Southeast Asian Studies, Vol. ῏ῑ, No. ῏, March ῎ῌ῍ῌThe Trading of Agro-forest Products and Commodities in the
Northern Mountainous Region of LaosYD@DN6B6 Satoshi*

Abstract
The purpose of this study is to clarify the trade flow of agro-forest products and commodities by analyzing commercial activities and private traders in a mountainous region.
This study focused on Ngoi district of Luang Phabang province in northern Laos where
there is a long history of non-timber forest product (NTFP) trading in the study area.
In the L£n X£ng Kingdom era, political coordinators called L£m collected agro-forest
products from mountain people as tax, and private traders purchased NTFPs, mainly
benzoin and cardamom. Then, under the communist regime in the period between ῍ΐῐῌand ῍ΐῒῐ, private traders were replaced by government-managed stores and the role of theL£m disappeared. After the Lao version of Perestroika or Chintanakan Mai in ῍ΐῒῐ, private
agro-forest product trading was re-established in the study area and in addition, general
stores and periodic markets appeared along the riverside. The re-establishment of agroforest product trading resulted from the stimulation of commodity flows due to the local
general stores and periodic markets, and vice versa.
During the Chintanakan Mai period, the NTFPs being traded in the study area were not
traditional foods or medicines but rather new products being exported to foreign countries,
especially China. The borders with Thailand, China, and Vietnam in northern Laos were
re-opened in the early ῍ΐΐῌs, after which Chinese traders came directly to northern Laos topurchase NTFPs. This paper shows how the stimulation of human mobility, commodity
distribution, and information flow observed after Chintanakan Mai has strongly affected
the livelihood of the mountain people.
Keywords: northern Laos, NTFP, commercial activity, agro-forest product trading, periodic
marketI

Introduction

Economic networks on a continental or global scale have developed, not only in urban
areas but also in rural areas since the late ῎ῌth century. The mountainous region of Laos
has also been incorporated into a novel market system, and this has brought about
various social, economic, and cultural changes. An understanding of these changes may
provide an insight into some of the effects of globalization. However, a basic understanding of the historic relationship between the mountainous and lowland regions in northern Laos is first required.
ῌ

374

῎῏ ῐῌ Department of Geography, Nagoya University, Nagoya ῏ῐ῏῍ῒῐῌ῍, Japane-mail: s-yokoyama῍nagoya-u.jp

YD@DN6B6 S. : The Trading of Agro-forest Products and Commodities in the Northern Mountainous Region of LaosIn Laos, the products that were supplied by the mountainous regions to the lowlands
were typically special kinds of forest products. Stuart-Fox [῍῕῕῔: ῐ῕] describes forest
product gathering in the northern mountainous region in the L£n X£ng Kingdom era ofthe ῍ῐth century: “Valuable forest products such as benzoin and other resins, sticklac formaking lacquerware, cardamom, and beeswax were collected mainly by Lao Thoeng.”῍) Interms of forest product trading, ethnic Lao ῎ ) traders, known as L£m, played an importantrole in the L£n X£ng Kingdom era of the ῍ῑth century [ibid.: ῐ῔ῌῐ῕]. According to Halpern[῍῕ῑ῔: ῒ῕], the relationship between the L£m and mountain people continued until the late῍῕ῑῌs.
Moreover, by the early ῎ῌth century, Yunnanese caravans, known locally as Cin Hocaravans, had constructed cross-border trade networks, and were trading between China,
Burma, Thailand, and Laos. This history has been shown to date back to the Tang age(A. D. ῒ῍῔ῌ῕ῌΐ) or more [Forbes ῍῕῔ΐ]. There were three main caravan routes between
Yunnan and northern Thailand through northern Laos during the late ῍῕th century: The
first was Muang Sing ῍ Xiangkok route to Chiang Mai and Uttaradit; The second was
Luang Namtha ῍ the Houayxay route to Nan and Uttaradit; The third was Oudomxay ῍
the Pakbeng route to Nan ῏ ) [Walker ῍῕῕῕: ῎῕ῌ῏ῒ]. At that time, raw cotton cultivated by
Lao farmers was sold to Yunnanese caravans as a principal product.
Although trading history in mainland southeast Asia has been an object of study fora long time, there is little information so far concerning agro-forest product trading byL£m and the trade between Yunnanese caravans and mountain people in Laos. As a topic
of research, it remains to be discussed further.
The trading system in northern Laos was greatly changed by political upheavals. In

῍῕ῐῑ, Laos became independent from France and established the Kingdom of Laos;
however, at the same time, a communist-led political association called Lao Issara (FreeLao) was increasing its influence in the country and established a provisional government in Vientiane [LeBar and Suddard ῍῕ῒῌ: ῍῕]. The Lao Issara had fought against
French colonialism and American imperialism for the liberation of Laos with a coalition
with the communist Vietminh. It subsequently formed a communist government called
the Pathet Lao,ῐ) and the headquarters were established in Xamneua in ῍῕ῑ῍ [ibid.: ῎῎]. The
Pathet Lao controlled the area of Phongsaly and Huaphan provinces in northern Laos,
designated as a liberated zone under the terms of the Geneva Agreements of ῍῕ῑῐ῍ῌ The term Lao Thoeng represents the Khmu.
῎ῌ The official ethnic name for this group is “Lao,” but it is often confused with an identicalword which stands for the Lao nation, that does not refer to any ethnic group. In thispaper, the term “ethnic Lao” is used to avoid confusion.
῏ῌ With regard to a route to Nan, Forbes [῍῕῔ΐ: ῍῏] suggest that caravan might visit Luang
Phabang, because a large daily market was held there.
ῐῌ This means “Lao Country.” The Pathet Lao was reorganized into the Neo Lao Hak Xat (LaoPatriotic Front) in ῍῕ῑῑ [Stuart-Fox ῍῕῕῔: ῕ῐ].
375ΐ῔῍῎῍ῑῐ ῐΐ῏ ῐ ῒ[Stuart-Fox ῎ῌῌ῍: ῍῕ῌ]. The Pathet Lao controlled the northern part of Laos from the late῍῕ῑῌs to the early ῍῕ῒῌs, and had established government-managed stores called Han Kha
Khong Lat in order to sell commodities and purchase agro-forest products.
The system of government-controlled trading continued even after the establishment of Lao People’s Democratic Republic (Lao PDR) in ῍῕ΐῑ. However, it began tocollapse in the mid-῍῕῔ῌs. The government adopted the Lao version of Perestroika or
Chintanakan Mai in ῍῕῔ῒ, and then private-managed general stores and periodic markets
began to appear in rural areas that had previously specialized in subsistence farming. In
addition, private agro-forest product trading was re-established.
Recent studies of trading in Laos have focused on border trade [Mya Than ῎ῌῌῒ;
Khontaphane et al. ῎ῌῌῒ], associated distribution routes [Walker ῍῕῕῕], smuggled timbertrading on border areas [Pholsena and Banomyong ῎ῌῌῒ: ῍ῐΐῌ῍ῑῐ], and an overview ofmajor agricultural crops [GoL, Department of Agriculture ῎ῌῌ῎]. There have been nostudies on how commodities have been supplied from the lowlands to the mountains, on
how agro-forest products have been supplied from the mountains to the lowlands, or on
historical changes in these processes. In addition, it remains unclear whether globalization has had an effect on agro-forest product trading.
In the northern mountainous region, the L£m have supplied many kinds of products
to lowland areas, and furthermore Yunnanese caravans may have directly trade a wide
variety of goods with mountain people. In this respect, the northern mountainous regionof Laos has been productive for a long time. However, the mountain people were merely
gatherers in this context, that is, there was a clear distinction between lowland people
and mountain people before Chintanakan Mai.
In fact, at present, the mountain people are in charge of a part of the global economy,
and they are not merely gatherers. Thus, it is hasty to reach the conclusion that themountain people of northern Laos were affected by globalization after Chintanakan Mai,
because the trading between the mountains and lowlands has been established, andagro-forest products have been exported from the mountains to foreign countries via thelowlands since the L£n X£ng Kingdom era. To be precise, some mountainous areas have
had a grounding in exporting natural resources on demand, and being embedded into themarkets of foreign countries [Pholsena and Banomyong ῎ῌῌῒ: ῍῏῍ῌ῍῏ῐ]. However, tradingin the region has constructed a different system after Chintanakan Mai than the one itpreviously had.
Over the past years, studies have focused on an economic shift, from subsistencebased agriculture and livestock to more commercialized agriculture and wage-earnings,
induced by government development policies.ῑ) Foreign investment from the neighboring countries such as Thailand, Vietnam, and China, have increased under the developῑῌ The Government of Laos has made it a top priority to break away from Least Developed
Countries (LDCs) by ῎ῌ῎ῌ [GoL ῎ῌῌῐ].
376

