1.0 INTRODUCTION

Natural rubber was introduced into Liberian agriculture in the late 19th century and soon became the catalyst that propelled the country out of severe economic difficulties. Throughout most of the 20th century, the rubber sector was the mainstay of the national economy, its largest agricultural export earner and the largest source of formal employment. Now, having endured 24 years of internal strife, Liberia’s economy has hit rock bottom. The fighting has slowed down and the ‘warlords’ are more or less confined; the task of rebuilding the country gains prominence and the international community seeks ways to partner with Liberians to this end.

With the end of the civil war, the international community is extending itself in unprecedented ways to help Liberians rebuild their country. In January 2004, international donors pledged $520 million towards the reconstruction of the country. The Transitional National Government has a unique opportunity to spur economic revitalization while providing sustainable income sources for all. Yet, the designers of the economic reconstruction of Liberia seem averse to taking into account the strategic importance of rubber to the national economy. The perception that rubber farming is solely an occupation for the wealthy could be the reason for this reluctance but we will illustrate the important role that rubber played throughout the conflict and even today in ensuring that thousands had a means of living.

This paper takes a look at the peculiar 157-year history of Liberia that led to the introduction and eminence of the natural rubber sector in its economy. Tracing the expansion of the sector, we will see the strategic role of natural rubber in creating a modern and viable economy. Drawing on semi-structured key informant interviews, personal experiences, development theory, historical and geographical texts and other documentary accounts, we explore the rubber sector; look at its importance for rural livelihoods and growth, for formal and informal sector employment and touch on the variety of institutional arrangements that have blossomed through the years. We will examine how conflict has modified, shaped and moulded the factors of production so that the rubber sector, while still retaining its economic prominence, is subject to whole new rules of the game.

The rubber sector is the country’s largest employer and remains the only one that can absorb thousands of disarmed militias, the returnees and those numbers of urban poor forced out of the rural areas by the long-running conflict. Given the relative high price that natural rubber currently commands on world markets and with the other traditional export earners being out of commission¹, rubber is the leading hope for kick-starting the national economy. Furthermore, with demobilization and reintegration of ex-combatants being vital for national rehabilitation, the entire peace and prospects for long term security could falter at the point of finding durable solutions for disarmed militias. “Getting it wrong and repeating mistakes from Liberia’s first civil war (1989-1996), could further harm the fragile peace”.² The process of reconstruction cannot ignore the host of returning refugees and internally displaced persons, the numerous urban dwellers who have lost their rural livelihoods, primarily agricultural in nature. All of them seek sustainable solutions for a means of living. In the face of tremendously weakened coping strategies and near complete erosion of assets, many people in the most populous counties of Liberia are in dire need of an income source that can jump start them into renewed economic involvement.

An understanding of the importance of livelihoods not only in conflict prevention but also in economic regeneration is a necessary subset of the themes and recommendations that emit from this paper. Using the DFID Sustainable Livelihoods Framework³ and real life case studies⁴, the paper will illustrate possible roles that the rubber sector can play in providing employment, rebuilding livelihoods and restoring dignity to Liberians as they move on the path of national reconstruction and renewed development. Looking back at the history of the country and the strategic role that has been played by the rubber sector, we hope to examine more profoundly the evolution of the rubber economy and the way it is organized to transact business. We will reflect on ways that the rubber sector can be used to generate and sustain employment and livelihoods in this post-conflict era. Creative recommendations will be put forth in this paper that can inform the planning and decision making that accompany national reconstruction.

HISTORY OF LIBERIA

The history of the Republic of Liberia is closely linked to that of the United States of America. In the early 19th century, the American founding fathers were consolidating their hard-earned freedom. The institution of slavery with its inherent racial biases, contradicted the rhetoric of the Constitution and the principles of equality and freedom for all people. With a growing population of Free Negroes, increasing pressure from abolitionists and ever-present fears of slave uprisings—given that in some states the enslaved population outnumbered the free people—several prominent Americans were prompted to meet and search out solutions. In 1817, these men, whose numbers included such luminaries as Thomas Jefferson, James Monroe, Bushrod Washington (nephew of George Washington), agreed to form an organization that would address these problems. Thus was born the American Colonization Society whose main objective was to find a home away from American shores for the Free Negro population and for those slaves whose owners would agree to emancipate them.

The Society, financed by a Congressional appropriation, hired agents that would seek out this ‘home’ and by 1820, land along the western coast of Africa had been selected and purchased from local chiefs. Two ships were hired and outfitted and soon the first load of Negro settlers sailed forth from the US for Africa. Plagued by adversity, this group of settlers in numbers greatly diminished by the voyage, the inhospitable climate, disease and penury, did finally reach the shores of present-day Liberia by 1822. Other ships followed and a colony soon grew in the narrow strip of coastal swamp despite constant attacks from the local tribes who were antagonized by the disruption of their coastal trading activities. The colony remained under the guidance of agents of the American Colonization Society (ACS), and operated with financing from the ACS and other colonization groups that were formed in the various southern states in America⁵.

