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Eucalyptus and Rural Development in Lao PDR - An NGO Perspective - Khankeo Oupravanh (CIDSE) and Charlie Pahlman (CUSO), Lao [supplemented by the report of the Japan International Volunteer Center (JVC), Lao]


Lao society is subsistence based with essential need of forest cover interrelated to the conservation of soil and water resources. Degradation of the forest resources has followed increased commercial logging, the bombing campaign and more intense shifting cultivation. Some 30 NGOs in Lao assist the Government in sustainable integrated development. Support is given in the National Community Forestry activities to promote community forestry and other forestry based activities to natural resource management. Conclusions include that: the local communities have a long history of comprehensive and complex forest management experience; community forestry activities must build on this local tradition of resource management; such initiatives need to be integrated with broad rural development activities; community forestry must be site specific; these activities are differentiated from plantation forestry of primarily commercial tree crops. Local communities do have capacity to manage nearby forest areas and require legal and enforceable rights against encroachment. References to regional adverse effects of tree farming are noted: environmental degradation, displacement of resource poor farmers, benefits to private sector interests. Concern is expressed over “unstocked land” use, rights of local communities, use of eucalypts, loss of biodiversity, soil and water depletion, expansion of area of fast growing trees and any monoculture.

Key words: Eucalyptus, Lao, industrial/community forestry, environment, biodiversity.


Lao PDR (People’s Democratic Republic) is a small, landlocked country in southeast Asia with an area of 236,800 km2 (about the size of Great Britain) and average population density of 18 persons/km2. It extends from northwest to southeast for 950 km along the grain of the Indochinese peninsula, sandwiched between Vietnam to the east and Thailand to the west. It also shares borders with Cambodia to the south, and China and Burma to the north and north-west.

Lao PDR is a tropical country, situated between 14o and 22oN latitude and 100o and 108o longitude (roughly equivalent to southern Mexico), and has a monsoon climate with three distinct seasons. Floods as well as droughts are common, and can cause problems to both agriculture and communications. 75% of the country is mountainous, with the only lowlands situated alongside the Mekong River and its tributaries. More than half the population is concentrated in these central and southern lowlands where most are engaged in paddy rice cultivation.

The estimated population is 4 million, 400,000 of which live in Vientiane (the capital). 85% of the people live in small villages and practice subsistence farming. Young people (under 16 years of age) comprise half the population. Lao PDR is a multi-ethnic society, differentiated by language, culture and geography. There are over 60 ethnic groups found within three major categories. The Lao Loum (lowland Lao) is the dominant group making up about half the population. The Lao Theung (upland Lao), such as Khmu and Lamet, comprise about one third of the population and are mostly Mon-Khmer speaking. The remaining population are called Lao Soong (highland Lao). They include most of the minorities, such as hill tribes like the Sino-Tibetan Hmong and Mien, and the Tibeto-Burmese Akha, Lahu and Lolo.

Lao PDR, essentially a rural subsistence society, is considered to be one of the poorest countries in the world. Over 80% of the population rely on subsistence rice production for their living. The lowland Lao cultivate paddy rice in the river valleys, while other groups tend to subsist on swidden (slash and burn) agriculture on the mountain sides. Marginal soils, a long dry season and unreliable rain adds to the uncertainty of agricultural production, with risk for both drought and floods, sometimes in the same year. Although self sufficient in rice production, this overall national self sufficiency tends to mask frequent local shortages (seasonal and geographic) which are not alleviated due to inadequate transportation facilities.

The impact of the heavy bombing that was inflicted on Lao PDR during the Vietnam war, and the virtual economic isolation that followed, are major reasons for today’s shortages of skilled people and capital, poorly developed transport and communication infrastructure, and limited education and health facilities.

