SMALLHOLDER TEAK AND AGRARIAN CHANGE

IN NORTHERN LAOS

J.C. Newby, R.A. Cramb, and S. McNamara

The University of Queensland

Paper presented to International Conference on

“Revisiting Agrarian Transformations in Southeast Asia:

Empirical, Theoretical and Applied Perspectives”

Research Centre for Sustainable Development,

Chiang Mai University,

13-15 May 2010

1

Abstract

Smallholder teak (Tectona grandis) plantations have become increasingly prominent in the

landscape of Luang Prabang Province, Lao PDR. While the global market for teak-wood is

attractive, investment has also been driven by a range of other factors, including changes to

land legislation, land-use planning, taxation incentives, and government and non-government

programs and promotions. The establishment of teak stands provides a labour-saving land-use

for households, potentially freeing up household resources for other farm and non-farm

opportunities. However, the degree to which households can participate in the industry varies

significantly, both within and between villages. In this paper we review some of the

underlying incentives for the expansion of teak plantations, examine the livelihood activities

of both teak and non-teak producers in five case-study villages in Luang Prabang, and

explore the differential outcomes emerging from the expansion of smallholder teak

production.

1. Introduction

Smallholder teak (Tectona grandis) plantations represent a potentially valuable component of

farming systems in northern Laos, with over 10,000 ha established in Luang Prabang

Province (Midgley et al. 2007). With a strong global market, returns from this low-input crop

can be very high, especially in relation to current household incomes. Furthermore, improved

management and marketing practices are likely to enhance the returns to households that

have established teak stands. In this paper we aim, first, to describe the changes in

government policies and planning related to land tenure, forestry, swidden agriculture, and

taxation that have stimulated the expansion of teak plantations in Luang Prabang. Second, we

explore the diversity within and between villages in the uptake and impacts of teak planting

by comparing the resources and activities of 127 households in five case-study villages

surveyed in November 2009. We show that this activity, like other apparently technical

interventions, needs to be seen in the context of endogenous and exogenous processes of

agrarian change to appreciate its trajectory and effects.

2. Policy Influences on Smallholder Teak Planting

2.1 Land policy

The land allocation process in Lao PDR began in the early 1990s and has been progressively

codified into law (Ducourtieux et al. 2005). Initially, households could enter into an

agreement for the management and use of degraded forest or non-forest land for agriculture,

forestry, and livestock production “in order to upgrade the village family’s living conditions”

(PM Decree No. 169/1993). After three years, if the household had complied with the

conditions of the contract, it could receive permanent tenure, including the right to transfer

and bequeath land and use land as collateral (PM Decree No. 169/1993). The land allocation

process was further consolidated into a national program under PM Decree No. 3/1996. A

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specific decree on Allocation of Land and Forest Land for Tree Plantation and Forest

Protection (PM Decree No 186/1994) also enabled allocation of land for these purposes.

The Land Law 1997 (amended in 2003) and Forestry Law 1996 (amended 2005 and 2007)

provide the current framework for the eradication of shifting cultivation and the

encouragement of sedentary agriculture, including tree plantations. The state authorises

individuals and households to use agricultural land in accordance with a local allocation plan and

objectives, with the maximum area available to a household based on the type of agriculture and

the number of labour units in the household labour force (i.e., aged 14 years or over and capable

of work). The maximum area per labour unit is 25 hectares (though in practice no household is

allocated this much land); this includes three hectares of degraded forest land where plantation

activities are to be focused. Degraded forests are “forests” that have been heavily damaged to

the extent they are without forest or barren, that is, land previously used for shifting

cultivation. If a household does not utilise the land allocated to it within three years it may lose

access to the land. The law seeks to return a plot which has been abandoned for over three

years to the village committee to be redistributed within the village to farmers who can make

use of it (Ducourtieux et al. 2005). As such, many farmers have planted teak on the plots they

do not currently need in order to be able to keep them for the future (Kolmert 2001; Midgely

et al. 2007).

The new framework created the security of tenure that enabled and encouraged investment in

tree plantations. However, the process also created an incentive for households to convert

existing swidden land (that would be classified as degraded forest land) into plantations

before the allocation process was carried out. This often meant they could obtain additional

land allocated for the purpose of growing cash crops, and at the same time keep the plots that

were previously planted with teak (Kolmert 2001). According to Kolmert (2001) this

disadvantaged farmers in the villages where the allocation first took place because those

farmers did not know how the process worked and did not have time to plant teak to gain

access to more land. Moreover, households arriving more recently in an area (either as part of

a resettlement program or voluntary migration) could not take advantage of this transitional

period and now have limited access to land due to the expansion of plantations on land that

would have previously gone back into the village pool for reallocation.