Though the numbers of colonists did indeed increase over the next 25 years, most of them remained firmly linked to their relatives and friends in the USA. Most especially, with numbers made up from people who had been denied education and were often unskilled, people whose main assets upon arrival in the colony was the land and the 3 month sustenance provided by the Colonization Society, the colony itself was far from being self sustainable. Additional colonists arrived: Africans that were rescued from slave ships by American, French and British vessels given that all three nations had by that time abolished slavery⁶. Nevertheless, with growing pressures from neighboring European colonies (France to the north and east, Great Britain to the west), with the continued operation of several illegal slave trading factories close to the colony, with few alternative sources of income besides customs revenue from traders in and around the colony, the settlers were urged to declare independence. In 1847, the Republic of Liberia was proclaimed and its first president, Joseph J. Roberts, immediately sought to ensure the economic survival of the country.

With the fortunes of the republic being so closely tied to that of the colonization society that founded it and to the philanthropic donations that sustained the ACS, with the limited economic means at its disposal, and continual disputes with slave trading operations thinly disguised as legal merchants and often enjoying the tacit support of the neighboring colonies, the new republic quickly compounded its economic difficulties. By 1864, the first of a series of disastrous loans was negotiated with bankers in Great Britain at ruinous terms that eventually led to the impeachment and death of then president Edward J. Roye. Having received the minutest portion of the borrowed funds, the republic struggled along for several years until a second loan could be negotiated that would wipe out the first one. Again, the loan was taken at very detrimental terms and the country continued to teeter on the verge of bankruptcy well into the 20th century. In 1912, Liberia went into a customs receivership. World War I and its consequent curtailment of the trade whose customs levies kept the nation afloat, compounded the country’s economic devastation.

The arrival in 1926 of the Firestone Rubber Company to set up rubber plantations in the country and armed with a $5 million loan which they would administer on behalf of the US government, signaled the start of a relationship that would guide and underpin the national economy for more than three-quarters of a century. The $5 million Firestone loan gave Liberia more favorable terms but basically transferred ownership of the national debt to a multinational corporation. At the same time, Firestone leased one million acres of land, signed customs agreements with the government and labor supply contracts with local chiefs and began operations.

3.0 THE RUBBER INDUSTRY IN LIBERIA

For most of the 20th century, rubber was Liberia’s foremost export product and earner of foreign exchange income. In terms of the national economy, the rubber sector provided employment for hundreds of thousands of Liberians⁷, either directly and formally or informally and in parallel industries and livelihoods. Given the high initial capital investment required for the establishment of a rubber plantation, and the depleted state of the national economy in the first half of the 20th century, private Liberian investment in rubber was limited. Planted rubber in Liberia is concentrated in an area known as the rubber belt that stretches from the northern outskirts of Monrovia nearly to the Guinea and Ivorian borders in the north, with additional planted areas in the southeastern part of the country in Sinoe and Maryland counties⁸. As the economy boomed in the years following World War II, plantation ownership expanded and fragmented so that 20.3% of the national rubber production attributed to private Liberian farmers in 1980 came from smallholdings of less than 25 acres⁹. As rubber is a plantation crop and is therefore managed differently from food crop or subsistence farms, yields from smallholder plantations are low and average about half of the production of the large estates¹⁰. Rubber smallholdings are therefore much less economically viable but nevertheless provide crucial employment options not only for the small holders, but also for the casual labour and the parallel informal labour market. On a macro level, even as rubber’s dominance as foreign exchange earner shifted towards iron ore in the 1960’s and timber in the 1980s, the rubber sector remained the largest source of employment in the country. Political changes in Liberia however, had a profound impact on the production of rubber and the coup d’etat in 1980 heralded changes in the national economy in general and in the functional operations of the rubber sector in particular.

3.1 THE INTRODUCTION OF NATURAL RUBBER

By the opening of the 20th century, Liberian agriculture was the foremost determinant of her economic viability. By 1910, Liberia faced uncertain prices for most of her agricultural exports and stiffening competition from other tropical colonies who enjoyed more favorable status from the industrialized nations. Even at that time, tropical exports were dominated by international bargaining and politics and Liberia’s exports were no exception to this norm. 1910 was also the first year that rubber began to replace spices as the preeminent export from tropical countries¹¹ especially with the advent of the automotive age and the importance of the rubber tyre. Nevertheless, with hard times facing all of West Africa, Liberia’s export situation and living standards were exceptionally bleak. The advent of World War I accompanied drastic reduction in merchant shipping along the West African coast and Liberia, with 80% of her national income coming from customs duties, faced a disastrous economic situation¹². The need for investment capital in Liberia could not have been more pronounced and though US President Wilson felt a “moral mandate” to assist Liberia with a $5 million loan, the loan never received American congressional approval and Liberia’s economic situation became more and more dire.