In 1986, the Lao government launched the New Economic Mechanism, an economic reform campaign aimed at creating a stronger economic base for the country. By opening its doors to foreign investors and the global market system, the government hoped to increase foreign exchange earnings and stimulate economic growth. Since then, there has been an increasing flow of funds, investments and technical assistance to Lao PDR.

Hydroelectricity is presently Lao PDR’s major export, accounting for about half of Lao’s hard currency income. The largest dam, the Nam Ngum, produces 150 megawatts of power, 80% of which is exported across the Mekong River to Thailand. Timber and other forest products is the second largest source of national revenue. Lao PDR also possesses significant un-tapped mineral resources, including tin, gypsum, iron ore, rock salt, coal, sapphire, and gold, and a number of foreign mining companies have received permission to carry out prospecting in various parts of the country.

Lao PDR is presently at a cross road. After years of virtual isolation, it is now trying to open its doors to the global market economy. The challenge is to find a way of doing this that does not lead to the short term exploitation and degradation of its natural resources, and which at the same time creates a sustainable and equitable base for social development.


More than 80% of the population in Lao live in rural areas and practice some form of subsistence agriculture. Their livelihoods have been closely dependent on and intertwined with their natural environment for many centuries. The forests especially are an important source of food, timber, firewood and medicines, and help to maintain the fertility of agricultural land and ensure the availability of water. Indigenous rural communities throughout Lao have often had comprehensive and complex traditional systems of managing and protecting the forest, land and water resources around them.

Over the past 40-50 years, however, the natural resources in Lao have come under increased pressure and degradation. Forest cover as a percentage of total land area decreased from more than 70% in 1943 to approximately 47% at present, representing an average annual forest area loss of more than 70,000 ha. Some of the major reasons for the degradation of the country’s natural resources are:

1. Increased commercial logging activities. The sale of timber has become the second largest source of foreign currency earning for Lao (after hydroelectricity). It is estimated that more than 30,000 ha of forest land are logged annually, with an annual log harvest of some 425,000 m3. Although a temporary ban on new logging concessions was introduced in 1990, the rate of logging does not seem to have slowed down significantly.

2. Impact from the bombing campaign inflicted on Lao during the Vietnam War (1964-1973). This caused not only significant direct damage to forest and land, but also the displacement of many communities, leading to the disruption of traditional land use systems and resulting in many land use conflicts between communities.

3. Slash and burn. The pressure of a growing population and the shortage of lowland areas over recent decades has led to more intense slash and burn cultivation in upland and highland areas, with shorter fallow periods, soil degradation and increased pressure on forests.

Developing long term and sustainable natural resource management strategies for the country is therefore a priority for the Lao government. The Ministry of Agriculture and Forestry (MAF) has been given the main responsibility for developing and implementing appropriate policies and approaches aimed at protecting and managing land, forest and water resources. Some of the key elements of the current government policy include:

In developing a legal and institutional framework for forest management, the Lao Government seems to be making sincere efforts to ensure that rights of local communities are recognized and protected. This is very encouraging, and several NGOs are working closely with the Ministry of Agriculture and Forestry to implement activities aimed at supporting community forestry and other forms of community-based natural resource management.


NGOs have been involved in Lao since early 1980 with a few organizations such as CIDSE, QUAKERS, MCC, etc. At present there are more than thirty NGOs. The NGOs work closely with the Government in order to solve difficulties in rural areas, e.g. rice shortage, clean water, animal disease, health, income generation, education, slash & burn cultivation, etc.

NGOs aim to:

NGOs play an important role at grassroots levels, as well as at a policy making level in Lao. NGOs support small projects at district and village levels in order to empower local people to be able to help themselves and to be self reliant.

