The Evolution of Certified Teak Grower Groups in Luang Prabang, Lao PDR: An Action Research Approach

Abstract

Tree grower groups have been promoted by governments and development programs worldwide as a means to generate income and improve the livelihoods of smallholders by generating economies of scale and improving their bargaining power. In Luang Prabang province, Lao PDR, three plantation teak grower groups were examined using an action research approach over a 4-year period between 2013 and 2016, with the aim of fostering improved returns to group members. At the beginning of the study, it was observed that despite the existence of a price premium from certification, the unpredictable nature of sales, complex government regulations and the small contribution of teak to total household incomes combined to thwart efforts by the group to sell trees on the regular basis that would make membership worthwhile for growers. An intervention by group members and researchers to develop an internally funded enterprise unit within the group structure which added value to local timber proved to be technically feasible, although it is still too early to judge its sustainability. However, this opportunity did not immediately benefit smallholders since high entry costs, poor technical knowledge and low financial transparency dissuaded group members from buying shares in the enterprise. Improved returns to smallholders will likely occur in time as a result of local enterprises paying higher prices for timber, rather than through active group membership.