent suggestions to concerned Lao PDR policy makers at all levels on sustained rubber development and the suitable alternatives to poverty alleviation and environment’s resources sustainability for further appropriate policy implications.
Luang Nam Tha, Oudomxay (Northern provinces), and Champassack (southern province) provinces are the study targeted provinces, due to the differences of ecology, culture, history and farming systems. Two villages in each province were investigated, and the extent of women’s participation was identified. Costs benefits analysis (CBA), SPSS and Excel programs were used to compare costs and benefits from cash crops/NTFPs, with those from rubber plantation (smallholder self investment, smallholders under contract farming, and large rubber concession plants).
Field findings indicated that: (i) the rubber smallholders’ self investment type of model had the highest net benefit, followed by cash crop/NTFPs, rubber smallholder contract farming, while the rubber large scale benefit/costs ratio was negative, indicating that it was not profitable; (ii) Lao women play a valuable role in all households’ decision making (in the case of rubber, they are also involved in the decisions related to rubber or cash crop plantation size and all related expenses and the price of latex sold); and (iii) there is weak legislation implementation, a lack of strong coordination between concerned authorities in allowing concessions for large rubber tree plantations, and issues arising from establishment of large scale rubber plantations.
According to experiences from other countries, rubber could be developed in a sustainable manner if there is the appropriate use of intercropping during the first three or fourth years of rubber tree plantation, law enforcement, no forest encroachment, national land use, smallholders self investment to be financially and technically supported, and the private sector to be involved in rubber processing only.
In the case of Laos, rubber tree plantation should not be systematically replicated over the entire country, and further studies need to be done in a more consistent way. Smallholders self investment might be the most suitable case to be promoted. Urgency and priority is to be given to national land use before allocating any concession to any development investment project (not only related to rubber tree plantation, including hydro power and mining development) and comparative studies on CBA within rubber, jatropha, eucalyptus, teak, eagle wood, ecotourism, hydropower and mining, should be undertaken.
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