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Rubber Boom in Luang Namtha A Transnational Perspective

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The perennial crop sector in Southeast Asia illustrates the plantation model of large-scale farming. Malaysia and Indonesia produce nearly 90 percent of the world’s palm oil, production of which has expanded rapidly in response to growing global demand for edible oils and strong government support. In Indonesia, planted area more than doubled from about 2.9 million ha in 1997 to 6.3 million ha in 2007. In contrast to annual crops, oil palm is highly labor intensive and the industry is estimated to have created an estimated 1.7 to 3 million jobs. Smallholders participate usually in association with plantations. Given. | Rural Development in Mountainous Areas of Northern Lao PDR Component 1 Natural Resource Management and Local and Regional Economic Development Rubber Boom in Luang Namtha A Transnational Perspective Weiyi Shi gtz February 2008 Contents Acronyms.1 Conversions.1 Acknowledgment.2 Executive Summary.3 1 Introduction.6 1.1 Previous studies.6 1.2 The scope of this study.7 1.3 Geographic focus.7 1.4 Approach and methods.9 1.5 Data reliability and study limitations.10 2 The Rubber Landscape in Luang Namtha.12 3 Why Rubber Why Now .17 3.1 Lao government s direct promotion and indirect support.17 3.2 Regional market forces.18 3.3 The Chinese government s active push.20 3.4 Villagers desire.21 4 Rubber Opium Replacement and Zou Chu Qu .23 4.1 Brief history of opium replacement.23 4.2 In the broader context of Zou Chu Qu .23 4.3 How it works.26 4.4 Potential concerns with subsidies.28 5 Typology of Rubber Investments in Luang Namtha.30 5.1 Rubber planting on concessioned land.30 5.2 Contract farming with large formal investors.33 5.2.1 How are contracts made .33 5.2.2 Does 2 3 really work .34 5.2.3 Perils of the top-down approach.39 5.3 Contract farming with small informal Investors.41 5.4 Villagers own investments and cooperation with phii-nong .44 5.5 A summary of typology.45 6 Transnational Business Networks.48 6.1 Typology of Chinese communities in the context of rubber boom.48 6.2 How do the transnational networks work .50 7 The Cross-Border Market Chain.53 8 One Border Two Countries One Path .57 8.1 Overview of rubber cultivation in Xishuangbanna.57 8.2 Comparing Luang Namtha to Xishuangbanna.61 9 Issues Recommendations and the Role for Development Aid.67 9.1 Summary of issues and recommendations.67 9.1.1 Contract farming.67 9.1.2 Land and forestry Management.69 i 9.1.3 Marketing.70 9.1.4 Other issues and recommendations.71 9.2 The evolving role of development aid.72 References.74 Appendix 1 List of villages listed.A1-1 Appendix 2 Questionnaire for village level data .