As part of its land policy, the Government of Laos (GoL) has been engaged in systematic

campaigns to reduce and eventually eradicate shifting cultivation and opium cultivation (GoL

2005). Shifting cultivation has previously been identified by the Government as one of the

main causes of forest loss, especially in the northern provinces. While officials have

acknowledged that, under certain circumstances, shifting cultivation may be less problematic

than rotational systems where fallows are limited to three to four years, in February 2010 the

Government reaffirmed its stance to eradicate shifting cultivation completely by 2010 (GoL

2010). Commercial tree planting provides a major alternative to shifting cultivation.

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2.2 Promotion of teak planting

Private teak plantings have been recorded in northern Laos since the 1950s (Midgley et al.

2007). In the past these have largely been confined to areas close to roads or rivers, which

allowed efficient access and transportation of logs to mills. Households engaged in shifting

cultivation have had exposure to teak plantations since this early stage. The Department of

Forestry and Water (DFW) started a teak plantation program in 1950, the plantations being

established by shifting cultivators on land belonging to the DFW. The household took care of

the plantation during the first two years and inter-planted the trees with food crops, mainly

upland rice. After harvest of the intercrops, the DFW took over ownership and management

of the plantation (Kolmert 2001).

After the formation of the Lao PDR in 1975, the Government of Laos (GoL) has made tree

planting a national priority, with a variety of laws and decrees supporting and promoting

plantation development. The National Socio-Economic Development Plan (2001-2006)

strongly promoted tree planting for commodity production and set a national target of

134,000 hectares. To achieve this target the Government’s strategy was to provide a range of

incentives, including the allocation or lease of land for tree planting, creation of property

rights to planted trees, land tax exemption for registered plantations, and free distribution of

seedlings to farmers and farm organizations. Teak plantations were identified as a promising

option for subsistence farmers. The Forestry Strategy to the Year 2020 (GoL 2005) again

included extension for tree improvement, plantation management, and cutting methods;

support for farmer organizations; marketing and product development; providing additional

land; financing farmers involved in teak planting; and the formation of teak growers’ groups.

Since 1990 there has been a so-called “boom” in teak planting in Luang Prabang Province,

with the total area increasing from 500 ha to over 10,000 ha (Kolmert 2001; Midgley et al.

2007). Researchers have identified a variety of reasons why farmers have planted teak

(Hansen et al. 1997; Kolmert 2001; Midgely et al. 2007):

• the depletion of wood supply from natural forest and the emergence of a

market for relatively young teak timber (15-20 years old);

• the possibility since the 1990s of secure private land tenure;

• the permanent settlement pattern adopted by most villages;

• the expansion of the road system;

• land allocation schemes that give additional land for production of perennials;

• promotion by private investors through financial support, the production of

stumps, and information dissemination;

• promotion and extension by government agencies (as described above).

The nature and extent of this boom is explored in the following section.

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3. A Survey of Teak-Growing Villages in Luang Prabang

3.1 Introduction

As part of an on-going project aimed at enhancing on-farm incomes through improved teak

management, funded by the Australian Centre for International Agricultural Research

(ACIAR), various teak systems are being evaluated in relation to alternative land uses,

including the social, economic, and environmental impacts of changing land-management

practices. A preliminary assessment of teak systems by Midgley et al. (2007) compared

various land-use options, but this initial assessment compared gross margins using partial

budgeting expressed on a per-hectare basis and did not take into account household resources.

They recommended that the development of an “optimal combination and sequence of crops”

by an individual smallholder must take into account both the total and seasonal availability of

resources, such as family labour and land suitable for particular uses. However, it is

important that recommendations for “optimal” farming systems recognise the diversity in

individual household circumstances within and between upland communities. This includes

diversity in access to resources and in livelihood activities. Moreover, formal and informal

institutions and other social factors influence an individual household’s decisions and

resource management practices.

