Foreigners will own Lao plantations
and Laotians will work for them?
By Jon Fernquest |
Massive ongoing land grants to foreign agribusiness in Laos was the focus of a Reuters article in the Asia Focus section of Saturday's Bangkok Post.
Will plantations and wage labour wipe out the family farm in Laos?
Will Laos come to be essentially owned by foreign plantations?
Will there eventually be a backlash with laws reducing foreign ownership?
With so many local officials in Laos granting land concessions, will the central government ever be able to control land ownership and land use?
The New Mandala blog at Australia National University provides a continual stream of interesting articles and discussion on agricultural land use in Laos.
Here is the article in full:
Challenges of 'agflation'
'Asia's orchard' faces thorny land issues. By Darren Schuettler (12-04-2008)After decades of isolation, Laos is enjoying an economic boom fuelled in part by surging demand for its abundant commodity - land.
From China to Japan and South Korea to Thailand, agribusiness firms are flocking to the landlocked nation to grow everything from rubber and pulp trees to organic vegetables and "green" crops for alternative fuels.
"Laos will be Asean's orchard in a couple of years," said Chalaempon Pongchabubnapa, the commercial officer at the Thai embassy in Vientiane.
In a country where many citizens live on $1 per day, Laos has gradually opened its tiny economy to foreign investment since the Pathet Lao Communists adopted market reforms in the mid-1980s.
The Asian Development Bank recently forecast nearly 8% growth led by mining and hydropower, but said: "An expansion of agriculture remains the key to raising incomes and employment."
However, the rapid investment in agriculture so far - 39 projects worth $458 million were approved in 2006 compared to six valued at $14 million in 2002 - has not gone smoothly.
The system for granting concessions "is a mess", said a foreign adviser to the central government, which imposed a halt on new land grants last May that provinces have largely ignored.
Land conflicts are rising as plantations encroach on village fields and forests, taking away traditional livelihoods with little or no compensation, activists say.
Laos has one of the lowest population densities of any Southeast Asian nation, retired professor and Laos expert Martin Stuart-Fox said of its 5.8 million people living in an area half the size of France.
"There is land available and the government can very easily take it off the people and sign deals for plantation agriculture."
With commodity prices soaring and land scarce at home, plantation firms are going further in search of good soil, weather and investor-friendly policies.
In Africa, South Korea's AFinc has leased 100,000 hectares in the Democratic Republic of Congo to grow soybeans and corn. Malaysia's Sime Darby is developing rubber and palm plantations in relatively stable Liberia.
Rubber, palm oil, tapioca and sugar plantations are sprouting up in nearby Cambodia.
In Laos, 150,000 hectares have been ceded to private investors for 30-50 years "at inconceivably low fee rates", according to the environmental group Terra
In the north, where a new paved highway to China's border opened last month, Beijing firms are heavily investing in rubber to feed the surging auto industry.
Yunnan Natural Rubber Industrial Co plans a 66,700-hectare plantation in Laos, aiming to double it to 133,300 hectares by 2010 and to 333,300 hectares by 2015.
Vietnam, one of Asia's fastest-growing economies, is carving out concessions in Cambodia and southern Laos for rubber trees and other cash crops.
Japanese, Indian and Scandinavian tree farms dot central Laos, while Thai tapioca growers are shifting their operations across the Mekong River to benefit from lower European import tariffs granted to poor nations.
Some argue the scale of plantations is not really known because Laos is still developing a land inventory. As well, multiple levels of government can grant concessions, leading to corruption.
"The national government has a hard time understanding what is going on. Even at the district level, concessions are given that the province does not know about," said the foreign adviser who asked not to be identified.
Last May, Prime Minister Bouasone Bouphavanh declared an indefinite moratorium on large land concessions for mining and agriculture "to address shortcomings of our previous strategy".
Some plantations had turned out to be illegal logging camps. In one case, a foreign investor who promised vast swathes of coconuts stripped the concession of its valuable timber and left.
