Economics of smallholder rubber expansion in Northern Laos

In Northern Laos, as elsewhere in the Southeast Asian uplands, there is an agricultural transition underway from subsistence production based on shifting cultivation to commercial production based on tree crops. In response to demand from China, rubber smallholdings are being established by shifting cultivators in Northern Laos, encouraged by government land-use policy. We examine the bio-economics of smallholder rubber production in an established rubber-growing village and model the likely expansion of smallholder rubber in Northern Laos. Data were obtained from key informants, group interviews, direct observation, and a farm-household survey. Latex yields were estimated using the Bioeconomic Rubber Agroforestry Support System (BRASS). A financial model was developed to estimate the net present value for a representative rubber smallholding. This model was then combined with spatial data in a Geographical Information System (GIS) to predict the likely expansion of rubber based on resource quality and accessibility. Implications are drawn for upland development in the region.