Contract Farming in Lao PDR: Cases and Questions - LAD - nafri

Cross-border ties
Through frequent visits and chats on the telephone with
relatives in Muang Mun in Muang La (Mong La) just across
the border in China’s Yunnan province Ms Tan became
aware of the possibilities for watermelons.
“Last year I asked my relatives from Muang Mun about
growing watermelons here because I have land when they
were visiting to buy rice. Actually they were not interested
because of the paperwork and the government. But I told
them not to worry because I would take care of it,” she
says as we squat in the fields eating remarkably sweet,
fresh watermelon.
They agreed to invest and buy the watermelons. Ms Tan
has been trading and investing with her relatives since
1998. “Because we have being doing business with each
other for many years we trust each other, we don’t need a
[written] contract, we share the risk.”
Their funds bought seeds, of a watermelon variety the
Chinese call Sip Song Pan Na after the ethnic Tai region
of southern Yunnan that borders Laos and Burma, and
fertilizer in Yunnan. They also spent some of the money
on preparing the land which she says was ploughed many
times, first with a big tractor, later with small tractors and
hiring labour from time-to-time.
Her Lue partners in Muang Mun also arranged for Chinese
specialists to visit to give advice on cultivation. They sent
experts to identify the sweetest melons, which depend
on dry weather, which they marked with a sticker with
Chinese characters.
The fields may produce enough watermelons to fill 7-10
Chinese 12-wheel trucks able to haul 25 tonnes. Lue
relatives will pay 0.9 yuan per kilogram. “This is the first
time I’ve done this, so I don’t know exactly how much I will
produce. If we can make a profit of 40,000-50,000 yuan I
will do it again next year.”
Those ties have grown over the
last few decades as borders
reopened for travel and trade,
which has become easier because
communications now flow
freely and instantly with mobile
telephones and the internet. In the
process blood ties and clan links
are being renewed across the hills
from which are carved Burma,
China, Laos and Thailand helping
to foster commerce that once
moved across the principalities of
the region on the backs of mules,
elephants and porters.
This trade is possible in part because the melons are
exported across the border into China without hindrance,
inspections or import duties because Chinese customs are
apparently for the time being willing to accept arguments
by traders that because the seeds, fertilizer, advice and
some of the financing comes from China the watermelons
are therefore actually Chinese not Laotian.
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