YD@DN6B6 S. : The Trading of Agro-forest Products and Commodities in the Northern Mountainous Region of Laosment project of the Greater Mekong Subregion (GMS) led by Asian Development Bank
(ADB) [ADB ῎ῌῌΐ]. Furthermore, China has an especially large influence on peoples’
livelihood in the northern Laos [Stuart-Fox ῎ῌῌ῕], and the mountain people comply with
Chinese demand for cash crops such as maize and sugar cane [Thongmanivong andFujita ῎ῌῌῒ], and rubber production [Cohen ῎ῌῌ῕; Shi ῎ῌῌ῔; Rattanavong ῎ῌῌ῔; Ziegler et al.

῎ῌῌ῕], in addition to forest products. These changes are strongly accelerated by improving transport infrastructure with aid from international donors such as ADB. In particular, Asian Highway No. ῏ linking Yunnan and northern Thailand through northern
Laos plays a central role in the regional integration. Many researchers have described
this circumstance as seeing Laos transition “from a land-locked country to a land linked
country” [Jönsson ῎ῌῌ῕] or becoming a “crossroads” [Pholsena and Banomyong ῎ῌῌῒ;
Lintner ῎ῌῌ῔].
It is obvious that the penetration of the global market has progressed at a rapid speed
and covered a wide spatial range in Laos. Improvements in transportation and logistics
platforms must be considered as one of the triggers underpinning this change, but that is
not all. There is still little known about what kind of changes occur in parallel with
infrastructure development in northern Laos. In order to deal with these issues, it isessential to understand agro-forest product trading and commercial activities at multiple
levels, from small mountain villages to urban areas. Consequently, the purpose of thisstudy is to clarify the trade flow of agro-forest products and commodities by analyzing
the commercial activities and private traders in the mountains from spatial and historical
viewpoints.
In order to achieve this purpose, this study focused on Pak Luang area,ῒ) Ngoi districtin Luang Phabang province as a representative example of the northern mountainous
region (Fig. ῍ ). Here, three ethnic groups, ethnic Lao, Khmu, and Hmong, live in the same
area. Only Pak Luang village, which was an ethnic Lao village until ῍ῑ Khmu families
moved there from a nearby village in ῍῕῕῕, is mixed. The other villages are ethnicallyhomogeneous. There are no land vehicles in the study area because only hill footpaths
are present; hence, access is only possible on foot or by boat using the Ou River. The
major economic activities in the study area are swidden agriculture and gathering
NTFPs (non-timber forest products).ΐ) Moreover, there are several kinds of commercial
activities such as a general store management and agro-forest product trading, whichwere introduced after Chintanakan Mai.

ῒ ῌ The Ngoi district office carried out the merging of villages in the mid-῍῕῕ῌs. As a result,several small villages in the study area merged into larger neighboring villages for administrative purposes, as shown in Fig. ῍. Although the administrative unit changed from village to settlement, the dwelling area did not change. Hence, to avoid confusion, the term
village but not “settlement” is used to denote an administrative unit.
ΐῌ The author previously discussed NTFP gathering in the study area [Yokoyama ῎ῌῌῐ].
377ῒΐῌ῍ῌῐ῏῎ ῑFig. ῌ Village Locations in the Study Area
Source: Surveyed by the author using GPS, and / Topographicalmaps issued by the National Geography Department, in 

II Commercial Activities in the Mountainous RegionIIῌ Trading History in the Study Area
In the study area, the commercial activities date back about  years, as determined frominterviews with elderly people in .

According to interviewees, they have nevertraded their products with Yunnanese caravans, but there were several L£m in the study
area. The L£m were appointed by a district office, and had been present in ethnic Lao
villages until the s. A major role of the L£m was not to trade but rather to collect tax
from mountain people in Khmu and Hmong villages. The purchasing of agro-forest
products from mountain people was undertaken by traders called Poka, separately from378

YD@DN6B6 S. : The Trading of Agro-forest Products and Commodities in the Northern Mountainous Region of Laos

the L£m. The L£m usually levied rice, opium, and valuable NTFPs from mountain people
as tax, and then paid tax to the district office as cash in French Indochina piaster.ῒ) The
L£m received the difference between the total value of products collected from mountainpeople and the total tax paid to the district office. The other role of the L£m was toarrange for Khmu people to engage in farm work in ethnic Lao villages. The ethnic Lao
people did not pay the Khmu people but sometimes provided them with a meal afterwork. The L£m had arranged a fixed partnership with at least one Khmu village. It canbe said that a patron-client relationship between ethnic Lao and Khmu had been
established in Ngoi district of Luang Phabang province. The L£m should be consideredmore like middlemen between mountainous villages and lowland ethnic Lao villages
rather than be seen as traders.
At present, it is unclear whether L£m existed across the whole of northern Laos. For
example, in an ethnography of the Lamet, who belong to the same linguistic family as thekhmu, written by Izikowitz [῍ΐ῏῍], the existence of the L£m mediating between a Lamet
mountainous village and an ethnic Lao lowland village was not mentioned. The Lamettransported surplus harvested rice by boat to ethnic Lao merchants in the lowlands,
which was exchanged for iron products such as farming implements and sharp tools[ibid.: ῎ῌῒῌ῎῍῏]. The function of the L£m as determined by the author’s survey differsfrom the descriptions by Stuart-Fox [῍ΐΐῒ] and Halpern [῍ΐ῏ῒ], and the existence of theL£m remains unclear given the conflicting accounts provided by Izikowitz’s ethnographyof the Lamet. However, there is little doubt that there were L£m in certain ethnic Lao
villages of northern Laos, and that the mountain people have had a strong relationshipwith lowland people for a number of centuries.
In Pak Luang village, which was established about ῎ῌῌ years ago, the elderly people
stated that there were two L£m and a trader of agro-forest products in the village. The
two L£m dealt with four Khmu villages: Khong Mone, Cheang Tai, Cheang Neua, andCheang Kang, and collected taxes from them for the French Indochina government andthen, for the Royal Lao government. A trader in the village had purchased benzoin,
cardamom, and opium from neighboring villages and sold these to the Chamber ofCommerce of the French Indochina government in Luang Phabang via Nam Bak until themid-῍ΐ῏ῌs. Nam Bak was then the largest town along the Ou River, because Nong Khiaw,
the current commercial center and seat of Ngoi district, had not been established.ΐ)In the case of Hatsa village, an ethnic Lao village with a similarly long history as Pak
Luang, there was only one L£m. He alone dealt with seven Khmu villages: Xam Noun,῍ῌ)ῒῌ The piaster was the official currency of French Indochina from the late ῍ῒῒῌs to the mid῍ΐ῏ῌs, and was subdivided into ῍ῌῌ cents. It was called hman in northern Laos.
ΐῌ In ῍ΐῑῐ, the seat of Ngoi district was moved from Ngoi village to a new town named Nong
Khiaw, where the Ou River crosses the road to Xamneua.
῍ῌῌ Xam Noun village is outside of the area shown in Fig. ῍.
379ΐ῔῍῎῍ῑῐ ῐΐ῏ ῐ ῒKiouxang, Houay Si, Kong Pod, Houay Talong, Mok Ouay, and Taban Lam,῍῍) and two
Hmong villages: Houay Lo Sung and Nyot Si. He had held the Phia, a title of the nobility,
which was the highest ranking official in the Taseang῍῎) in the era of the Kingdom of Laos.
Moreover, Hatsa village had five traders until ῍῕ῒῌ who purchased the same kinds offorest products as were bought in Pak Luang. The products were transported to Luang
Phabang by boat to be sold to French traders.
Under the Pathet Lao regime, a government-managed store located at the Ou riverside between Hatsa village and Pak Luang village was established in the early ῍῕ῒῌs(Fig. ῍ ). The store replaced the local traders and purchased agro-forest products fromlocal residents besides selling daily necessities. Mountain people sold agro-forest products such as benzoin, cardamom, opium, and sticklac to the government-managed store,
then these products were sent to Xamneua.

