SMALLHOLDER TEAK AND AGRARIAN CHANGE IN NORTHERN LAOS. J.C. Newby, R.A. Cramb, and S. McNamara The University of Queensland

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1 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, May 2010

2 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 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 1

3 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. 2

4 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 ( ) 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. 3

5 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 4

6 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 5

7 Table 1 Survey sampling data by case-study village Village Kok- Phatong Phonsavang Sanok Xieng- Total Ngiou -lom Lom District Luang Prabang Nan Xieng Ngeun Chomphet Luang Prabang Village population 1, ,115 No. of households No. of households surveyed No. of households surveyed with teak Total trees planted by surveyed households Average no. trees per household with teak Largest holding (trees/household) ,071 10,490 52,660 23,250 50, ,718 1, ,106 1,550 2,185 1,329 4,500 3,000 20,400 3,050 7,800 20, 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 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 (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. 6

8 Figure 2 No. of teak trees planted by respondents annually ( ) and area (ha) of teak planted in Luang Prabang Province ( ) 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 Yr certificate rec 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. 7

9 Number of respondents >2500 Total number of teak trees Kok Ngiou Phatonglom Phonsavang Sanok Xienglom 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 Phatonglom Phonsavang Sanok Xieng- Lom Total A B < C D 1,000-1, E 1,500-1, F 2,

10 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 Had training in pruning Know how to prune Have done pruning Heard about thinning Had training in thinning Know how to thin Have done thinning

11 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 No. full-time farm workers No. off-farm workers No. students No. dependants Age of household head (yrs) Edcn. of household head (yrs) Max. edcn. in household (yrs) 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). 10

12 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 Khmu Lahu Lao Phunoi Total 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. 11

13 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 No. parcels of fallow No. parcels of timber land Total parcels Fallow parcels/upland parcels Land area (mean hectares per household) Area of paddy rice Area of upland Area of fallow Area of timber land Total area Fallow area/upland area % timber land Paddy rice % households with paddy Area of paddy (ha/paddy hh) Upland cropping (% of households) Any upland crop Rice Corn Jobs tears Sesame Pineapple Banana 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 12

14 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 (%) No. cattle owned Own buffaloes (%) No. buffaloes owned Own pigs (%) No. pigs owned Own goats (%) No. goats owned Own chickens (%) No. chickens owned Own ducks (%) No. ducks owned

15 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 Car Tuk tuk Boat Electricity in house Hand-held tractor Mobile phone Television Refrigerator Purchase drinking water Roof of house (% of households) Grass Tile Iron

16 House walls (% of households) Bamboo Brick Cement Cement and wood Stone Wood 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 (%) Sold land (%) Borrowed money (%) Source of loan (no. of households) - Bank Family Village fund Total

17 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 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 16

18 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. References Barney, K., Power, Progress and Impoverishment: Plantations, Hydropower, Ecological Change and Community Transformation in Hinboun District, Lao PDR. Toronto, Canada, Center for International Forestry Research (CIFOR). Ducourtieux, O., J. R. Laffort, and Sacklokham, S., Land policy and farming practices in Laos. Development and Change 36 (3): Enters, T., and Anderson, J., Rethinking the decentralization and devolution of biodiversity conservation. Unasylva 50 (199): the decentralization and devolution of biodiversity conservation Government of Lao [GoL], Forestry Law. National Assemby No. 1/ October 1996 Government of Lao [GoL], 1999 The Government's Strategic Vision for the Agricultural Sector. Vientiane: Ministry of Agriculture and Forestry. Government of Lao [GoL], Land Law. National Assembly No.61/PO. 5 November 2003 Government of Lao [GoL], 2003a. National Growth and Poverty Eradication Strategy. Vientiane: Government of the Lao PDR. Government of Lao [GoL], Forestry Strategy to the Year Vientiane: Government of Lao PDR. 17

19 Government of Lao [GoL], National Socio-Economic Development Plan ( ). Vientiane: Committee for Planning and Investment. Government of Lao [GoL], 2007 Forestry Law. National Assembly No. 6/NA. Vientiane Capital 24 December 2007 Hansen, P.K., Sodorak, H. and Savathvong, S Teak production by shifting cultivators in Northern Lao PDR. Technical Report No. 9. Paper to a workshop on Indigenous strategies for intensification of shifting agriculture in Southeast Asia, Bogor, Indonesia, June Cornell University and the International Centre for Research in Agroforestry. Hansen, P.K., Sodorak, H., and Savathvong, S., Smallholder timber production: example of teak in Luang Prabang. In Improving Livelihoods in the Uplands of Lao PDR. Vientiane: NAFRI, NAFES and NUoL. Keonakhone, T. (2005). A Holistic Assessment of the Use of Teak at a Landscape Level in Luang Prabang, Lao PDR. MSc Thesis, Department of Soil Sciences, Swedish University of Agricultural Sciences ( Kolmert, A Teak in northern Laos. Minor Field Studies No. 175, Swedish University of Agricultural Sciences, Uppsala, Sweden. Leach, M., Mearns, R., and Scoones, I., Community-Based Sustainable Development: Consensus or Conflict? IDS Bulletin No. 28. Brighton: Institute for Development Studies, Sussex University. Lestrelin, G., and M. Giordano, Upland development policy, livelihood change and land degradation: interactions from a Laotian village. Land Degradation and Development 18: Manivong, K., and Sophathilath, P., Status of Community Based Forest Management in Lao PDR. Report to the Regional Community Forestry Training Center for Asia and the Pacific (RECOFTC). Midgley S., Blyth, M., Mounlamai, K., Midgley, D., and Brown, A., Towards Improving Profitability of Teak in Integrated Smallholder Farming Systems in Northern Laos. ACIAR Technical Reports 64, Canberra: ACIAR. NAFRI, Research Report on the Effect of Village Re-location on Previous Land Allocation in Phonexay, Luang Prabang, and Namo, Oudomxay. Roder, W., Keoboualapha, B. and Manivanh, V Teak (Tectona grandis), fruit trees and other perennials used by hill farmers of northern Laos. Agroforestry Systems 29(1),

20 Rodger, W., Keoboualapha, B., and Manivanh, V., Teak (Tectona grandis), fruit trees and other perennials used by hill farmers of northern Laos. Agroforestery Systems 29(1): Southitham, T., Study on Teak Plantation Management and Processing. Consultant Report to Department of Forestry, Ministry of Agriculture and Forestry, and JICA. 19

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