Rubber Production in Northern Laos: Geographies of Growth and Contractual Diversity

ABSTRACTED FROM INTRODUCTION: Lao PDR is the least densely populated country in Asia and has long been remote and isolated from the rest of the continent. This role has only recently begun to change. The geographic location of Laos between the booming economies of Thailand, Vietnam, and China has led to the perception of Laos as a potential crossroads of the tightly integrated GMS an organization promoting trade, tourism, and development between countries through which the Mekong River runs. However, this is a role it has been somewhat reluctant to accept. It has become clear that Laos is changing at a rapid pace even as the ramifications of such changes are not fully understood. Nevertheless, the country will continue to follow this path of development as long as it continues to yield economic growth. Yet what does such a path of development entail and how will it play out in the future? Thus far, the Lao government has conceived the development of the agricultural sector as a crucial part of the country’s overall economic development. For the government, this has meant a push to transform the agricultural sector from one that is based on production for subsistence to one that focuses on production for the market. While many of the crops already grown in Laos are marketable, this has also meant the introduction of new cash crops. Most prominent among these has been rubber due to soaring prices over the past few years as well as its potential for smallholder development. Although rubber development has the potential to fulfill promises of poverty alleviation and economic development, its rapid expansion has created a number of problems for farmers. As investment from Chinese companies in the form of growing contracts has spurred the growth of rubber by a majority of villages and farmers, problems have begun to abound. The wide variety of contractual types has had varying socioeconomic effects on farmers entering into them. A loose regulatory environment has allowed investors to use contracts to exploit the land and labor of poor farmers in order to produce rubber in a cheaper and less risky manner. This report examines how this has happened using both a secondary literature review and firsthand fieldwork data. The first section is a background of the historical-geographical development of rubber as a cash crop in northern Laos, examining its origins in China and its transnational transfer across the border to Laos. The second section outlines the methodological framework employed during the fieldwork and afterwards when analyzing the data. The third section, entitled “Geographies of Growth”, looks at spatial trends of rubber growth throughout the region over time. The fourth section makes up the body of the report. This section uses contractual types and the diversity between and within them as a lens of analysis. Through the different contractual and growing types issues of social relations between different actors and resulting socioeconomic effects can be understood. Section five concludes the paper by offering policy suggestions and recommendations to help mitigate negative effects on farmers.

Available for download

Report