That Stink Is the Smell of Money: China's New Rubber-Farming Dilemma

By Chris Horton
rubbertree.jpgA worker collects latex from a rubber tree in Sanya, China (Andy Gao/Reuters)

Our van stopped at a scenic vista on the contour road where verdant mountains undulated southward toward China's border with Laos. Stepping out to take some photos, I was overcome by an acrid, unpleasant odor. I asked my local travel partner Xiao Guan what the stink was.

"Money," he said with a wry smile. "That's the smell of money, my friend."

He pointed to a small rubber plantation where latex was being processed. After I took some photos and boarded the van, I noticed rubber plantations everywhere we went.

It was late 2010 and I was traveling through the countryside in the Xishuangbanna Dai Autonomous Prefecture, a tropical area roughly the size of New Jersey in southwest China's Yunnan province. In addition to being home to several ethnic minorities, Xishuangbanna is best known for pu'er tea, wild elephants and the Lancang River, the Chinese name for the Mekong. Recently, however, Xishuangbanna has taken on a new identity: the land of rubber.


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According to a recently released report, land under rubber cultivation in Xishuangbanna nearly tripled between 2002 and 2010 to account for more than a fifth of the area's total land. And in those years, rubber's positive impact on local livelihoods, especially among ethnic minorities, has become increasingly pronounced: Traditional wooden homes have given way to modern concrete and rebar edifices and cars have replaced motorcycles. But recent research by Chinese and Western scientists suggests the industry could collapse in the near future if new management strategies are not applied.

So how are the people in this remote corner of one of China's poorest provinces making so much money off of rubber? The answer is plain to see in Xishuangbanna's roads and parking lots: cars.

In 2009 China overtook the United States as the world's largest market for new automobiles and the trend is not going away. The China Association of Automobile Manufacturers predicts seven percent growth in 2013, fuelled by China's domestic consumption and the growing demand for Chinese cars overseas. China's car boom not only has created extensive auto-focused supply chains on the banks of the Yangtze and Pearl Rivers, but also has changed the fortunes of farmers in Xishuangbanna. Cars need tires and this mountainous, lush pocket of southwestern tropical China is a crucial producer of natural rubber for China's massive tire market, which constitutes about one-quarter of global tire demand.

Around 42 percent of the rubber consumed worldwide in 2013 will come from rubber trees while the rest, according to Singapore-based International Rubber Study Group, will be synthetic rubber made from petroleum. Natural rubber is derived from latex, a viscous substance produced beneath the bark of the tree Hevea brasiliensis, which, after being treated with acid and rolled out, can be used to make a wide range of consumer goods. Rubber trees must grow for about seven years before they can produce latex. Once mature, a tree can be tapped once a day, every two or three days, for around 25 years.

Today it is difficult to travel in Xishuangbanna without encountering rubber plantations, and mountains covered by nothing but rubber are a common sight throughout the area. This is not Xishuangbanna's first experience with cash crops, but it is the first time that so much of its land has been converted to grow just one species.

Xishuangbanna covers only 0.2 percent of China's land area, yet it contains 16 percent of the country's vascular plant species and is home to more than one fifth of its mammals and well over a third of its birds -- a spectacular biodiversity now threatened by rubber's spread. In domestic terms, the prefecture's rubber output is second only to that of Hainan, an island province in the South China Sea.

"Rubber cultivation has made ethnic minority farmers really rich in the context of China."

Native to Brazil, rubber trees have grown in Xishuangbanna since 1940, when government researchers planted the first trees in the area. These initial plantings were followed in the mid-1950s by the first state-run plantations. Under the land reforms of the 1980s, the local government allocated plots to farmers for the first time since Mao-era collectivization. Since rubber tapping isn't particularly labor intensive and yet yields a high return, many farmers enticed by growing demand have felt justified creating slash-and-burn farms consisting solely of rubber trees. These so-called monoculture plantations maximize rubber tree coverage, but they are green deserts. Compared with natural forests, massive stands of rubber trees do little to sustain other plant or animal life, according to R. Edward Grumbine of Prescott College in Arizona.

According to data from the UN Conference on Trade and Development, annual average free market prices for blocks of benchmark TSR20 rubber (the "light sweet crude" of the latex trade) rose to nearly $5,000 per metric ton in 2011, up from $1,000 in 2003.

"Rubber cultivation has made ethnic minority farmers really rich in the context of China," says Janet C. Sturgeon, associate professor of geography at Simon Fraser University in Canada.