The local traders, therefore, could notcontinue trading with merchants in Luang Phabang.
However, the Chintanakan Mai period began in ῍῕῔ῒ, and the government-managed
store was closed in ῍῕῔῔.

Just before the closure of the government-managed store,

privately managed general stores began to appear in Hatsa village. Then, two periodic
markets on the Ou riverside were established in ῍῕῕ῌ (Photo ῍ ). Private agro-forest
product traders also re-emerged in Hatsa village around the same time that the general
stores began to open in ῍῕῔ῑ. When agro-forest product trading recommenced, the traderssold the products they purchased to the government-managed store. After the government-managed store closed in ῍῕῔῔, the traders started selling to other traders in the Nong
Khiaw or Luang Phabang areas.

Photo ῌPeriodic Markets and General Store in the Study Area

῍῍ῌ Taban Lam village is located near Nyot Si. However, its inhabitants moved to anothervillage and it is now deserted.
῍῎ῌ This was a sub-district within the district, and contained ῍ῌ to ῎ῌ villages. This administrative unit was abolished during the Chintanakan Mai period [Stuart-Fox ῎ῌῌ῍: ῏῍ῑ]. In Thailand, however, Tasaeng acts as an official administrative district.
380

YD@DN6B6 S. : The Trading of Agro-forest Products and Commodities in the Northern Mountainous Region of LaosIIῌ῎ Characteristics of Commercial Activities in the Study Area
In ῎ῌῌ῍, the general stores and agro-forest product traders were unevenly distributed in
the study area (Fig. ῎ ). The general stores are only located in Pak Luang village and
Hatsa village.

Many general store managers have an additional role as agro-forest

product traders. There are two types of general store: permanent stores found in Hatsa
village and non-permanent stores, which are only open during the periodic market, foundin Pak Luang village. The first general stores in the area were opened in ῍ῒῑῐ in Hatsa
village by seven households. Two households in Pak Luang village started thefirst non-permanent stores in ῍ῒῒ῎. By

῎ῌῌ῎, Hatsa village and Pak Luang village had ῍ῐ and five stores, respectively.
All general store managers are ethnic
Lao, but not former traders or L£m.
A periodic market is held on theriverbank at two places, Phonsana village and Pak Bout village. In addition tothese, Houay Chanum periodic market
in Phongsaly province, which is outside
the study area, is included in this study
because the general store managers andagro-forest product traders in the study
area use this market.
Agro-forest product trading differs
greatly in the nature of the activity according to the spatial range of trading.
Thus, in this study, agro-forest productFig. ῍traders are classified into three levels(Table ῍ ).

While only Level-῍ traders

Table ῌTrader Type

Distribution of Agro-forest Product
Traders and General Stores in the
Study Area, ῎ῌῌ῍

Source: Surveyed by the author

Classification of Agro-forest Traders According to Spatial Range of Trading
Range of Product Purchasing

Selling Destination

Trading Permit

Level-῍Forest product gatherers, agricultural productgrowers, Level-῎ traders and Level-῏ traders in
the market and the village

Traders or exporters living outside
study area

District permit

Level-῎Forest product gatherers and agricultural
product growers in the market and the village

Level-῍ traders

Village permit

Level-῏Forest product gatherers and agricultural
product growers in the same village

Markets andLevel-῍ traders

Village permit

Source: Surveyed by author381ΐ῔῍῎῍ῑῐ῏ ῒ

who have a motorized boat trade outside the study area, the range of activity of Level-
and Level- traders is limited to the study area. Additionally, traders must pay a fee foran annual trading permit to Ngoi district office. Annual trading permits are of four types:
domestic permits, provincial permits, district permits, and village permits. The domestic
permit allows unlimited transportation of goods within Laos, and also allows the exportof products.

The cost in  was  Kip/year (about 

US$/year).

The

provincial permit, district permit, and village permit cost , , and 
Kip/year (about,  , and   US$/year), respectively. Traders with a village permit

can sell products purchased in the village at the periodic market. In the study area in, no trader had a domestic permit or a provincial permit. Level- traders have a
district permit, and Level- and Level- traders have a village permit. All traders shownin Fig.  have an official permit of Ngoi district.
Agro-forest product trading has extended beyond ethnic Lao villages appearing in
Pak Bout village in 

and Phonsana village in 

. These are both Khmu villages

located along the Ou riverside. Afterwards, traders appeared in Cheang Neua (Upper) and
Cheang Kang villages, which are Khmu villages in the mountains, and Om Mok village,
which is a Hmong village, also in the mountains. In terms of geographical location,although Level- and Level- traders are only in the Ou riverside villages, Level- traders
are limited to the mountain villages.
Commercial activities in the study area after the start of the Chintanakan Mai period
were initiated by ethnic Lao households located along the river where accessibility tourban areas has been comparatively good since the mid- s. Later, these activities
spread to the Khmu households located along the river, then, finally to the Khmu andHmong households located in the mountains. However, Level- traders and general
stores are found only in riverside households. In the study area, geographic village
location, influenced by traffic networks such as the river, greatly contributed to theinitiation of commercial activities.)

III Trading System of Agro-forest Products and Commodities
IIIῌ Periodic Markets and Commodity Supply
In the study area, two periodic markets were started in   whereby many stalls wereopened by general store managers in both Hatsa village and Pak Luang village. All
merchants of Hatsa village had both a store open in the village and a stall in the periodic
markets. The periodic markets and general stores at Hatsa village are, therefore, the only
commercial outlets available for mountain people.
ῌ Yokoyama [] discusses the way in which the economic activities were newly introduced to the villages are related to the village location, as the major effect of new information is obtained from surrounding villages through the road link.
382

YD@DN6B6 S. : The Trading of Agro-forest Products and Commodities in the Northern Mountainous Region of Laos

Commodities sold comprise daily necessities, clothes, and food, all of which are madein Thailand, Vietnam, or China. The general store managers travel to Luang Phabang
and Muang Khoa areas at least once a month to purchase commodities to sell in theirstores and stalls.῍ῐ) Moreover, they ask friends or relatives resident in those areas to sendcommodities whenever possible. From ῍῕῕ΐ, the five general store managers of Hatsa
village sometimes traveled to Mengla, Xishuangbanna in China to purchase Chinese
commodities at a low price by sharing a truck hired in the Muang Khoa area.῍ῑ) However,they stopped these journeys in January ῎ῌῌῌ because Chinese merchants started to sell alarge amount of cheap Chinese commodities in the periodic markets from that time.
Periodic markets have been seen in many places through out the ages. There aremany similarities between periodic markets throughout the world, for example, they areheld at regular intervals based on the local calendar and act as a place for social
interaction [Ishihara ῍῕῔ΐ: ῍ῒῌ῏ῐ; Skinner ῍῕ῒῐ]. The periodic markets in the study area
follow this pattern. A market is held once every ῍ῌ days in accordance with the Khmu
calendar.῍ῒ) Phonsana periodic market and Pak Bout periodic market are held on the third
day (Kat) and the tenth day (Huay) of this ten day “week,” respectively.
The number of stalls and their patterns of flow to the periodic market are shown in
Fig. ῏. In Pak Bout periodic market on ῎῕ November ῎ῌῌ῍, ῐΐ stalls originated from four
villages. From the study area, Hatsa village and Pak Luang village contributed ῍῕ stallsand ῏ stalls, respectively, and from outside the study area, Muang Khoa area (Khoa
district, Phongsaly province) and Hatpon village (Mai district, Phongsaly province)
contributed ῎ῐ stalls and ῍ stall, respectively. Stalls originating from the Muang Khoa
area are more numerous than those from inside the study area.
Because many people come to Pak Bout periodic market, it is held on both banks of
the Ou River at different times. The Pak Bout side on the west bank of the river holds themarket from around ῒ a.m. to ῔ a.m. It then moves to the Houay Nong side on the eastbank of the river and lasts from around ῔ a.m. to ῍ῌ a.m. The Phonsana periodic market
on ῎ῑ April ῎ῌῌ῍ was relatively small, with ῍῔ stalls from three villages. From the study
area, Hatsa village and Pak Luang village contributed ῍ῐ stalls and ῏ stalls, respectively;from outside the study area, Sop Khing village (Ngoi district) contributed one stall. In
Houay Chanum periodic market, which is held every ninth day (Hap), on ῔ March ῎ῌῌ῍,

