MINISTRY OF EDUCATION AND TRANING NATIONAL ECONOMICS UNIVERSITY VIETNAM MINISTRY OF EDUCATION AND SPORT NATIONAL UNIVERSITY OF LAOS LAOS HOUNGPHET CHANTHAVONG HOUNGPHET CHANTHAVONGHOUNGPHET CHANTHAVONG HOUNGPHET CHANTHAVONG ANALYZING IMPACT OF RUBBER PLANTATION ON POVERTY REDUCTION, LAND OWNERSHIP AND NATURAL FOREST RESOURCE IN NORTHERN LAO PDR Specialty : Economics Agriculture Code : 62.31.1001 Supervisor: Assoc.Prof.Dr. Nguyen Thi Ngoc Huyen A dissertation Submitted to the National Economics University, Vietnam and National University of Laos in fulfillment of requirements for the degree of Doctor of Philosophy in Economics HANOI, 2013 i DECLARATION Being aware of legal liability I declare, that the diploma thesis was written by myself and it does not include any contents obtained in the illegal way. I also declare that the presented thesis was not a subject of any university professional title’s proceedings previously. In addition I declare that the presented version of the thesis is identical with the electronic version included. The author of the thesis HOUNGPHET CHANTHAVONG ii ABSRACT This examined the economic impacts of rubber plantations on rural people’s livelihoods and forest resources. Sing district of LuangNamTha Province was selected for field data collection and different techniques for data collection at the field level were designed focusing on qualitative data analysis. The outcome from the field data analysis was shared with the government officers at both provincial and national levels. The results of the study illustrated that rubber plantation have both positive and negatives impacts. The rubber planting provides alternatives on land use opportunity for the upland cultivators and it will also contributes to the achievement of forestry strategies implementation to increase the forest cover in the future. The negative impacts happened to the livelihoods of local people, especially during the awaiting period for latex tapping. However, those impacts will decrease when income can be generated from the rubber latex. The study revealed that immediate technical assistance at the provincial and district level are required. Natural resource management and land use planning need to be improved to minimize the impacts of wide spreading of land conversion. iii ACLNOWLEDGEMENT First of all, I would like to extend my deep appreciation to PGS.TS.Nguyen Thi Ngoc Huyen for her advices and supports during my research activities till its completion. I am grateful for Prof.Dr. Tran Tho Dat Vice President of National Economics University of Vietnam and Assoc.Prof. Dr. Lai Phi Hung, the coordinator for Lao-Vietnam PhD program for his effort facilitating during my study. I would like to express my deep gratitude to all relevant staffs of the Faculty of Forestry, National University of Laos who have been very helpful in facilitating my study. I am very grateful to Prof. Dr.Soukkongseng Saignaleuth, the President of National University of Lao PDR for his support and allowing me to enroll in this study program. I have also received impressive supports from my collaborating institutions, including: the Department of Forestry, the Departments of Investment and Planning (Ministry of Planning and Investment), the National Economic Research Institute and the National Land Management Authority. They have kindly provided me very good sources of relevant information and data. Moreover, the government officials in the province of LuangNamTha and Sing District provided me worthwhile collaboration and assistance during my field research. All visited families and farmers, who were very active involved in giving me accurate information and very much appreciated for their devoted time. Finally, unforgettable, I would like to give special thanks to my colleague at the faculty of Forestry especially Dr. Sithong Thongmanivong, the director of Natural Resource Management and Climate Change for his support reviewing my writing. I would also like to thank to my whole family members they are always support me to continue my study, especially my loved wife and daughters. iv TABLE OF CONTENTS DECLARATION i ABSRACT ii ACLNOWLEDGEMENT iii TABLE OF CONTENTS iv ABBREVIATION vi LIST OF FIGURES viii CHAPTER 1: THESIS INTRODUCTION 1 1.1 Rationale 1 1.2 Objectives 3 1.3 Research Questions 4 1.4 Scope of the study and study area 4 1.5 Research Methodology 6 1.5.1 Research model 7 1.5.2 Data Collection Method 8 1.5.3 Data Collection Process 11 1.5.4 Data profile 12 1.5.5 Data processing 15 1.6 Research Contribution 15 1.7 Research Limitation 16 CHAPTER 2: ANALYTICAL FRAMWORK OF ANALYZING IMPACT OF RUBBER PLANTATION ON POVERTY REDUCTION, LAND OWNERSHIP AND NATURAL FOREST RESOURCE 17 2.1 Basic issue of impact analysis 17 2.1.1 Impact assessment 17 2.1.2 Basic theory of impact evaluation 18 2.2 Rubber Plantation Development 18 2.2.1 Overview of Rubber Plantation Development 18 2.2.2 Factors Determining Rubber Plantation Development 22 2.2.3 Plantation and Economic Development 23 2.3 Political and Legislation Factors on rubber plantation development 25 2.3.1 Government Strategies for rubber production in Lao PDR 25 2.3.2 Laws related to plantation development 25 v 2.3.3 Policies related to plantation