Case study in Son La and Lam Dong Provinces PROPOOR LAND CONSOLIDATION: Issues related to Ethnic Minorities 1/2013 1

Rationale of the Research Land consolidation (LC) is happening in all over the country, which has impacts on different ethnic minority groups and under different modalities It has changes farming effectiveness, product quality and income value per unit of land It stringers changes in land use, labor structures in the society, which may cause “land loss”, lack of on-farm employment and negative impacts on the social structure It is a solution to develop agriculture commodities which producers apply as an advantage How LC has taken into account the perspectives of the poor and ethnic minorities? 2

Study in Son La and Lam Dong Selecting production entities as a research object to describe LC solutions and its impacts on relevant stake holders Case study, qualitative research methodology Describe perspectives of different stake holders, especially ethnic minorities who involve in LC In depth interview 46 households, 5 group discussions, interview 5 companies, 10 governmental departments, People Committee in 8 communes, 7 village leaders 3

Ethnic Minorities in Son La and Lam Dong Son La has more than 1 mil people belonging to 12 ethnic groups. Ethic minorities accounts for over 80%; Thai – 55%, H’mong – 12%, Muong – 8.4%, Dao – 1.82%, Kho Mu – 1.89% and other groups Lam Dong has over 40 ethnic groups – 1 mill people. Ethic minorities account for 33%: K’ho – 12%, Ma – 2.5%, Nung – 2%, Tay, Hoa – 1.5 %, Chu Ru – 1% and other groups 4

Production Entities that has Land Consolidated Companies – State Joint Stock company (Son La Joint Stock Rubber Company) – Lam Dai Ltd. Company (100% foreign owned, producing vegetables) – Maya Ltd. Co (100% foreign owned) Cooperatives – A cooperative which its founder members is ethnic minorities (S ơ n La) – A cooperative which has no ethnic minority (Lam Dong)

Land Consolidation in Different Cases LC reflects the specialization approach of the production entities in order to exploit the local natural resources, social and technical advantage (farmers contributing land to the joint venture, contract farming, companies leasing land from farmers) Time period of LC depends on the availability of supporting policies and the results of the production entities The “specialization” solution and “capacity of the farmers who has land use rights” decides the cooperation modalities between the land use right holders - farmers and the production entities in LC 6

Pull Factors of Land Consolidation CompaniesCooperatives The role of the local authorities Call for investment, supportive policies, support infrastructure, “a bridge” supporting companies leasing land from farmers Approval, and involve in the process of dissemination at village level Capacity of the production entities Financial resource, technology, market. Capacity to seize/exploit opportunities created by investment policies Indigenous knowledge, understanding of ethnic minorities. Capacity to exploit advantages created by pilot models Farmers’ need to increase production effectiveness The need of farmers who have not effectively use their land (but still keep some land for production – Son La), leasing land - short term Expectation to increase income from production in each land unit Commodity development policy Policy to develop hi-tech agriculture (not exclude cooperatives, more suitable for companies) Project to support agriculture models: providing technique, seeds and credit 7

Reason to choose the modality of Land Consolidation * Case Guidelines from the province, district Commune plan Need of the company Needs of farmers The Rubber company19 ** 14 The 19/5 cooperative Case study Sơn la 8 *Perspective of the interviewees ** Number of farmers in the interview minutes

Change of Labor Structure Changing the position of land use right holders (from employers to employees) Change the labor relations (from having full autonomy to make decision to depending on the decision of the production entities) Change the characteristic of asset accumulative production to commodity production. Reduce opportunities to select products/commodities which is suitable to their farming capacity Promote (cooperatives) and eliminate (rubber company) the simple emerging agri production models in the locality 9

Changes of Income Income changes : change of income is often compared between salary received and past income from the land contributed to the company. None of “farmer shareholder” knows how many % of the company value that they are holding, the profit sharing mechanism… Having income from land lease (in Lâm đ ồng) Change of income is corresponding with the level of labor invested (contributing land to cooperatives) Changing the “face” of community: (i) reducing poverty gap the poor get better off, the better-off become poorer (Son La rubber company); (ii) not get out of poverty/reducing livelihood opportunities (L Đ) 10

Changes of Traditional Social Structure Correspondent with change of production model at household and community levels Changes of household decision making related to organizing production, labor division, redistributing income in household Role of the elderly and skilled full producers reduces. Risk of negative impacts on indigenous knowledge with local product characteristic and culture identity Time for cultural activities and festival shorten and in smaller scale 11

Who decides Land consolidation Who decide?HouseholdLocal authority The rubber company136 The cooperative – corn variety production 7 If they could re- decide the land consolidation Still contribute land NoNot sure The rubber company6121 The cooperative – corn variety production 7 Son La case study 12

Challenges CompanyCooperative Product and market risk Farmers do not receive dividends if the company has no profit. Asset on land do not belong to farmers if the company run bankruptcy Product selling price is low (farmers contacts other buyers) Transparency in profit sharing mechanism Farmers perceive that the contribution value for 1 ha of land is low. They are more interested in their future benefit Relationship between cooperatives and farmers could be broken if there is an competitor with short term buying objectives Voice of community members when becoming workers/member Labor relationship -employees and employers – is often applied rather than shareholders and companies The position of farmers is higher when they become the owners of the contract with the cooperatives Effectiveness of land contribution and keeping “Red books” Limitation of land capitalization for company and the ability to use remained land use rights of farmers Not apply 13

Discussion: Effectiveness of Land Consolidation (Son La) In line with the industrialization objectives of the locality Leading to many households under the “safety” level Eliminate simple emerging production models “Assimilate” community to be the sole worker class LC exploits natural and policy advantages, rather than social, technical and culture advantages Erosion of cultural values, indigenous knowledge through different production development stages of LC 14

Discussion: Effectiveness of Land Consolidation (Cooperatives) Limit the dynamic of production entities because they can not consolidate big land area Within the “safety” level of households Create opportunities for market access and to develop commodities with indigenous knowledge No significant change of income and social structure Improve farmers’ position when they are a production entity signing contract with companies Difficult to make big changes due to small scale, technical capacity and limited production organization 15

Recommendations The approval procedures of investment project which having land consolidation should includes : – Appraise the relevance of the planned land consolidation with culture identity, social structure to avoid loosing culture and ethnic identity – Appraise the adaptability of production model at household level after land consolidation – Implement community consultation before approval the investment project. Should not approve first, and then mobilizing/sensitizing people 16

Recommendations Should have supportive policy to “pull” production entities to introduce traditional products to market Should have special policies when land consolidation involved: changing farming structures for farmers who fall under the safety level of production and labor Continue to study to improve the rubber company model: representativeness of shareholders, insurance for assets on land, effectiveness of keeping the “red book” Other researches 17