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CHAPTER THREE: RESEARCH FINDINGS

3.1 Impacts of the Rubber Plantation

3.1.1 Previous reports on the impacts of rubber plantation

Environmental concerns associated with rubber plantation include (O’Brien, 1998):

 Loss of land by indigenous communities to business developers and associated loss of livelihoods and traditional ways of life.

 Clearing of natural forests to make way for the plantation, leading to a loss of biodiversity.

 Loss of non-timber forest products for local communities.

 Air pollution when burning is used to clear the land.

 Increased amounts of pests and rodents.

 Increased use of pesticides and fertilizers which pollute nearby water sources.

 Pollution from the processing of latex.

 Increased soil erosion and reduced run-off control.

Cara Kirkpatrick conducted a workshop on ‘Livelihood effects of Tum Ring Rubber Plantation on Local Villages’ with villagers in the commune. The workshop’s aim was to obtain people’s perceptions on the impacts of rubber plantation. Participants were asked to find positive and negative impacts. The results show that positive impacts are: new roads, a new school, a pagoda, and gifts for the local people. Negative impacts are: land taken by the rubber company, cut resin trees etc. (See Appendix 1 Negative and Positive Household Livelihood Effects). Land emerged as a major issue. The local people wanted to keep their old land, which they had inherited from their ancestors.

Prior to the plantation, land had not been a major concern of the village people. Sufficient land was farmed by them to satisfy their needs, many devoting the bulk of their labor time to the much more lucrative occupation of resin collection. The population of the area was small; few outsiders had entered, and in any case tended to keep away from established villages. But the more the plantation destroyed the commune’s forest resources and fueled an influx of outsider, the more it made land a key issue (Cock, 2004).

3.1.2 People’s livelihoods prior to and after the rubber plantation

Traditionally, families in the survey area used to practice shifting cultivation; the period of field use varied between three and seven years, depending on soil quality, after which fields were abandoned in order to rebuild fertility before reuse. At that time, villagers shifted their farming sites to other fields that had regained their fertility. Owing to the fertility of the soil in some areas, some villagers cultivated one piece of land semi-permanently, and did not shift. Villagers usually practiced upland cultivation; some grew both upland and lowland rice, particularly in Samrong village. People harvested on average 43 tang of rice per hectare (1 tang = 24 kg). Villagers always had enough rice to feed their families.

Table2 Agricultural indicators for each village prior to the rubber plantation

Indicator All villages Samrong Tum Ar Ronteah
 Mean yield of rice (tang/ha)

43

32

56

40

 Mean rice sufficiency (months/family/year)

 11.7

11.8

11.6

11.7

Note: This yield estimate is the upland and lowland rice of each family in the sample.

NTFPs were an important additional income or food security for families when crops failed. People made money from selling liquid and hard resin, vine, rattan and wild fruits, using the money earned to buy milled rice and other foods to feed their families. On average, one resin tree could provide 1.5–2 kg of liquid resin per month. The price of liquid resin was 500 riels per kg; hard resin was 500 to 600 riels per kg, vines 300 to 700 riels per bunch, rattan 150 riels per bunch. Most people had their own resin trees. In Samrong, 40 percent of households had resin trees, with an average of 47 trees per family. In Tum Ar, 70 percent of households had resin trees, with an average 247 trees per family, and in Ronteah 79 percent of households had resin trees, with an average 351 trees per family.

Table3 Households with resin trees prior to the rubber plantation

Indicator All villages Samrong Tum Ar Ronteah
 % households with resin trees in 1999

65

(22)

40

(4)

70

(7)

79

(11)

 Average no of resin trees per household

 11.7

11.8

11.6

11.7

Note: Number in the bracket is number of households.

After the rubber plantation was established, all families changed their livelihood activities to rice and cash crops and some families planted rubber mixed with other cash crops. The findings show the average rice yield is around 36 tang per hectare. This yield can provide rice sufficiency for 10 and a half months, as shown in Table 4. Compared with prior to the plantation, the rice yield has dropped by 168 kg. This indicates that food shortage is greater now in the commune.

