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National forest products statistics, Lao PDR

 

Introduction

The Lao People’s Democratic Republic (Lao PDR) is located in central Indochina between 13º 50’-22º 30’ North and 100º 10’-107º 40’ East. The total land area is 236 800 km2 and borders are shared with China, Myanmar, Thailand, Cambodia and Viet Nam and. Elevation ranges from 80 m above sea level in the extreme south, where the Mekong River leaves the country, to 2 820 m at Phoubia Mountain in Xiangkhuang Province; 79 percent of the country is regarded as mountainous. The Mekong River enters Lao PDR from China in the northwest where the borders with Myanmar and Thailand meet and then flows east to Luangpabang and south to the region bordering Thailand, Viet Nam and Cambodia. The population in 1998 was estimated at 5.2 million with an annual increase of 2.7 percent and a population density of 22 people per km2.

The climate is dominated by the monsoon and, as such, has pronounced wet and dry seasons. The rainy season lasts from May to September when the prevailing wind is from the southwest. Average annual rainfall varies between 1 000 mm in the north to 3 000 mm in the South. The dry season which runs between October and April is characterised by winds from the northeast. Daily mean temperatures range from 10º C in January to 38º C in July with the north of the country generally cooler than the south. Lowland areas are classified as tropical, whilst the higher elevations and mountainous areas in the north are considered sub-tropical.

Lao PDR is highly dependent on forest products due to its low population density and high forest cover (Foppes and Ketphanh, 2000). Forest products serve a wide range of subsistence needs and provide opportunities for income generation. More than 500 plants and animal products are reported to be used. Forestry is also the second largest economic sector, after agriculture, and a crucial source of export income. Several provinces are highly dependent on forestry revenues and more than 10 percent of the population are employed in the forestry sector, there being few other sources of industrial development. There are good development opportunities in forestry as Lao timber species are well known, and in high demand. The investment climate is also favourable owing to low wages and the existence of many valuable non-timber forest products attractive to export markets.

Laos is aware that its natural resources have been in decline over the years as a result of increasing populations, the expansion of settlements, subsistence agriculture in natural forest areas, forest fire and unsound logging practices. Owing to extensive upland agriculture (slash and burn), substantial land areas have been degraded in Lao PDR and with population growth more land has been required for food production, which has meant conversion of forestlands for agriculture. National development efforts also require resources such as timber and in addition tree clearance has been necessary for hydropower plant construction.

Forest resources

With respect to natural forests, Lao PDR was considered one of the best endowed of the South East Asia countries. The forests are of great importance due to their contribution to socio-economic development, and therefore require proper management. The Lao government is now staging efforts to protect the remaining forests in order to maintain an ecological balance in the nation’s natural resources. Forest law provides a clear definition of forest which stipulates that the Lao Government may designate forestlands as either (i) Protection forest, (ii) Conservation forest, (iii) Production forest, (iv) Regeneration forest or (v) Degraded forest.

Forest cover has recently been estimated at 47 percent, with an area of about 11.1 million ha. Of the total forest cover 35 percent is mixed deciduous forest, 5 percent dipterocarp forest and 5 percent dry evergreen forest; the remaining area is coniferous and mixed coniferous forest (Table 1). The low and medium altitude forests (100-500 m above sea level) contain hardwood tree species of commercial value in the Dipterocarpaceae and Leguminoseae families including Dipterocarpus spp., Pterocarpus spp. and Lagerstromia spp.. At higher levels broad-leaved species and tropical pines, such as Araucaria cunningamia, occur. There are also a wide range of non-timber forest products including bamboos, rattans, cardamoms, benzoin, latex, bark resin and gum and the forests provide a home to a variety of birds, reptiles, amphibians and other fauna.

Table 1. Forest types in Lao PDR

Forest type

Area (ha)

Evergreen forest

3 400 000

Mixed deciduous forest

5 680 000

Deciduous forest

1 600 000

Other

480 000

Total

11 160 000

The challenge to the forestry sector

The potential impacts of economic and social changes in Lao PDR and neighbouring countries and the effects of regional integration on Lao forests and forestry are difficult to predict owing to the number of unknown factors involved. In general it is likely that more forestlands will be converted to other land use types, especially agriculture and rice paddy, required for subsistence of the increasing population. Furthermore, roads and reservoirs will be constructed in forest areas as part of the country’s development programme. The magnitude of forest loss is difficult to predict, however, it is likely that conversion to agriculture land will be commensurate with population increase.

Policy and strategy development

The Lao government has laid down forest policy and guidelines that include the following provisions:

To fulfil the strategy to 2000, Lao PDR developed a Tropical Forest Actions Plan (TFAP) in 1990, which was endorsed by the Lao government in 1991.