῍ῐῌ The general store managers buy Thai and Chinese products from the Luang Phabang area,
and Chinese and Vietnamese products from the Muang Khoa area. Chinese products can bebought in both areas, so managers can choose to buy where the price is lower.
῍ῑῌ Regarding long-distance trade in northern Laos, Walker [῍῕῕῕: ῍῏῔ῌ῍ῒ῎] illustrates thatwomen traders known as Mee Kha play a central role in trading commodities. In the study
area, women traders also traveled to buy commodities in China.
῍ῒῌ The calendar of Khmu that has one cycle every ῍ῌ days is as follows; First day: Mung,
second day: Puk, third day: Kat, fourth day: Kot, fifth day: Huang, sixth day: Tao, seventh
day: Ka, eighth day: Kap, ninth day: Hap, and tenth day: Huay [Chazée ῍῕῕῕: ῒῐ].
383ῒΐῌ῍ῌῐ῏ ῐΐ῎ ῐ ῑFig. ῍ Stall Flows of Periodic Markets
Source: Surveyed by the author
Table ῌCharacteristics of Stalls in Periodic Markets

Commodity
Category

Commodity
Sub-category

Sundries

Daily Necessities
Clothes and Bedclothes
Lamp Oil and Gasoline
Medicine(Unit: Stalls)

Phonsana Market Pak Bout Market Houay Chanum Market
῎ῑ April ῎ῌῌ῍῎῕ November ῎ῌῌ῍῔ March ῎ῌῌ῎

ῒ
῔
ῌ
῍

῍῍
῎ῌ
῍
῎

῍῎
῍῍
῎
ῐ

Appliances Electrical Products
Tools
Watch Repairer

ῌ
ῌ
῍

῎*
῎*
῍

῍*
῍*
῍

Foods

῍
῍

ῐ
ῐ

ῐ
῏

῍῔

ῐΐ

῏῕

Noodles
Confectionary
Total

Source: Surveyed by the author
Note: * Chinese merchantsfour stalls originated from Hatsa village and three stalls originated from Pak Luang
village. The number of stalls in Houay Chanum periodic market was ῏῕, which makes it
the second largest periodic market along the Ou riverside, after that at Pak Bout.
Stalls deal mainly in small commodities such as sundries, appliances, and foods(Table ῎ ). Although the commodities are difficult to accurately categorize because of the384

YD@DN6B6 S. : The Trading of Agro-forest Products and Commodities in the Northern Mountainous Region of Laoslarge variety present, many stalls primarily sell daily necessities and clothes. Additionally, there are noodle stalls and confectioners. Note that the general stores at Hatsa village
are not considered in Table ῎, where many kinds of commodity, though not electrical
products, can be bought.
Among the general store managers, a number of Chinese merchants have opened
stalls dealing in electrical products and tools at Pak Bout and Houay Chanum markets
since ῎ῌῌῌ. They run general stores in the Muang Khoa area. By the time that the general
store managers of Hatsa village had stopped traveling to China as mentioned above,
Chinese merchants had already reached the northern mountainous region of Laos.
IIIῌ῎ Purchasing of Agro-forest Products in the Mountainous Region
The function of these markets is not only to facilitate the selling of commodities, but also
to facilitate the purchasing of agro-forest products from individual people. Moreover,some people barter their products for commodities. The products traded in the study
area are mainly NTFPs: cardamom, benzoin, Puack Muack, paper mulberry, rattan fruits,galangal fruits, and tiger grass (Table ῏ ). In terms of agricultural products, cash crops
are limited to sesame and the opium poppy, while other crops including upland rice,maize, and cassava are grown for consumption, not for sale. Opium is sold directly toforeign traders and its distribution flows are difficult to follow: therefore, it is excluded
from the category of agro-forest product trading in this study.
Table ῌCharacteristics of Non-timber Forest Products in the Study Area, ῎ῌῌ῎Name (Scientific)

Type

SeasonDestination Buying Price Selling Pricefor Export(Kip/kg)(Kip/kg)

Cardamom(Amomum villosum)

Fruit

Aug.ῌSep.

China,
Vietnam,Korea

῍ῑῒῌῌῌ

῎ῌῒῌῌῌ

Medicine

Benzoin(Styrax tonkinensis)

Resin

Apr.ῌMay

France,Germanyῐῑῒῌῌῌ

ῑῑῒῌῌῌ

Flavor,Fragrance,
Medicine

Puack Muack*(Boehmeria sp.)

Bark

Year-round China

῎ῒῌῌῌ

῎ῒῑῌῌ

Glue forIncense StickPaper Mulberry
Bark(Broussonetia papyrifera)

Year-round Thailand

῎ῒῌῌῌ

῎ῒῑῌῌ

Paper

Rattan(Daemonorops sp.)

Fruit

Aug.ῌSep.

China

ῐῒῌῌῌ

ῑῒῌῌῌ

Medicine

Galangal(Alpinia galanga)

Fruit

Jul.ῌSep.

China

ῐῒῌῌῌ

ῑῒῌῌῌ

Medicine

Thailand

῎ῒῑῌῌ

ῑῒῌῌῌ

Broom

Tiger Grass
Flower Mar.ῌApr.
(Thysanolaena latifolia)

Use

Source: [Yokoyama ῎ῌῌῐ]Note: * In some regions, “Puack Muack” is called “Nan Nyao” or “Sapan.”385ΐ῔῍῎῍ῑῐ ῐῑ῏ ῐ ῒAgro-forest product trading iscarried out at both the periodic markets and the traders’ houses.

Asshown in Fig. ῐ, three trading territories have been formed: there is an overlap between parts of trading territory
B and C. This means that people sell
products to both areas.

In trading

territory A, there are nine traders infive villages. Only one Level-῍ trader
exists at Pak Bout village, and theothers are Level-῎ and Level-῏ traders.
Level-῎ traders living in Pak Bout andHouay Nong villages sell almost all
their products to the Level-῍ trader.
However, Level-῏ traders living at Om
Mok,

CheangNeua(Upper),andCheang Kang villages on the east sideof the Ou River sell their products at
Pak Bout periodic market.

Level-῏

Fig. ῌ

Trading Territory of Agro-forest Productsin the Study Area, ῎ῌῌ῎
Source: Surveyed by the author

traders living in the mountain villages cannot transport their agro-forest products to Pak Bout village on the opposite
bank because they have no boat.
On the day of the Pak Bout periodic market centering on trading territory A, andPhonsana periodic market centering on trading territory C, many agro-forest producttraders with abundant funds living in other villages, such as Hatsa village and Pak Luang
villages, come to purchase products, and a competition for products occurs between the
traders. To facilitate this, Level-῍ and Level-῎ traders living in Pak Bout and Houay Nongvillages offer free accommodation to mountain people on the day before the periodic
market,῍ῑ) the traders then purchase products from the mountain people who have stayedat their home. This method of purchasing was introduced in ῍ΐΐῒ. Mountain people haveno obligation to sell the agro-forest products to the trader who offers the accommodation.
However, in most cases, a relationship of regular trading has been built between the
traders and the gatherers.

Consequently, although traders offer their houses at nocharge, this method is advantageous because of the easier access to agro-forest products.

῍ῑῌ People in Om Mock, Houay Lo Sung, and Khong Mone villages take about four hours toreach the Ou River on foot. In order to be on time for the periodic market, which is only
held in the morning, they have to leave the village at midnight and walk along a pitch
black road.
386

YD@DN6B6 S. : The Trading of Agro-forest Products and Commodities in the Northern Mountainous Region of Laos

Moreover, a Level-῎ Khmu trader at Pak Bout village visited three Khmu villages,
Houay Lo Toung, Saouy, and Khong Mone, ten times in ῎ῌῌ῍ in order to purchase NTFPs.
He employs mountain people as porters to carry the NTFPs that he acquires.