Table 4 Agricultural indicators for each village after the rubber plantation

Indicators

All villages

Samrong

Tum Ar

Ronteah

% of families with only chamkar

60

(19)

50

(5)

57

(8)

60

(6)

% of families with both chamkar and rice paddies

35.3

(12)

50

(5)

35.7

(5)

20

(2)

Mean yield of rice per hectare (tang/ha, 1 tang = 24 kg)

36

28

36

45

Mean rice sufficiency per year (months of rice/family)

10.5

10

10.3

11.4

Note: Number in the bracket is number of households.

People have adopted other activities to compensate for their losses. A majority (73.5 percent) work as laborers for others with large cash crop fields, as shown in Table 5. They earn 3,000–4,000 riel per day (US$0.75–US$1). Some families in Tum Ar still have resin trees; they can go and collect as previously because the trees are outside of the plantation area.

Table 5 Additional incomes of villagers in the three villages

Additional activity

No. of households

Percentage

Work for others

25

73.5

Tapping resin

4

11.8

Others

5

14.7

Total

34

100.0

Note: Tapping resin only in Tum Ar village.

Villagers do not seem to be interested in working for the rubber company; only five in Samrong are doing so. Villagers in Tum Ar said they were angry with the company, claiming that most of the skilled workers were from the outside, particularly from Kampong Cham province where there are many people who have experience in rubber plantation work.

3.1.3 Impacts on people’s domestic animals

Cows or buffalos are a daily worry for the local people. The company fines 50,000 riel per cow or buffalo entering the rubber plantation. In Tum Ar, a village-level informant said ‘people have sold their cows and buffalos because there is nowhere else for them to eat and they were afraid their animals would get into the rubber plantation’. The informant added that at the present time there were only four cows, whereas before there were around 40 to 60. The rubber company had already fined one old man in the village 50,000 riel early in 2005 for a buffalo being present in the plantation. In Samrong, cows belonging one member of the village went inside the rubber plantation and ate rubber trees. The cows were caught by the company guards, although the company did not fine: it was said that the company did not fine for cows or buffalos caught eating rubber for the first or second time – the third time, the company applies the 50,000 riel fine per cow or buffalo. In Ronteah, people have similar problems. A village-level informant said ‘before people let buffalos eat freely in the dry season; we tied them up only when we wanted to use them. But now we have to keep them tied up every day. Most villagers have sold their cows and buffalos.’ The company has fined for one cow already. Another village-level informant in Ronteah said her buffalo had died near the rubber plantation in 2004 but she did not know why. She took her other buffalos to her son living at Stung Sen because she was afraid the company would fine her.

3.1.4 People displacement

People displacement is one of the main impacts of the rubber plantation. Since the rubber plantation was established, there have been increases in numbers of outsiders living in the commune. According to the commune statistics, there are 722 families, of which 59 are outsiders considered as temporarily staying in the commune. According to the commune chief, some had come to work as cash cropping growers between the rubber trees, and some as rubber workers for the rubber company. At this point, there is no conflict between outsiders and the local people. Local people have recently started to move to forested areas to clear land for their chamkar; some are hunting wild animals and some are clearing their old chamkars in the forest. In Ronteah, one village-level informant stated that ‘villagers went and cleared from one to 2.5 hectares of forest each for their chamkar land in O Toek Thla and in forest areas near the village’. According to the informant, ‘recently, around 50 percent of families went. This displacement is going on because people have lost their old land which they used for cultivation; before villagers had five hectares of land and now they have only three hectares.’

3.1.5 Trend analysis

The trend analysis was conducted in Tum Ar village in order to obtain villagers’ perception on changes in their communities. Seven villagers participated in the discussion. Participants selected the main changes in their village before and after the rubber plantation. These main changes are: number of families, size of forest cover, numbers of wildlife, and amount of illegal logging. The trends show that the number of families has increased gradually, largely as a result of people from outside moving in (in 2002–03, the number of outsiders increased when the rubber plantation was established, as shown in Figure 2). Most came from Chamkar Leu, Kampong Cham, and Baray, Kampong Thom. Based on commune statistics, at this point there are 33 families who are temporary (unofficial) residents of the village.

Figure 2 Trend in number of families

Figure 3 illustrates that forest cover dropped sharply in 1997; at that time forests were being cut by logging companies. Forests continued to decline gradually to nearly zero after 2001, when the rubber company cleared forest for rubber plantation.