development 29 2.3.4 Policies on Land Ownership 32 2.3.5 Forest Land Conversion and Concession for Plantation 34 2.3.6 Policies impacts on plantation development 46 2.4 Existing approaches for analyzing impact of rubber plantation on poverty reduction and land ownership and natural forest resources 50 2.4.1 Impact of Rubber Plantation on Poverty Reduction 51 2.4.2 Impacts of Rubber Plantation on Land Ownership 55 2.4.3 Impacts of Rubber Plantation on Natural Resource 56 2.5 Lesson learn from Vietnam 58 CHAPTER 3: ANALYZING IMPACTS OF RUBBER PLANTATION ON POVERTY REDUCTION AND LAND OWNERSHIP AND NATURAL FOREST RESOURCES IN NORTHERN LAOS 61 3.1 Overview of Sing District, North of Laos 61 3.2 Rubber Introduction in Northern Laos 63 3.3 Factors Determining Rubber Plantation Development in Northern Laos 65 3.3.1 Lao Government’s Foreign Investment Promotion Policy 66 3.3.2 Regional Market Influences 67 3.3.3 Villagers’ Motivation 68 3.4 Impacts of Rubber Plantation on Poverty Reduction, Land Ownership and Natural Forest Resource in Northern Laos 70 3.4.1 Impact on Poverty Reduction 70 3.4.2 Impact on land ownership 76 3.4.3 Impact on Natural resources 79 3.5 Reason of negative impacts 83 CHAPTER4: CONCLUSION AND RECOMMENDATION 87 4.1 Conclusion 87 4.2 Recommendation 89 4.3 Implication 92 REFERENCE 94 ANNEX 1 99 vi ABBREVIATION Lao PDR Lao People’s Democratic Republic DAFI Development of Agriculture, Forestry and Industry NAFRI National Agriculture and Forestry Research Institute FRC Forest Research Centre PAFO Provincial Agriculture and Forestry Office DAFEO District Agriculture and Forestry Extension Office IRSC International Rubber Study Group WWF World Wide Fund FDI Foreign Direct Investment CPI Committee Planning and Investment FAO Food and Agriculture Organization MAF Ministry of Agriculture and Forestry NTFPs Non-Timber Forest Products PPID Provincial Planning and Investment Division SEIA Social Environment Impact Assessment NLMA National Land Management Authority MPI Ministry of Planning and Investment MOD Ministry of Defense CPMI Committee for Promotion Management of Investment DOF Department of Forestry GTZ German Technical Cooperation vii LIST OF TABLES Table 1.1: Participant criteria 13 Table 1.2: Number of interviewees in each studied village 13 Table 1.3: Number of interviewees in each studied village by economic status 14 Table 2.1: Land use types and their responsible body 26 Table 2.2: Scope permission for land lease and concession 38 Table 2.3: Differentiation between land lease and concession 39 Table 2.4: Plantation investment projects in provinces 44 Table 2.5: Investment areas before and after land concession project in Barjieng and LaoGnam district 48 Table 3.1: Rubber plantation in hectare by provinces, in Laos 64 Table 3.2: Rubber Plantation in five provinces in the North, Laos-2006 65 Table 3.3: Hardyao Village Land Zoning, 2005 and 2011 78 viii LIST OF FIGURES Figure 1.1: Map of Sing District 6 Figure 1.2: Conceptual framework of the research study 7 Figure 2.1: Bottom up concession flow 41 Figure 2.2: Top down concession flow 43 Figure 3.1: Willing of households in rubber plantation investment and involvement 69 Figure 3.2: Main income sources of visited villagers, categorized by socioeconomic status. 71 Figure 3.3: An increase in rice areas in Sing district in 1999 and 2009 72 Figure 3.4: Cost of rubber products before exporting 73 Figure 3.5: Comparing rubber incomes among three different groups 74 Figure 3.6: Livelihood improvement resulting from rubber plantation expansion 75 Figure 3.7: Comparing GDP growth in LuangNamtha province, 2003 to 2008 76 Figure 3.8: Percentage of forest and land use changes between 1991 and 2004, Sing district 80 Figure 3.9: Rubber Plantation Area in 2006, 2007 and 2010 (Planned), Sing district 81 Figure 3.10: Comparing Rubber Plantation Area in different districts, 2002 to 2008 81 Figure 3.11: Map of Sing’s Land Use and Forest Cover 2002 83 1 CHAPTER 1 THESIS INTRODUCTION Sustainable forestry and land use to promote social and economic development is a key component of development policy in many developing countries. Putting in place the right combination of resource use, industrial development policies to meet these goals is a complex policy challenge. This thesis analyzes Impacts of Rubber Plantation on Poverty Reduction, Land Ownership and Natural Forest Resource in Northern, Lao PDR using in-dept interview technique for data collection as well as using conduction analysis to produce the results. This chapter provides an overview of the thesis and its structure. It begins by discussing the problem statement of the research, followed by its rationality, objectives, questions, scope, research site, contribution and limitation of the present study. It then outlines the structure of the study. 