Economic Valuation of Land Uses in Oudomxay Province, Lao PDR: Can REDD+ be Effective in Maintaining Forests?
2. Land Use and Socio-Economic Context of the Study Region
|Household Characteristic||Unit||Rubber||Maize||Upland Rice||NTFP|
|Number of households surveyed||number||37||35||30||36|
|Average family size||person||8||7.54||6.53||6.67|
|Average income per capita||USD||157||351||104||205|
|Household head’s education|
|Less than primary school||percent||32||48||30||17|
|Higher than primary school||percent||33||23||53||50|
|Average household crop land holding||ha||2.55||1.61||1.71||-|
|Agriculture land use in study villages are converted from:||ha||92.5||46.3||286.6||-|
|Old upland rice farming area||ha||32.7||14.9||-||-|
2.1. Research Question
- Is the development of commercial agriculture an effective strategy for reducing rural poverty?
- How are gains and losses of ecosystem services factored in rational decision-making on land use practices?
- Can incentives such as REDD+ be an effective mechanism for supporting sustainable livelihoods and maintaining forests?
2.2. Analytical Framework
|Land Use Practice, L||Production Cycle||Description|
|Maize||Annual crop||Maize plantations have dramatically expanded in northern Lao PDR, and Oudomxay province is the second largest producer in the country with much of the crops exported to China. The Provincial Agriculture and Forestry Department has promoted maize amongst local farmers, and expansion of maize farms is largely from conversion of production and fallow forests . Maize is mostly grown in the mountainous regions and slopes, causing soil erosion in many areas. Maize is also a highly soil-depleting crop and farmers commonly reported that harvests begin to decline drastically after year 5. Local maize farming practice is heavily dependent on chemical herbicides and, typically used unchecked, has led to soil degradation, water contamination, farmer illnesses, and death of livestock and fisheries.|
|Rubber (self-financed and 2 + 3 contract farming models)||30 year cycle, with production of latex starting at year 7||The emergence of rubber is driven by both policy and investor interests. The main arrangement in rubber plantations is through a ‘2+3’ contract model where farmers provide land and labour, and the plantation company provides capital (in the form of seedlings, fertilizer and other equipment), technology and access to markets. When the trees become productive in 7 years, revenues from sale of latex are shared according to conditions set in the initial contract—usually 60% to farmers and 40% to the company . There are also instances where farmers with relevant knowledge (e.g., villagers located close to borders with China and Thailand and who have worked on rubber farms in these countries), capital and agency (e.g., farmers’ groups) can negotiate better arrangements that limit the role of investors or even resist their offers if they have already secured market access (as documented in ). Both scenarios of a self-financed and 2 + 3 contract farming rubber land use systems are modeled here. Due to the region’s geography, rubber plantations have expanded into uplands and hill slopes, increasing soil erosion risks, and use of chemical herbicides have also caused local health issues.|
|Upland rice swidden||Rotational annual crops, with fallow periods ranging from 3 to 7 years||Upland rice swiddens are normally practiced on a rotational basis moving from plot to plot within the same landscape after a certain fallow period. While generally considered to be environmentally sustainable, rotational swiddens do require extensive land area. This is the predominant traditional farming system in the northern uplands of Lao PDR. Pressures from national policies  and expanding maize and rubber plantations are shortening fallow cycles and impacting the productivity, biodiversity and ecosystem services from this land use system [12,13]. Communities in the northern uplands actively cultivate in the fallow lands and also depend on the fallow forests for wide variety of forest foods and non-timber products [4,10]. In the study region, expanding maize and rubber plantations have generally come at the expense of old fallow and secondary forests.|
|Forest/NTFP (with and without REDD+ incentives)||Daily and seasonal activity||Collection of NTFPs is a traditional practice throughout rural Lao PDR for cash incomes and subsistence needs. Forest use includes harvesting wild products for food and sale at local markets, medicines, fodder, house construction and handicrafts production. Forest food contributes substantively to rural household diets, both in terms of diversity and weight, up to 80% of non-rice food consumption and between 30% to 50% of protein consumption. NTFPs are estimated to have an annual direct use value of between US$313–525 per household in Lao PDR [14,15]. REDD+ incentives could also target swidden systems in addition to forests, towards lengthening fallow periods and increasing carbon stocks in fallow forests, and also co-benefits of biodiversity and other ecosystem services [4,12]. For simplification and due to lack of detailed information on the economics of rotational swidden patterns across the entire landscape, the study assumes that REDD+ incentives are applicable only to forest land use. In this way, we compare the profitability to households in converting forest to the other land uses (upland rice swidden, maize and rubber) versus maintaining the forest for REDD+ and NTFPs.|
