Agriculture Reference
In-Depth Information
13.6
Peasant Subsistence Risks, Market Risks,
and Investment Risks
“The biggest risk is not taking one.” - ADB (2005d: 18)
Model for the Proposed Lao Plantation Authority
The primary activities of the Asian Development Bank in Laos are organized
around delivering and managing loan and grant programs for rural poverty reduc-
tion, through environmental management and private sector development.
Another crucial function of the development banks is the management of external
perceptions of Laos as a high sovereign investment risk country. For example the
Phase 2 FPDP plantation promotion project was to include a
US$200 million
political risk guarantee for facilitating foreign direct investments (ADB 2005c).
And based on the field experiences with the ITPP Phase 1 project, it was con-
cluded by the ADB project managers that a smallholder pulpwood plantation
sub-sector in Laos could only develop in relation to assistance and expertise from
private plantation actors.
As indicated in Table 13.1, a majority of the ITPP smallholder loan recipients
were from peri-urban areas around the cities of Vientiane and Savannakhet.
However there were also many smallholder loan recipients from more marginal
provinces such as Salavane. The poor performance and outcome of the first ITPP
project, especially in these peripheral areas raises significant questions concern-
ing the weighting of market and livelihood risks by the project. In Ban Naa Pang
Yai, it is clear that the extent of the project risks borne by peasant farmers was
unacceptably high. Arguably, insufficient analysis and conceptualizing of small-
holder risks in Laos characterized both ITPP and the design proposals for a Phase
2 project.
For peasant farmers in Naa Pang Yai, the 'biggest risk' was indeed to agree to
accept a loan for an unproven forestry technology from the ADB, with no market,
no extension advice, and delayed or inadequate provision of technical inputs. Many
farmers in Naa Pang Yai are barely able to produce a sufficient surplus of calories
and cash income to feed their families. Under these conditions, the decision to use
the cash and fertilizer input facilities of the smallholder loan program to spread
their livelihood risks, and to address immediate household vulnerabilities, was a
rational approach based on a rural-peasant's perspective of risk reduction. Yet, such
understandings of peasant vulnerabilities and responses to risk were never featured
in any ADB project planning documents. The messy contingencies which charac-
terized villager's actual interactions with the ADB's ITPP eucalyptus program did
easily not fit with the project's view of marginalized Lao farmers as incipient 'arbo-
real entrepreneurs', who would, with the proper incentives, organize their conduct
only around silvicultural imperatives and the seven year planning horizons required
for growing eucalypt trees. Another reason for this lacuna concerning peasant live-
lihood and risk on the part of the ADB may have been that smallholders were
always conceived of as subsidiary tree planting actors. The primary goal of the
ADB project designers, particularly evident in the Phase 2 proposal documents,
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