Many activities have been implemented successfully at grassroots levels, i.e. rice banks, cow and buffalo banks, chicken raising, weaving, fruit tree plantation, land clearing for permanent lowland rice fields, water supply, primary health care, adult education, soil improvement by using low external input, botanical pesticides, small scale irrigation, training, etc. Projects start from the needs of the people, and increase from small to larger scale activities, which are environmentally sound and sustainable, with the use of appropriate technology which villagers are able to manage by themselves. NGOs promote villagers to implement rural credit activities by applying many techniques for enabling villagers to be able to handle the activities by themselves, e.g. training and establishing a revolving fund for chicken raising for a women’s group. NGOs work with poor and marginalized people in order to provide them with opportunities to gain benefits from their society.


The Sustainable Agriculture Forum

The Sustainable Agriculture Forum (SAF) is an autonomous coalition of international non-government organizations (NGOs) and Lao development workers who are promoting sustainable agriculture, community forestry and other environmentally sound and participatory approaches to rural development in Lao. SAF was founded in March 1991 by a group of Lao development workers employed by international NGOs who have programmes in rural development in the country. SAF is affiliated with the South East Asian Sustainable Agriculture Network (SEASAN), and is informally connected to several other regional networks and coalitions. Most of the forest related activities supported and implemented by NGOs have been coordinated through SAF.

National Community Forest Workshop

In the middle of 1991, discussions started between the Department of Forestry (DoF) and the Sustainable Agriculture Forum about how NGOs could support the development of community forestry in Lao. Following those discussions, a major workshop on community forestry was held in Vientiane in January 1992, organized jointly by SAF and DoF, and supported by the CUSO/Canada Fund. The main objective of this workshop was to identify needs in relation to implementing effective community forestry in Lao, to formulate strategies for meeting those needs, and strengthen information exchanges for its promotion.

Participants numbered more than 100, and comprised representatives of the various ministries of the GOL (including DoF personnel from the central, provincial and district levels), NGOs and other international development agencies active in the field of forestry and rural development. The workshop strongly endorsed the need to support community forestry in Lao. A major constraints identified by the workshop, however, was the lack of documented information about traditional and existing systems of community forestry in Lao, and the lack of understanding about the concept of community forestry among DoF personnel, both at the central and field level.

Information Collecting on Traditional Community Forest Systems

As a direct outcome from this first workshop, DoF and SAF worked together to plan and organize a training programme (also funded by CUSO and the Canada Fund) for DoF and NGO personnel on using participatory rural appraisal (PRA) techniques for collecting information on existing community-based models of forest management throughout the country. TERRA (Towards Ecological Recovery and Regional Alliances, a regional environmental NGO based in Thailand) assisted in planning and designing this programme. The first of the two training work-shops took place in July 1992, with participants from 13 provinces. The workshop was facilitated by four trainers from Thailand with extensive experience in community forestry and PRA.

The participants from this first workshop then carried out detailed PRA surveys in at least two villages in their province and prepared reports and case studies based on these surveys (where possible NGOs with projects in those provinces were able to provide assistance and support to this process).

The second workshop, held in February 1993, brought together the same participants to discuss, analyze and synthesize the process and content of these survey reports in order to more clearly identify key constraints and opportunities for extending and implementing community forestry, both at the provincial and national level. During the last two days of this workshop, a larger group of people were invited to participate (from DoF, MAF, other ministries and government agencies and international organizations with rural development activities) to present some of the findings of the information collecting process, and to discuss strategies for future cooperation.

The Community Forestry Support Project (CFSP)

In order to follow up on the activities described above and provide on-going support to community forestry activities throughout the country, a Community Forestry Support Project (CFSP) is being implemented jointly by DoF and participating NGOs (with the National Plantations Division and CUSO as lead agencies). The main objectives of this project are:

The project includes the establishment of a Community Forest Support Unit within the National Plantations Division of the Department of Forestry, and a pool of funds to support initiatives proposed by local communities and provincial and district level forestry officials. The project is supervised and monitored by an advisory committee made up of representatives from DoF, MAF and SAF members.