Figure 3 Trend in forest cover

Figure 4 illustrates the decline in the number of resin trees, particularly in 1997 when logging companies exploited forests in the commune. At the time of the rubber plantation arrival, some resin trees remained.

Figure4 Trend in number of resin trees

Figure 5 illustrates the decline in numbers of wildlife starting from 1996 and 1997, when logging companies started to explore the area. The number of wildlife declined further to after 2001, when the rubber plantation set up in the commune.

Figure 5 Trend in number of wildlife

Figure 6 reveals that illegal logging started to occur in 1996 and increased sharply in 2000 before the rubber plantation arrival; it has continued to rise steadily.

Figure 6 Trend in illegal logging

3.2 Issues of Implementation of the Rubber Plantation

The rubber plantation not only affects people’s livelihoods and the environment, but also throws up issues in organizing the project itself. The main issues are: (i) compensation for the land lost to the plantation; (ii) redistribution of land for family scale rubber plantation; and (iii) constraints in implementing the family scale rubber plantation.

3.2.1 Compensation for land lost to the rubber plantation

The Tum Ring rubber company is responsible for facilitating compensation for villagers whose land was lost to the rubber plantation. There are no guidelines for this compensation. So far villagers have received compensation ranging from 50,000 to 300,000 riel per hectare. This compensation is quite low. According to Ronteah village-level informants, ‘the Prime Minister announced during opening of the Hun Sen Primary school that villagers would be paid 500,000 riel per hectare for their chamkar land lost to the plantation’. At the commune level it is said that ‘there are 20 to 30 families who did not receive compensation; it is still being considered’. In Tum Ar, all villagers received compensation but the amount was lower than the Prime Minister had promised (namely, that compensation for land lost would be equal to the cost of land cleared by bulldozers). One of Tum Ar villager said the compensation paid to them was only half of the actual cost.

3.2.2 Land redistribution for the rubber plantation

So far, the rubber company has cleared around 1,400 hectares of land for the industrial rubber plantation and around 400 hectares for the family scale rubber. The local people were allocated three hectares per family for rubber planting. To be fair in distributing the land, villagers were asked to draw lots to confirm the location of their landholding. However, land distribution is not transparent and has created conflicts in Tum Ring. Some families did receive three hectares of land but were not given a land title. Some families did not receive the land even though they were born in the village. Some families sold their land back to the rubber company. In addition, new couples have not yet been given land and are not sure whether there is land reserved for them and for future generations. The rubber company is responsible for providing this land to each family by cooperating with the commune chief based on the year 2000 list of families in the commune, with an out-of-date number of families. Some families in the study area are apparently not eligible to receive the three hectares. Table 6 shows a total of 56 families in the three villages not receiving land. The commune chief, however, says that only about 40 families did not receive the three hectares.

Table 6 Number of families ineligible for land

Village

No. of families not receiving land

Reason

Village authorities’ reaction

Samrong

27

Do not know

Reported to commune level; no response as yet.

Tum Ar

4

Names not on village list

No idea how to solve this issue.

Ronteah

25

Names not on village list

No idea how to solve this issue.

According to the Tum Ar village chief, new couples married after 1999 have not yet been given land: they must wait until the next family census in the commune. The chief did not know when this would be. Ronteah village chief said that some new couples without land have been given some by their relatives; some are clearing forest areas and some rent other people’s land. The commune chief said the company would provide land to those who had not yet received it after forest clearing was finished in the plantation.

Once the three hectares has been distributed, villagers have to thumbprint an agreement letter at the rubber company office, then are given a receipt to show ownership of the land (although this is not an actual legal land title). In Tum Ar, families have already received land but have not yet got receipts. It was not known when the company would issue them. The village chief said that the company was trying to motivate villagers to sell land back to them; if villagers wanted to sell, the rubber company was able to buy immediately.