The years immediately before World War I established natural rubber as a hugely important tropical crop and the bark of the Hevea Brasiliensis tree proved to be the best provider of natural rubber¹³. American factories produced the vast majority of rubber goods even as the value of South American ‘wild rubber cultivation’ was diminishing and the importance of plantation rubber from the Far East was increasing. Demand expanded in the US but the supply of rubber was mainly held by Dutch and English colonial planters in the Far East, weighting the international market for natural rubber in favor of the suppliers. During the depression that hit the US in 1920-1921, the rubber ‘barons’ of the Far East devised a monopolistic scheme known as the Stevenson Rubber Restriction Act¹⁴ that increased the price of rubber from 14 cents/lb to $1.23/lb during the six year life of the Act. Under the Stevenson Act no rubber could be exported from British colonies without a licence to be granted by an oversight Board. Although Dutch growers did not participate in the Act, they had all the advantages of price controls without the limitations on production so that their share of rubber supply in the international market went from 25% before the Act to 48%. Most American manufacturers docilely accepted this effective bounty payment to the suppliers –with the glaring exception of Harvey S. Firestone.

By 1925, the US consumed 70% of the world natural rubber and Harvey Firestone began to promote the slogan “Americans should produce their own rubber”¹⁵ a call that was quickly echoed by prominent American industrialists like Henry Ford and Thomas Edison. Firestone began actively seeking to control the supply of natural rubber to his vast industrial machinery and after exploratory missions to several countries worldwide, settled on Liberia as being the most advantageous for his plantation. Not only was Liberia seen as a new source of natural rubber but the country was free of foreign domination and, with its unique history, was notably friendly to the US. According to Firestone, the world need for rubber would give Liberia an opportunity for economic development on a large scale and develop the country faster¹⁶. Thus was born a partnership between a multinational and a sovereign nation that has shaped the economic fortunes of Liberia in the 78 years since then.

By the mid-1930s, the production of natural rubber had become the major resource of Liberia and, would eventually lead the country from virtual default to outstanding solvency. For the US, natural rubber had been the foremost tropical import since 1912 but was only one of a long list of tropical commodities whose major production was centered in the Far East. Within 100 days of the Pearl Harbor attack, the source of 90% of US tropical imports, including many goods essential to winning the war, were in enemy hands¹⁷. With every pound of natural rubber a potentially life-saving commodity, rubber production in Liberia was stepped up, in a manner unprecedented, to meet the increasing demands of the war and compensate for the restricted supply from the east. The collaboration between Liberia and Firestone also shaped the cooperation between Liberia and the US and its allies. World War II mapped out a new and improving economic status for Liberia one that was rooted in the country’s production of natural rubber.

3.2 THE CONFLICT YEARS

In April of 1980, a military coup d’état overthrew the president and installed a quasi-military regime that ruled the country for the next ten years. Given the peculiarities of Liberia’s socio-economic history where descendants of the American settlers held the lion’s share of political and economic power in the country, this political change reverberated throughout the economy. The coup and subsequent public execution of political leaders precipitated an exodus of the economic elite. With these, went most of the scions of the large (>30 acres) private rubber plantations—whose production underpinned more than one-third of the rubber produced in Liberia—along with private economic investment in the rubber sector. Production management for private rubber farms remained with caretakers—for larger plantations—and with the less viable smallholders. The rubber sector went into abrupt decline. Nevertheless, the large transnational rubber concessions remained operational, dominated the production of natural rubber and continued the sector’s eminence in local labour markets. Most of these concessions relied mainly on their own plantations for the supply of rubber¹⁸, the supply that previously came from the private sector being too erratic or of inferior quality. Private Liberian farms were already then plagued by old and ageing trees, unproductive management practices and limited financial capital for reinvestment or even for proper farm maintenance. Liberian rubber farming by then was comprised of smallholders (up to 85% of rubber produced on Liberian-owned farms was from farms that were 30 acres¹⁹). This dynamic is an important one because the standard view of the rubber sector is one of wealthy plantation owners, far removed from national poverty indices, and needing no financial infusion to add to their wealth. In fact, a Liberian rubber farmer is more likely to be in the middle to better-off wealth group of the rural poor²⁰. The gradual withdrawal from the rubber sector translated into reduced national production on the eve of the civil war.

The civil war, which began in December of 1989, signaled the end to rubber farming in Liberia as it had been practiced for more than 60 years. The initial National Patriotic Front of Liberia (NPFL) march to the capital began along the Ivorian border followed the main highway through the rubber belt into Monrovia²¹. For more than a year, all rubber activities ceased and even when Firestone and LAC re-opened their plantations in 1991, it was to greatly diminished activities because of widespread looting and the large-scale displacement of labour. The private sector did not recommence farming on any appreciable scale and for any sustained period until the mid-90s. Even then, apart from Firestone’s production at their main plant, only unprocessed cup lump was produced because of the lack of purchased inputs, the lack of financial injections, and clandestine tapping. With the vast majority of the 150,000 acres of privately planted rubber having surpassed their productive years or having been damaged or destroyed during the war, most Liberian farms were in desperate need of refinancing and replanting. This situation was compounded by the slaughter-tapping—the practice of cutting deeper or longer furrows in the tree to have a greater flow of latex—of viable trees by the military groups that occupied the farms along the rubber belt to finance their payrolls. The main income in the rubber sector during this period was gained through sales of coagulated rubber to exporters at the expense of the slaughter-tapped trees and the income for the legitimate owners.