Forestry-related laws

The Lao government has issued many decrees in relation to natural resource utilisation, which were enacted in 1996 as forest law. Many copies of the forest law have published and distributed. Various regulations and technical guideline were drafted by the Department of Forestry including the following:

Forest land-use planning and land allocation

Under land use planning practice, land for different uses is allocated to villagers, households or communities. Allocation is a participatory process in which villagers make the decisions on how land should be used. Following indication of the boundaries of allocated lands, land tenure certificates, prepared by the land allocation committee, are issued to applicants.

Shifting cultivation stabilisation

The Lao government places high priority on reducing/stabilising shifting cultivation to protect forest resources and the natural environment. One of the 8 priority programmes of the government is to protect natural resources whilst increasing living standard of rural people. Bilateral donors have supported many experiments concerning shifting cultivation stabilisation, which have utilised many different methods. Moves are currently being made to limit agricultural production to flat areas.

Wood products supply

Timber harvesting in Lao PDR uses a quota system based on Provincial Forest Management Plans and Infrastructure Development Programmes. The Ministry of Agriculture and Forestry and the Department of Forestry are responsible for summarising the logging plans of all provinces in the country. A nationwide Annual Logging Plan is formulated from the individual provincial plans and submitted to The Prime Minister’s Office for consideration and approval. Quotas are then sent to the provinces prior to the beginning of the harvesting season.

Logging takes place in the dry season, which normally runs between November and late May. The provincial government allocates the quota received from central government to the wood processing enterprises in each province and shares are also allocated to one of the three national state owned enterprises. During the 1997/98 logging season, harvest quotas were mainly from dam construction areas, (e.g. Nam Theun Dam, Nam Ngum Dam, Nam Leuk Dam Xe Nam Noi Dam and Xepian Dam) although harvesting also took place in other project areas and production forests. Wood products have also recently been supplied from plantation grown trees such as Teak and Eucalyptus. The major companies engaged in logging are the state forest enterprises and foreign companies involved in joint ventures with the Lao government.

The demand for wood products within and outside Lao PDR is currently increasing rapidly. Wood products provided by the forestry sector include lumber, furniture, doors, parquet flooring and poles. Most houses in urban areas are now built with bricks although wooden houses still dominate in rural areas and a large proportion of production serves to meet increasing demands associated with construction. The increase is resulting in heightened demand for doors, flooring, furniture and other household items.

In 2000, the forestry sector contributed 5 percent to GDP. However, this figure does not include the contribution of the wood-processing industry, which is accounted for under the industry sector, or values associated with subsistence use of logs for house construction or other purposes. The growth of the forestry sector’s share, from 3.4 percent in 1990, reflects the increase in logs production from 300 000 m3 in 1990 to 734 000 m3 in 1999. The share is expected to reduce in size in the future due to planned harvesting reductions.

The wood industry

Forest related industry constitutes a significant part of the Lao economy and within the timber industry saw milling is the largest sub-sector. Furniture factories in Lao PDR mostly serve domestic markets and mainly produce household furniture using species such as May Dou, May Tekha, Rosewood and Teak. According to the Order of The Prime’s Minister Office No. 10/PM of 4 October 2000, concerning forest management and wood industries, there were 1 164 wood processing factories in the country (Table 2). Due to overcapacity some revision is needed in the sector to adjust the number of industries to match raw material supply. Two factories, located in Xaisomboun special region, were established in 1995-96 with government permission. There are two plywood mills in the country, the Bolisad Phathana Ket Phoudoi plywood mill in Khammouane Province and Huang Fat Hong Lao plywood mill, which although situated in Vientiane Province acquires timber from Bolikhamxay Province.

Table 2. Forest products processing factories in Lao PDR

Type of installation

Number

Sawmill

161

Factory producing finished wood products

11

Bamboo factory

2

Furniture factory

954

Factory producing finished rattan products

4

Agar wood factory

10

Plywood factory

2

Source: Donor meeting 1998, Savannakhet Province

Forest products data collection

Collection of information on production and export of forest products is a duty of the Department of Forestry. DOF embraces concerns such as sustainable management of forests and ecosystems and sustainable use of forest products. Collection of forest products statistics not only assists the Department of Forestry in management planning and providing other organisations with information for forest related development but also contributes to Lao PDR’s over-arching concern with poverty alleviation as detailed in the current five year programme.

As yet, there is no forest sector information system in Lao PDR. Consequently, the quality of existing data on forest resources and production and consumption of wood products, including industrial products is not highly reliable. Time series data is only available for select variables such as import and export of products from wood-based industries.

