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The economics of ELCs

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A man does his washing last year at a relocation site built next to an economic land concession in Koh Kong province.

The economics of ELCs

Economic land concessions in Cambodia have a profound and negative impact upon rural households located near the plantations, severely limiting residents’ access to natural resources and causing incomes to dip by almost a fifth, a new study by the University of Copenhagen has found.

The report, titled Rural household incomes and land grabbing in Cambodia, surveyed 600 households across 15 villages in three communes: Taken in Kampot province, Sangke Satoap in Kampong Speu province and Tomring in Kampong Thom province.

The results found that ELCs lowered villagers’ total household income, as well as how much cultivable land they had access to, while their distance to forests increased and their livestock holdings decreased.

“The total household annual income subjects to ELCs were estimated to decrease by 15 [to]19 [per cent],” the report says.

“While providing some employment opportunities, we find no evidence of positive income effects of ELCs on households in the areas where ELCs are located.”

Of the Kingdom’s more than 14 million people, over 80 per cent live in rural areas. Incomes average around $135 per month and are largely derived from agricultural and environmental sources.

Still, despite moratoriums on land grabbing, companies operating ELCs dominate and run much of Cambodia’s arable land. According to the report, by 2012, land concessions covered more than 2 million hectares.

“There are no official statistics available, but this large-scale land allocation may have affected some 400,000 people as land has been transferred mostly from subsistence farmers,” the report says.

Since Prime Minister Hun Sen imposed the moratorium on new ELCs in May 2012, the government launched an audit of existing plantations, cancelling many that were deemed to have not lived up to their investment promises.

Critics, however, say that the scheme has not focussed on areas which remain important to local tycoons or foreign investors, who forest monitors claim target rare and protected timbers for export.

In Tomring, government-sponsored rubber plantations began taking root in 2001.

Such plantations now cover around 6,200 hectares – 14 per cent of the total commune area.

But while improvements in infrastructure have admittedly provided better access to markets for some of the residents, the report says, “Household level forest related activities are declining as distance to natural forest is increasing.”

Furthermore, in Taken commune, local residents depend on forest products, such as logs, fruits and bamboo shoots, both for personal use and to sell.

However, rampant deforestation and land clearance has made access to these products more and more difficult.

“This has fuelled demand for new settlements and agricultural land with consequent deforestation, a situation further exacerbated by land speculation among the local elites and recent ELCs of some 5000 [hectares] for acacia and cassava plantations,” the report says.

Many ELCs have in the past committed to boost job creation in such areas. But the report found that their presence forced rural residents to find alternative revenue sources and trespass on company land.

As a result, the reporting team recommends that Cambodia changes its land laws and more forcefully implement its 2012 moratorium on concessions.

Pheap Sochea, president of the Cambodian Indigenous Youth Association, said that while his organisation has no economic impact studies available, he has seen a dramatic decrease in annual income.

“Our indigenous peoples rely heavily on land for agriculture and natural resources for [forest products],” he said in an email.

“They do not have the expertise or capacity to earn income in other livelihoods. Our incomes are not in cash, too.”

Stella Anastasia, technical assistant for rights group Adhoc, also noted that land clearance sometimes leads to no further development of the concession, leaving it effectively barren for locals.

“In many cases, land is cleared and trees are harvested for commercial logging purposes, without the concession being developed,” she said.

“As a result, villagers often lose access to natural resources while no new employment opportunities are created.”

Spokesmen for the Council of Ministers and Agriculture Ministry declined to comment.

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