|Mean total costs||USD/ha||705||544||543||55|
|Input costs (seeds and equipment)||USD/ha||33||100||82||9|
|Environmental health costs||USD/ha||0||72||3||0|
|Average crop yield||kg/ha||874||4495||566||*|
3. Results and Discussion
|Upland Swidden Rice||Maize||Rubber (Self-Financed)||Rubber (2 + 3 Contract)||Forest/NTFP|
|NPV private (US$)||−4546||2229||2117||686||−96|
|NPV public (US$)||−4546||−4375||1980||662||−96|
|Forest/NTFP (PCO2 = 0)||Forest/NTFP (PCO2 = $2)||Forest/NTFP (PCO2 = $4.80)||Forest/NTFP (PCO2 = $10.30)|
3.1. Implications on Land Change for Poverty Reduction
3.2. Implications for Ecosystem Services and Decision-Making
3.3. Role of REDD+ as an Incentive for Maintaining Forests
- Planting commercial crops of maize and rubber has improved cash incomes for the households and, hence, contributed towards alleviating rural poverty. It has however exposed the area to environmental risks, such as soil depletion and water contamination due to poor soil management practices and improper chemical use, leading to environmental health issues. The costs of these environmental impacts are not fully factored within the households’ rational decision-making process as much of this information is not immediately known or well understood at the local level.
- Swidden farming and collection non-timber forest products are currently considered as sustainable practices in our research sites, but these systems are increasingly vulnerable under the pressure of expanding maize and rubber plantations into old fallows and secondary forests. This transition is also precipitated by the Lao government policy, whose rationale is to integrate marginal lands into the global market and lead to the end of swidden farming, a practice considered as backward, unproductive and environmentally destructive [4,10,13]. The loss of swidden rice fields to commercial crop plantations also increases the risks of local food insecurity and loss of a safety net in future as rice production declines and forest fallows are lost.
- Environmental incentives such as REDD+ can be an important mechanism to compensate farmers for maintaining important ecosystem services and forgoing alternative agriculture land use. While REDD+ is shown here to have potential to positively impact farmer land use decisions towards forest conservation, it can only be effective if the REDD+ benefits are sufficient, equitably distributed and properly targeted to those households who are incurring the opportunity costs. Whether REDD+ can be sufficient also depends on the markets for carbon credits and how it can compete or interact within other economic and market transformations occurring in rural Lao PDR. At the time of this research, the GoL does not yet have a national strategy for REDD+ and how it will define the forests or areas eligible for REDD+ and who will have the right to benefit. The national strategy and corresponding policies will shape how REDD+ can be effective, efficient and equitable, and this can be a challenge particularly within the Lao PDR’s push towards economic growth and agriculture industrialization.
- In certain instances, upland swidden agriculture may still be the most rational land use for farmers from economic and environmental perspectives, and for cultural reasons [12,13,38]. REDD+ policies can be directed towards maintaining or rehabilitating traditional swidden systems with sufficiently long fallow periods to allow for regeneration of mature secondary forests and maintenance of ecosystem services.
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Wong, G.Y.; Darachanthara, S.; Soukkhamthat, T. Economic Valuation of Land Uses in Oudomxay Province, Lao PDR: Can REDD+ be Effective in Maintaining Forests? Land 2014, 3, 1059-1074. https://doi.org/10.3390/land3031059
Wong GY, Darachanthara S, Soukkhamthat T. Economic Valuation of Land Uses in Oudomxay Province, Lao PDR: Can REDD+ be Effective in Maintaining Forests? Land. 2014; 3(3):1059-1074. https://doi.org/10.3390/land3031059Chicago/Turabian Style
Wong, Grace Y., Souphith Darachanthara, and Thanongsai Soukkhamthat. 2014. "Economic Valuation of Land Uses in Oudomxay Province, Lao PDR: Can REDD+ be Effective in Maintaining Forests?" Land 3, no. 3: 1059-1074. https://doi.org/10.3390/land3031059