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

Oudomxay bans banana projects

Growing bananas under a contract farming arrangement with a Chinese company. Photo from Phongsaly Province (2012).

Vientiane Times, 1 May, 2013

Oudomxay provincial authorities will not issue new investment licenses for the plantation of bananas for export. The decision to impose the ban has been made after banana growing has caused negative impacts to the environment and a reduction in rice production in the province.

Deputy Head of the Provincial Agriculture and Foresty Department Mr Souvik Chanthayod told the Vientiane Timesthis week that the provincial authority has already banned new banana investment projects for two years.

Such projects reduce rice production in the province as the people lease their rice fields to investors for banana cultivation for export to China.

The official said that banana projects also have a bad effect on the environment through the use of chemical fertilisers. These projects also do not follow the right investment formula as determined by the government and known as 2+3. This refers to the involvement of the people in the project, which should be labour and land on the one side, while the investors are responsible for technology, funding and sales.

Mr Souvik said “Investment in banana projects is conducted in the form of 1+4 as the local people only receive funds from leasing the land while all the other benefits go to the investors. The provincial authority allocates the site for crop projects and then the investors go to lease the land from the local people. Investors will normally pay rent of about 6 million kip per hectare of rice paddy per year or 3 million kip per hectare per annum for undeveloped land, he said.

At the present time, six foreign companies are carrying out banana growing projects on a total land area of 675 hectares in two districts of the province, Xay and Baeng, according to statistics from the provincial Agriculture and Forestry Department. Oudomxay provincial authority began to issue investment licences for banana plantations six years ago and now there are many companies interested in operating similar projects, but they are not being allowed to do so currently. Besides banning banana projects, other crops such as cassava and rubber have also been forbidden because there are no buyers for cassava and the rubber tree plantations encroached into areas of national forest conservation.

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