Hence, when developing and evaluating teak farming systems, the assumption of

homogenous households and communities should be discarded. Enters and Anderson observe

that, although small groups may share resources and livelihoods, whole village communities

tend to be “heterogeneous, factional and stratified” (1999). Similarly, Leach, Mearns and

Scoones, in evaluating the failure of many community-based projects aimed at delivering

improved environmental outcomes, attribute a large part of the failure to faulty assumptions

concerning “the existence of homogeneous, consensual ‘communities’; the existence of

stable, universally valued ‘environments’; and of a potentially harmonious relationship

between these” (1997: 2). There is in fact considerable diversity both within and between the

villages planting teak in Luang Prabang. This includes diversity in ethnicity, relocation

history, access to land resources, alternative farming opportunities (such as paddy land and

river gardens), road infrastructure and access to markets, access to extension activities (teak

and other livelihood projects), and the implementation of government policies. These factors

all influence the adoptability of alternative production systems and are thus central to the

analysis of the impacts of smallholder teak on the livelihoods of households in the

participating villages.

In November 2009 a household survey was carried out in five villages in four districts of

Luang Prabang Province (Luang Prabang, Xieng Ngeun, Chomphet, and Nan). The selection

of these villages was based on a number of criteria in order to obtain a cross-section of

variables, including proximity to Luang Prabang city, ethnicity, resettlement history,

population density, and other land-use opportunities. The five villages selected were Ban Kok

Ngiou, Ban Xienglom, Ban Phonsavang, Ban Phatonglom, and Ban Sanok (Fig. 1).

Household survey sampling was carried out with the assistance of the village headman (ni

5

ban) and the village committee, who also acted as key informants for the study. It was

requested that a range of households be selected for interview, reflecting differences in

location, access to paddy, and extent of teak planting (including those without teak).

However, the survey was not able to capture absentee landholders.

Project field staff conducted a structured survey with the household head or an older member

of the household. The questionnaire sought information regarding the household’s

composition, settlement and relocation history, cropping and livestock activities, non-timber

forest products (NTFP) and collection activities, off-farm and non-farm employment, access

to extension services and other sources of information, access to credit, land transactions, rice

self-sufficiency, and household assets. For those household with teak plantations additional

information was sought regarding the number of blocks planted, number of trees, timing of

planting, spacing, companion crops, and knowledge of silvicultural practices. Table 1

presents sampling data for each of the five case study villages, including the total number of

trees planted by the survey participants and the average plantation size.

Figure 1 – Location of case-study villages in Luang Prabang Province

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Table 1 – Survey sampling data by case-study village

Village Kok-

Ngiou

Phatong

-lom

Phon-

savang

Sanok Xieng-

Lom

Total

District Luang

Prabang

Nan Xieng

Ngeun

Chom-

phet

Luang

Prabang

Village population

1,020 590 446 346 713 3,115

No. of households

191 99 76 65 157 588

No. of households

surveyed

29 25 25 21 27 127

No. of households

surveyed with teak

26 14 25 15 23 103

Total trees planted by

surveyed households

32,071 10,490 52,660 23,250 50,247 168,718

Average no. trees per

household with teak

1,234 749 2,106 1,550 2,185 1,329

Largest holding

(trees/household)

4,500 3,000 20,400 3,050 7,800 20,400

3.2 Timing and extent of teak planting

As indicated above, teak plantations have been established for over 50 years in Luang

Prabang Province, but the rapid expansion has occurred in the last 20 years. According to

Kolmert (2001), there was one “boom” in teak planting in Luang Prabang in 1988 and

another larger one in 1996. After that it was believed that planting decreased, mainly for

political reasons (Kolmert 2001). The pattern of planting revealed by the household survey

also showed a few years of extensive planting during the 1990s. However, the real boom was

still to come in the 2000s (Figure 2).

The data suggest that the rapid expansion in planting was not primarily due to strategic

behaviour in the lead-up to the land allocation process, which was mostly in 1995-1996

(Table 2). Rather, it appears to be related to factors such as the implementation of restrictions

on swidden agriculture, the new ability to transfer land, and the improvement in road

infrastructure and market opportunities. Furthermore, early adopters are now able to reap the

benefits of their plantations, encouraging other households to adopt.