Reforestation and plantation activities in Lao have so far been quite limited. According to DoF figures a total of not more than 6,500 ha have been reforested, mostly with indigenous hardwood species. Survival rates of planted trees have been quite low. In recent years, however, a small but growing area of plantations using fast growing tree species, especially Eucalyptus spp., have been established by the private sector. The private sector, in cooperation with multilateral financial institutions such as the Asian Development Bank (ADB), are currently promoting the rapid development and expansion of such commercial plantation activities.

Plantation activities implemented by the private sector take place both on farmers’ land and on “unstocked degraded forest land” identified by the government as suitable for plantation activities. Participating farmers are often provided with credit to purchase necessary inputs. The main market for eucalypt is the pulp wood industry in Thailand. Two main companies promoting eucalypt in Lao are Burapha and Asia Tech. The main purchaser at present is the Phoenix Pulp and Paper Company in Khon Kaen city, Thailand. Within the Department of Forestry, the National Plantations Division is responsible for planning, coordinating, monitoring and regulating plantation activities.

A major rationale for developing commercial fast growing tree plantations is to “... bring into productive use unstocked and barren forest lands and offer a alternative source of raw wood materials which would reduce the pressure on natural forests...” (ADB Industrial Tree Plantations Project Summary, 1993).

Large areas of supposedly “unstocked” land have been identified as potentially suitable for plantation activities. In the provinces of Boulikhamsai, Khammouane, Savannakhet, Vientiane and Vientiane Prefecture a total of more than 120,000 ha have been identified as potential plantation areas.

NGOs recognize that commercial tree growing activities, if developed slowly, carefully and on a limited scale, have the potential to provide a long term source of income for both farmers and the government. Initiatives aimed at strengthening the institutional and technical capacity of the Lao government in this area are therefore worthy of support.

Nonetheless, commercial tree growing is also fraught with risk, especially when implemented on a large scale using fast growing tree species. The experiences in other part of the region, not least in neighbouring Thailand, have shown how plantation activities often result in both environmental degradation and the displacement of resource poor farmers, with benefits mostly flowing to private sector interests.

There are many widely held concerns about the many commercial plantation activities currently being promoted by the private sector and the ADB, especially relating to the lack of adequate safeguards for ensuring that local villagers are not disadvantaged by these activities. Some of the main concern about plantation activities that have been voiced by government officials, NGOs, academics and environmentalists include:

1. “Unstocked” Land and Rights of Local Communities: Proponents of plantation activities often argue that only degraded and “unstocked” land will be used to establish plantations. What is really meant by this? From most accounts, it seems clear that most deforested land in the country is in fact presently utilized by local villagers one way or another (e.g. grazing, shifting cultivation, firewood collection etc.) The fact that these areas are not covered by any official land tenure should not be taken to mean that the land is not being used by local people. It is also worth remembering that fast growing tree species grow faster on good soils than poor soils. What safeguards exist to ensure that plantation activities, especially those implemented by the private sector, will not cause local farmers to be displaced from productive land areas?

2. Private sector emphasis: The private sector does not have a good record in terms of ensuring that their activities do not have a detrimental social and environmental impact, and DoF does not presently have sufficient capacity to adequately monitor and control their activities. Lao rural communities have only limited experience in dealing with commercial activities and private companies, and there is a very real risk that villagers will be exploited and/or displaced, especially in the case of any land use conflicts that may arise out of plantation activities.

3. Rural Credit: Experiences from Thailand and other countries in the region clearly show that rural credit programmes tied to the promotion of a particular cash crop have often resulted in a long term cycle of debt and marginalization, especially among resource poor farmers. The entire risk burden of the enterprise is placed on the farmers. (To minimize risks and maximize incentives for farmers, one potential model is for farmers to pay back the loan as a fixed percentage of their actual in kind production output. If the plantation fails, or produces less than predicted, then the farmer will not be under pressure to finance the loan from other sources).

