Presented by Indah Waty Bong, from the Center for International Forestry Research (CIFOR), at the 7th Conference of the ASEAN Working Group on Social Forestry (AWG-SF) in Chiang Mai (Thailand), June 12-16, 2017.

1. Implications of the ASEAN Economic Community
(AEC) for trans-boundary agricultural
commodities, forests and smallholder farmers
Robert Cole, Grace Wong, Indah Waty Bong
AWG-SF Annual Conference
Chiang Mai, 12-14 June 2017

2. Outline
1. ASEAN Economic Community (AEC)
2. Potential impacts of AEC integration
- Forest transition
- Agrarian transition
3. Laos case study: AEC and contract farming
4. Implications for forests and AEC policy limitations
5. Recommendations for policy and future research
to support evidence based policy making

3. 1. ASEAN Economic Community (AEC)
• ASEAN launched AEC in early 2016
• “a globally competitive and integrated single
market and production base that is founded on
the free movement of goods, services, capital,
investment and skilled labor” (ASEAN 2008)

4. 1. AEC (cont…)
• 2007-2015: Increase ASEAN trade by USD 700 bio
(1/4 intraregional) (ASEAN 2016a).
• 2015-16: ASEAN attracted USD 120 bio in Foreign
Direct Investment (FDI)(ASEAN 2016a). … but most went
to Singapore and Indonesia
• More advanced member countries  FDI for
manufacturing
• CLMV block  investment for natural resources
and agricultural production

5. 1. AEC (cont…)
• AEC’s focus on food, agriculture and forestry 
regional food security and increase ASEAN
competitiveness in global market.
• Open up access to larger regional and global
market, while exposing domestic producers to
intensified competition from more advanced
countries.
• Could lead countries to intensified competition
over agricultural and forest land and resources.

6. 2. Potential impacts of AEC integration
- Forest transition
(Angelsen and Rudel, 2013)
- Agrarian transition
(de Konick, 2004)

7. FT curve 1
FT curve 2
2. Potential impacts of AEC integration

8. 3. Laos case study: AEC and contract farming
Integrated agricultural production (AEC)
affects forests and smallholder livelihoods
in Laos
• Expansion of trans-boundary contract
farming of commodity crops
• Different contract, sharecropping and
land rental schemes in Laos related to
trans-boundary demand: maize, banana,
sugarcane, cassava and rubber.
• Demand or to supply specific
neighboring markets e.g. Vietnam,
China and Thailand

9. 3. Laos contract farming (cont..)
• Driven by increasing demand and investment
from neighboring markets
• Sustained growth across the region  more
prosperous 
1) changing food consumption  Animal
protein/livestock
2) Urbanization  outsourcing of food production
from land/labor-constrained countries

10. • Contract farming beneficial for smallholders?
Income for farmers.
However:
• Weak position in contract agreement, depend on
provider.
• Laos is a supplier of raw agricultural commodities
for more advanced ASEAN neighbors.
• This role altered land-use and livelihood
practices, accelerated the expansion of
commodity crops to marginal areas, put
pressures to forests.
3. Laos contract farming (cont..)

11. Strengthening
commodity market
within AEC can displace
the production of land
intensive commodities
from countries at later
stages of forest
transition (pushing for
reforestation
domestically) to
countries with advancing
forest-agriculture
frontier.
3. Laos contract farming (cont..)

12. 4. Implications for forests and AEC policy limitations
If countries such as Laos
continue to provide a mainly
supply role in regional
commodity markets, this will
draw heavily on their present
main comparative advantage
– the ability to absorb land
intensive production (Bourdet
2000). Unless adequate
institutional and regulatory
frameworks are supported
and enforced, this may risk
further large-scale
conversion of forests and
loss of important ecosystem
services.

13. 4. AEC policy limitations (cont..)
AEC promote collective aims towards sustainable
practices that protect forests.
But, limited sector coordination with competing
interests and lack of acknowledgement of diverse
SF and agroforestry models
Sector specific strategic plans of action (SPA)
• Livestock
• Crop production
• Forest

14. 5. Policy recommendation for equitable and
sustainable outcomes of AEC integration
• Stronger coordination at regional and national levels between
forestry, agriculture and livestock sectors in considering and
evaluating trade-offs of coexisting objectives for optimizing
production on the same land base.
• Considering and responding to local contexts and
participation of those who depend on land and forests for their
livelihoods in achieving AEC objectives.
• Giving stronger role to initiatives or national programs that are
more responsive to local needs and different pressures on forests
e.g. social and community forestry.
• More direct regulatory and safeguard measures within
specific sectors; e.g. contract or investment arrangements could
be designed to improve the balance of ownership, voice, risk and
reward between investors and landholders or producers

15. 5. Recommendations for future research to provide
evidence to support informed policy making
• Case studies into how enhanced regional integration and changing demand structures have
affected land, smallholder livelihoods and forests.
• Provide policy inputs for increasing inclusiveness and agency at the local level:
Understanding how smallholders cope with and manage the different risks, and how they
capitalize on the opportunities, resulting from AEC integration.
• Manage policy synergies and trade-offs: Assessing how the AEC interacts with forest
sustainability policies and mechanisms (e.g. PES, REDD+, FLEGT, forest certification standards)
and cross-sectoral environmental policies (e.g. climate change and NDCs)
• Enabling and ensuring sustainability and equity goals within different contexts:
Examining AEC integration at multiple scales (subnational, national and regional) to situate
location and sector specific issues within aggregate processes of change.
• Derive lessons and assess the differentiated socioeconomic and ecological impacts
in participating countries: Review the forest and agriculture policy architectures of
existing models of economic integration (such as the North American Free Trade Agreement
and the Common Agricultural Policy of the European Union).

16. cifor.org
blog.cifor.org
ForestsTreesAgroforestry.org
i.waty@cigar.org
cifor.org/asfcc