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Figure 2 – No. of teak trees planted by respondents annually (1973-2009) and area (ha) of

teak planted in Luang Prabang Province (1975-1998) as reported by Kolmert (2001)

Table 2 – Timing of land allocation in the case study villages

Village Kok-Ngiou Phatonglom Phonsavang Sanok Xieng-Lom

Yr of land allocn. 1996 1995 1995 2005 1996

Yr certificate rec. 1996 2005 1995 2005 2005

Yr title issued 2009

As Table 1 (above) shows, the size of teak plantations varied widely within and between

villages. The overall mean holding size was about 1,330 trees (1.4 ha) but varied from 750 in

Phatonglom to 2,110 in Phonsavang. However, individual households had between zero and

over 20,000 trees. Moreover, the distribution was skewed to the right, with the average

plantation size inflated by a small number of larger plantations (Fig. 2). Around 20 per cent

of households surveyed had never planted teak. An additional 40 per cent had planted less

than 1,000 trees in total. The largest 10 per cent of plantations had holdings over 3,000 trees

and ranged up to 20,000.

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Figure 2 – Distribution of plantation size by village

The degree to which households can participate in teak planting is largely determined by the

resources available to them, especially land. Within the community, access to these resources

is modified by a range of factors, including age, ethnicity, and settlement history. Given the

range in the size of plantations, households were classified into six size groups (A-F), based

on the number of teak trees they had planted, to facilitate an exploratory analysis of these

factors (Table 3, Figure 3).

Table 3 – Survey households classified by number of teak trees and village

Group No. of trees Kok-

Ngiou

Phatong-

lom

Phon-

savang

Sanok Xieng-

Lom

Total

A 0 4 11 0 6 4 25

B < 500 9 6 2 2 7 26

C 500-999 5 4 4 3 3 19

D 1,000-1,499 1 3 10 1 2 17

E 1,500-1,999 5 0 5 3 1 14

F 2,000 + 5 1 4 6 10 26

0

5

10

15

20

25

30

0

0-2

50

25

0-5

00

50

0-7

50

75

0-1

00

0

10

00

-12

50

12

50

-15

00

15

00

-17

50

17

50

-20

00

20

00

-22

50

22

50

-25

00

>2

50

0

Nu

mb

er

of

resp

on

de

nts

Total number of teak trees

Kok Ngiou Phatonglom Phonsavang Sanok Xienglom

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Figure 3 – Classification of households by number of teak trees planted (see Table 3 for

definitions of groups A-F)

The expansion of teak plantations has not been followed by improved management of teak.

There have been several reports in Luang Prabang looking at the need for improved

management of teak, especially focusing on thinning and pruning (Roder 1995; Hansen et al.

1997; Hansen et al. 2005; Keonakhone 2005; Midgley et al. 2007). Table 4 shows the

percentage of teak households that had heard about, had training in, knew how to, and had

adopted thinning and pruning. While around 40 per cent of households had done some

pruning, only nine per cent had done any thinning. The data also suggest that although

individuals had attended training events on thinning, they were not confident that they knew

the appropriate method. Similarly, some farmers reported that they had done some pruning,

but again were not sure of the appropriate method.

Table 4 – Knowledge and adoption of thinning and pruning of teak (% of households in each

size group)

Group B C D E F Total

Heard about pruning 27 21 29 57 42 34

Had training in pruning 12 0 29 29 19 17

Know how to prune 15 26 24 36 50 30

Have done pruning 35 42 29 43 54 41

Heard about thinning 8 11 24 36 38 23

Had training in thinning 4 0 24 29 19 14

Know how to thin 0 11 6 14 8 7

Have done thinning 0 11 12 14 12 9

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3.3 Demographic and ethnic characteristics

On average, households had around 5.7 members (Table 5). Teak households tended to be

smaller, better educated, with significantly fewer dependants. This is to be expected given

that, on average, household heads were older.

The education level of the household head was positively correlated with the number of trees

planted. At the same time, the maximum education level of any household member was also

higher for those with more teak. This was hypothesised to be due to both the greater wealth

generated by teak, hence the ability to send children to school, and also the reduction in

labour required by converting cropland to teak. Thus children in households with more teak

could stay longer in education given that the labour requirements of the household were

lower.

The average number of off-farm workers was also positively correlated with the number of

trees planted. Those with alternative income sources had a greater ability to meet food

requirements through net purchases if they converted cropland to tree plantations.