Yet only a month into the moratorium, the governor of Vientiane province granted 705 hectares to a Korean rubber project, according to state media reports.
"Plantations need land and local officials can deliver it. They go to a village and say, 'This land is degraded and can be used for plantation development'," said a researcher with a foreign NGO.
In northern Laos, once home to swathes of opium-covered hills, farmers are now planting rubber trees under contract to Chinese firms. The government says plantations are fighting poverty by employing villagers, including ethnic minorities relocated from upland areas with promises of schools, health care and new land.
But critics say the policy has ensured a cheap source of labour.
Tamang, 56, is still waiting for the rice paddy the government promised him two years ago when his family of eight moved to a village in central Laos where a large eucalyptus plantation is being developed. The plantation owner, Japan's Oji Paper, has built a new school that some of his children attend.
"We are waiting for the government to give us land but we have heard nothing yet," says Tamang. REUTERS
(Source: Bangkok Post, business section, Asia Focus, page B2, Darren Schuettler, 12-04-08, temp-link)
Vocabulary:
Laotians - all the citizens of Laos ("Lao" refers to people who belong to the Lao ethnic group and speak Lao as their native language)
agribusiness - the various businesses involved in food production, including farming, seed supply, agrichemicals, farm machinery, wholesale and distribution, processing, marketing, and retail sales (See Wikipedia)
a plantation - a large farm in a tropical country with many workers growing crops such as sugar, pineapples, coffee, or rubber
wipe out - destroy completely, so that no more exist
a backlash - a sudden strong reaction against something
granting concessions - when the government gives the right to do a business or use a scarce resource (See glossary)
faces thorny land issues - has difficult land problems to solve
an economic boom - a time of great economic activity and growth
X fuelled by Y - factor Y made situation X worse or more intense
abundant - exists in large quantities
flocking to - coming in large numbers to
landlocked - a country surrounded by land, with no coast, no area next to the sea
pulp, wood pulp - a material from crushed wood used to make paper
pulp trees - trees grown for wood pulp and paper production
an orchard - a farm that grows fruit [Thai: tham suan]
Pathet Lao Communists - a communist and nationalist political movement and organization in Laos, formed in the mid 20th century, the group was ultimately successful in assuming political power after a civil war that lasted from the 1950s to 1975, the Pathet Lao were always closely associated with Vietnamese communists, during the civil war, it was effectively organized, equipped and even led by the army of North Vietnam (See Wikipedia)
adopted - began to be used
market reforms - improvements in the way that markets work in a country (usually reducing government control and regulation)
Asian Development Bank - a regional development bank established in 1966 to promote economic and social development in Asian and Pacific countries through loans and technical assistance (See Wikipedia)
hydropower - using the fast moving water in rivers to generate electricity (See Wikipedia)
has not gone smoothly - there have been many problems
imposed a halt - make them stop doing it
encroach on land - when one person starts using land that is not their own, spread onto someone else's land
compensation - pay money for a loss or injury (See glossary)
activists - a person working to bring about social or political change through public campaigns
population density - how crowded a place is, population per unit area, cities and apartments being much denser than houses and the countryside (See Wikipedia)
take it off the people -
scarce - not enough, only limited quantities exist (people cannot use as much of it as they want as they can air, for example)
soybeans - a high protein bean used in tofu, soy milk, oil, meat substitutes, soy bean paste in Korean food, and livestock feed (See Wikipedia)
X ceded to Y - Y allowed to have X, often through political pressure
inconceivably - cannot believe that it will happen
carving out concessions - cut out pieces of land to give the agribusinesses (like carving a tree)
dot central Laos - scattered and spread out over central Laos
a moratorium - officially stopping temporarily
indefinite moratorium - officially stopping with no end date set
shortcomings - faults and weaknesses
to address shortcomings of our previous strategy - the weaknesses and problems of the way they tried to solve the problems