Theadvantage in purchasing in the mountains is that products can be obtained at a cheaper
price than if bought at the Pak Bout periodic market, even with the extra porter charge.῍ῑ)
There are few traders who employ this method, but there are many who make contracts
with gatherers and pay cash in advance in order to ensure a reliable supply of NTFPs.
This method is particularly common for purchasing benzoin and cardamom because
these products generate larger profits for traders than the other products, as shown in
Table ῏.
Hatsa village, which functions as a center of trading territory B, is an importantcenter for the purchase of agro-forest products in the study area, even though a periodic
market is not held.

The main reason for this is that Hatsa village meets the daily

demands for both the purchasing of agro-forest products and the selling of commodities.
Hatsa village is very convenient in comparison to the periodic markets which are held
only once every ῍ῌ days. Meanwhile, Pak Luang village is not located in any trading
territory despite there being six Level-῍ traders and five general store managers in thevillage.

All Pak Luang merchants carry out most of their business at the periodic

markets, so no store is open in the village. Accordingly, mountain people do not trade in
Pak Luang village, but instead choose Hatsa village as the best location for agro-forest
product trading.
It has been clarified that both commodity sales and agro-forest product trading are
centered on Pak Bout periodic market, Phonsana periodic market, and Hatsa village.
These(Fig. ῐ ).

activities

areclosely

associated

The trader purchases agro-forest

products from mountain people, and pays
them cash.

Mountain people buy com-modities from the general store using thismoney. Thus, a circulation of cash as moneyis passed from the trader to the mountainpeople, and finally to the general store manager. The agricultural products, cash, andcommodities end up in the hands of the
trader, general store manager, and mountainpeople, respectively.

Fig. ῌ

Circulation of Agro-forest Products,
Commodities and Cash

῍ῑῌ Hmong people in the study area dislike reducing the price of their products so they do notsell forest products in the village. The Khmu trader could not buy any forest products in
the Hmong villages, although he went on buying trips in ῍ῒῒῒ.
387ΐ῔῍῎῍ῑῐ ῐῒ῏ ῐ ῒThe spread of the agro-forest product trading resulted from the stimulation ofcommodity flows through local general stores and periodic markets, and vice versa. Oneof the noteworthy features of trade in the mountainous area is that buying and sellingtransactions occur concurrently. Selling commodities is the role of the ethnic Lao, andbuying them is chiefly carried out by the Khmu and Hmong people. A close relationshipbetween commodity sales and agro-forest product trading has been built up in market
places. Although it appears relatively simple, commodity dealing and agro-forest product trading in the mountains are part of a complex system influenced by transportconditions and ethnic relations based on regional history.
IIIῌ῏ Spatial Characteristics of Income from Non-agricultural Activities
In order to determine household income῍ΐ) from non-agricultural activities including
trading and general store management, the author conducted interviews with ῍ῑῌ households in ῍῎ villages in the study area.

To avoid gathering biased income data, thehousehold income was broadly classified into three levels based on the information of thevillage administration committee and randomly sampled households from each level.
The calculated results of income from non-agricultural activities are shown in Fig. ῑ.

Fig. ῌ Income from Non-agricultural Activities, ῎ῌῌ῍
Source: Suveyed by the author
Note: * ῍ U. S. dollar (US$) was equivalent to ΐ῔ῌῌῌ Kip as of December ῎ῌῌ῍.
**Number of sampled households was ῍ῑῌ settlements, ῍῎ villages.

῍ΐῌ The incomes listed in this paper refer to gross revenue, for which wholesale cost is
deducted from commodities sales.
388

YD@DN6B6 S. : The Trading of Agro-forest Products and Commodities in the Northern Mountainous Region of Laos

Since four mountain villages, Cheang Neua (Lower), Mok Ouay, Houay Si, and Nyot Si,
were not involved in any non-agricultural activities, their income was zero. In addition,in other villages, income varies among households in the same village. In the case of
Hatsa village, six out of  interviewees were not involved in non-agricultural activities.
The difference between minimum and maximum income of non-agricultural activities
among those engaged in such activities in the village was about  Kip (about US$). This variation is not evident in Fig. , which only shows the village average.

However, differences between various geographical locations and ethnic characteristics
can be observed in the map.
It was found that residents of ethnic Lao and Lao-Khmu villages, Hatsa village and
Pak Luang village, obtained a large income and that the inhabitants of both villages
initiated non-agricultural activities at an early stage compared with the others in the
study area, and gradually expanded the scale of trading. The average household income
from non-agricultural activities was as follows: Hatsa village,  Kip (about  US$); Pak Luang village,    Kip (about   US$). The income included in the
Others component shown in the figure refers to public servants’ salary, drugstore sales,
and technical workers’ earnings.
Among the Khmu villages, the average household income of Cheang Kang village,
where only one Level- trader resided, was larger than those of Pak Bout village andPhonsana village where Level- traders resided.) The income of the trader in Cheang
Kang village came from three tons of benzoin trade even though the trader was onlyclassified as Level- . Furthermore, benzoin is the most profitable NTFP of the study area,
as shown in Table .
The income included in the Others component in the Khmu villages was as follows:a public servant’s salary in Khong Mone village and a Video CD show) in Pak Bout andPhonsana villages. The Video CD show was given by a trader who had a TV and a Video
CD set. It was provided for mountain people who stayed with the trader on evenings
before the day of the periodic market. In , the owner of the device earned a show feeof  Kip/person (about   US$) from the audience. Children were charged half-rate.
The Video CD show is a special activity which is found only in villages with a private
electric generator, as in the study area.

ῌ There is a Khmu trader in Houay Nong village, but data on his cash income could not be
obtained because he was absent when the survey was carried out. Therefore, data relevantto this could not be included in the data of Fig. .
ῌ Although Yokoyama [] reports on income from a VCR show in the rural village of
Oudomxay province, this show was not found in the survey of the study area as of . It
is thought that the VCR show changed to a Video CD show. Video CDs have becomecommonplace in Southeast Asia because of the ease with which people can burn Video CDs
on CD-Rs using their PCs. Video CDs, such as movies, are often bought in the Nong Khiaw
and Muang Khoa areas. The generator for a thresher is used as a power supply.
389

ΐ῔῍῎῍ῑῐ῏ ῒIn the village of Hmong, income from non-agricultural activities comprised income
from the agro-forest product trade in Om Mok village and a pension in Houay Lo Sungvillage.
According to the second Lao Expenditure and Consumption Survey (LECS  ) carriedout for the ῌ fiscal year, the average household commercial income of sevennorthern provinces was  

Kip [GoL, National Statistics Centre ]. For compar-

ison, the commercial income in  was converted to the price level for   using theconsumer price index.) As a result, the commercial income in   was determined to beequivalent to  

Kip (about    US$). ) The commercial income of Hatsa village

was   Kip (about US$). Clearly, Hatsa village had a commercial income

higher than the average for northern Laos. This is surprising for a remote area with noroads.
IIIῌ

Ethnic Contrast and Trading System

It is generally ethnic Lao living in the Ou riverside who purchase agro-forest products,
and Khmu and Hmong people living in the mountains who sell them. This, in addition tocommodity dealing, may exhibit a clear ethnic contrast.
However, it is a mistake to believe that ethnic Lao are born as traders or merchants.
Ethnic traits must be created through a history of relations with other ethnic groups. In
northern Laos, the Khmu, a Mon-Khmer-speaking group, are regarded as one of thenative peoples that preceded the Lao [LeBar et al.  :  ]. Hmong emigrated fromsouthern China to the Luang Phabang area around  ῌ[Culas : ]. Although the

Khmu have a long history of living in northern Laos, their political position has beenvery low. Ethnic Lao referred to the Khmu as Kha, meaning “slave,” until the Pathet Laoera. It is not difficult to imagine that the ethnic Lao that ruled the country maintained
control over the Khmu in the northern region. Halpern also refers to the fact that “often
the Khmu lack sufficient goods to trade, and they are forced to work for the Laosettlements as coolies or servants” [ :  ]. This can explain the existence of the L£m
who made arrangements to force Khmu people to engage in farm work in ethnic Lao
villages without pay.
In this historical context, it is understandable that ethnic Lao engaged in trading inorder to control valuable NTFPs gathered by Khmu people. Few other options wereavailable for ethnic Lao, who arrived in the region more recently and were unfamiliar
with the natural environment in the study area. The ethnic contrast regarding commercial activities seen in the study area may have been inevitable given the history thatῌ When the consumer price index in  was set as  , the consumer price indexes in and   were   and   , respectively [IMF, Statistics Department  ].
 ῌ The LECS  survey includes the urban area. If it had included only rural villages as theobject of study, the average income might have been lower.
390

YD@DN6B6 S. : The Trading of Agro-forest Products and Commodities in the Northern Mountainous Region of Laos

Laos, a complex multiethnic country, has experienced.