4. Impact on Women: Experiences from plantation projects in Vietnam have not been positive in this regard, where women have often had to carry the major burden of the work involved, while receiving little benefit or recognition. Plantation activities, with their emphasis on production, can contribute to further marginalization the value of reproductive work done by women, with resulting negative impact on the health and nutritional status of rural families. This risk is especially high when loans are involved, and direct financial returns from the plantation activities will take a long time.

5. Environmental Impact and Biodiversity: The environmental impact of planting large areas of Eucalyptus spp. is a serious concern. It is widely recognized that eucalypt plantations can have long term detriment effects on soils, and can contribute to lowering the water table. Eucalypt trees are very hardy, but also very thirsty. Areas which have been used for growing eucalypt are difficult to reclaim for other crops. Apart from the specific problems associated with eucalypt, any monoculture system is not ecologically sustainable.

6. Community Forestry: Community forestry is concerned with regeneration and protection of forests that are the source of spiritual, cultural, practical and economic value to local communities. Although fast growing tree species may be a potentially suitable cash crop for farmers in certain situations, commercial plantation activities should not be confused with community forestry.

Given the largely subsistence nature of the Lao rural economy, and the lack of experience with commercial plantation activities, both at government and farm level, the need for a gradual and careful approach in promoting fast growing tree species such as Eucalyptus cannot be over-emphasized. Unless plantation activities are developed as part of a rational and farmer-based process of resource management and planning, there is a very real risk that local communities will be displaced, causing additional pressure on existing forest resources.


The following points emerged as conclusions and/or resolutions from the workshops and training on community forestry described above.



Savannakhet Province, Lao - K. Oupravanh, CIDSE

Data was compiled of villager attitudes to planting Eucalyptus to share this information with other participants. In Lao, there are few people growing Eucalyptus, and precise and comparative data are not readily available.

Information was obtained from Mr. Nouphai, a eucalypt grower, during a recent visit to one of the CIDSE projects in Savannakhet, the southern province of Lao. The following are questions posed, with answers, as indicative of the attitude of a eucalypt grower in Lao:

Q: Why did you grow Eucalyptus?

A: It grows faster, in only four years you can sell and it is easy to take care of.

Q: When did you start to grow Eucalyptus?

A: Since 1990 (nearly three years ago). I started with 0.5 ha in Km 12 and in Keng Kabau (40 km from Savannakhet). I planned that it should be near the town and the road in order to be easy for transportation.

Q: Where did you get seed?

A: I got seedlings from the Government forest nursery.

Q: What is your plan?

A: This year (1993), I grow about 10 ha more and in 1994, I will grow another 100 ha or more than that.

Q: Do you grow monoculture?

A: Yes, but I plan also to grow peanut plants to solve weed problems and also to improve soil fertility.

Q: Is it true that the Eucalyptus can grow in bad soil?

A: Yes, it is also one reason why I am interested in growing Eucalyptus.

Q: What is the quality of the soil of your two plots?

A: It is not bad soil.

Q: What do you mean by that?

A: It is good in that this soil could also grow rice and other crops.

Q: Why don’t you use it for growing rice or other crops?

A: If there is the market for them, I am interested to grow others crops, too. However, for my Eucalyptus, Buarapha (a trading and consultant company) has guaranteed the price with me (450 Baht/m3) and I have also planned to buy seeds from them.

Q: Why don’t you grow it in bad soil rather than in good soil?

A: Because I do business, I would like to be sure of the results that I get. If I lose who will compensate me ? I use also chemical fertilizer (350 kg of 15.15.15/ha; 200 gr/hole).

Q: Do you think that others will grow in bad soil?

A: I don’t think so. For example, one company came to my province this year to start the project growing Eucalyptus. The company cleared jungle of 50 ha for growing it. It is 5 km near to the main road. I am not surprised that they choose to grow there. It appears that when an official comes to promote intensive rice cultivation, he will select those who have the best plot in the village but never select the bad one.

Q: Could you tell me if you have any problems growing Eucalyptus?

