Falling Rubber Prices in Northern Laos: Local Responses and Policy Options

ABSTRACTED FROM EXECUTIVE SUMMARY: Rubber prices in northern Laos have fallen significantly over the last few years, eroding much of the enthusiasm developed by both farmers and government officials in the 1990s and early 2000s about rubber providing a way out of poverty for poor upland farmers. The drop in prices paid to Lao rubber growers has been precipitous; from highs around CNY 14/kg of lump rubber (yang korn) in 2011, prices fell by half, then by half again, reaching a low around CNY 3.5/kg in 2014; prices during our fieldwork were just slightly higher (~CNY 4) and have since fallen even lower (~CNY 2.5). This study examines responses to this price drop by Lao rubber growers and state institutions. It also examines the reasons that prices are what they are, given that price volatility was identified as a risk during the mid-2000s, and that in at least some cases, steps were taken to prevent contract farmers from falling rubber prices. Drawing on 20 days of fieldwork in mid-2015 in five districts and seven villages of Luang Namtha and Oudomxai provinces, this study is one of the first pieces of research to connect an earlier body of research on the rubber-planting boom of the 2000s with the more recent fall in prices. Its focus is on qualitative changes that have taken – and are currently taking – place in northern Laos; these were captured through 33 key informant interviews with 68 participants at the provincial, district and village levels, as well as a review of available scientific literature, media reports and online sources and consultation with a small group of expert researchers.

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