Lessons learnt from afd support to smallholder rubber plantations
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Lessons learnt from AFD support to smallholder rubber plantations. Panel 2 : Different types of support programs for smallholder rubber plantations. J. DELARUE– N. NOEL AFD. Smallholder rubber plantation projects. What were the projects’ outcomes and how were they achieved? What’s next?

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Lessons learnt from AFD support to smallholder rubber plantations

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Lessons learnt from afd support to smallholder rubber plantations

Lessons learnt from AFD support to smallholder rubber plantations

Panel 2 : Different types of support programs for smallholder rubber plantations

J. DELARUE– N. NOEL

AFD


Smallholder rubber plantation projects

Smallholder rubber plantation projects

  • What were the projects’ outcomes and how were they achieved?

  • What’s next?

    • How can good quality plantations be achieved in the long term?

    • Should we support a greater number of smallholders in the future?

      Who and how?

    • Are rubber plantations a good way to alleviate poverty?


Afd support to rubber sector 1993 2009

AFD support to rubber sector1993 - 2009

13 interventions including 3 loans to private sector (PROPARCO)


Pilot phases followed by a rapid development

Pilot phases followed by a rapid development

Pilot phase

Context Activities

New areas Prove the feasibility of SRP

Low rubber pricesBuild capacities

Absence of extension servicesCreate first quality plantations

Absence of LT resources for banksDeliver services

Development phase

ContextActivities

Better rubber pricesBuild capacities

Extension services need moneyCreate more quality plantations

Absence of LT resources for banks Deliver services

Reach smaller farmers

Prepare a national policy

Outcomes


Implementation

Implementation

Guarantee for bank

Mitigation of risk for farmer

Coordination with national programs

LAND

Core aspect of projects

(50 – 65%)

Long term with grace period

Covers all plantation monetary costs

RURAL

ROADS

CREDIT

FARMER

INPUTS

EXTENSION

Advice to farmers, nurseries, banks…

Plantation, immature period, tapping period

Research/Development

Costs covered by credit

Planting material

Inputs delivery on field


High yields and profitability

High yields and profitability


High yields and profitability1

High yields and profitability

  • Cambodia:

  • 4 ha farm

  • real rubber prices until 2008, average price of 0.77 $/kg DRC after 2008

  • 2007 prices for other products


Assessment of the situation

Assessment of the situation

SRP technically feasible

Sustainable loans repayments and profitability

Price forecast not so pessimistic in the long run

Many spontaneous plantations

But

Beneficiaries still need credit and technical advice:

Many non beneficiaries also have needs (quality planting material, technical advice, credit)

Risks on the plantations

Difficulties to get banks involved on a long-term basis

 Dependence on donor’s financing and immature period not fully covered

Operational constraints

 Short-term projects don’t fully fit long-term needs


What s next

What’s next?

How can good quality plantations be achieved in the long term?

Should we support a greater number of smallholders in the future?

Who and how?

Are rubber plantations a good way to alleviate poverty?


How can good quality plantations be achieved in the long term

Smallholder

Private

Company

Bank

How can good quality plantations be achieved in the long term?

Engaging perennial stakeholders in a contractual scheme is promising

Delivers rubber to the company at a fixed price

Needs rubber supply :

Co-finances extension

Support nurseries

Tapping training

Sanitary control

  • Risks

  • land ownership

  • environnemental impact

  • negociation capacity

Attracted by the company’s involvement, takes commercial risk, pre-finances

Possible options:

Favouring the contract farming scheme in various countries

Increased support to producers’ organizations


How can we support a greater number of smallholders in the future

How can wesupport a greater number of smallholders in the future?

(1) Absolute priority : quality planting material

Adapted clones available

Large demand for planting material

(2) Large-scale extension : necessarily through national extension services (Vietnam) or producers’ organizations

(3) Financing needs

Possible options (1) and (2):

Support nurseries development and certification system

Support producer’s organizations

Funding : attract bigger donors? Levy on rubber exports (?)


How can we support a greater number of smallholders in the future1

How can we support a greater number of smallholders in the future?

(3) Financing needs:

  • Current situation:

  • Plantation costs are mainly covered

  • The loan is reimbursed by rubber production and profitability remains high

  • Difficulties to get banks involved in the first place (Cambodia) or on a long-term basis (Vietnam) (subsidized rates)

  • The financial scheme depends on donor’s provision of long-term resources (limits number of beneficiaries) and the immature period is not fully covered

  • Possible options (3)

  • For 60 to 75% of the farmers, we could probably adapt the credit … Financing needs

  • - Basing it on existing credit offer

  • Reducing the total amount of credit through targeted plantation cost reduction

  • posscredit


Are rubber plantations a good way to alleviate poverty

Are rubber plantations a good way to alleviate poverty?

  • Current situation:

  • Projects have served about 20% poor SEprofiles

  • Land scarcity is the main problem

  • Rubber has long immature period

  • Rubber has high plantation costs / access to credit Poorcst

But rubber is highly profitable!

Possible options:

Political decisions:

Land distribution could be done as in Vietnam, Thailand…

High plantation costs : targeted subsidies for planting material

Within small-scale projects :

Study pro-poor crop associations

Propose low-cost plantation techniques

Direct scarce long-term credit resources to the poor


Conclusions

Conclusions

  • Technical success was achieved thanks to intensive project support

  • Short-term projects do not fit long-term needs

  • Contract farming is a promising way of engaging stakeholders in the long term

  • To serve more smallholders, credit product offerings for plantations should be adapted to integrate the constraints of the banks

  • National policies are necessary to develop smallholders’ plantations on a larger scale or to target the poor


Financing needs

Financing needs

Moreover, rubber smallholders usually reimburse in advance

Retour


Socio economic profiles of beneficiaries

Socio-economic profiles of beneficiaries

72%

Retour


Poor people face strong constraints

Poor people face strong constraints

Land constraint

Credit selection

Retour


What credit was proposed for the next phase in cambodia

What credit was proposed for the next phase in Cambodia?

Credit over 8 years / Interest rate : 19%/year

Retour


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