A: I use chemical pesticide to kill grasshoppers, termites, etc. when it is young. Eucalyptus need a lot of water. During the dry season I experiment also. I watered a tamarind tree and eucalyptus tree. I found eucalyptus absorb twice as much water as tamarind. I am concerned also that in the next year if I expand my area, I will have to look for more water resources.

Supplemental Paper

[The Japan International Volunteer Center (JVC), Lao, supports the above report and requests that its own considerations of the issues be appended as follows.]

Eucalyptus Plantations in Lao, PDR

Japan International Volunteer Center (JVC), Lao


Commercial plantations of fast growing trees, including eucalypts, have been promoted in Lao in cooperation with developed countries. Some 3,200 ha of eucalypt have been established and this will be doubled in the near future; the product will be exported to a private pulp and paper company in Thailand. Additional expansion is in train. Existing experience in Lao in plantations is considered of marginal level. Some NGOs, e.g. JVC, are concerned and consider that such plantations proceed with caution; rights of village people need careful consideration. Development programmes need assessment of: affected communities, soil qualities, environmental effect, etc. Such impact be also studied in adjacent countries; this information must be supplied to local communities for their consideration.

Key words: Eucalyptus, Lao, plantations, environment, community involvement.


Commercial plantation activities of fast growing trees, especially Eucalyptus spp. in Laos have been promoted by the private sector in cooperation with developed countries.

Burapha (Swedish-Lao joint venture Company), and some companies have started agro-industries in Lao, as commercial tree plantation activities. Burapha has already established 20,000 rai (3,200 ha) of eucalypt plantations and is going to expand this area immediately to 40,000 rai and eventually to 100,000 rai. Additionally, an Asian Development Bank loan to the Government of Laos is expected to cover part of the investment of Burapha. Phoenix Pulp and Paper Company, Khon Kaen city, Thailand, will purchase all Burapha’s eucalypts output (The Nation, 4 June 1993).

Land Use Decree No. 99 of Lao PDR issued in December 1992 addresses the land use right to an extent, by ensuring availability of land, both to farmers and commercial enterprises, for industrial tree plantations. Its implementation may be difficult (ADB, Industrial Tree Plantation Project Summary, April 1993).

In fact, the lack of experience and knowledge for promoting fast growing trees, such as eucalypt plantations is recognized in Lao, both at the Government and local people level. More-over, the ADB project and some commercial plantation activities refer to this marginal experience in fast growing trees. The Lao villagers still keep their traditional life style with community forest, that is to say, they live relying on natural resources. They do not have a habit of growing industrial plantations of fast growing trees, even as cash crops. Therefore, it is doubtful that industrial plantation projects can protect and manage the local rights of farmers. NGOs in Lao suggest that such commercial plantation projects should be promoted slowly and carefully.

FAO mentions in the booklet “The Eucalypt Dilemma” that it would be unwise to grow eucalypt if this were not the most beneficial land use for the local people. From this point, there are cases in Laos where it may not be an appropriate area to introduce eucalypt plantations.

If the industrial eucalypt plantation projects are established in unstocked areas as stated by the ADB proposal, the ADB should survey and assess the soil situation and establish eucalypt adaptation trials. The impact on the community and the effect of eucalypt plantations on the environment of the surrounding area, including other countries along the Mekong River, should be studied before the implementation of the Project. FAO’s booklet also suggests that “in some areas eucalypts will not be appropriate; in some areas eucalypt plantation will be very useful”.

For this reason, any company, international organization or developed country supporting projected plantations of these controversial species should implement detailed surveys not only on the soil problems but also spend considerable time studying the effects on the community. Reforestation and plantation of fast growing trees have been established since the later 1980’s in Lao; however, most of local people have little information of the pros and cons of eucalypts. Enough time should be given for discussions among the various administration levels and villagers concerning plantations of fast growing trees, especially eucalypts.

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