1. Sustainable Natural Rubber Production Model
and Value Chain in Mekong Region: Engaging
with private sector and communities
on voluntary safeguards and landscape forest
governance
By WWF Mekong Forest Hub
Second Regional Land Forum – MRLG
30th May 2018
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3. Main buyers of high-deforestation–risk rubber producers
4. Juni 2018 3
In 2015 South East Asian countries accounted for 92% of the worldwide
production of natural rubber (11,300 kt produced)
4. Source: originally published by IRSG (May 2016) Singapore Annual Meeting.
Rubber Market – Demand & Supply
4. Juni 2018 4
• High demand/ high price before
2015: excess planting leading to
projected overcapacity
• Predictions suggest 40% increase in
demand by 2025 from 2010 (7,5 t)
• 4.3-8.5 million ha of additional
rubber plantations are required to
meet demand 2024
• Despite potential for productivity
improvements, unnecessary land
use changes are happening (due to
land grab and speculation)
5. Smallholders
Source: Rubber Research Institute of Thailand (RRIT), 2016*
90% of rubber farmers are smallholders at 1.4 million farms at 4 Ha Average.*
• Poverty
• Land Grab for Agriculture
• Forest-based Livelihood
• Un-Sustainable Practice
8. Main challenges
Rubber price fluctuation leading to unpredictable harvests and profitability
85% of the world’s natural rubber comes from small-holders
Lack of coordination between the farmers and between the farmers and the traders
Low yield production by small-holders
Poor quality rubber -> poor planting material, lack of grading / quality labs
Land tenure governance and farmers traditional rights are complicated
Lack of certification system (addressing land-issue)
Lack of traceability along the supply chain from plantation to the factory
Lack of financial mechanism that would incentivize farmers to invest in sustainable
rubber management
4. Juni 2018 8
Production
SupplyChain/
Governance
10. Rubber Sector Engagement
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• Transform the rubber industry towards
responsible and sustainable practices
applied by the main rubber
companies, investors and processors
as well as small holders (deforestation
free supply chains)
• Make it real through landscape
approach – on the ground work with
smallholders and private sector
14. Landscape in Myanmar
4. Juni 2018 14Figure 1.-- Landsat satellite image showing degradation along the Dawei
and Lenya roads
Forge
partnerships
Strengthen
business
case
Influence
governance
Develop
country
capacity
17. Reflections
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• Understand and present reality of the ground
• Commitment by private sector is not enough
• Difficulties for companies to implement on the ground zero
deforestation commitment
• Importance of stakeholders plateform – Government engagement
• Market opportunity with high demand for certified woods is the real
market driven with high challenge
• Take time to reach and engaged smallholders and to connect with
suppliers...
• Rubber farming system
• bottom up and top down approach in parallel
In Cambodia the speed of deforestation has accelerated more than in any other country -> rubber has been a top driver of this deforestation
Top rubber exporters Vietnam and Malaysia are now among the top 10 countries with the fastest forest loss over the past 15 years
Cambodia, Myanmar, Laos, and Thailand saw the world’s most new rubber plantations in the last 10 years
Similar activities and measures within the project are similar in Thailand, Myanmar, Laos, Cambodia lessons learnt gained in one of these countries can be used for other countries
In Cambodia the speed of deforestation has accelerated more than in any other country -> rubber has been a top driver of this deforestation
Top rubber exporters Vietnam and Malaysia are now among the top 10 countries with the fastest forest loss over the past 15 years
Cambodia, Myanmar, Laos, and Thailand saw the world’s most new rubber plantations in the last 10 years
Similar activities and measures within the project are similar in Thailand, Myanmar, Laos, Cambodia lessons learnt gained in one of these countries can be used for other countries
Three sustainability risk reports – on manufacturing, infrastructure and agricul
Myanmar Rubber Study Tour in Thailand (resulted in the Ministry agreed to follow an agroforestry model in Myanmar (engaging smallholders) and appointed staff at rubber market and rubber cooperatives to learn how to set them up for Myanmar)
WWF Myanmar has been providing inputs to ensure that a sustainability component was embedded in National Rubber Law.
Rubber Study Group, in 2015 about 12 million tonnes of natural rubber have been produced
Global rubber prices have declined dramatically since April 2011, from $2.65 per pound to less than 74 cents in October 2015.
Industry data suggests that Natural Rubber (NR) area expanded enormously both in traditional and marginal areas during the price boom period (2011-13), and more importantly, a larger share of this addition to supply capacity is yet to come. World NR demand is forecast to increase by 3.0 per cent to 12.5 million tonnes in 2016 and by 2.9 per cent to 12.87 million tonnes in 2017. NR demand will grow at 2.9 per cent in short-term (2017-18) and it will increase by 2.8 per cent over longer-term (2017-2025).
(http://rubberasia.com/2017/02/17/nr-demand-will-grow/)
The Association of Natural Rubber Producing Countries (ANRPC), an organisation of major rubber producing countries, has forecast that the output will exceed demand by over 3 million tonnes in 2017. Last year the production surpassed demand by 2.7 million tonnes. http://economictimes.indiatimes.com/articleshow/57556850.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
Focus should be on yield improvement rather than on land grab for more plantations
4.3-8.5 million ha of additional rubber plantations are required to meet demand 2024 (FSC presentation)
20 million people depend on the rubber sector
Wir sind nicht mehr on top of the wave was die Entwaldung angeht, aber es wird vermutet, dass bei erneuten Preisanstieg vermehrt wieder neue Plantagen gepflanzt werden, weil die alten abgeholzt wurden/ zu alt sind etc.
