Smallholder Timber Production: Example of Teak in Luangprabang

Smallholder Timber Production: Example of Teak in Luangprabang Mountainous topography, undeveloped infrastructure, limited market demand and relative poverty slows farmers' adoption of new technologies. However, teak planting by shifting cultivators has expanded rapidly since 1988. Teak provides high income and is readily adopted by farmers, but the benefits of teak planting are currently limited by: Poor management of teak plantations. Inferior genetic material. Competition with agriculture for arable land. Inability of farmers to hold on to plantations for 20-30 years. Smallholder Timber Production: Teak in Luangprabang 165

There are also concerns that plantations may be susceptible to serious pest attacks, excessive erosion and soil depletion. Teak planting may provide an alternative or supplement to shifting cultivation, but is not likely to have a role in improved fallow systems. History The first farmer-owned teak plantations in northern Laos were established around 1950 under the French colonial regime. Since the late 1980s, farmers have been expanding the teak plantations. Luangprabang Province has been the main centre for this expansion because of the relatively better infrastructure, and the presence of older plantations that can supply seed. It is significant that teak was adopted by shifting cultivators and expanded into the uplands where previously very little tree planting had taken place. This means that more ethnic groups have adopted teak, especially the Khamu. After the 1975 revolution, a centrally-planned economy took ownership of all land and introduced state farms. During these years, the government attempted ambitious plantation programmes in all provinces, mostly carried out by state forest enterprises. Properties and use of teak Teak has exceptional properties that make it one of the most sought after and expensive timber species, both locally and in the international market. The wood is structurally strong, durable, and resistant to fungus and termites. There is little risk of splitting and warping during drying and processing. Teak is easily carved and this makes it useful for house construction, boat railings, and furniture. Teak's high market price makes long distance transport economically feasible. This is not the case with industrial tree species such as eucalyptus and acacia, which depend on nearby processing facilities for pulp or board production. In Laos, teak is used for a few secondary purposes. A yellow dye for silk yarn is made from boiling the dry leaves. Thinning and pruning the trees provides firewood, and leaves may also be used to thatch roofs and for packaging. Propagation Teak is usually established from stumps, which though sensitive to dry spells in the first two months after planting, are inexpensive, easy to transport and plant and produce a higher 166 Improving Livelihoods in the Uplands of the Lao PDR

quality tree. Since 1993, many private nurseries have produced stumps for family use or sale. Seedlings are more expensive, difficult to transport, and produce a lower quality tree. The advantage of genetic improvement of teak is well established and selecting superior trees can increase production by 10-15% (Hedegart 1995). Little systematic selection of seed trees, stands or provenances takes place in Laos and the plantations established in recent years were propagated from genetically unknown and possibly inferior sources. The rapid expansion of teak planting in northern Laos has created a seed shortage, and it is likely that inferior seed will be used for many years. The scarcity of seed is reflected in the price, which in Luangprabang province increased from 35 to 800 Kip per kilogram between 1992 and 1996. Even at the higher price, seed costs represent only 5-10 Kip per seedling, equivalent to 10-20% of the price of a teak stump. Management Teak is inter-planted with agricultural crops during the first one to three years. This ensures adequate weeding and protection in the early years and promotes growth. Few farmers have sufficient labour available to do this if crops and teak are planted separately. Teak stumps are planted in June or July after the first weeding of the associated crop. Planting after mid-july is not recommended as small trees are vulnerable to weed competition, animals and dry season fires. When interplanting ends after one to three years, little management is necessary except for slashing taller weeds and controlled burning early in the dry season. Phenology of the teak tree in Laos Smallholder Timber Production: Teak in Luangprabang 167

Regrettably, few farmers prune low branches or forked trees, and the latter sometimes occurs in more than 50% of the plants. Thinning usually takes place too late, often when the trees are ten to fifteen years old. Pruning during years one to three not only promotes growth but also prevents knots, resulting in a more valuable tree. Teak is usually sold by the tree and not by volume. Teak is preferred to alternative perennials because it is easy to manage, grows quickly in the early years and is fire-tolerant. The expansion of teak planting has lead to concerns that teak mono-cropping may lead to pest attacks, especially by bee-hole borers and caterpillars. Teak offers little soil protection and soil erosion is often seen in older plantations. Factors facilitating adoption of teak in shifting cultivation 1. The possibility of securing private land tenure. 2. Promotion and extension by government agencies. 3. The permanent settlement pattern adopted by most villages. 4. The expansion of the road system, making plantations possible in new areas. 5. Land allocation schemes that give additional land for production of perennials. 6. The depletion of wood from natural forest and the emergence of a market for younger teak timber. 7. Promotion by private investors through financial support, production of stumps and information dissemination. Income generation Commercial teak rotations are usually 50-80 years, with plantation teak cut at 15-25 years. The minimum size of round wood accepted by local sawmills is 20 cm diameter at breast height. In Luangprabang Province this size is attained at about 15 years. On average, four trees of 18 cm make up one cubic metre of round wood. Farmers currently receive about US$25 per 18-20 cm tree, equivalent to about $100 per m 3. The trader sells the timber for $130-140 per m 3 to provincial sawmills. Round wood sold in Vientiane is about $230 per m 3 and at the export market $350-$600 per m 3. In Luangprabang and Vientiane planks sell for about $450 and $650 per m 3 respectively. Waiting 20-30 years for the income is a problem for farmers, so many have sold their young plantations to investors. While land is still plentiful in most of the country, it is generally scarce in areas where teak planting is most common and feasible. The rapid expansion of teak in parts of northern Laos could result in poor farmers losing much of their best land to wealthy investors. On the other hand, teak can provide farmers with money that would be very difficult to obtain by other means. Depending on the location (especially near cities), and age of the trees, plantations sell for $700 to $2,000 per hectare, against a mean annual household income of $500 for shifting cultivators. 168 Improving Livelihoods in the Uplands of the Lao PDR