1.1 Rationale A demand for rubber production has grown worldwide significantly over the past decades due to rapid progressive economies of China and India. Global rubber consumption has risen up to 5.9% in average annually since early 2000s (Douangsavanh, Thammavong& Noble 2008 &Vongkhamor, S. et al. 2007). Although the market for rubber in industrial nations is more stable and unlikely expected to increase, rubber is extremely increasing in "New Asia emerging economies" including China, India and other the ASEAN countries. In 2003, China’s rubber imports shot up almost 24% (Raintree 2005). This has created opportunities for, then, rubber plantation programs to be largely invested in potential rubber producing countries in order to supply the rubber market demand. In Lao PDR, historically, rubber was first introduced by French planters in Champasack Province (in 1930) during the colonial period. After that, more than 50 [...]... understand factors determining rubber plantation development These include forces of market demand, suitability of the land for plantation, institutional arrangement for promotion of investment and motivation of the local in rubber plantation The second component focuses on the context of rubber plantation in the northern region Details of rubber plantation will cover types of investors, sources of investment... the division of production forest and forestry business was organized to get insight of business in plantation in Laos cover both issues and opportunities in plantation business in Laos Director General of the Land Development Department of the National Land Management Authority was interviewed to understand the land policy in the context of investment on land for agribusiness Director General of department... following regions and categories: Article11) and assigned role and responsibility for government institutions as expressed in Table 2.1: Table 2.1: Land use types and their responsible body Land types Assigned Ministry Agricultural land Ministry of Agriculture and Forestry Forest land Ministry of Agriculture and Forestry Water area land Ministry of Agriculture and Forestry Industrial land Ministry of Industry... undertake land survey, land classification and land use planning at the local, regional and national levels; 3 to coordinate with concerned sectors and local administrations to plan the use of land, to protect and develop land, to classify land, to assess the quality of land, to define land areas for certain uses, and to monitor such land use; 4 to allocate land use rights, to lease or grant concessions, and. .. local land and forest resources In particular, the specific objectives of this research are to: 4 1 Investigate impacts of land conversion for rubber on improving rural livelihoods in the northern part of Lao PDR 2 evaluate the contribution of rubber expansion on natural resources accessibility and utilization and on the sustainability of environmental condition 3 Give recommendations to multiply the contribution... organization to manage forestland and to determine forestland types in collaboration with other sectors concerned and to study and draft regulations on management, preservation, development and utilization of these land types including preservation of environment, which are to be submitted to the government for consideration and endorsement It is necessary to be clear understanding on definition of land ownership. .. administrations, and also assigns responsibility for the management of land use to concerned sectors such as the Ministry of Agriculture and Forestry, the Ministry of Industry and Handicrafts, the Ministry of Communication, Transport, Post and Construction, the Ministry of Information and Culture, the Ministry of National Defense, and the Ministry of Security Land in the whole country is divided into... ownership and natural forest resource in northern, Lao PDR It has four main contributions reflecting the writer’s opinion, as illustrated as follow: First, the research provides the better understanding on positive and negative impacts of rubber plantation on poverty reduction and land ownership and natural forest resource in northern part of Laos Though several similar studies have been conducted in Southeast... use land; 5 to develop land registers, make land evaluations, conduct land registration, issue land titles, and collect land statistics; 6 to collect land tax; 7 to settle land disputes; 8 to manage State land and protect the environment; 9 to define policies on the management of its organization and transactions for the sale and purchase of rights to use land; 10 to develop a data and information system... investment fund, location and size of plantation area, forms of investment and ownership as well as period of investment The last but very important component relates to impacts of rubber plantation Particular interested will be placed on the impacts on poverty reduction by assessing the changes in GDP, income and economic status of rubber plantation farmers Impact on land ownership will be investigated especially . for analyzing impact of rubber plantation on poverty reduction and land ownership and natural forest resources 50 2.4.1 Impact of Rubber Plantation on Poverty Reduction 51 2.4.2 Impacts of Rubber. analyzes Impacts of Rubber Plantation on Poverty Reduction, Land Ownership and Natural Forest Resource in Northern, Lao PDR using in- dept interview technique for data collection as well as using conduction. 3.4 Impacts of Rubber Plantation on Poverty Reduction, Land Ownership and Natural Forest Resource in Northern Laos 70 3.4.1 Impact on Poverty Reduction 70 3.4.2 Impact on land ownership 76