Table 5 – Household composition by teak group

Teak Group A B C D E F Total

No. in household 6.48 5.15 5.47 6.00 5.07 5.81 5.70

No. full-time farm workers 2.68 2.85 2.00 1.88 2.71 2.31 2.43

No. off-farm workers 0.28 0.46 0.84 1.06 0.64 1.23 0.74

No. students 2.12 1.50 2.16 2.76 1.50 1.92 1.98

No. dependants 1.40 0.35 0.47 0.29 0.21 0.35 0.55

Age of household head (yrs) 37.5 47.5 40.8 45.8 50.8 47.0 44.6

Edcn. of household head (yrs) 4.1 5.0 6.4 4.8 5.5 6.3 5.3

Max. edcn. in household (yrs) 6.5 9.0 9.7 11.2 9.1 11.4 9.4

During the key informant interviews with the village heads, the ethnic composition of the

village was obtained along with other village statistics. The survey sampling was generally

consistent with the overall occurrence of ethnic groups in the village. Table 6 shows the

distribution of ethnic groups among the six teak groups. Khmu and Lao households

predominated. Other ethnic groups included Hmong, Lahu and Phunoi.

Consistent with other studies, ethnic Lao households tended to plant more teak (Roder et al.

1995). According to Roder et al., this is related to the length of permanent settlement in an

area, access to information, and also rice security. Having said this, much of the variation

between ethnic Lao and Khmu households in the survey is explained by Ban Phatonglom, a

village with a dominant Khmu population, where households have not planted teak. The high

percentage of Lao in Group F is to some extent attributable to the extensive teak planting

activities in Ban Xieng Lom and Ban Sanok, both of which have large ethnic Lao populations

with a longer history of settlement, confirming the findings of Roder et al. (1995).

11

There was only a small Hmong population in the case study villages. These households had

relocated from other villages within Luang Prabang or nearby provinces. Often they had little

or no land allocated to them and where in no position to participate in teak planting.

However, anecdotal evidence from within the case study villages and surrounding villages

suggests that Hmong families living in other areas, such as Luang Prabang City, are

participating in the teak industry by acquiring land planted with teak.

Table 6 – Distribution of ethnic groups among the teak groups

Ethnic Group Teak Group

A B C D E F Total

Hmong 6 0 0 0 0 0 6

Khmu 15 14 11 13 9 6 68

Lahu 0 0 0 0 1 0 1

Lao 4 12 8 4 3 20 51

Phunoi 0 0 0 0 1 0 1

Total 25 26 19 17 14 26 127

3.4 Access to land and crop activities

The maximum allocation of land to households as set out in the Land Law is based on the

number of household units of labour. In practice, the initial land allocation process at the

village level varies considerably and is subject to change after the process is complete

(NAFRI 2007). As indicated above, a number of factors can influence how much land is

available to a household to plant teak. Furthermore, the amount of paddy land available is

limited. During the allocation process paddy land was often retained by those already using it,

hence the distribution of land by area and productivity was not uniform.

Table 7 summarises the access to and use of land by the survey households. Respondents

were asked the number of cultivated upland parcels, fallowed parcels, and timber

(predominately teak) parcels, and the area of paddy land. Many respondents had difficulty

distinguishing between cropped and fallowed land. Furthermore, the process was complicated

by households not wanting to be seen to be violating the government policy on shifting

cultivation. This was more prevalent in some villages, where farmers would talk about

parcels of suan khao (rice gardens) rather than hai, the term for swidden fields. Barney

(2007) reports a similar problem in Hinboun District, Khammouane Province, and suggests

that some flexibility between the terms hai and suan is required to solve the problem of

implementing the official swidden stabilisation/eradication policy.

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Table 7 – Access to land resources and cropping activities

Group A B C D E F Total

Parcels (mean number per household)

No. upland parcels 1.7 1.9 2.1 1.5 1.8 1.7 1.8

No. parcels of fallow 1.9 1.4 0.9 0.6 0.8 0.8 1.1

No. parcels of timber land 0.2 0.9 1.5 1.6 2.0 2.9 1.5

Total parcels 3.8 4.1 4.5 3.6 4.6 5.4 4.4

Fallow parcels/upland parcels 1.1 0.7 0.4 0.4 0.4 0.5 0.6

Land area (mean hectares per household)

