“Overview of Rubber Situation in Laos”

By Vongpaphane Manivong

Ministry of Agriculture and ForestryLaos

Contents

• Dynamic changes in Laos• Rubber boom in Laos• Current rubber planting arrangements in Laos• Current government strategies• Observations • Sector prospects

Drivers of rubber industry in Laos

• Moving from ‘land locked to land linked’

• Investor interest in Laos as the ‘orchard of Asia’

• Government policy to turn ‘land into capital’

Agriculture & Forestry Sector Strategy Goal 1: Food Production

– Increase agriculture & forestry GDP growth rate 3.4% annually– Maintain the level of food production at 400-500 kg per capita per year; corresponds to 3.3

million tons of paddy rice by 2010– Increase quantity of food in the 47 poorest districts; equivalent to national level (350 kg per

person per annum)– Increase production of meat, eggs, fish, & fresh milk by 5% annually; average consumption

demand of 40-50 kg per capita per year Goal 2: Commercial Production

– Supply raw materials & agriculture & forestry products to processing industries & the service sector

– Increase export share of agriculture & forestry products to 1/3 (approximately US$1 billion) of the total export value of commercial & services sectors (US$3.48 billion) by 2010

Goal 3: Stabilizing Slash-and-Burn Cultivation– Total end of shifting cultivation practices by 2010– Focus on 47 poorest districts; link to rural development, poverty reduction & environmental

protection Goal 4: Sustainable Forest Management

– Balance between exploitation, utilization, and protection/conservation of forest– Increase forest cover from current 41.5% to 53% (9 million ha to 12 million ha) of total land area

by 2010

Current rubber planting areas in Laos

In the North, Louang Namtha, Phongsali, Bokeo, Oudomxai, Xaignabouri are the key rubber planting provinces

In Vientiane Province, Bholikhamxai and Savannakhet a combination of plantation and small holder rubber is emerging

In the southern provinces, large scale plantations are competing with other land uses such as high value coffee plantations and mining and hyrdopower concerns

Rubber planting (ha) by provinceArea planted in 2007 Area planted in 2008 Plan for 2010

Northern 16,555 75,900 166,500

Phongsaly 15 12,600 26,400

Luangnamtha 8,770 21,700 20,000

Bokeo 700 9,800 25,000

Xayabouly 70 5,200 50,000

Oudomxay 4,500 17,100 21,000

Luanprabang 2,500 9,500 22,000

Houaphan 0 0 2,100

Central 2,950 25,650 34,360

Vientiane Capital 100 600 0

Xiengkhuang 0 50 60

Vientiane 100 9,200 10,000

Borikhamxay 1,000 5,100 4,000

Khammouan 1,500 6,100 6,300

Savannakhet 250 4,600 14,000

Southern 8,700 39,000 48,500

Saravan 1,400 4,700 6,500

Champasak 6,700 20,100 33,500

Xekong 100 6,200 5,000

Attapeu 500 8,000 3,500

Total 28,205 140,550 249,360

77%

23%

smallholders private companies

Current ratio of rubber planting

Planting arrangementsArrangements Farmers’ input Benefits for farmers

Smallholder

Land Labor Capital

All profit from latex and timber goes to farmer (farmer seeks market on their own)

Contract farming Land Labor

Profits from latex (not timber) sales are shared among farmers and investors (investors purchase products)

Concession Labour Farmers are paid monthly wages

Current strategies of the Government

• Clarifying the concession rates and concession regulations • Land use planning to support identification of agro-ecotypes

that is most suited to rubber production• Land titling for farmers planting rubber• Developing rules and regulations for development of farmer

groups and associations• Improving R&D capacity to support smallholders (inter-

cropping, recommendation for planting, variety selection, nursery development)

Observations• Current support is driven by private sector• Current government activities are project driven:

– Technical inter-cropping trials (NAFRI)– Socio-economic and social/environmental studies (NAFRI, GTZ,

NLMA, NERI, etc)– Technical reference materials (NAFRI/NAFES)

• There is still no institutional home for rubber development in Laos– No inter-institutional agency responsible for strategic planning

for rubber– No R&D organization responsible for supporting smallholder

farmers (credit, technical, processing, marketing, etc)

Sector prospects

Opportunities• Close market (China)• Investor interest from

China, Vietnam, Thailand• Farmer interest

Challenges• Lack of coordination and

strategic support from government agencies

• Lack of donor support programmes for rubber

• Farmer experience in planting, management and processing

• Uncertain germplasm could have impacts on quality and yields

Thank You