The Fall and Rise Again of Plantations in Tropical Asia: History Repeated?

TitleThe Fall and Rise Again of Plantations in Tropical Asia: History Repeated?
Annotated RecordAnnotated
Year of Publication2014
AuthorsByerlee D
Secondary TitleLand
Volume3
Issue3
Pagination574-597
Key themesAgriculturalModernization, Conversion-FoodSecurity, FDI, MigrationLabour
Abstract

The type of agrarian structure employed to produce tropical commodities affects many dimensions of land use, such as ownership inequality, overlapping land rights and conflicts, and land use changes. I conduct a literature review of historical changes in agrarian structures of commodities grown on the upland frontier of mainland Southeast and South Asia, using a case study approach, of tea, rubber, oil palm and cassava. Although the production of all these commodities was initiated in the colonial period on large plantations, over the course of the 20th century, most transited to smallholder systems. Two groups of factors are posited to explain this evolution. First, economic fundamentals related to processing methods and pioneering costs and risks sometimes favored large-scale plantations. Second, policy biases and development paradigms often strongly favored plantations and discriminated against smallholders in the colonial states, especially provision of cheap land and labor. However, beginning after World War I and accelerating after independence, the factors that propped up plantations changed so that by the end of the 20th century, smallholders overwhelmingly dominated perennial crop exports, except possibly oil palm. Surprisingly, in the 21st century there has been a resurgence of investments in plantation agriculture in the frontier countries of Cambodia, Laos and Myanmar, driven by very similar factors to a century ago, especially access to cheap land combined with high commodity prices. As in the last century, this may be a temporary aberration from the long-run trend toward smallholders, but much depends on local political economy.

URLhttp://www.mdpi.com/2073-445X/3/3/574/
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Overall relevance: 

This article traces the history of plantations in Asia which begun in the 1900s and expanded to what the author calls “periods of globalization”. The first period reflects the beginning of 1850 when the first movement of capital, labor and trade liberalisation occurred coinciding with the expansion of European empires. This tide has flipped inward after WWI when there was a shift away from plantations towards smallholders as the key producers of tropical cash crops which lasted until the mid-1980s. Since then, the region saw a resurgence of interests in large-scale plantations with massive expansions seen in Cambodia, Indonesia, Laos and Myanmar. How and why this occurs are the key questions asked in the article. The paper noted that there are three critical issues in the tropics today. First, agrarian structure is still defined by land ownership. Second, large land concessions are marginalising local communities. Third, large-scale mono-cropped plantations and commercial farms are still important drivers of deforestation

Key Themes: 
  • FDI and land access: economic land concessions, contract farming, short term and long term renting - Plantations offer several economic benefits. First, it enabled coordinated economies of scale especially for highly perishable commodities such as sugar cane, oil palm, tea and sisal which needs processing within 24 hours of harvest. Second, it lowers pioneering costs and risks especially for novel crops. Third, speculative investments for higher future returns
  • Land policy and land law - The growth of plantations could also be facilitated by distorted economic policies as for instance in the lax enforcement of social and environmental safeguards to lover costs for the company
  • Agricultural modernisation: key ideas and debates relevant to land tenure security - Modern production and agronomic practices also aid the growth of plantations. They have enabled specialisation of tasks and improved management to meet time-sensitive demands
Research basis: 

The article is a historical analysis of the landscape of commercial plantations for export commodities in Southeast Asia. It has developed a framework to undertake the analysis. The framework is composed of three sets of factors: economic fundamentals, biased policies, and beliefs and perceptions of modernity. This framework is applied in tea, oil palm, rubber and cassava. (Provided by Albert Salamanca)