Table 7 Number of families who received the three hectare land

Village

Families receiving

the three hectares of land

Received

receipt

Not yet received receipt

Samrong

51

All

n/a

Tum Ar

143

n/a

All

Ronteah

69

10

59

3.2.3 Using the three hectares of land

Findings show that people were not able to follow the rubber company’s guidelines to ‘plant rubber one hectare in the first year, one hectare more in the second year, and the last one in the third year’. The survey shows that more families plant rubber in Samrong, whereas in Ronteah no one plants rubber: most of villagers use the land to grow corn. Villagers are busy planting other cash crops which can provide harvests to meet their daily needs in a shorter period. Rubber takes seven years to grow; people prefer to plant rice and other cash crops (See Appendix 2 illustrating the use of the 3ha across the three villagers). Some families rented the 3ha land to others (for 300,000–400,000 riel per hectare per year – US$75–100).

Some families sold off the land to the rubber company for US$35–125 per hectare. According to the village chiefs, many families have done this: 10 families in Samrong, 63 families in Tum Ar and 33 families in Ronteah. Factors behind this were severe poverty, family members getting sick, and persuasion. One informant stated that villagers were motivated to sell off their land. In Ronteah, for example, it is said that measures were taken by various actors to intimidate villagers into selling their land: the latter were informed that they would have to move elsewhere if they did not sell. It was also alleged that officials were receiving bribes in order that they assist in motivating villagers to move. Villagers were therefore hesitant to keep their land. The informant stated that villagers also felt that they had already experienced loss of land once when the company arrived in the commune. This was another factor persuading them to sell. The village chief, however, is keeping his land. 

At commune level, it is said that of the villagers in the five villages who have already received their land, around 40 percent of them have sold it off. Villagers do not want to plant rubber, particularly in Tum Ar village. One villager in Tum Ar said that villagers are threatened that if they do not sell their land it will be taken back later on.

The rubber company has also been trying to persuade villagers to sell their land to them. Villagers in Tum Ar stated that anyone who could find villagers who wanted to sell their three hectares would get 100,000 riel per hectare (US$25/ha) commission from the company.

According to the Ronteah village chief, villagers sold their land and then they went to clear the forest for cultivation. This may be another reason behind land selling and buying in the commune.

3.2.4 ‘Family scale rubber plantation’ in Tum Ring

The ‘family scale rubber plantation’ was conducted without taking into account people’s participation. The company used a top-down approach for implementation by setting the guidelines for the local people to plant rubber on their three hectares of land. As well as rubber, cash crops can be planted. Rice, however, is not allowed, because it can affect the growth of rubber trees: the company is afraid of the rice straw catching fire. The household survey revealed that all families said they were given no training on how to plant and care for rubber. Families do not trust the company and do not expect to make any profits from their rubber. People prefer to plant rice, cash crops and other fruit trees which can provide income sooner to meet family needs. The survey showed that 70 percent of villagers did not know the price of rubber; only 12 percent of households wanted to plant rubber, 3 percent wanted to grow rubber and rice, and 79 percent wanted to plant fruit trees, cash crops and rice. Having noted that people were not interested in planting rubber, the company issued a declaration dated 14 November 2003: ‘The Company does not force people to plant rubber. Those who have received the 3ha land now can plant any crop they want; the company lets people make their own decisions.’

3.3 Stakeholders’ Perspective on the Rubber Plantation

3.3.1 Assistant Sandan District Chief

The Assistant District Chief strongly supported the rubber plantation in Tum Ring. He talked with the rubber company officials who said that a three-year’s old rubber plantation including the land could be worth US$3,000 per hectare. After seven years of planting rubber, annual income from the plantation would be US$500 per hectare rising to US$1,000 per hectare when the trees are ten years old. Therefore, people in Tum Ring would be rich in a few years time. The Assistant District Chief said this was a good government initiative that aims at achieving poverty alleviation in the commune.