Area of paddy rice 0.3 0.3 0.3 0.5 0.2 0.6 0.4

Area of upland 1.4 1.5 1.4 1.0 1.3 1.2 1.3

Area of fallow 1.5 1.2 1.0 0.5 0.4 0.8 0.9

Area of timber land 0.2 0.4 0.7 1.1 1.3 2.2 1.0

Total area 3.3 3.4 3.5 3.1 3.2 4.8 3.6

Fallow area/upland area 1.1 0.8 0.7 0.5 0.3 0.7 0.7

% timber land 5.4 12.5 21.3 36.9 40.7 46.6 27.3

Paddy rice

% households with paddy 36.0 50.0 31.6 70.6 42.9 73.1 51.2

Area of paddy (ha/paddy hh) 0.8 0.7 1.0 0.6 0.5 0.9 0.8

Upland cropping (% of households)

Any upland crop 88.0 84.6 84.2 58.8 64.3 65.4 75.6

Rice 59.1 36.4 25.0 10.0 22.2 35.3 35.4

Corn 18.2 27.3 37.5 40.0 44.4 23.5 29.2

Jobs tears 18.2 9.1 12.5 0.0 22.2 35.3 16.7

Sesame 18.2 22.7 18.8 0.0 44.4 35.3 22.9

Pineapple 13.6 36.4 31.3 0.0 44.4 17.6 24.0

Banana 4.5 18.2 43.8 50.0 44.4 29.4 28.1

The ratio of fallow to upland area was lower for those households with more teak as these

households had used fallow land to plant teak. This resulted in shorter rotations on the

remaining upland or a higher incidence of perennial crops such as pineapples and bananas

(Table 7). However, these households were also more likely to have access to paddy land,

and so were more likely to be self-sufficient in rice – only 28 per cent of non-teak households

were self-sufficient whereas over 50 per cent of teak households were self-sufficient. While

not having paddy land did not necessarily mean a household would not have teak, of those

households interviewed that did have paddy, 100 per cent also had teak plantations, with the

exception of Ban Phatonglom. Furthermore, the average number of trees planted, and thus the

area converted to teak, was significantly larger for households with paddy land.

The alternative upland crops in Table 7 can be explained further when analysed by village.

With the exception of rice, the upland crops planted tended to be a function of village

location rather than the adoption of teak. Pineapples were common in Kok Ngiou; Jobs tears

13

and bananas in Phonsavang; corn in Phatonglom; and sesame in Sanok. This is thought to be

related to previous extension programs and the presence of traders who often promote and

provide inputs for specific crops. In Ban Sanok the sesame was grown to be added to the river

weed that was harvested and sold in Luang Prabang.

Other important livelihood activities in Ban Xienglom and Ban Sanok were the vegetable

gardens grown along the river banks of the Khan and Mekong Rivers respectively. These

were often reported to be the main income-generating activity. The collection of non-timber

forest products (NTFPs) was also an important activity for many households, especially in

Ban Phonsavang. Products included broom grass, paper mulberry, bamboo, mushrooms,

forest vegetables, and rattan.

3.5 Livestock

Rearing small and large livestock provides an important activity for many households. Table

8 shows the ownership of livestock by teak group. Cattle ownership appeared to be

negatively correlated with the number of teak trees planted. This relationship was particularly

evident in the low adoption of teak in Ban Phatonglom and the high number of cattle in that

village. While households with no teak were more likely to have cattle, those with teak who

also had cattle were more likely to have a larger herd. On the other hand, buffaloes were

more common among teak households than non-teak households, but only a few households

had buffaloes.

Respondents were asked if there was any other information they would like to provide. In

Ban Phatonglom many respondents informed us of their interest in maintaining land for

pasture rather than establishing teak, and requested support to improve their livestock

productivity. The extent to which livestock and teak compete for land is subject to ongoing

research, but has been identified as a problem in other areas of Laos where rubber plantations

have expanded.

Table 8 – Livestock activities by teak group

Group A B C D E F Total

Own cattle (%) 48.0 23.1 26.3 29.4 7.1 3.8 23.6

No. cattle owned 2.9 5.8 3.8 8.4 3.0 10.0 4.8

Own buffaloes (%) 12.0 3.8 15.8 5.9 28.6 30.8 15.7

No. buffaloes owned 1.7 6.0 2.0 3.0 3.0 7.8 4.7

Own pigs (%) 44.0 34.6 21.1 52.9 42.9 38.5 38.6

No. pigs owned 5.5 4.0 4.3 2.6 4.0 3.2 3.9

Own goats (%) 8.0 0.0 26.3 11.8 14.3 11.5 11.0

No. goats owned 2.7 0.0 10.2 2.0 5.0 4.3 5.7

Own chickens (%) 72.0 84.6 78.9 88.2 78.6 96.2 83.5

No. chickens owned 17.0 19.2 23.6 21.3 22.2 29.3 22.4

Own ducks (%) 12.0 34.6 26.3 64.7 35.7 61.5 38.6

No. ducks owned 20.0 7.1 12.6 11.4 9.6 20.4 14.3

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3.6 Teak planting and agrarian differentiation