As in any wartime economy, contraband trading was carried out with impunity and utter disregard to legal property ownership. Those who had traditionally gained their living from the rubber sector were hard pressed to continue doing so. Employment in rubber and its attached ‘hedge’ against the hunger season before the rice harvest had been removed and this loss of livelihood compounded the population shift towards Monrovia. Even after hostilities ceased, lacking reinvestment in the rubber sector, few farmers had access to the capital and credit needed to re-equip their plantations; few labourers returned.

The presidential elections of 1997 and Charles Taylor’s accession to legitimate power, provoked another change in the dynamics of the rubber sector. With little improvements in national or local security, farmers were forced into irrational contractual arrangements. The military groups that had plundered the rubber farms during the war split up and a new labour force comprised mainly of ex-combatants appeared on the farms.

4.0 LIVELIHOOD ANALYSIS

The war temporarily closed down most major industries in Liberia. Iron ore and logging, both of which had surpassed rubber as the main source of foreign exchange, remained idle throughout most of the nineties since the high capital investment was not present and could not be accessed because of the reigning insecurity. At present, none of the iron ore or timber concessions are operational, the former because of the high capital re-investment needed and the latter because of the UN and international sanctions on the timber trade that is still ongoing²². Once again, rubber dominates the Liberian economy and the possible sources of livelihoods.

But what exactly is meant by ‘livelihood’? A livelihood comprises the capabilities, assets (including both material and social resources) and activities required for a means of living. It is sustainable when it can cope with and recover from stresses and shocks and maintain or enhance its capabilities and assets both now and in the future²³. The term is used to more accurately reflect the complexities of rural life, especially life for the rural poor²⁴. In post-conflict Liberia, the most densely populated areas of the country fall roughly along what is known as the rubber belt –areas where planted rubber predominates in land use patterns. In this area, the rubber sector provides livelihood options and around 50% of the income of the population²⁵. There are several formal and informal livelihoods associated with the rubber sector: rubber plantation management, latex collection and sale, farm maintenance, transportation, charcoal production & sale, rubber wood production, among others. Additionally, there are backward and forward linkages between the rubber sector and other parallel agricultural and rural livelihoods: blacksmithing, service provision to rubber farm workers, transportation, technical extension work, the entire export sector – from legal and illegal government inspections, customs clearances, port fees, fumigation services, banking services, etc. An understanding of these livelihoods and the linkages between and among them is key for rubber sector employment and development.

Economic theory names the main factors of production as land, labour and capital. In Liberia, the abundance of land would seem to make it the least crucial factor but land that is planted in rubber is usually only found in the rubber belt running from the northern borders in a broad line to the coast. Labour and capital predominate in rubber production. Rubber requires heavy capital investment over 5-7 years before the first returns are made. Throughout the productive life of the rubber tree, capital is required to maintain productive operations: paying for the labour, the supplies and the equipment necessary to cultivate and harvest the rubber crop. The war destroyed capital investment in rubber –trees and rubber infrastructure were damaged or ruined, and renewable assets were looted on a large scale. Rubber farming ceased to be profitable even though farmers struggled to preserve what assets they could and most larger farms (> 30 acres) tried to maintain minimal operations.

Labour is the most important factor for rubber production. Rubber harvesting cannot be mechanized and so the recruitment and maintenance of a regular labour supply is the most crucial element in rubber farming. This labour supply determines production levels and explains the relatively low production on the privately owned farms that cannot compete against the multinationals in the labour market. Where the large concessions like Firestone are able to provide housing, social welfare plans, educational and medical facilities for their workers and their families, a private farm is hard-pressed to attract Tappers and other farm workers. In the early nineties, Firestone bowed to ‘government’²⁶ pressure and set the wage rate for its rubber Tappers at $2/day, a rate that is the highest effective rate that rubber Tappers are paid anywhere in the world. With the competitive bar raised so high, Liberian farmers were unable to attract farm labourers and so profit levels dropped precipitously. The relationship between capital, labour and land in a war context has reshaped the rubber sector and impacted profoundly on its traditional abilities to create and sustain jobs and livelihoods.

4.1 RUBBER PRODUCTION

To understand rubber livelihoods, one must understand how the formal rubber sector works. The production of natural rubber requires an initial period of 6-7 years between planting and the first harvest, although high yielding clones can be brought into production one or two years earlier. During these years, the plantation must be weeded and tended until brought into production by tapping, the process of harvesting rubber. Thereafter, latex –the name given to the resin that flows from the bark of the tree– flows from a daily incision collects in cups attached to the tree at the base of the incision and is harvested into a bucket. More modern tapping techniques allow for tapping on alternate days in order to prolong tree life but in general, a tree is expected to produce latex over an expected life span of 30-40 years. The latex is carried to a bulking factory on the plantation, is weighed and poured into a tank to which formic acid is added in order to process the latex into coagulated slabs. More refined techniques allow for the preservation of the latex in its liquid state which commands a higher price at processing plants. The entire process from bark incision to factory bulking is highly labour intensive, as is the care and management of rubber farms or plantations, and is mainly carried out by a Tapper. Weeders, or “Slashers,” as they are known, are needed to keep the undergrowth in check to allow the Tapper free passage through his task. The essential farming tools include the machetes for cutting undergrowth, the tapping knife used to make the incision in the tree, the buckets, usually slung on either end of hand-made wooden poles, and the ‘cup lump’ bag used to gather the strings of coagulated rubber left over from the previous tapping. Each tree is outfitted with a spout that is inserted into the bark at the base of the tapping incision, a cup to collect the latex that flows down the incision and via the spout and the wire that keeps the cup attached to the tree.