3.3.2 Tum Ring commune chief

The commune chief was positive about the rubber plantation development in the commune. However, he was concerned about people who could not afford to plant rubber, since it is a long-term investment. The chief said the rubber company provided soy bean seeds and rubber seedlings to villagers with technical assistance, such as in grafting rubber. ‘Some people are not happy because they do not receive the 3ha land, but people who already received it do not have any problem but some of them still felt disappointed with the company because their farmland was taken and provided with 3 hectares in a place where it is not a good soil or far a way from their houses.’ According to him, rubber could be a good source of income for people in the future. However, he was concerned about the ability of people to plant rubber. He said ‘People are now very poor and lack food to feed their families. If they committed to plant rubber, they would lack rice to eat. But some people who committed to plant rubber can do it quite well. Later on they will have a better livelihood when their rubber provides latex. Then they can make money every day through selling latex.’ The chief added that ‘according to the announcement in the commune, rubber will provide latex when it is six to seven years old. From the time people plant rubber to the time it provides latex villagers are not given any [financial] support, but people can make a living through mix crop cultivation on the land provided…’

3.3.3 Village chiefs in Tum Ar, Samrong and Ronteah

The village chief in Tum Ar said ‘People’s livelihoods have become more vulnerable than before. The results of the project are not what they expected because there is no land reserved for the next generations and villagers don’t know how to plant rubber. Villagers will become rubber workers for the rubber company.’ The village chief in Samrong said ‘Now, the rubber plantation does not reduce poverty but it reduces the numbers of cows and buffalos in the village. The rubber company gave us seedlings that were too young and distributed them to plant in August when there is not enough of the rainy season left for the rubber trees to survive.’ The village chief in Ronteah said it was difficult for him to comment as to whether the rubber plantation could reduce poverty in the commune because he did not know anything about rubber. He added the project did not match what he expected because he wanted to plant various kinds of crops which provide more immediate harvests than rubber.

3.3.4 Rural Poor Family Development (RPFD)

RPFD, local non-governmental organization, has been working in the commune since 2001. RPFD’s main activities are community development, training and advocacy, and gender awareness training. The Director of RPFD said ‘I think the purpose of the program [to reduce poverty] may sound very nice. But actually, it increases poverty…, people have no capability both financial and technical to invest and to implement rubber plantation. The company does not pay much attention to the family scale rubber plantation because they have work on their own rubber plantation. But now villagers are allowed to plant any crop they like on their land. Now the poorest 90 percent can not plant rubber. Even though the company tried to provide rubber seedlings, villagers have no time to take care of them. They are busy finding food to feed their family. The company does not trust the villagers to take care of their rubber trees.’ He added that the land cleared was not as good quality as it was before: in the past people cleared and burned land, which made soil more fertile but the land cleared by the rubber plantation removed all fertility from the top soil. Therefore, farmland now is not good for growing rice; even beans do not grow healthily.

3.3.5 The local people

The majority of people do not want the rubber plantation development in the commune. According to the survey, about 67 percent of households said they did not like the rubber plantation. The survey also reveals that 23 percent of households said their livelihood was better, 12 percent of households said their livelihood was the same as before and 65 percent of households said their lives were harder than before the arrival of the rubber plantation. One villager in Tum Ar said ‘Now it is more difficult to make a living than before…it [the rubber plantation] does not reduce poverty, but it increases poverty in our community.’ (See Appendix 3 for more details of people’s opinions on the rubber plantation development.)

3.4 Cost- Benefit Analysis

To study in more depth, a cost-benefit analysis is used to analyze the viability of rubber plantation development in Tum Ring. This analysis compares the net benefits of two options: (i) upland cultivation and forests resource collection; and (ii) rubber plantation to see which option is preferable. To estimate costs and benefits of each option, several factors are assumed (see Appendix 4 in assumption and baseline calculation). Other factors to consider are: international rubber market trends, national and international rubber prices, and measurement of costs and benefits as discussed in the following section.

3.4.1 Cambodian rubber market

According to the state-owned Chup Rubber Plantation Company, Cambodian rubber productions have four types of quality: CSK5L, CSK5, CSK10, and Low grade. CSK5L is the best quality. A company official said ‘One ton of raw latex can produce CSK5L 70%, CSK5 20%, CSK10 7% and Low grade 3%’. The average price of the four grades is shown in Appendix 6. ‘Rubber production is exported to Singapore, Malaysia, and Vietnam. Cambodian rubber sells at a price 5–20 percent lower than the price in Malaysia.’ Figure 7 shows the average Cambodian and Malaysian (SMR 20) rubber prices, revealing that rubber price in Cambodia is around 12 percent lower than in Malaysia. The annual average rubber price (SMR 20) in Malaysia has fluctuated between US$0.54 and US$1.53 per kg over the past 20 years. Rubber prices rose to a peak of US$1.53 per kg in 1995 and then dropped sharply to around US$0.6 per kg in 1999. It started to rise gradually again from US$0.6 per kg in 2001 to US$1 per kg in 2003. Cambodian rubber prices have risen and fallen in a similar pattern to that in Malaysia.