The above findings suggest that it was better-off households that had settled earlier, had

access to paddy land, had achieved higher education, had off-farm sources of income, and

were not reliant on shifting cultivation that had adopted teak and planted more trees. Table 9

shows indicators of household wealth by teak group. As can be seen, those households

without teak were likely to have fewer assets and live in houses constructed of bamboo and a

grass-thatch roof. This is again related to a number of factors already discussed, including the

age of the household head and the household’s relocation history. Some of the variation in

assets can also be explained by village-level factors, such as the fact that electricity was not

connected in Ban Sanok, the lack of a mobile phone signal in Ban Phonsavang, and a fire in

Ban Phonsavang that burned many houses to the ground.

There is some difficulty is separating cause and effect when looking at the data in Table 9.

Did these households have more assets because they had planted and benefited from teak, or

were they able to establish teak plantations because they had more resources to begin with?

There is clearly a danger in looking at the data and suggesting that households that have

planted teak have benefited from the process, and therefore encouraging other households to

follow the same path. While it is true that many households have benefited from the early

adoption of teak, and will testify that they have purchased motorbikes and hand-held tractors

and now send their children to school with the income teak has generated, the ability of other

households to follow this pathway depends on the resources they have to draw on.

Table 9 – Households assets and house construction by teak group

Group A B C D E F Total

Household assets (% of households)

Motor bike 28.0 46.2 63.2 76.5 64.3 88.5 59.8

Car 4.0 0.0 5.3 5.9 0.0 11.5 4.7

Tuk tuk 0.0 3.8 5.3 0.0 0.0 0.0 1.6

Boat 20.0 26.9 15.8 17.6 21.4 57.7 28.3

Electricity in house 60.0 88.5 78.9 94.1 71.4 76.9 78.0

Hand-held tractor 8.0 19.2 15.8 29.4 14.3 38.5 21.3

Mobile phone 24.0 57.7 63.2 76.5 57.1 96.2 62.2

Television 40.0 61.5 73.7 82.4 57.1 76.9 64.6

Refrigerator 4.0 42.3 36.8 58.8 35.7 69.2 40.9

Purchase drinking water 8.0 11.5 26.3 47.1 21.4 46.2 26.0

Roof of house (% of households)

Grass 36.0 7.7 10.5 0.0 0.0 0.0 10.2

Tile 4.0 3.8 15.8 23.5 21.4 15.4 12.6

Iron 60.0 88.5 73.7 76.5 78.6 84.6 77.2

15

House walls (% of households)

Bamboo 88.0 50.0 47.4 17.6 21.4 15.4 42.5

Brick 0.0 0.0 5.3 0.0 0.0 3.8 1.6

Cement 8.0 26.9 26.3 41.2 42.9 15.4 24.4

Cement and wood 0.0 7.7 5.3 35.3 14.3 42.3 17.3

Stone 0.0 3.8 0.0 0.0 0.0 0.0 0.8

Wood 4.0 11.5 15.8 5.9 21.4 23.1 13.4

Given the low rate of rice-self sufficiency, the problem for households who adopt teak is the

time to wait until the trees can be harvested. Hansen et al. (1997) suggest that teak is

therefore primarily suitable for wealthier farmers, for businessmen, and for government

employees. They conclude that one of the main motivations for other upland farmers to plant

teak is the possibility of selling the 1-3 year-old plantations to investors. Furthermore, they

suppose that since plantations are predominantly established on flatter land next to roads,

farmers have lost much of the best agricultural land for the production of cash crops.

According to Kolmert (2001), this practice had been occurring even before farmers had the

required certificates and resulted in many farmers not having enough land on which to grow

food.

During the interviews, households were asked if they had purchased or sold land in the past.

