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Implications of the ASEAN Economic Community (AEC) for trans-boundary agricultural commodities, forests and smallholder farmers


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Presented by Indah Waty Bong, from the Center for International Forestry Research (CIFOR), at the 7th Conference of the ASEAN Working Group on Social Forestry (AWG-SF) in Chiang Mai (Thailand), June 12-16, 2017.

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Implications of the ASEAN Economic Community (AEC) for trans-boundary agricultural commodities, forests and smallholder farmers

  1. 1. Implications of the ASEAN Economic Community (AEC) for trans-boundary agricultural commodities, forests and smallholder farmers Robert Cole, Grace Wong, Indah Waty Bong AWG-SF Annual Conference Chiang Mai, 12-14 June 2017
  2. 2. Outline 1. ASEAN Economic Community (AEC) 2. Potential impacts of AEC integration - Forest transition - Agrarian transition 3. Laos case study: AEC and contract farming 4. Implications for forests and AEC policy limitations 5. Recommendations for policy and future research to support evidence based policy making
  3. 3. 1. ASEAN Economic Community (AEC) • ASEAN launched AEC in early 2016 • “a globally competitive and integrated single market and production base that is founded on the free movement of goods, services, capital, investment and skilled labor” (ASEAN 2008)
  4. 4. 1. AEC (cont…) • 2007-2015: Increase ASEAN trade by USD 700 bio (1/4 intraregional) (ASEAN 2016a). • 2015-16: ASEAN attracted USD 120 bio in Foreign Direct Investment (FDI)(ASEAN 2016a). … but most went to Singapore and Indonesia • More advanced member countries  FDI for manufacturing • CLMV block  investment for natural resources and agricultural production
  5. 5. 1. AEC (cont…) • AEC’s focus on food, agriculture and forestry  regional food security and increase ASEAN competitiveness in global market. • Open up access to larger regional and global market, while exposing domestic producers to intensified competition from more advanced countries. • Could lead countries to intensified competition over agricultural and forest land and resources.
  6. 6. 2. Potential impacts of AEC integration - Forest transition (Angelsen and Rudel, 2013) - Agrarian transition (de Konick, 2004)
  7. 7. FT curve 1 FT curve 2 2. Potential impacts of AEC integration
  8. 8. 3. Laos case study: AEC and contract farming Integrated agricultural production (AEC) affects forests and smallholder livelihoods in Laos • Expansion of trans-boundary contract farming of commodity crops • Different contract, sharecropping and land rental schemes in Laos related to trans-boundary demand: maize, banana, sugarcane, cassava and rubber. • Demand or to supply specific neighboring markets e.g. Vietnam, China and Thailand
  9. 9. 3. Laos contract farming (cont..) • Driven by increasing demand and investment from neighboring markets • Sustained growth across the region  more prosperous  1) changing food consumption  Animal protein/livestock 2) Urbanization  outsourcing of food production from land/labor-constrained countries
  10. 10. • Contract farming beneficial for smallholders? Income for farmers. However: • Weak position in contract agreement, depend on provider. • Laos is a supplier of raw agricultural commodities for more advanced ASEAN neighbors. • This role altered land-use and livelihood practices, accelerated the expansion of commodity crops to marginal areas, put pressures to forests. 3. Laos contract farming (cont..)
  11. 11. Strengthening commodity market within AEC can displace the production of land intensive commodities from countries at later stages of forest transition (pushing for reforestation domestically) to countries with advancing forest-agriculture frontier. 3. Laos contract farming (cont..)
  12. 12. 4. Implications for forests and AEC policy limitations If countries such as Laos continue to provide a mainly supply role in regional commodity markets, this will draw heavily on their present main comparative advantage – the ability to absorb land intensive production (Bourdet 2000). Unless adequate institutional and regulatory frameworks are supported and enforced, this may risk further large-scale conversion of forests and loss of important ecosystem services.
  13. 13. 4. AEC policy limitations (cont..) AEC promote collective aims towards sustainable practices that protect forests. But, limited sector coordination with competing interests and lack of acknowledgement of diverse SF and agroforestry models Sector specific strategic plans of action (SPA) • Livestock • Crop production • Forest
  14. 14. 5. Policy recommendation for equitable and sustainable outcomes of AEC integration • Stronger coordination at regional and national levels between forestry, agriculture and livestock sectors in considering and evaluating trade-offs of coexisting objectives for optimizing production on the same land base. • Considering and responding to local contexts and participation of those who depend on land and forests for their livelihoods in achieving AEC objectives. • Giving stronger role to initiatives or national programs that are more responsive to local needs and different pressures on forests e.g. social and community forestry. • More direct regulatory and safeguard measures within specific sectors; e.g. contract or investment arrangements could be designed to improve the balance of ownership, voice, risk and reward between investors and landholders or producers
  15. 15. 5. Recommendations for future research to provide evidence to support informed policy making • Case studies into how enhanced regional integration and changing demand structures have affected land, smallholder livelihoods and forests. • Provide policy inputs for increasing inclusiveness and agency at the local level: Understanding how smallholders cope with and manage the different risks, and how they capitalize on the opportunities, resulting from AEC integration. • Manage policy synergies and trade-offs: Assessing how the AEC interacts with forest sustainability policies and mechanisms (e.g. PES, REDD+, FLEGT, forest certification standards) and cross-sectoral environmental policies (e.g. climate change and NDCs) • Enabling and ensuring sustainability and equity goals within different contexts: Examining AEC integration at multiple scales (subnational, national and regional) to situate location and sector specific issues within aggregate processes of change. • Derive lessons and assess the differentiated socioeconomic and ecological impacts in participating countries: Review the forest and agriculture policy architectures of existing models of economic integration (such as the North American Free Trade Agreement and the Common Agricultural Policy of the European Union).
  16. 16.