4.2 RUBBER LIVELIHOODS

On a rubber farm, there are several categories of formal livelihoods whose number is determined by the size and capacity of the farm. The ‘Farm Manager’—often the farm owner, especially for smaller farms (<30 acres)—is responsible for every aspect of the farm operations from securing capital, supplies and equipment, to marketing and managing farm expenses, including wage and salary payments. The ‘Overseer’—on farms >30 acres—is in charge of farm operations including management of the rubber harvest and daily production: from the work of the ‘Tappers’ and the farm cleaners—called ‘Slashers’—to the input of chemicals to the latex to cause the appropriate degree of coagulation and so forth. The ‘Headman’ functions as a Personnel manager by recruiting farm laborers and monitoring their production as well as their benefits received from the farm work. In smaller farms, the farm owner may play all three of these roles but in farms with more than 10 Tappers, it is nearly impossible for one person to carry out all of these functions making it necessary to divide farm duties among family members or to hire out some services. The work of a rubber Tapper is to make the cut in the tree (’tapping’), allowing the rubber resin or ‘latex’ to flow into a pre-positioned cup, returning to collect this resin after a few hours and to carry it in buckets to the farm ‘factory’ where it is combined with the collection of the other Tappers. A Tapper usually taps a “task” of about 450-600 trees daily²⁷and can deliver anywhere from 20-100 lbs of latex depending on his capacities, the productivity of the tree, and the distance from his task to the factory. On larger farms, one Slasher is employed for every five or so Tappers; on smaller farms, tapping and slashing duties are often combined. Rubber is coagulated throughout one or two days and stored in the factory with the ‘tanks’ being cleaned and made ready for the next day’s production. When enough coagulated slabs are ready, the rubber is transported and sold to a processing plant such as Firestone, where further trade in farm inputs (rice, farm supplies, equipment) is carried out. Many larger farms have their own transportation and hire Drivers, but the extensive capital flight of the 80s and 90s led to rubber being mainly transported in hired vehicles so that transportation is an important livelihood option in the sector. Concurrently, farmers and farm workers must ensure food crops to sustain their families over and above income earned from rubber. Subsistence agriculture therefore co-exists with rubber farming adding to the farm worker’s daily tasks. All tasks from heavy physical labour to refined farm management needing adequate commercial grounding, are carried out 365 days a year so that “The rubber planter [farmer] has no vacations . . . All mistakes and omissions are proportionately costly²⁸.”

Transportation provides another key livelihood for the rubber sector, for the large concessions and for small Liberian farms. Given that there were some processing plants that did not own plantations or trees, and others—like Firestone—who purchased rubber from Liberian farmers, domestic rubber trading necessitated a network of transporters and rubber brokers. The practice of brokering rubber—buying it from farmers and selling it to the processing plant—was common during the post-coup era, especially as 20% of the sale price of rubber was given in foreign exchange—but only for sales of over 5,000 lbs—well beyond the means of the vast majority of smallholders. Brokering was a lucrative offshoot of the rubber transport business and brokers soon came to dominate the rubber transport sector. When dozens of mini-exporters entered the rubber market to export unprocessed rubber during the war years, transportation became even more important and exporters merged with rubber brokers since they bought coagulated rubber from a multitude of sources, legitimate and otherwise, and sold it – only this time instead of selling to processing plants, it was packed into containers and shipped it out of the country. Transport was essential to collect the rubber from the many farms and plantations and to either get it to the processing plants (Firestone, etc.) or to bulking sites where it could be stuffed into containers. Stuffed containers of unprocessed rubber as well as crated processed rubber from the concessions are transported to the port in larger trailer trucks.

Informally, the production of charcoal from rubber trees is a livelihood option that grew out of the age and declining productivity of the rubber trees. The tree is felled and cut up into smaller pieces that are then burned in earth kilns. The charcoal that is produced is then bagged for sale as cooking fuel. Ideally, the age and damaged condition of the trees would favour the felling of trees for charcoal production, especially if the income realised from the sale of charcoal would be re-invested into gradual replanting. However, the lack of supplies and rubber stumps²⁹ precluded replanting and years of conflict diverted income realised from charcoal production into personal subsistence rather than farm re-investment.

Rubber also provides income opportunities through the numerous quasi-governmental regulations on the sector. Military and police barriers impose informal tolls on rubber transport at every stage in the process from the farm to the port. Fumigation and so-called inspection services for international export certification and export clearances and taxes are also obligatory. The graft that accompanies these services provides important income sources for hundreds of people, supplementing delayed and inadequate government salaries. However, graft added significant operating costs to a devastated sector of the economy and the costs were mainly borne by those who had already lost their assets: the farmers.

