There will be no more rubber plantations in Luang Namtha province until the government assesses the socio-economic impact and profitability of rubber, provincial authorities said on Monday.
Rubber plantations in the province now account for a total of 21,600 hectares and provincial authorities want to provide for other crops to ensure food security in the province.
“Now nobody knows whether the rubber is good for our economy and poverty reduction so we will stop it to study the impact,” said provincial administration office Deputy Head, Mr Bounma Phandavong.
Forestry officials said rubber plantations were approved in the past in response to requests from investors who claimed rubber was good for poverty reduction, but there was no proof of this claim.
China is the biggest market for Lao rubber, but the price of rubber in China has plummeted from 870,100 kip (700 yuan) per kg in February to only 372,900 kip (300 yuan) recently.
Commerce officials said there was no agreement about price guarantees between companies and villagers in Luang Namtha and they were concerned about the lower prices at a time when rubber trees were mature enough for extraction.
Luang Prabang provincial authorities also said they would try to stop rubber plantation development and focus on growing beans that feed lacquer-producing insects. These insects produce resin, which is then processed into lacquer and used in the production of handicrafts.
Villagers could earn 13 million kip a year from producing lacquer from one hectare, compared to only nine million kip from planting rubber in the same area, according to authorities. Officials also said it took only six months to produce lacquer but rubber needed at least six years.
In February, the government issued a notice to suspend the approval of new rubber plantation projects to study the positive and negative impacts of rubber in terms of the environment, socio-economic impact and profitability, according to Deputy Director General of the Forestry Department, Mr Thongphat Vongmany. He said the suspension aimed to ensure that rubber plantations were truly beneficial to local villagers.
At the moment, it is still in doubt whether rubber can bring wealth to villagers.
Two months ago, Xekong provincial authorities announced a rubber plantation project in the province had been stopped after local villagers sold their land to investors because the villagers feared that local authorities would take their land for this purpose.
Another reason for the stoppage was to save land for other crops after 6,000 hectares of the trees had been planted.
National Land Authority President, Mr Kham-ouan Boupha, said he was concerned there were not enough Lao labourers to meet the needs of the rubber industry. During the plantation process one person is needed to work per hectare, but during the extracting period five people per hectare are needed.
Mr Kham-ouan was also concerned about environmental problems because, in the past, rubber plantations had been approved without adequate study to determine land use and which crops are best suited to certain areas.
“I think that we need to study three things about rubber: one is the economic return, second is the environmental impact and the third relates to social issues,” he said.
“If the rubber project is not suitable based on these three things then we will not approve land for investment.”