Working towards greater community control over land, forests and natural resources

Government grants 4,700 hectares for rubber plantations

Another rubber concession has been approved despite concerns over the environmental impacts caused by industrial tree plantations. Photo from Sekong province; clearing land for a rubber concession.

Vientiane Times, January 3, 2012

The government has allocated another sizeable area of land for a Vietnamese firm to grow rubber trees despite concerns over the environmental impacts caused by industrial tree plantations. Deputy Minister of Natural Resources and Environment Dr Akhom Tounalom on Friday signed a 40-year land concession for the Lao-Viet joint venture to grow rubber trees on 131 plots of land totaling 4,739 hectares. Senior officials from the Ministry of Agriculture and Forestry, Ministry of Planning and Investment, Ministry of Natural Resource and Environment were present at the agreement signing in Vientiane.

According to a press release, 1,011 hectares of the allocated land are in Saravan province and the other plots are in Champassak. The concession fee is US$30 to US$40 per hectare depending on location. The rubber company agreed to increase the concession fee by five percent every five years, with the payment to be made directly to the Ministry of Finance.

The Ministry of Natural Resources and Environment decided to award the concession to the Vietnamese firm based on the belief that the project would bring much-needed funding into these rural areas to develop infrastructure. The project also aims to improve the quality of the land and add value to Laos’ natural resources. This would provide favourable conditions for the government to put its poverty reduction policy into practice as well as ensure the success of its socio-economic development plan.

The Ministry of Natural Resources and Environment also signed an agreement to allow the Nam Giep 2 hydropower plant developer to lease about five hectares of land over a period of 25 years in Phaxay district, Xieng Khuang province. The concession fee for this plot of land is US$1,000 per hectare, with the power company agreeing to increase the payment by five percent every five years. The ministry awarded the concession in line with the Party’s policy to turn Laos into ‘the battery of Asean’. The concession payment will be paid directly to the Ministry of Finance. The government has already approved about 340,000 hectares in land concessions to local and foreign investors on which to grow cash crops and industrial trees such as rubber and eucalyptus.

However, large-scale com-mercial agricultural projects like these are creating long term environmental challenges. According to a recent study by a group of Lao researchers, sweetcorn and rubber plantations in particular are degrading the land so that local communities can no longer use it to farm their crops. The group’s study was conducted on land under rubber cultivation in Namor district, and on sweetcorn plantations and upland rice farms in Hun district, Oudomxay province.

Webmaster’s note: See related article Limits set on future rubber plantations in Laos, September 2011, stating that rubber plantations have reached the 300,000 hectare ceiling set by the Ministry of Agriculture and Forestry.

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