4.3 LIVELIHOOD LINKAGES

As with most rural livelihoods, rubber farming is characterised by several linkages to other sectors of the economy, either feeding them—forward linkages—or being fed by them—backward linkages. Livelihood linkages are affected by and reinforce the viability of the rubber sector and they are important for our analysis because they illustrate the multiplier effect that growth in the rubber sector can trigger. A prosperous sector creates and supports linked livelihoods; likewise, hardships in the rubber sector reverberate throughout the rural economy. Social services such as health care and schools, trade in consumer goods, transport services, blacksmithing, food production and marketing are examples of rural livelihoods that are tied to the rubber sector. Nurses, midwives, doctors, teachers, bakers, traders earned incomes that are linked to the fortunes of the rubber industry. Towns along the rubber belt became mini trading hubs as population movements gravitated towards them.

Transportation requires skilled mechanics and autoworkers and this livelihood option is an important one in the rubber belt. Blacksmiths to forge and repair rubber tools and equipment, chainsaw operators to fell rubber trees, bricklayers to construct housing and even farm extension workers are all in high demand on and around rubber farms and plantations. Skilled bud-grafters—people who graft and prepare rubber stumps for replanting—form a livelihood group that commands high wages and fees for service in the post-conflict reconstruction era.

Social services such as education and health services are also linked to the rubber sector, as are banking and financial, farm supplies trading, fuel depots and so on. According to statute, every rubber plantation of a certain size must provide a primary school and health center on site. The people who staff these institutions find their employment linked directly to the farm's success; others working in independent centers still serve the numerous rural population whose livelihoods—and ability to pay for services—are linked to the fortunes of the rubber sector.

4.4 INSTITUTIONAL ARRANGEMENTS

The ‘institutional arrangements’ of an industry refers to the relationship between the factors of production of land, labour and capital and the contractual agreements that define these relationships. The classical arrangement for a rubber farm has the landowner normally also owning or managing the capital that pays the labour. Within this classical framework, there is room for alternate arrangements such as the effective ownership of the land being with a financial institution in a mortgage arrangement or where the farmer provides the farm labour himself.

When rubber plantations were established in Liberia, the classical arrangement governed the sector. The owner of capital purchased the land and invested in the rubber trees to build the rubber plantation; as the trees came into production, skilled and unskilled labour needed on the plantation were hired at daily wage rates. Very quickly it became evident that rubber tapping was only one of several livelihoods options used by the farm workers. Subsistence farming was widespread throughout the rubber belt and rubber Tappers usually doubled up on their labour in order to provide themselves and their families with food crops as well as wages for sustenance. Credit on rubber wages was provided through the issuance of weekly rice rations and it is useful to note that the link between rubber and rice has always stabilized the sector since the introduction of rubber. All production and sales costs for the farm were borne by the farmer. When the coup occurred in 1980, new arrangements were proposed because many plantation managers lacked the resources to keep farms running in line with classical management practice. Sharecropping arrangements on a fifty-fifty basis became widespread. The farmer was spared the risks and costs of recruiting and maintaining the Tapper through the provision of housing, tapping materials (Tappers had to bring their own tapping knives and buckets) and rice credit while sharing rubber marketing costs (transportation, taxes,etc.) with the Tapper. The sharecropping Tapper could increase his income and sometimes doubled up his labour on more than one farm. The rubber industry operated thus with various degrees of sharecropping arrangements on most of the smaller farms and traditional plantation management on the larger farms. The labour market became more constrained as recruitment was more competitive.

By 1990, the rubber sector was operating at only partial strength. Many farms lay idle or were being tapped clandestinely; unsupervised farm were being surreptitiously stripped and the trees burned for charcoal production. Rational rubber farming was not profitable because the price was too low, the costs too high and most farmers had already lost too much of their investment. Smallholders were almost uniformly in sharecropping arrangements and larger farms were operating at only partial strength in an inelastic labour market. Within months, an unforeseen looting was unleashed on the rubber farms: cups, wires and spouts previously attached to the trees and rarely stolen, were systematically stripped. Eventually, by the time the transitional government was put in place, a thriving black market had developed in these rubber tree supplies. Legitimate rubber tapping materials and supplies were scarce; the rice that underpinned rubber farm operations was no longer available; capital necessary to re-open farms was non-existent and most farm owners had taken refuge elsewhere, often across borders.

In 1992, the National Patriotic Reconstruction Government (NPRG)³⁰ – decreed that rubber Tappers be paid in foreign currency at $2 per day. This was meant mainly to tax Firestone and the Liberian Agricultural Company (LAC) and provide income to the Taylor government. Liberian rubber Tappers became the highest paid in the world and most Liberian owned farms could add exorbitant operating costs to the asset loss they had already sustained. Faced with these constraints, low rubber prices and the heavy risk of operating in a war economy, sharecropping arrangements became more common. The terms now favoured the Tapper rather than the farmer as 60-40 arrangements became the norm; only a handful of larger plantations operated under traditional employer-employee mode.

Figure 1. Asset Pentagon: 2004 Liberian Rubber Farmer

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The farm owner in this figure has stocks of human capital in terms of his farming knowledge but he cannot command sufficient labour as this is too expensive. He has some access to his land and trees (natural capital) and the prestige that farm ownership or management confers (social capital). He is lacking the finances (financial capital) and the damaged or destroyed trees lack equipment and materials (physical capital).