IV The Trading Flows of Agro-forest Products and Commodities
IV῍῍ Changes in Agro-forest Product Exports and Political Situation
Let us now attempt to examine the agro-forest product distribution channels between themountainous region of northern Laos and foreign countries. Export points of NTFPs
were greatly affected by the prevailing political regime. We have only limited information on trading of agro-forest products during the L£n X£ng Kingdom era. However, it
may safely be assumed that products were sent to the former capital Luang Phabang andthen shipped to Thailand or Vietnam, namely, to ports from which the products could beexported to European countries. In the days of French Indochina from the late ῍ΐthcentury, the products were initially exported to Saigon via Vientiane, but this shiftedfrom Saigon to Bangkok in the ῍ΐῐῌs because of the warehousing facilities constructedwith American aid at both Thadeua in Vientiane and Bangkok [LeBar and Suddard ῍ΐῑῌ:῎῎ῌ; Vercouttre ῍ΐῐΐ].
During the French Indochina period, the rivers played a central role in the transportation of people. LeBar and Suddard describe the transportation conditions at the time:“Throughout the centuries the natural waterways of Laos ῌ the Mekong and its
tributaries ῌ have been supplemented only by the most primitive trails and tracks, but
communication by boat is well developed and Lao villages are for this reason usually
located near water courses” [῍ΐῑῌ: ῎῍ῐ]. Areas with only river access are considered to beisolated from the outside world by present day standards. In fact, the opposite is true.
Areas with river access were geographically most convenient for communication withthe outside world. Roads were not involved in the transportation of products for traders
in northern Laos, as noted in more detail below: “Laos has about ῏῔ῐῌῌ miles of roads andtracks of which only about ῍῔῎ῌῌ were surfaced in ῍ΐῐῒ, mostly in the south.

Theremaining mileage which was unsurfaced could not be used in the rainy season” [ibid.:

῎῍ῒ]. In order to engage in trading in northern Laos, it was necessary for ethnic Lao
traders to be located in villages on the river.
Under the communist regime of the Pathet Lao, government-managed stores sent all
products they purchased in the mountains to Vietnam via Xamneua. After the establishment of Lao PDR. in ῍ΐῒῐ, the products began to be exported to foreign countries from
Vientiane, namely, a shift from Vietnam to Thailand occurred again.
During the Chintanakan Mai period, several borders with Thailand, Vietnam, andChina were opened in order to improve relations with neighboring countries in preparation for a decrease in foreign assistance from the former Soviet Union and the Eastern
bloc. In addition to this, the transport infrastructure was being improved by foreignassistance, as mentioned in Chapter ῌ. As a result, cross-border trade was re-established.
391ΐ῔῍῎῍ῑῐ ῎῏῏ ῎ ῒThe question we have to ask here is how this cross-border trade made the mountains
change. In addition to the trade flows of agro-forest products, brokerages of private
traders and changes of natural resource gathering needs to be examined in detail. Theseare questions to be considered in this chapter.
IVῌ῍ The Export of Agro-forest Products from the Mountains
Agro-forest products from the study area are exported from four export points: Boten῍῎)on the Chinese border, Houay Xay and Vientiane on the border with Thailand, and Tai
Chang on the border with Vietnam (Fig. ῏ ). Among these, Tai Chang is a local borderFig. ῌ Distribution Channels of Agro-forest Products
Source: Surveyed by the author῍῎ῌ After the mid-῍ῌῌῌs, two local border checkpoints, Meo Chai (Namo district in Oudomxay
province) and Phang Hai (Muang Sing district in Luang Namtha province), were mainly
used for cross-border trading between northern Laos and southern Yunnan, instead ofBoten, which is an international border checkpoint.
392

YD@DN6B6 S. : The Trading of Agro-forest Products and Commodities in the Northern Mountainous Region of Laos

which is used only by Lao and Vietnamese nationals. These borders were opened one
after another between the late ῍ῑῐῌs and the early ῍ῑῑῌs. The stimulation of humanmobility and information flow that occurred through the opening of the borders greatly
contributed to the formation of various agro-forest product trade flows.
Benzoin (a) is transported to the exporter in Vientiane over land, and then by plane
to France or Germany. Cardamom (b) is exported to China, Vietnam, and South Korea.
Cardamom is the agro-forest product with the greatest variety of channels in the study
area. All cardamom exported to Vietnam over land passes through a trader/exporter in
the Nam Bak area, and other products exported to China over land pass through a trader/
exporter in the Muang Khoa area. The trader/exporter in the Nam Bak area exports the
cardamom to South Korea in addition to China. This trader/exporter separates the
cardamom into two groups according to the fruit size; large fruits are sent to China andsmall fruits are sent to South Korea via Vientiane.
All Puack Muack, rattan fruits, and galangal fruits (c) are exported to China from
Boten over land. As for tiger grass and paper mulberry (d), the trader/exporter in the
Muang Khoa area directly exports them to Thailand using a combination of land andriver routes. On the other hand, the shipments dealt with by the traders/exporters in theNong Khiaw and Nam Bak areas are transported to an exporter in the Luang Phabangarea, who then transports them to a paper mill in Thailand by boat. Much of the tiger
grass is transported to Thailand without being processed, but some of it is processed by
the company in the Luang Phabang area. The company started operating a small-scale
paper mill in ῍ῑῑῑ after obtaining paper-making machines from Chiang Mai, Thailand.
Although the company purchased about ῏ῌῌ tons of paper mulberry bark, about ῎ῌῌ tons
was exported to Thailand without processing because the processing capacity of thepaper mill is only ῍ῌῌ tons a year.
Sesame (e) is exported without processing by the same route as tiger grass and paper
mulberry bark via the Luang Phabang area. Some sesame sent to Thailand is transported
to a sesame oil factory in Thailand, and the remainder is exported to Taiwan.
So far, the author has described the distribution channels and methods of trade ofagro-forest products from the study area to foreign countries. As for the actual routes
used for the distribution of the agro-forest products, the land transportation route wasused only by the exporter from Vientiane who transports benzoin and cardamom
between Luang Phabang and Vientiane where the road is paved, and over a shortdistance to China or Vietnam. All the other agro-forest products exported to Thailand or
by way of Thailand were sent on the Mekong river. In northern Laos where the roads areunderdeveloped, the river played an important role as a distribution channel of theagro-forest products, as described above.
IVῌ῏ Interconnection between the Mountainous Region and Urban Areas
The trading flows of agro-forest products from the study area to various destinations are393ῒΐῌ῍ῌῐ῏ ῏ῐ῎ ῏ ῑFig. ῌ

Trading Flows of Agro-forest Products and Distribution of Traders/Exporters

very complex, as illustrated in Fig. ῑ (a). On the one hand, we can see complex flows thatreach destinations via five brokerages; on the other hand, there are simple flows in whicha trader living in an urban area purchases products directly from traders on site in themountains. We will take the example of benzoin (b) to illustrate the flows. It is possible
to classify these flows into three types.