Given the sensitive nature of the topic, they were not asked for the details about to whom

they had sold the land, although information regarding the number of trees was obtained. For

those households that had purchased land, information regarding the land-use of the parcel

was also obtained. Table 10 shows that 36 per cent of households had purchased land and 21

per cent had sold land, with similar percentages across the teak groups. The data suggest that

numbers of survey households were purchasing both teak blocks and fallow land which they

later converted to teak. Given that the survey did not include absentee landlords, the full

extent of land transactions is difficult to quantify. Anecdotal evidence, however, suggests that

the scale of land transactions is increasing, with investors looking to plant both teak and

rubber. The money from land sales was reported to be used for school fees, weddings, or to

meet healthcare expenses.

Table 10 – Land transactions and borrowing by teak group

Group A B C D E F Total

Purchased land (%) 40.0 34.6 31.6 35.3 35.7 38.5 36.2

Sold land (%) 12.0 30.8 15.8 35.3 14.3 15.4 20.5

Borrowed money (%) 40.0 30.8 26.3 47.1 21.4 11.5 29.1

Source of loan (no. of households)

- Bank 7 6 3 3 1 1 21

- Family 2 0 0 3 1 0 6

- Village fund 1 2 2 2 1 2 10

- Total 10 8 5 8 3 3 37

16

There were sources of credit in some villages, including loans from the agricultural

cooperation bank, village revolving funds, and family. The interest rate for a loan from the

bank ranged between 12 and 15 per cent per year. Money could be borrowed from the village

revolving fund for around three per cent per month. Table 9 indicates that the incidence of

borrowing was higher among non-teak households and those in the smaller size classes,

suggesting that teak plantations (like rubber plantations) substitute for borrowed capital,

providing a “bank” to fund household needs.

4. Discussion and Conclusion

Smallholder teak plantations have had a long history in Luang Prabang Province and are

becoming increasingly important to processes of agrarian change. Apart from the buoyant

market for teak wood, the expansion of teak smallholdings has been influenced by a range of

policies that encourage timber production and discourage and restrict swidden agriculture.

The land and forestry laws, supported by various decrees, provide the institutional framework

that gives farmers the security of tenure to invest in this longer-term land-use option.

The livelihoods of households in the case study villages were relatively diverse, hence the

ability to integrate teak into the farming system varied between households and villages. The

survey results show that teak planting has been more extensive among households with a

longer history of settlement, where the household head is older and better educated, where

household members have off-farm sources of income, and where the household has access to

paddy land and is thus more likely to be self-sufficient in rice. For these households, teak

planting presents a land-use option that requires less labour input and, if managed effectively,

can substantially improve household incomes, and has already done so for early adopters.

For households that depend on shifting cultivation for their livelihoods, the role that teak

plays in their livelihood strategy has not changed much since the 1950s. Many of these

households reported that they borrowed land for upland rice production on the condition that

after harvest they established teak for the owner. The next year they would have to find a new

piece of land to grow their crops. However, as the area of teak has expanded, these

households reported that they now have to travel further afield, often walking to neighbouring

villages and into more remote and steeper lands.

According to Hansen et al. (1997) the most realistic role for teak was as a supplement to

shifting cultivation by planting teak on part of the land while continuing upland cropping on

other land. Relatively small plantations would be suitable for most farmers if they applied

proper management and retained ownership. Hansen et al. (2005) suggested the establishment

of smaller plantations of 50-200 trees that farmers would be able to maintain over many

years, with better management techniques, and be less likely to sell off. Our data suggest that

there are very few households establishing teak in this size range. Therefore, without access

to alternative productive land or income sources, many households will continue to find it

difficult to maintain ownership of their teak land and, as permanent land titles are provided,

may look to sell some of their land in order to survive. The development of improved

17

agroforestry systems that provide short and medium-term cash flow may enable a more

gradual transition to teak systems for household with limited land and labour that can be

redirected at low opportunity cost. In the meantime, processes of agrarian differentiation

appear to be intensifying.

Acknowledgements

This research was funded by the Australian Centre for International Agricultural Research

(ACIAR) Project FST/2004/057. The household surveys were conducted by staff of

NAFReC: Mr Somphanh Sakanphet, Ms Phontip Thongda, and Siphommachanh Phonekham

(Noy) a student working with the project. We are grateful to Mrs Dao Midgley for initial

introductions to the village heads in the study. We also express our appreciation for the time

and assistance of the farmers who took part in the interviews.

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