Rubber farm owners were in a most unfavorable position: lacking significant financing to re-equip their trees, with supplies of farm materials being scarce and exorbitant, unable to access rice to attract labourers and facing increased risks (theft, low market prices, security, etc.).

Figure 2. Asset Pentagon: 2004 Sharecropper

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The sharecropper commands human capital provided through his necessary labour. He has no legitimate access to land and trees (natural capital) and limited and questionable social relations (social capital) because of being considered either an ex-combatant or as having received the farming materials illegally. He lacks finances (financial capital) but ‘owns’ the equipment and materials (physical capital) needed for rubber farming.

Case Study 1:

Tarqueh Farm is a 25- acre farm in Margibi County and it was planted almost entirely in rubber in the mid-50s. In the 70s, it enjoyed its most productive period and was tapped by 6 Tappers, including 3 of Mr. Tarqueh’s immediate family members. Mr. Tarqueh himself worked as a Farm Supervisor on a neighbouring farm; 2 other members of his immediate family were similarly employed on neighbouring farms. Upon the elder Tarqueh’s death, the rubber farm passed to his oldest son although the other farming areas devoted to rice and vegetables are still shared by all family members. Since the conflict, 2 sharecroppers are tapping the remaining viable trees. Tarqueh does not have the capital to invest in replanting; his trees were slaughter-tapped by various militia groups over the years and very few of them have significant commercial value. Tarqueh is eager to replant but lacks the resources to do so. Although he has contracted 10 acres of damaged trees to charcoal burners, he cannot tie up this income in the farm since he has to rebuild his house that was burned down by the fighters. His family still plants rice and other food crops but they lack farming implements to continue. His children attend school on a neighbouring farm or in Kakata, the nearest urban center, which is 9 miles away. Health services are also 9 miles away, at best. Tarqueh is classified as being well off in terms of livelihoods since he owns some productive assets and earns some income from his supervisory work on the neighbouring farm. However, the farm that employs him is only operating at 20% capacity and has reduced his pay to less than half of his pre-war salary. His oldest daughter lives and works in the USA and supplements the family income through the remittances she regularly sends.

Case Study 2:

S.K.H. Farm is 100 acres of planted rubber located 25 miles out of Monrovia on the main highway. The trees were planted in the early 50s and Firestone extension workers have commended the farm as being of an ideal size for private production. At its peak, the farm employed 33 skilled and unskilled workers. During the height of the conflict, its location was squarely in the middle of the buffer zone between Taylor’s forces and the peacekeepers; all farm workers fled the area. The location protected the trees from destructive practices until just before elections in 1997. Then, a neighbouring farmer took advantage of the legal disarray that followed the death overseas of the farm owner and illegally destroyed about 25 planted acres of trees for charcoal burning. Attempts by the owner’s estate managers to restart farming activities were hampered by the location as workers feared for their security in case of any flaring up of conflict. During the post-election period, ex-combatants took up residence on the farm and slaughter-tapped the trees. The heirs to the farm would like to replant the rubber but lack investment financing; planting materials and necessary technical expertise are likewise not available to undertake replanting. Seven families who had previously worked on the farm have taken up residence in the farm houses and supplement their food cropping activities by clandestinely tapping the remaining damaged trees. Some commute to Monrovia or Careysburg (the nearest urban center) searching for employment opportunities. Trees on the further edges of the farm (away from view of the factory) are being destroyed for charcoal.

Case Study 3:

Vahnyeamah has a total acreage of 1,000 acres of which around 680 were planted in rubber. It is one of about 50 or 60 farms that are considered large plantations and is located on Bong Mines Road in the heart of the rubber belt. At its peak, the farm employed around 90 Tappers and provided formal employment for 30 additional persons. The farm had a fully constructed school which educated children of rubber workers from a radius of 4 miles. Health services were provided through bi-weekly day clinics. Oil palms and citrus fruits were also planted on 50 + additional acres of the farm and Vahnyeamah had its own trucks, tractors, and other heavy farm equipment, with the requisite personnel to operate them. A replanting exercise was begun in the mid-80s but the war began before those trees could be brought into production. During the war, all the farm buildings were destroyed and all equipment looted. The farm was taken over by combatants who slaughter-tapped all the new trees and about 30% of the old trees. After the 1997 elections, the farm manager agreed to sharecropping arrangements but only on the previously damaged trees. Since 2003, many Tappers come seeking employment but, without housing facilities, only about 12 Tappers agreed to commute from villages nearby to work under regular employment contracts. A rubber nursery has been started but the farm owner lacks the resources needed to bud-graft the 40,000 stumps. The school operates in three rooms on the ground floor of the two-story farmhouse and there are 135 students enrolled.

Case Study 4:

Gehngema owns 4 acres of land planted in rubber, part of a 20-acre plot inherited from his father. He works in Monrovia but his older son or his wife tap the rubber and sell it every 2-3 months. His son and his wife were also employed on a nearby farm to supplement family income. During the conflict, the cups, wires and spouts on his trees were stolen and he lost about 30 trees to a fire. His 4 acres are far off the main road and were not damaged by slaughter-tapping. Gehngema would like to start tapping his rubber again but has only managed to accumulate enough cups for 300 trees. Neither his son nor his wife is employed since the farm that previously employed them has shut down and the owners have left. Gehngema himself lost his job with an NGO but stays in Monrovia looking for a new job.

