New Mandala

One of the most fascinating transformations that has occurred recently in the uplands of southeast Asia is the rapid adoption of rubber in the border districts of north-western Laos. In many upland regions, tree crops are seen as a desirable alternative by state agencies seeking to “stabilise” shifting cultivation systems. In north-western Laos rapidly improving connections to the dynamic Chinese market, and the cross-border proximity of well established rubber plantations in southern Yunnan, has encouraged the southern expansion of “borders of rubber“.

There are many factors that drive these sorts of agricultural transformations. Many observers of the uplands of southeast Asia have expressed concern about the various pressures that undermine local systems of resource management and subsistence production. But, while not dismissing these external pressures, it can often be useful to return to agro-economic basics. Farmers in the southeast Asian uplands, like farmers all over the world, usually adopt new crops because they perceive that they will be more profitable than their current alternatives. Of course, innovation carries an array of risks. Some of these risks are particularly intense in relation to tree crops, where long term investments (that have involved years of deferred income) can be wiped out by climatic misfortune (such as severe frost), market disruptions or regulatory intrusion. Farmers sometimes make mistakes. Sometimes they badly miscalculate. Sometimes they are unlucky. And sometimes they go broke.

But they still try to make decisions that will improve their livelihoods. And one of the reasons that rubber is proving popular in north-western Laos is that it is increasingly looking like a profitable agricultural alternative. A recent paper by Vongpaphane and Cramb published in Agroforestry Systems provides some results of detailed economic and ecological modelling of rubber production in Luang Namtha province. Here is an extract from the conclusion:

These results show that, given current and likely future market conditions, investment in smallholder rubber production in the uplands of Northern Laos can be highly profitable. The results from the discounted cash flow analysis for the study village help confirm that the expansion of rubber planting in that village is based on good economic returns. Therefore, rubber can be considered as having considerable potential for poor upland farmers, in line with the government policy of stabilising shifting cultivation and supporting new livelihood options for poverty reduction. This should be given prominence in current policy discussions about the desirability of granting large-scale foreign concessions for rubber planting.

The spatial analysis indicates that the potential for rubber in the study village is not an isolated case; there is a considerable area in Luangnamtha Province that appears to be economically suitable for smallholder rubber. It is important to note that the maps presented are very rough approximations and should not be used for the government’s land-use planning and allocation process, especially where farmers are uncertain about reducing their dependence on shifting cultivation. The role for government, as in other countries where smallholder rubber has played a significant role in rural development, is to ensure the provision of good quality planting material, to assist financially during the long investment period when no income is generated, and to continue investing in roads and marketing infrastructure, especially feeder roads to enable those in less accessible areas to participate.

I am sure this won’t be the last word on the issue. Other New Mandala readers who have worked on rubber in northern Laos, or on comparable agricultural transformations in other parts of southeast Asia, are very welcome to contribute your views.