Die Oversupply weiß ja der Farmer nicht. Er wird trotzdem abholzen und neue Plantagen gründen, wenn der Preis wieder ansteigt.
Es wird mit neuen Investments und Playern gerechnet.
For WWF Thailand, under Sustainable Market Department, one project regarding sustainable commodity related to forest resources is Improve rubber plantation management for smallholders. We focus on improving smallholders due to smallholders are the main players for sustainable rubber plantation management as we have 90% of rubber farmers are smallholders at 1.4 million of them. Many of smallholders which are poor and need farmland who they live near the forest/protected area that could cause the forest loss by expanding rubber plantation with non-environmentally friendly or Un-Sustainable practice.
We also aim to improve their livelihoods as well as their capacity and their rights to access to practice sustainable plantation management and also be ready for market opportunity towards sustainably supply chain demand.
In Cambodia the speed of deforestation has accelerated more than in any other country -> rubber has been a top driver of this deforestation
Top rubber exporters Vietnam and Malaysia are now among the top 10 countries with the fastest forest loss over the past 15 years
Cambodia, Myanmar, Laos, and Thailand saw the world’s most new rubber plantations in the last 10 years
Similar activities and measures within the project are similar in Thailand, Myanmar, Laos, Cambodia lessons learnt gained in one of these countries can be used for other countries
Halb staatlich Organisationen involviert
Viele Middlemen
Rubber Production Models
Smallholder rubber production
Farmer associations.
Contract farming models.
Land concession model.
Contract farming models. Contract farming provides a way for investors to access land and labour without issuing concessions. The “2+3” model is the most heavily promoted rubber farming approach in Lao PDR, where the investor supplies capital, technology and a secure market, while the farmer provides land and labour. In this model, the investment companies reach an agreement/contract directly with individual farmers or with farmer associations, who are required to plant rubber under the supervision of specialists provided by the companies. When the trees begin to produce latex, yields are in theory shared at a ratio generally of 70% for the farmer and 30% for the company. In practice, in current agreements most farmers receive less than 70% of the profits. Contract farming provides greater ownership and security for farmers, hence its promotion by the GoL. However, studies in Luang Namtha and other provinces have shown that the model is not always successful or stable, and is often converted into a “1+4” approach. This approach gives companies more control over production as well as a higher share of the profits6.
In Cambodia the speed of deforestation has accelerated more than in any other country -> rubber has been a top driver of this deforestation
Top rubber exporters Vietnam and Malaysia are now among the top 10 countries with the fastest forest loss over the past 15 years
Cambodia, Myanmar, Laos, and Thailand saw the world’s most new rubber plantations in the last 10 years
Similar activities and measures within the project are similar in Thailand, Myanmar, Laos, Cambodia lessons learnt gained in one of these countries can be used for other countries
Stop of Land conversion (deforestration free)
Proof of economic viability of sustainable rubber on a smallholder scale and income
Nachhaltige rubber produktion in SEA at benefit
Transparent and sustaibnable value and supply chain
(methodological and practical proof)
20 million depend on the rubber sector
Regarding our main aims, we promote the Sustainable Rubber’s life cycle practice for smallholders. Whereas sustainable means not only for environmental aspect, but also included social, economic, and cultural aspects. In each region of Thailand, they treated rubber differently. In southern region, Rubber is life. While, in the other regions, rubber is the alternative income. So to understand this would help for different stakeholders to work with smallholders in effective way.
Furthermore, the understanding of whole value chain of rubber is very important among farmers and other stakeholders. Many farmers focus on only at tapping stage whereas they might not consider that the thinning at 2nd stage will generate the high quality of rubber wood at the last stage that means additional income like a pension for farmers at the end of rubber life cycle. The sustainable way of thinking and practice would help farmers to have better livelihoods then to sustain their plantations which will benefit the rubber industries for the country and overall rubber supply in the future.
Three sustainability risk reports – on manufacturing, infrastructure and agricul
Myanmar Rubber Study Tour in Thailand (resulted in the Ministry agreed to follow an agroforestry model in Myanmar (engaging smallholders) and appointed staff at rubber market and rubber cooperatives to learn how to set them up for Myanmar)
WWF Myanmar has been providing inputs to ensure that a sustainability component was embedded in National Rubber Law.
Three sustainability risk reports – on manufacturing, infrastructure and agricul
Myanmar Rubber Study Tour in Thailand (resulted in the Ministry agreed to follow an agroforestry model in Myanmar (engaging smallholders) and appointed staff at rubber market and rubber cooperatives to learn how to set them up for Myanmar)
WWF Myanmar has been providing inputs to ensure that a sustainability component was embedded in National Rubber Law.
In Cambodia the speed of deforestation has accelerated more than in any other country -> rubber has been a top driver of this deforestation
Top rubber exporters Vietnam and Malaysia are now among the top 10 countries with the fastest forest loss over the past 15 years
Cambodia, Myanmar, Laos, and Thailand saw the world’s most new rubber plantations in the last 10 years
Similar activities and measures within the project are similar in Thailand, Myanmar, Laos, Cambodia lessons learnt gained in one of these countries can be used for other countries
In Cambodia the speed of deforestation has accelerated more than in any other country -> rubber has been a top driver of this deforestation
Top rubber exporters Vietnam and Malaysia are now among the top 10 countries with the fastest forest loss over the past 15 years
Cambodia, Myanmar, Laos, and Thailand saw the world’s most new rubber plantations in the last 10 years
Similar activities and measures within the project are similar in Thailand, Myanmar, Laos, Cambodia lessons learnt gained in one of these countries can be used for other countries
