Rubber Boom in Luang Namtha A Transnational Perspective

Rural Development in Mountainous Areas of Northern Lao PDR Component 1: Natural Resource Management and Local and Regional Economic Development Rubber Boom in Luang Namtha A Transnational Perspective Weiyi Shi February 2008 Contents Acronyms..............................................................................................................................1 Conversions..........................................................................................................................1 Acknowledgment...............................................................................................................2 Executive Summary.............................................................................................................3 1 Introduction.......................................................................................................................6 1.1 Previous studies..........................................................................................................6 1.2 The scope of this study.............................................................................................7 1.3 Geographic focus ....................................................................................................7 1.4 Approach and methods .........................................................................................9 1.5 Data reliability and study limitations....................................................................10 2 The Rubber Landscape in Luang Namtha................................................................12 3 Why Rubber? Why Now?..............................................................................................17 3.1 Lao government’s direct promotion and indirect support .............................17 3.2 Regional market forces..........................................................................................18 3.3 The Chinese government’s active push.............................................................20 3.4 Villagers’ desire .......................................................................................................21 4 Rubber, Opium Replacement, and “Zou Chu Qu”.................................................23 4.1 Brief history of opium replacement......................................................................23 4.2 In the broader context of “Zou Chu Qu”............................................................23 4.3 How it works.............................................................................................................26 4.4 Potential concerns with subsidies.........................................................................28 5 Typology of Rubber Investments in Luang Namtha.................................................30 5.1 Rubber planting on concessioned land.............................................................30 5.2 Contract farming with large (formal) investors..................................................33 5.2.1 How are contracts made? ............................................................................33 5.2.2 Does “2+3” really work?..................................................................................34 5.2.3 Perils of the top-down approach .................................................................39 5.3 Contract farming with small (informal) Investors...............................................41 5.4 Villagers’ own investments and cooperation with “phii-nong”......................44 5.5 A summary of typology..........................................................................................45 6 Transnational Business Networks..................................................................................48 6.1 Typology of Chinese communities in the context of rubber boom...............48 6.2 How do the transnational networks work?.........................................................50 7 The Cross-Border Market Chain...................................................................................53 8 One Border, Two Countries, One Path?.....................................................................57 8.1 Overview of rubber cultivation in Xishuangbanna...........................................57 8.2 Comparing Luang Namtha to Xishuangbanna................................................61 9 Issues, Recommendations, and the Role for Development Aid............................67 9.1 Summary of issues and recommendations........................................................67 9.1.1 Contract farming.............................................................................................67 9.1.2 Land and forestry Management ..................................................................69 i 9.1.3 Marketing..........................................................................................................70 9.1.4 Other issues and recommendations............................................................71 9.2 The evolving role of development aid................................................................72 References .........................................................................................................................74 Appendix 1 List of villages listed..................................................................................A1-1 Appendix 2 Questionnaire for village level data collection..................................A2-1 Appendix 3 Photo archive...........................................................................................A3-1 List of Tables, Figures and Cases Table 2.1 Major rubber companies in Luang Namtha ..............................................16 Table 5.1 Investors, modes of operation, and main concerns.................................46 Table 7.1 Comparison of key input and output prices..............................................56 Table 8.1 A comparative look at rubber development in Luang Namtha and Xishuangbanna.................................................................................................................66 Figure 2.1 Rubber plantation area in Luang Namtha: 1994-2006............................13 Figure 2.2 Rubber plantation area by district..............................................................14 Figure 3.1 China natural rubber production vs import: 1992-2005 ..........................19 Figure 3.2 SMR5 (MRB FOB NOON) and SCR5 prices: 1995-2007..............................19 Figure 3.3 Policy context of Luang Namtha’s rubber boom....................................22 Figure 6.1 Business networks and stakeholder relationships......................................52 Figure 7.1 The cross-border market chain....................................................................54 Case 5.1 Ban Chagnee, in the midst of a military concession ................................32 Case 5.2 Ban Den Kang..................................................................................................35 Case 5.3 Ban Sivilai...........................................................................................................36 Case 5.4 Meuto Kao, waiting for the road..................................................................37 Case 5.5 Meung Sa, a “cluster” of disputes................................................................41 Case 5.6 Houay Long Mai...............................................................................................42 Case 5.7 The Mom cluster...............................................................................................43 Case 5.8 Isse in Xiengkheng...........................................................................................44 Case 6.1 The Chen family...............................................................................................51 ii Acronyms CPI Committee for Planning and Investment DAFEO District Agriculture and Forestry Extension Office DPI Department of Planning and Investment GoL Government of Lao LFA Land and Forest Allocation LUPLA Land Use Planning and Land Allocation MAF Ministry of Agriculture and Forestry NAFRI National Agriculture and Forestry Research Institute NPA National Protected Area PAFO Provincial Agriculture and Forestry Office YDOC Yunnan Department of Commerce Conversions 1 hectare 1 USD 1 USD 15 mu 7.6 yuan (2007 spot average, U.S. Federal Reserve) 9,300 kip (local market rate in Luang Namtha, late 2007) 1 Acknowledgements This study would not have been possible without the generous support and guidance of many organizations and individuals. The study was conceptualized by Lao-German Development Cooperation, integrating inputs and initiatives from GTZ RDMA (Rural Development in Mountainous Areas), CIM (Center for International Migration) and HRDME (Human Resource Development for Market Economy). Throughout the study, GTZ team in Sing provided unfailing support in sharing background information, initiating contact with line agencies, and arranging transportation and logistics. Team leader Peter Reckhaus and Country Coordinator Uli Sabel-Koschella provided insightful guidance and suggestions at various stages of the research, as have Klaus Goldnick (CIM Regional Planner), Florian Rock (GTZ Land Policy Advisor), and other GTZ team leaders and advisors. The logistical support from ACF (Action Contre le Faim) was indispensable for completing fieldwork in the Long district. The staff at PAFO, particularly Mr. Sounthone Ounthala, tirelessly shared their expertise in rubber. Provincial DPI supplied many of the regulations, rubber contracts, and project materials reviewed in the study. The agencies in the Sing and Long districts were remarkably patient in accommodating my repeated inquiries. Tremendous gratitude also goes to Dr. Lu Xing, Director of the GMS Center of Yunnan University and Ms. Gao Lihong, who were instrumental in introducing me to the rubber landscape of Xishuangbanna and helping me negotiate the often elusive information channels in China. I have also benefited from stimulating discussions with fellow researchers. In particular, Dr. Yayoi Lagerqvist (Fujita) provided many background materials, contacts, and helpful comments that informed and guided the course of the study. Most importantly, I would like to thank the many villagers, traders, migrants, and company managers I have come into contact with on both sides of the border for sharing their knowledge, experiences, and perspectives. I owe deep appreciation to Songxai, who not only drove me around field sites but also served as a near encyclopedic reference to Muang Sing. I thank Souksakhone Philavanh (Tad) for providing wonderful translations and Aeur (Zhang Hezhi) for lending me his excellent trilingual skills and guiding me through the border Akha villages in Luang Namtha as well as Xishuangbanna. 2 ... - tailieumienphi.vn