Three firms in Lai Chau Province are in serious disagreement with the local government after a change in the province’s rubber tree development policy,

Workers plant rubber trees in the northern province of Lai Chau. A change in the province’s development policy may cause huge losses to rubber firms.

More than 700,000 rubber seedlings planted under the committee’s directive by the three firms in 2006 will be cut down and wasted, with the committee only willing to compensate for one-third of damages.

The saplings were planted by Xuan Thanh Production Co-operative, Lan Anh Company Ltd, and the province’s Management Board for Protecting Forest to supply rubber trees for the district’s 500ha in 2008 with a vision to 2010.

By 2008, 700,000 trees had been planted by the firms, and then the committee decided to develop large-scale cultivation instead by letting the Lai Chau Rubber JSC under the Viet Nam Rubber Corporation grow the rubber saplings.

Under the change, the supply of rubber saplings to farmers would be planted and distributed by the Lai Chau Rubber company instead of the three firms as before.

Ineffective, small-scale

The model of small-scale cultivation is no longer compatible with the agriculture development in the province, said Le Trong Quang, deputy chairman of the Lai Chau People’s Committee.

“The three firms have a lack of investment capability; ensuring the sustainable development of the rubber saplings requires from VND90 million (US$5,000) to VND100 million ($5,560) per hectare,” he said.

The yield of the three firms for the past two years was only 624ha, while the Lai Chau company in less than a year had planted more than 2,300ha; this created many jobs and stable income for farmers, he said.

In order to develop Lai Chau as an effective processing centre for rubber, the cultivation of seedlings must be carried out on a large-scale instead of small-scale, he added.

A second rubber company in Muong Te District will be set up by the end of this year to reach the target of 26,000ha of rubber trees by 2015, he said.

‘Unreasonable’

Firms will be given only VND3,000 (US$0.16) each for 275,000 saplings, according to the committee’s meeting held on August 19.

Nguyen Van Tho, head of Xuan Thanh Production Co-operative, said the compensation was unreasonable as all his 430,000 seedlings were planted following the direction of the committee.

“The committee in 2006 issued a document to ask our three firms to produce 275,000 rubber saplings. In 2007, we were asked to grow 600,000 additional saplings to supply an extra 1,000ha, written in the committee’s year-end summation,” he said.

Quang, who decided rubber seedlings policy in the district, said: “Only the seedlings directed in documents by the committee in 2006 were to be compensated”.

“The committee indeed issued a document to direct rubber seedlings plantation in 2006. But from 2007, no further directions to plant more were made,”

The decision to plant additional saplings were only due to the enterprises’ desire to make profits without careful consideration about legal documents and verification in the following years, he said.

However, according to Tho, further direction in 2007 was written in the 2006’s end-year summation and through the word of mouth of some officials.

“The officials then arrived personally at each unit to ask for more sapling cultivation,” he added. “We were then too careless, because we didn’t ask for the contracts.”

Xuan Thanh co-operative, suffering the heaviest loss of more than VND3 billion ($168,000), is on the edge of bankruptcy. Out of the VND800 million ($44,800) total compensation, Tho only benefits VND300 million ($16,800).

Based on the price level regulated by the Ministry of Agriculture and Rural Development, the total loss of the three firms was calculated as more than VND5 billion ($280,000).

Reforestation rejected

A proposal to afforest the saplings in question instead of cutting them down was rejected by the committee at the meeting. The reason was not stated.

It is unclear why this is not an option, given the committee’s stated policy of rubber tree development in the area.

Another suggestion to merge the three firms with the Lai Chau company to keep the saplings alive was also rejected.

“The merge is not feasible, because those saplings are too big to be germinated and the three firms lack professional experience and capital,” he said.

VietNamNet/VNS