Environmental suitability and geographical distribution The main environmental limitation is elevation, as teak does not thrive above 700-900 m. Floodprone, gravelly or strongly acidic soils are also unsuitable. These site requirements effectively exclude teak from about 40-45% of the northern region. They also mean that teak plantations do not optimise the use of marginal land. More than 95% of plantations are established along roads and rivers. Because teak is confined to areas with road or river access, it is planted in the more populous areas, i.e. where shifting cultivation is under pressure. In such areas, fallow periods are generally only 2-6 years and few farmers produce sufficient rice for their household requirements. Rice deficiency is often a farmer's stated reason for selling their plantations. Integration with agriculture and livestock Teak is usually planted with other crops. Thus, plantations necessarily occupy agricultural land, although much of this land is unsuitable to permanent cultivation. The number of years teak is inter-planted depends on whether a reasonable return is expected from the agricultural crop. With a 2m x 2m spacing, usually only one year of inter-cropping is possible. The more common spacing of 3m x 3m allows two to three years of inter-planting. The crop species influences how many years of inter-planting can take place. Upland rice can be produced for only one or two years because of weed competition and a rapid yield decline when planted in consecutive years. Other crops, such as pineapple, maize or sugarcane, may be planted for two or three years. Fallows: where does teak fit in? The possibility of replacing some shifting cultivation with teak planting may be technically and economically feasible, but farmers Using teak in improved fallows is limited by the long production cycle of 15-25 years, compared to the 2-6 year fallows available to most farmers. Even if long fallow periods were possible, teak plantations as currently managed would probably have limited or negative effects on soil fertility. If farmers could keep their teak plantations until logging starts, the high income would make crop production irrelevant. The most realistic role for teak is as a supplement to shifting cultivation, i.e. planting teak on part of the farmland while continuing upland cropping on other land. Relatively small plantations would be suitable for most farmers if they apply proper management and retain ownership. Smallholder Timber Production: Teak in Luangprabang 169

would have to wait 25 years to see any return. The value of the annual increment of teak plantations and the return on labour far exceeds that of upland rice cropping, so it would seem possible to devise schemes which finance farmers' plantations until logging can start. Ownership of plantations could lie with private investors, with the farmers or be a matter of shared ownership. Extension It is possible to improve the growth and quality of teak through simple measures. These include timely weeding, thinning, pruning and fire control, as well as improved propagation methods and selection of seed sources. Better silviculture enables quicker log sales and helps farmers retain their teak plantations. Initiatives to improve plantation management include: Promoting the establishment of smaller plantations (50-200 trees), which farmers can more easily maintain over many years. Formulating technology recommendations for propagation and plantation management. Producing better information material for farmers and extension workers. Establishing sites for demonstrating improved management techniques. Promoting teak planting in areas without road or river access. Providing timber and seed sources for local usage. Conclusion and recommendations The potential income and economic spin-off from teak planting in the uplands of northern Laos is high compared with current land use. Further expansion of teak planting is possible in areas of degraded forest. Road improvements can expand the potential for teak planting to new areas. Selected references Fogdestam, N. & Galnander, H. 2004. Small-scale teak plantations on Luang Prabang Province, Lao PDR - Silviculture, ownership and markets. Swedish University of Agricultural Sciences. Hedegart, T. 1995. Teak Improvement Programmes for Myanmar and Laos. FAO Regional Project "Strengthening Re-afforestation Programmes in Asia", Field Document No. 3. Authors: Peter Hansen (pkhansen@moa.gov.bt), Houmchitsavath Sodarak (frclpb@laotel.com) and Sianouvong Savathvong (sianouv@yahoo.com) Improving Livelihoods in the Uplands of the Lao PDR was produced in 2005 by NAFRI, NAFES and NUOL. 170 Improving Livelihoods in the Uplands of the Lao PDR