First, there is “Direct Trading,” in which

Exporter-A in Vientiane makes a trading contract with a Level-ῌ trader in the study area
and goes to purchase directly from that trader. Second, there is “Consignment Trading,”
in which Exporter-B in Vientiane entrusts the purchase of benzoin to a trader/exporterin the Muang Khoa area. Here Exporter-B does not go to the study area. Finally, there
is general “Phased Trading,” in which benzoin is transferred in stages from a Level-῍/
Level-῎ trader to Exporter-A in Vientiane via the Nong Khiaw and Nam Bak areas. In thecase of traders/exporters in district and provincial towns, the purchased NTFPs areexported to China using self-owned trucks. This trading system, which involves several
traders, is recognized as “Phased Trading.”
A method of trading similar to “Direct Trading” was observed for cardamom, Puack
Muack, galangal fruits, and rattan fruits. As shown in Fig. ῑ (b), there are four traders/
exporters in the Nong Khiaw area, and three of them trade directly with China. According to traders/exporters in the Nong Khiaw area, Chinese traders come to purchase394

YD@DN6B6 S. : The Trading of Agro-forest Products and Commodities in the Northern Mountainous Region of Laos

NTFPs at regular intervals of two to three weeks from August to October, during thegathering period for cardamom, galangal fruits, and rattan fruits.

At other times,

traders/exporters in the Nong Khiaw area sell NTFPs to other traders/exporters in the
Nam Bak or Luang Phabang areas.
One can safely state that the agro-forest product trading on demand in foreigncountries is widespread across the country from the provincial towns to the remotevillages. The important point to note is that the cross-border trading made it possible for
Chinese traders and exporter in Vientiane to carry out “Direct Trading.” This is one of thecharacteristics of the NTFP trading after Chintanakan Mai.
IVῌ Income and Expenditure of Benzoin Trading
In the study area, income from agro-forest product trading was larger than retail income,such as that from general stores. It may be said that this is specific to this study area
where particularly valuable NTFPs such as benzoin are gathered.
In the case of agro-forest product trading, the income is large, but the costs are also
large.

Here, clarification of the realities of agro-forest product trading is provided

through an explanation of the relationship between the trading price and the cost at
every trade point from the gatherer to the exporter. Here, the benzoin trade is focused onhere as an example. It is comparatively easy to follow the trade flow of benzoin because
there are only three export companies in the country.
The trading price and the cost at every trade point in  are shown in Fig. . The
trading price of benzoin in the gathering area is set at a price in Laos Kip equivalent to US$ every year. However, sometimes the benzoin trading price fluctuates owing tocompetition among traders.) Even though the purchase price in the study area rises,
traders cannot increase the trading price accordingly because of pressure from foreign
customers. Therefore, the exporter’s profits) decrease when the local price increases.
The gatherer does not incur costs from gathering benzoin. There is no direct cost,
although the land tax for the swidden field might be considered as a cost because benzoin
is gathered in fallow swidden plots.
The Level- traders sell benzoin purchased at

 Kip/kg (about  US$) to tradersin the Nong Khiaw area or Exporter-A at   Kip/kg (about   US$). The profit
obtained is   Kip/kg (about   US$). However, it is necessary to pay a fee of  
Kip (about   US$) for an annual trading permit to the district office, which is theequivalent of income tax. If the trader deals only in profitable NTFPs such as benzoin,

ῌ In the study area, a group related to Exporter-A and a group related to Exporter-B competed strongly over the purchase of benzoin in . At the beginning of trading, the pricewas   Kip/kg (about  US$/kg) in March, but reached   Kip/kg (about   US$/kg) in May.
ῌ In this paper, family labor, which has an opportunity cost, is included.
395ῒΐῌ῍ῌῐ῏ ῏ῑ῎ ῏ ῑFig. ῌ Trading Price and Cost of Benzoin at Trade Point, ῎ῌῌ῎Note: * ῍ U. S. dollar (US$) was equivalent to ΐ῕ῐῌῌ Kip as of April ῎ῌῌ῎.

the balance becomes a deficit unless ῍῎ῐ kilograms (about ῐῌῌ US$, ῏῕ῑῐῌ῕ῌῌῌ Kip) of
benzoin are traded. If a trader deals only in less profitable NTFPs such as Puack Muack
and paper mulberry bark, and makes a profit of only ῐῌῌ Kip/kg (about ῌ῔ῌῐ US$), one tonof trade is needed. In the study area, only a few traders with sufficient financial resources
are efficiently purchasing agro-forest products by specializing in benzoin, and the majority of traders mainly deal in NTFPs with a low unit price. It seems that the net profit of
trading is not so great even though the amount of cash income is large. Of particular noteis that traders who deal mainly in heavy, low-profit NTFPs have to bear the costs oftransport, and so the profits decrease even further.
Traders in the Nong Khiaw area, which is the seat of Ngoi district office, are in almost
the same situation as the Level-῍ traders. Nevertheless, their trading permit fee is large
compared with that for a Level-῍ trader. In addition to this, the shipping charge foragro-forest products greatly affects the profit. The charge for transportation by truck
from the Nong Khiaw area to the Luang Phabang area is ῍ῌῌ῕ῌῌῌ Kip/ton (about ῍ῌ῔ῐ US$).
The period of benzoin trading is limited to three months, and the shipping charge is not
expensive because the product is lightweight. However, the traders transport three tonsof other products once a week on average. The annual shipping charge of all products
amounts to ῍῏῕῏ῌῌ῕ῌῌῌ Kip (about ῍῕ῐ῍ῐ῔ῒ US$).
Exporter-A in Vientiane exports the benzoin to France and Germany, at ῍ῐ tons to396

YD@DN6B6 S. : The Trading of Agro-forest Products and Commodities in the Northern Mountainous Region of Laoseach country per year. When exporting, the benzoin is divided into five grades from A
to E according to the size of the resin. Little high-grade resin remains after cleaning andsorting. The trading permit fee that Exporter-A has to pay is ῍῕ῐῌῌ῕ῌῌῌ Kip (about ῍ῐῑ῔ΐUS$). Other charges in addition to this are the cost of transport between the mountainvillages and the Vientiane office, and the costs of packing and transport to foreign
customers in France and Germany. Moreover, many other costs are incurred comparedwith other traders, such as personnel expenses to pay workers for the benzoin grading,the cost of electricity for air-conditioning in a storehouse,῎ῑ) bank interest,῎ῒ) and exporttax.
For the NTFP gatherers in the mountains, the only cost is the land tax, so the moregathering that is done, the more the gatherer profits. On the other hand, the agro-forest
traders must process a considerably large amount of product to make a profit because
they have to pay high trading permit fees. The cost of trading in benzoin increases
exponentially from remote areas, to provincial towns, to large cities. The international
trading price of valuable NTFPs such as Siamese benzoin is also high, and the domestic
trader requires considerable capital to carry out the purchase.
In the study area, although there were ῎ῒ agro-forest product traders in ῎ῌῌ῍, only ῍ῐ
traders bought more than ῍῎ῐ kilograms of benzoin, which represents a value equivalent
to the trading permit fee. Three traders did not purchase benzoin because they had
insufficient funds, and a lot of benzoin was purchased by traders outside the study area.
The traders in the remote area cannot obtain loans from banks because they are unable
to obtain a mortgage. Exporter-A in Vientiane can obtain a bank loan, but the loan
amount is small. Moreover, even if Exporter-A purchases agro-forest products by taking
out a large bank loan, the high interest on the loan is prohibitive.
In a developing country such as Laos, agro-forest product traders and exporters faceconsiderable difficulty in the raising of funds. If the exporters reduce funds for purchasing agro-forest products from traders, the traders, who are at a subordinate level toexporters, must in turn reduce the quantity of products they purchase. Then, the NTFP
gatherer is forced to decrease the amount of products gathered. As a result, the cash
income of mountain people decreases drastically. A shortage in purchase funds among
the traders immediately results in a decrease in the income of the agro-forest productgatherers in the mountains.

῎ῑῌ Benzoin has a milk white color when gathered, then changes to brown when it oxidizes. It
is necessary to cool the product for dehumidification in storehouses to prevent oxidation
before export.
῎ῒῌ Bank interest is greatly affected by the exchange rate of the Lao Kip to the US dollar. The
Kip loan interest rate in ῎ῌῌ῎ was high, at about ῏ῌ῍.
397ῒΐῌ῍ῌῐ῏ ῏ῐ῎ ῏ ῑVChanges in Agro-forest Product Trading and Natural Resource Use

Changes in agro-forest product trading and natural resource use in the northern mountainous region of Laos are shown in Fig. ῍ῌ.