"Rubber farmers I interviewed across Mengla County [one of Xishuangbanna's three counties] averaged about $30,000 in annual household income," she said. "I was totally astonished. Rubber farmers had better incomes than workers on state rubber farms." Annual income at this level would put a family firmly in the middle class in China's more prosperous coastal cities, but in Yunnan, one of the country's poorest regions, it affords a very high standard of living.

Xishuangbanna's rubber boom is driving monoculture rubber plantations into areas previously considered too steep or too high for planting rubber trees. Plantations also are encroaching on protected areas and many local rubber farmers are expanding their holdings over the border into Burma or Laos and importing half-processed rubber back to Xishuangbanna.

In a recently released report, Grumbine and his colleagues Xu Jianchu and Philip Beckschaefer examined the spread of monoculture rubber plantations throughout Xishuangbanna from 1992 through 2010. Working at the Kunming Institute of Botany's Centre for Mountain Ecosystem Studies, the team used satellite imagery to track changes in land use. It found that Xishuangbanna's rubber plantation coverage had exploded over the 18-year period. In the 10 years from 1992 through 2002, the total area covered by rubber farms in Xishuangbanna jumped 77 percent, to 380 acres, while in the following eight years rubber coverage jumped 177 percent to 1,050 acres.

By 2010, more than 22 percent of Xishuangbanna was rubber farms, a calculation that doesn't account for the crop's intrusion into the Xishuangbanna and Nanbanhe Nature Reserves, which Grumbine described as "significant." In sum, Grumbine, Xu and Beckschaefer's findings show that Xishuangbanna's rubber industry at present is anything but sustainable.

Rubber plantations sequester less carbon than natural forests and their spread has led to a substantial net release of carbon dioxide. Because after the first few years the plantations require chemical fertilizers that often contaminate nearby bodies of water, oxygen-sapping algae can bloom and kill off fish and other aquatic species. In addition, since rubber trees use more water than native vegetation or other crops, especially during the hot months of November through April, the area's dry season is growing longer and both the number of foggy days and the amount of fog on those days is declining, affecting other agricultural production and regional food security.

The team's paper concludes that if the local climate continues its hotter and drier trend, it could become unsuitable for growing rubber altogether, a development that would devastate the local economy.

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Rubber is drastically altering Xishuangbanna's landscape, but for an area whose residents have watched much of the rest of the country become rich since the launch of China's reform and opening policies in the late 1970s, it is a sacrifice that many have been willing to make.

Small-hold rubber farms now cover more of Xishuangbanna than do state farms. In addition to being less productive than state farms, small-hold farms often use land that is not suitable for rubber trees. Local officials have encouraged small farmers to convert their plantations back to natural forest, but local governments also benefit from increases in regional GDP and have provided few economic incentives for farmers to change course. In the meantime, rubber farmers continue to tap their trees and make money.

"Rubber farmers are now able to build huge new houses, buy the latest model cars, get bank loans for new businesses, and send their children through school, including university for those who qualify," Sturgeon said. "They see themselves as successful entrepreneurs in China's booming economy."

"It wouldn't take too long -- tropical forests are the easiest to regenerate. It's really just a matter of there being a will to make it happen."

Yi Zhuangfang, a daughter of small-hold rubber farmers, not only went to university and became the first ethnic Dai woman to earn a Ph.D. in Xishuangbanna, but wrote her doctoral thesis on how to create a more environmentally friendly rubber industry. Yi says her research bridged a gap between her parents, who depend on rubber for income, and the local government, which wants to get a grip on the spread of rubber farms without hurting the economic interests of the farmers or its own tax revenues.

"I just wanted to do something useful," Yi said. For the Xishuangbanna government, which lacked important baseline data on its rubber industry, Yi's work could be very useful indeed.

After four years of research, Yi concluded that more than 50 percent of Xishuangbanna could be made off-limits to rubber plantations. It wouldn't be very difficult to do so, she said, provided that the local government made a real effort to implement and enforce her plans. Yi's proposal consists of five central elements: a ban on wasteful planting, the creation of strategic protected corridors linking existing pockets of biodiversity, sharing knowledge between government-run and private farms, compensating farms whose land is converted back to natural forest, and greatly improving enforcement.

Needless to say, this is easier said than done -- and it seems the current window will not be open for long.

Should the Xishuangbanna government decide to act against runaway plantations soon -- and it has not gone on the record to say that it will--positive results would be noticeable in just a few years, Yi said.

"It wouldn't take too long -- tropical forests are the easiest to regenerate. It's really just a matter of there being a will to make it happen."



A version of this post appears at ChinaFile, an Atlantic partner site.

This article available online at:

http://www.theatlantic.com/china/archive/2013/05/that-stink-is-the-smell-of-money-chinas-new-rubber-farming-dilemma/275578/