This study included desk-based research, interviews and workshops and was carried out by the Division of Planning in the Department of Forestry. To gather information, the team organised workshops within each Provincial Forestry Office and each international border checkpoint. Workshops were also conducted centrally with the Customs Department and other organisation concerned with timber trade and small meetings were held with a wide range of institutions, including:

The FAO questionnaires were used to gather data, but in many cases there were no records at all or records were damaged through the passage of time or as a result of termite attack. It was also found that forest products data collecting agencies frequently refer to Department of Forestry data. It was therefore difficult for the team to consolidate data for review. Comparison of data with those produced by FAO was done using information from the Planning and Cooperation Division within the Department of Forestry. Other older information is available in the Department of Forestry library but it was not easy for the team to access accurate information.

Agencies involved in wood products data collection

Agencies involved in wood products data collection include the following:

Ministry of Agriculture and Forestry

Available forest products data

This section details available forest products production and export data. Although many attempts have been made to collect a more c omplete set of national forest products data the objective has not yet been fully achieved. Therefore some data have been estimated, particularly for the period between 1990 and 2000.

Fuelwood consumption

Data on fuelwood consumption in Lao PDR is not complete or accurate, figures for 1990-1994 are shown in Table 3. Utilisation of wood for energy causes forest degradation both directly and indirectly. However, fuelwood is an important income-generating commodity for slash and burn farmers. Fuelwood and charcoal may be used for both household consumption and for income generation through collection and sale. There are no records of export of fuelwood or charcoal.

Table 3. Woodfuel consumption 1990-1994 (including wood for charcoal)

Year

Consumption (tonnes)

1990

917.29

1991

980.75

1992

924.43

1993

979.60

1994

1,070.40

Total

3 872.47

Source: Department of Forestry 1997

Production data

Log production volumes increased from 331 220 m3 in 1990 to 594 930 m3 in 1994 and then remained steady at 560 000 m3 between 1996 and 1998 (Table 4). Volumes have since been decreasing as a result of the 1998 Asian economic crisis. The main sources of logs are infrastructure development sites such as dam construction areas and tracts of land cleared for hydropower transmission lines or roads. The main wood products consumed domestically are charcoal, poles and firewood. There are no pulp and paper factories in Lao PDR.

Table 4. Industrial roundwood production

Year

Volume (m3)

1990

331 220

1991

408 290

1992

210 890

1993

516 000

1994

594 930

1995

543 246

1996

583 814

1997

495 332

1998

465 400

1999

523 300

2000

434 838

Total

5 109 260

Source: Annual Forestry Department Report

Export data

Although log export is banned, some companies operate to supply various processing factories as authorised by government quotas. Over the last four years 16 percent of government tax revenues have been from log royalties and log sales are an important source of revenue for many provinces. Wood products account for approximately 40 percent of total exports by value. With respect to trade in timber, the most important export products were logs, sawnwood, stumps, parquet flooring, plywood and a ranch of semi-finished products and finished products. Due to the Asian economic crisis log exports have been well below planned levels and domestic wood consumption has also dropped due to price increases resulting from devaluation of the Kip.

The total revenue from wood products in Lao PDR between 1990 and 2000 is estimated at US$279 million (Table 5). The main exports were logs followed by sawnwood, finished products such furniture, flooring and photo frames and stumps. Plywood has also contributed significantly to export earnings. Between 1990 and 2000 the export value of sawnwood and processed wood products amounted to US$9.5 million and log export value totalled US$37.2 million. The major export markets were Thailand, China, Taiwan, Japan and France. Each year, revenue from export of wood products totals approximately 30 percent of national foreign currency earnings and various non-wood forest products are also exported. The country is in desperate need of these export revenues for both import purchase and domestic investment.

Table 5. Estimated total wood-products income, 1990-2000

Income source

Income (US$)

Lowland log sales

232 679 280

Log export

37 200 000

Processed wood export

9 500 000

Total

279 579 280

Source: Forestry Sector Strategy for 1993-2000.

The following tables detail wood products export for Lao PDR between 1990 and 2000. The team tried to collate these data and compare them with the other sources collected but found that some data were not available, especially value figures between 1996 and 2000. Value data, where not available, were therefore estimated on the basis of export volume and average unit prices for the products concerned.