Figure 7 Trend in annual average SMR 20 price Malaysia and rubber price Cambodia

3.4.2 Trend in real rubber price in Malaysia

Malaysia is one of the biggest rubber market countries in South East Asia; the real rubber price trend in Malaysia can therefore be used to predict the rubber price in Cambodia in the future. Figure 8 reveals that the real rubber price in Malaysia has decreased slightly at around 1.9 cent per kg per year over the last 20 years. Therefore, from this trend we can assume that the average rubber price each year in Cambodia over the next 30 years will remain constant at the current average price, which is about US$1.

Figure 8 Trend in real rubber price (SMR 20) deflated by 1987

3.4.3 Measuring costs of option 1 and 2

The present value of a stream of benefits [PV(C)] of each option is estimated by using the formula:

 

where Ct denotes the costs incurred in t for t = 0, 1, 2…,n, i is discount rate. The major costs of the rubber plantation are the direct costs that will be disbursed over the whole project life, from years zero to 30. The potential costs are for land clearing, tree nursery establishment, rubber plantation, and salaried workers for the first six years. According to the Tum Ring Rubber Company, the costs for the preparation and rubber plantation in the first six years are estimated at around US$2,300 per hectare. After six years, rubber trees become mature and start to provide latex. During this period the rubber company still spends money on taking care of the rubber trees, paying workers’ salaries, latex processing, latex collection and transporting rubber latex for export. Each year’s costs for rubber plantation for the project life is estimated by the Chup Rubber Plantation (see Appendix 7). Therefore, the present value of the stream of costs of option 2 is:

The costs of option 1 are unquantified but are very small compared to the costs of option 2 (see the comparison of NPV of option 1 and 2 in Section 3.4.5).

 3.4.4 Measuring benefits of option 1 and 2

The present value of a stream benefits [PV(B)] of each option is estimated by using the formula:

 

where Bt denotes the benefits received in period t for t = 0,1,…, n, and i is discount rate.

The present value of benefits of option 1 is the combination of the value of upland cultivation and the income from resin trees in each year, given that the option 2 is not present (see the value estimation in assumption and baseline calculation in Appendix 4 and Appendix 7). Therefore, the present value of the stream benefits of option 2 is:

Since the PV(C1) is very small, so NPV1 = PV(B1) » $4.1 million

Similarly, the present value of the benefits of the rubber plantation (option 2) is computed by applying the above formula. The benefits of option 2 are profits that are received from selling rubber latex through years seven to 30 (see Appendix 8). The annual benefits received are equal to the price of rubber per kg multiplied by the total amount of rubber production. In the analysis, the price of rubber, US$1/kg, is used to compute profits that are received each year (the rubber price assumption is explained in Section 3.4.2). Therefore, the present value of the benefits of option 2 is:

Thus, NPV2 = PV(B2) – PV(C2) = $45,110,857 – $41,252,094 = $3,858,763

3.4.5 Comparison of net present value (NPV) of option 1 and 2

Options 1 and 2 are mutually exclusive. If we choose option 2, we forgo the benefits of option 1 and vice versa. Table 8 shows the NPVs and environmental costs of each option in the period of 30 years. It reveals that the NPV of option 1 is larger than that of option 2 (see calculation in Appendix 7 and 8). Environmental costs of both options are not quantifiable but we know that option 1 has smaller environmental costs than that of option 2 because option 2 has severe impacts on forest resources and wildlife in the area. Therefore, option 1 is preferable to option 2.

