Bananas, beef and gold: China’s appetite drives ‘Made in Laos’ brand, but at what cost?
- In 2021, Laos earned more than US$900 million from agricultural exports, with more than 80 per cent of that total going to China
- Demand is gobbling up land as Laotian farms pivot to a Chinese market. There are fears Laos’ debt crisis is leaving it exposed to unethical investments
‘Made in Laos’ has become a banner of quality in China’s supermarkets, as part of a decade-old trend that started with bananas but is branching out into new crops – many like corn, which are unwanted in the domestic market but grow fast in Laos’ climate.
Demand from across the border has changed the incomes of countless Laotian farmers who used to get by on just two or three yearly rice harvests, with months of downtime in between, in what is one of Asia’s poorest nations.
Now, the day rate for farm labour is around US$5-7 in many areas, an increase of about a dollar according to local farmers. But most importantly, the work is year round, rather than seasonal.
“We have built new houses,” says Nang, 47, as she prepares lunch for a dozen others scything through ripe rice stalks across several hectares of land.
“We have work across the whole year now … we barely take days off. Once the rice is harvested we’ll plant the corn almost immediately. It goes on like that for many months.”
But the demand is also gobbling up land as Laotian farms pivot to a Chinese market that is also seeking cassava, oranges and beef.
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In 2021, Laos earned more than US$900 million from agricultural exports, according to data from the Lao Trade Portal website. More than 80 per cent of those went to China.
New deals have set the direction of travel.
The country agreed to export 100,000 tonnes of peanuts, cassava and bananas to China between 2021 and 2025, Chinese state media reported last week, while a joint venture with a Tianjin-based agricultural firm has agreed to “large-scale healthy breeding of cattle”. Laos has been given a quota of 500,000 head of cattle for export to China.
Environmental groups and Laotian smallholder farmers fear that runaway plantation growth – and industrial-scale cattle farming – will overwork the land and undercut plans for tree regeneration in one of Southeast Asia’s most forested nations.
There are also fears Laos’ debt crisis – the country owes billions of dollars to foreign governments and companies that have built its infrastructure – is leaving it exposed to unethical investments.
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Mining concessions are causing particular concern – Laos exported US$55 million in gold and gold bullion last year – and several Chinese companies hold rights to vast tracts of ore-rich land in the middle of remote, pristine forests.
“Investment can bring huge economic benefits to recover from the current crisis, but equally certain investments can seriously undermine social and environmental development, and in the longer term cost the country more than it benefits.”
The country’s government has taken action against some dangerous farming practices.
It banned new concessions for banana plantations using certain pesticides and preservatives, after complaints from villagers about sickness and the toxic run-off that makes its way into water sources and soils shared with natural forests.
But in an unintended consequence of the country’s breakneck development, ethnic groups at the bottom of the economic ladder are being pushed to farm further into forested hills as the best land goes to Chinese investors.
Sai, a 38-year-old of the Khmu ethnic group, says his community has resoundingly lost from Chinese investment after being relocated for a Chinese dam on the Beng river, exiled from their farmland and forced to leave their livestock behind.
“Now we work for the Chinese but we can’t feed ourselves,” he said. “Some months we’ve got work and others we don’t.”
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Clean business advocates have urged foreign investors eyeing Laos’ land and natural resources to help raise – rather than erode – standards in a country only just emerging from decades of isolation.
“Businesses that have strong commitments to working responsibly should bring that culture with them to Laos,” O’Connell of the UNDP added.
“There is a willingness among Laos’ businesses to learn from international businesses on how to balance growth with respect for social and environmental standards.”
This story was produced with support from the Rainforest Journalism Fund in partnership with the Pulitzer Center