Table 6. Quantity and value of log exports, 1990-2000

Year

Volume (m3)

Value (US$)

Data source

1990

39 200

3 456 000

Donor meeting 1998

1991

23 200

3 003 000

Donor meeting 1998

1992

34 200

9 500 000

Donor meeting 1998

1993

32 100

7 500 000

Donor meeting 1998

1994

53 200

11 800 000

Donor meeting 1998

1995

130 500

30 700 000

Donor meeting 1998

1996

313 000

-

Department of Custom and Electrical Enterprise of Lao

1997

68 000

-

Department of Custom and Electrical Enterprise of Lao

1998

77 000

-

Department of Custom and Electrical Enterprise of Lao

1999

17 000

-

Department of Custom and Electrical Enterprise of Lao

2000

156 783

13 033 572

Department of Custom and Electrical Enterprise of Lao

Table 7. Quantity and value of non-coniferous sawnwood exports, 1990-1999

Year

Volume (m3)

Value (US$)

Data source

1990

100 000

17 028 000

Donor meeting 1998

1991

286 000

32 796 000

Donor meeting 1998

1992

121 000

81 300

Donor meeting 1998

1993

128 000

31 100 000

Donor meeting 1998

1994

159 000

30 000 000

Donor meeting 1998

1995

166 000

31 200 000

Donor meeting 1998

1996

102 000

-

Basic statistics of the Lao PDR

1997

173 000

-

Basic statistics of the Lao PDR

1998

69 000

-

Basic statistics of the Lao PDR

1999

1 346 000

-

Basic statistics of the Lao PDR

Table 8. Quantity and value of plywood exports (non-coniferous and coniferous), 1990-2000

Year

Quantity

(millions sheets)

Value

(millions US$)

Data source

1990

1 004

247

Donor meeting 1998

1991

553

175

Donor meeting 1998

1992

198

81.3

Donor meeting 1998

1993

185

92.8

Donor meeting 1998

1994

5 104

1 483

Donor meeting 1998

1995

1 434

-

Department of Custom and Electrical Enterprise of Lao

1996

1 461

3 344

Department of Custom and Electrical Enterprise of Lao

1997

1 125

-

Department of Custom and Electrical Enterprise of Lao

1998

39

-

Department of Custom and Electrical Enterprise of Lao

1999

341

-

Department of Custom and Electrical Enterprise of Lao

2000

729

1 933

Department of Forestry (6/7/2000)

Table 9. Quantity of parquet flooring (non-coniferous) exports, 1990-2001

Year

Quantity (m2)

Data source

1990

417 000

Department of Custom and Electrical Enterprise of Lao

1991

-

1992

-

1993

-

1994

-

1995

220 000

Department of Custom and Electrical Enterprise of Lao

1996

-

1997

-

1998

3 816 650

Department of Custom and Electrical Enterprise of Lao

1999

283 155

Department of Custom and Electrical Enterprise of Lao

2000

167 254

Department of Custom and Electrical Enterprise of Lao

2001

196 278

Department of Custom and Electrical Enterprise of Lao

The Chai Seng Wood Products Company in Vientiane Province exports many finished wood products, items include photo and picture frames, tea light holders, stands, trays, vases, boxes, mouldings and shelves. The company began producing photo frames for export in 1995. Quantities of timber consumed by the company and the export value of finished products and photo frames from the company are summarised in Table 10.

Table 10. Timber consumption and exports value, 1995-2001

Year

Consumption (m3)

Value (US$)

1995

251

113 280

1996

524

202 947

1997

440

181 793

1998

693

253 866

1999

883

386 752

2000

987

380 235

2001

803

350 620

Total

4 591

1 769 494

Source: Chai Sang Wood Products Company Vientiane Municipality

Weaknesses and constraints in current statistical system

The current statistical system suffers due to delays in submission of statistical reports by the Provinces to the Department of Forestry. The Department of Forestry is approached by different organisations requesting data for particular purposes, however, there is often insufficient information to provide for their needs.

Dissemination of information to related agencies is time consuming due to the need for preparation of reports from the information sent by each province, which may take two weeks.

Recommendations to improve the forest products statistical system

Forest products statistics collected under the present organisational structure in the Department of Forestry are much appreciated. The working methods have promoted responsibility, transparency and sustainability. With respect to the future, the development of statistical systems and data collection methods for forest products in Laos is of key importance. To improve the national forest products statistical system the following changes are recommended:

An information system should be established.

References

Annual Reports of the Department of Forestry

Basic statistics of the Lao PDR, 1995-2000.

Lao-Thai border checkpoint official communication, 16 December 2001.

Lao-Thai border checkpoint official communication, 12 February 2001.

Lao-Vietnam border checkpoint official communication, 17 December 2001.

Official communication with head of provincial forestry office, Savannakhet, 15 December 2001.

Official communication with head of provincial forestry office, Champasack, 11 February 2001.

Official communication with head of provincial forestry office, Sayabuly, 16 February 2002.

Kenthao border checkpoint official communication, 18 February 2002.

Report on 4th Donor meeting, 1998, Lao PDR.

World Bank (1998) Technical note IDA Supervision Mission.

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