On the basis of the discussion in thepreceding section IV-῍, the patterns of trading and resource use can be classified into
three groups. During the colonial period, private traders and L£m purchased agro-forest
products from mountain people. These products were sent to traders in the former
capital Luang Phabang and shipped to Thailand or Vietnam. Under the communist
regime, the agro-forest products were purchased by governmental traders stationed in
the governmental-managed store. These NTFPs were then exported to Vietnam via
Xamneua during the Pathet Lao government period and to Bangkok via Vientiane during
the Lao PDR period.

Then, during the Chintanakan Mai period, the borders withThailand, China, and Vietnam began to be opened from the late ῍ῒῑῌs, and cross-border
trade was re-established. Private trading was revived in both urban and rural areas.
The gathering of the NTFPs shown in Table ῎, excluding benzoin and cardamom,
started being gathered after the opening of the borders. Information about demand inforeign countries received through the domestic traders led to the gathering of new
NTFPs in the mountains. A network of private domestic traders has been expanding
throughout the country, and has played an important role in the transmission of
information to the northern mountainous region of Laos since the Chintanakan Mai
period.
The trading flows of agro-forest products from the study area to various destinations
are very complicated. Agro-forest product traders appeared in various urban areas after
the Chintanakan Mai period. It has been clarified that traders in smaller urban areas haveengaged in “Direct Trading” with Chinese traders, and have thereby gathered new typesof NTFPs in the mountains. These agro-forest products started to be exported directly to

Fig. ῍ῌ Changes in Agro-forest Product Trading and Natural Resouce Use in Northern Laos398

YD@DN6B6 S. : The Trading of Agro-forest Products and Commodities in the Northern Mountainous Region of Laos

China from mountainous areas.
For the time prior to the colonial period, and because the functions of mountains andlowlands differed, it is considered that the social structure of northern Laos in that period
can be represented as a dichotomy between the mountain people as gatherers and thelowland people as traders. This structure is explained by the relations between ethnic
groups that were historically established by the L£m, who had strong ties with mountainpeople, especially the Khmu, who were used for manual labor by the lowland people.
Mountainous regions experienced commercial activities, such as periodic markets, general
stores, and agro-forest product traders, under the communist period, and were directly
affected by the Chinese economy after the Chintanakan Mai period. As a result, it has
become more difficult to understand the social structure of northern Laos in the context
of this dichotomic typology.

Additionally, from a spatial viewpoint, the northern

mountainous region of Laos has not been isolated but connected with the lowlands by alongstanding and well-established river transportation system. The social structure in
northern Laos, therefore, must now be considered within the context of the globalizationof agro-forest product demand, and beyond local ethnic relations. Such changes in thesocial structure have been triggered by the opening of borders that accompanied theChintanakan Mai period.
Regarding the challenges of globalization for the northern mountainous region of
Laos, the sustainable use of natural resources is a key issue. Although mountain people
traditionally used natural resources mainly for subsistence before the Chintanakan Mai
period, their use has sometimes been disordered when related to trading. None of the
newly gathered NTFPs, which have been exported to China since the ῍ῒῒῌs, are traditional
goods used as food or medicine. These NTFPs are plants that had previously beengathered in China, but are not any more. It is particularly surprising that gatherers andtraders do not know the intended use of the newly gathered NTFPs. Local people,
especially the Khmu people who know a lot about NTFPs, had little interest in the species
until they started to gather them for sale. Therefore, they know little of the resource
potential and reproductive power of the plants. Although newly gathered NTFPs in the
study area are not precious species, there is a possibility that excessive gathering willlead to their drastic decline. All surveyed farm households, except those engaged incommercial activities, are gathering the NTFPs for export. Even though local gatherers
and traders do not know how these NTFPs are used in China, they unquestioningly
accept the information provided by foreign traders on this issue.
The government prohibits the gathering of certain natural resources such as Chinese
cinnamon (Cinnamomum cassia) [GoL., NAFRI, NUoL and SNV ῎ῌῌῑ: ῏῏ῌ], and the exportof certain ornamental plants such as orchids is regulated by quotas set by district andprovincial offices [ibid.: ῏ῑῐ]. Regulation, however, has yet to be effectively enforced.
Effective local governance regarding natural resource management will be needed in the
future. A field study on natural resources in the northern mountainous region of Laos399ῒΐῌ῍ῌῐ῏ ῌ῍῎ ῌ ῑand a survey of foreign demand for NTFPs, especially with regard to China, might berequired.

VI Conclusion
This paper has introduced the history of agro-forest product trading in the northern
mountainous region of Laos showing how trading can be traced back to the L£n X£ng
Kingdom era. In this era, L£m collected agro-forest products from mountain people astax. In addition, private traders were involved in the purchase of products from them.
However, during the Pathet Lao period, government-managed stores located along the Ou
River replaced the private traders, and purchased agro-forest products and sold commodities at the same time. During the Chintanakan Mai period, the government-managed
stores were closed and private traders re-emerged from ethnic Lao households located on
the river. Agro-forest trading spread to the Khmu households along the river, thenfinally to the Khmu and Hmong households in the mountains. However, general storesare currently only operated by ethnic Lao households on the riverside. In addition to this,agro-forest product traders who trade outside the study area are found only in riversidehouseholds.
Even in areas without road access, people in the study area could initiate commercial
activities using navigable rivers as Laos has had a developed river transportation system
for a long time. In northern Laos where there are many mountainous areas, major roads
are being constructed with foreign aid, but many roads remain in a poor condition.
Therefore, traders still rely on rivers to export products.
After the closure of the government-managed stores, two periodic markets were heldon the Ou riverside, and permanent general stores are located in an ethnic Lao village.
These provide the opportunity for mountain people to buy agro-forest products and tosell commodities. The supply of natural resources from the mountains to lowlands once
began with a brokerage form via L£m, before transforming into private traders including
Chinese merchants. Although the mountains of northern Laos seem to face the powerfultide of globalization at the present stage, as pointed out in Chapter ῌ of this paper, thetrading between the mountains and lowlands has always existed for a long time and theform of trading has varied across the ages.
The trading networks are in the process of spreading throughout the country, andthe flows of agro-forest products and commodities are increasing. It seems reasonable tosuggest that the private traders serve as an important driving force in the developmentof agro-forest product trading. They obtain information regarding demand of foreigncountries and encourage the mountain villages to gather NTFPs on demand from foreigncountries. Although it was conceivable that the ethnic minorities such as the Khmu andthe Hmong did not engage in commercial activities before Chintanakan Mai, the traders400

YD@DN6B6 S. : The Trading of Agro-forest Products and Commodities in the Northern Mountainous Region of Laos

were always the ethnic Lao. However, after Chintanakan Mai, the Level-῎ and Level-῏traders started to cover remote villages without road access. In addition to this, in somecases, Chinese merchants are also engaged in trading in the study area. This paper has
also shown that not only road maintenance and improvement led to the transformationof the nation from being “land-locked” to “land-linked-,” after Chintanakan Mai but it has
also made clear that private traders, regardless of national and ethnic distinctions,appeared. As a result of these ongoing changes, the mountains of northern Laos havebeen and continue to be further pulled into the global market at a rapid speed and as suchrequire more scrutiny in further studies.

Acknowledgements
This survey was made possible through the support of the people of Ngoi district, Luang Phabang
province. I received excellent advice from the forest and agriculture team of the project entitled “A
Trans-disciplinary Study on the Regional Eco-History in Tropical Monsoon Asia: ῍῕ῐῑ῍῎ῌῌῑ,” headedby Professor Tomoya Akimichi, the Research Institute for Humanity and Nature, Japan. The author
would like to express sincere thanks to all these people.
This study was partly funded by the Toyota Foundation, Grant No. Dῌ῍῍A῍ῌῐῒ, and Grants-inAid for Scientific Research, Scientific Research-C, No. ῍ῒῑ῍ῌ῍῔῔ (῎ῌῌῐ῍ῌΐ) from the Japan Society for
the Promotion of Science.

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