Table 8 Cost-benefit of both options in 30-year period

 

NPV (US$millions)

Environmental cost

Option 1

4.1

Smaller, but unquantified

Option 2

3.8

Larger, but unquantified

In Tum Ring, the rubber plantations are already present. This means that option 2 is already chosen, therefore the benefits of option 1 are already forgone. Thus, total net benefits of option 2 have to internalize the costs of option 1 that are foregone forever and other environmental costs caused by option 2. This can be written mathematically as:

Total net benefits of option 2 = NPV of option 2 – (NPV of option 1 has gone forever + cows/buffalos + environmental functions + other forest resources).

The net benefits of option 1 foregone forever are around US$4.8 million (see explanation in Appendix 9). The value of cows and buffalos, environmental functions and forest resources that are foregone forever can not be measured. We can rewrite:

Total net benefits = US$3.8 million - US$4.8 million – Unquantified costs.

It can be seen that the total net benefits of option 2 are negative (-US$1million = US$3.8 million – US$4.8 million) even though it does not include the unquantified costs. Therefore, option 2 is not profitable.

3.4.6 Sensitivity of rubber prices

Sensitivity of rubber prices present a chance for further analysis of the ways in which net benefits of option 2 change as the rubber price changes. Figure 9 shows that if the price of rubber is lower than US$1, net benefits of option 2 will be negative. If the rubber price is just above $1, they will be positive. But it can not be concluded that the net benefits are positive at that price because the analysis did not include other negative externalities of option 2 into its costs, such as the unquantified costs as shown in Table 8. If these can be monetized and included, it will affect the net benefits of option 2. Thus, net benefits of option 2 may become negative.

Figure 9 Expected net benefits of option 2

 

 

 

 

 

 

3.5 Discussion

The rubber plantation in Tum Ring has detrimental impacts on the people’s livelihoods. The findings show that the average yield of rice per hectare has dropped from 43 tang per hectare in 1999 to 36 tang in 2003. This drop of rice yield corresponds with the claim that agricultural land is no longer productive because top soil fertility was removed when land was cleared by the rubber company. Local people are facing shortages of food since the rubber plantation arrived in their commune. Around 65 percent of households said it was harder to make a living now compared with five years ago.

Furthermore, the project was not well organized in terms of handling compensation, distributing lands and implementing the family scale rubber plantation. As a result, it has not achieved its goal of promoting family scale rubber plantation, as stated during the launch ceremony of the rubber plantation. The rubber company uses a top-down approach to undertake the project; people are not consulted, nor are they allowed to participate in the development planning. People are intimidated and feel insecure about whether their lands will be taken back by the company in the future. As a result, many families have decided to sell off their land. At the same time, the company is trying to buy land back from people, which could also be a strategy to grab land from local people. The survey shows that people are not happy with the rubber company established in the area. 67 percent of households said they did not like the plantation. People use the 3ha land for planting other cash crops or rent to someone else. Having seen that people are not able to plant rubber, the company has allowed people to grow whatever crops they want, and is not restricting them to planting rubber as before.

Another impact of the rubber plantation is the displacement of people. There is an influx of outsiders moving to the commune, whereas insiders move to clear forest for land. The results correspond with Andrew Cock’s findings in his article about the rubber plantation in Tum Ring. People migration leads to more deforestation inside and outside the commune. According to the village chief in Ronteah, many villagers (50 percent of families in Ronteah) have moved to clear forest for new land to cultivate. These activities could violate the recent Prime Minister’s declaration on taking measures to curb illegal forest clearing.

The rubber plantation development should start to focus on current issues and on promoting family scale rubber plantation on the land which is already cleared rather than clearing further forest land for the plantation. Remaining forests should be protected as income sources for the community. ‘In certain cases the economic value of NTFPs is greater than the expected commercial logging benefits. The forest products in Ta Pean forest (Ratanakiri province), for example, was found to have an annual economic value that may be as high as US$3,922 per hectare of forest. If this forest were harvested for timber it would have a value of no more than US$1,697 per hectare (present value over 90 years).’[1]

Therefore, continued clearing of the remaining forest areas would make the project incur more and more costs. This means that the social net benefits of the project would become more and more negative. Since the trend in international rubber prices has been decreasing for the last 20 years, it is risky to invest in rubber. From society’s point of view, the project is not environmentally, socially or economically viable. But from the company point of view, the project could be profitable since the costs of negative externalities of the project are not included into their accounts.


[1] Bann (1997).

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