The sharecropping Tapper dominated the contractual arrangement, shifting the factors of production away from the farm owner as illustrated in Figures 1 and 2 where the center of the pentagon represents a lack of the asset. The asset pentagons illustrate the asset basis for the contractual arrangements that prevail in the rubber sector. Without access to finances and lacking the materials and equipment needed for rubber farming, owning only the trees, the land and his personal capacities and knowledge, the farmer is forced to rely on external labour from those who have what he lacks. This arrangement is detrimental in the long term for all concerned because the erosion of the trees through harmful harvesting practices precipitates the demise of the rubber sector and the livelihoods it provides.

4.5 RUBBER MARKETS

Firestone has always dominated the rubber market in Liberia. Most rubber farms were planted using technical resources, capital and material inputs supplied by Firestone, in an elaborate ‘sharecropping’ relationship. All rubber produced was sold to Firestone at prices they set. Isolated attempts at independent production and sale soon proved unviable and uncompetitive. Although other concessions have been established and functional, the rubber prices, the farming extension and transport services, the price of farm supplies and rice offered by Firestone to its client farmers remained a more profitable mix for the Liberian farmer. Even if other firms could compete on one aspect, it was unusual that they could do so on several or all aspects of the rubber trade. More common was a gentlemanly arrangement between Firestone and other concessions, and with tacit approval from the government, where Firestone’s monopoly reigned supreme.

The eighties and nineties saw an increase in export companies, often linked to Far Eastern rubber processing plants, who preferred to export unprocessed coagulated rubber. Soon, export companies proliferated, to the long-term detriment of the rubber sector, offering higher prices to the farmer but little in the way of services or supplies. Many clients defaulted on their obligations to Firestone and other concessionaires further skewing the dynamics of the sector; cut-throat competition was rife. The war years saw an intensification of this dynamic in the marketplace as rubber trade mirrored the pillaging that was the norm in rubber production. All of these factors combined with a de-linking from an effective national economy or to world rubber markets to cause severe shifts in characteristics of the Liberian rubber sector.

Although Firestone’s de facto monopoly over domestic sales and export of rubber in Liberia may have limited the available information on world rubber trends, and hobbled attempts by domestic farmers to function rationally, the rubber sector has been impacted by other concerns as well. The war has triggered absentee ownership and consequent irrational exploitation of the rubber crop and this too has been detrimental to the national economy. Even the supply and demand of labour in the rubber sector has functioned in an aberrant manner with unviable sharecropping practices where the ownership of renewable assets—the cups, wires, spouts, buckets, etc that are needed to tap rubber—having passed from the farm owner to the ‘labourer’. Finally, the looting and/or destruction of the more permanent assets—the rubber trees themselves—is another form of irrational behaviour that is also fuelled by the lack of information about the optimal benefits of rubber trees and by the continual insecurity that is the result of the civil war. In spite of these considerations, there are positive aspects to this imperfect market situation.

The world demand and price for natural rubber is currently rising. Given that it comprises only one-third of the demand for rubber in the world, the dominance of synthetic rubber would seem to not bode well for the market for natural rubber. However, synthetic rubber is produced using petroleum by-products and so its manufacture is closely linked to supply and price of petroleum. In 2004, petroleum prices have increased to their highest ever levels and consequently the demand for natural rubber is increasing. Liberia has the potential to increase its supply of natural rubber at prices that could stimulate revitalization of the sector. In fact, the local purchase price of a pound of coagulated rubber in Liberia has doubled from around 7 cents in 1996 to more than 15 cents in June 2004. This would benefit the Liberian economy as a whole but the income and livelihoods that would obtain to a war-weary and economically ravaged population could not be more opportune.

5.0 IMPLICATIONS FOR NATIONAL RECONSTRUCTION

The international community has pledged reconstruction aid to Liberia worth more than $500 million. But the war has taken its toll and more than 50,000 soldiers need to be disarmed, demobilized and given some productive opportunities to avert a re-descent into conflict and chaos. The economy, having run close to empty for so long, is struggling to re-start even as Liberia’s main industries do not have serious prospects of recommencing activities soon. The iron ore industry is closed down and will need billions of dollars of capital re-investment to get started again –even were the main iron ore mine not facing drastic depletion at the time they were closed. The logging industry, a most prominent foreign exchange earner throughout the eighties and nineties, is under UN sanctions for its purported role in having fuelled the conflicts in the West African region. Neither logging nor iron ore had the prominence of rubber in the labour market and given dismal immediate prospects, cannot be expected to be viable options for the economy. The rubber sector, for all its tribulations over the past 24 years, is the main hope for economic revitalization and employment generation.

Natural rubber has a number of applications whose demand and supply dictate the trading price on the international market. Although natural rubber only accounts for roughly 33% of world rubber consumption, it has specificities and applications that are not competitive with synthetic rubber. Furthermore, natural rubber enjoys a comparative advantage because synthetic rubber is a by-product of petroleum and is highly sensitive to price fluctuations in the petroleum market. The vast majority of the world’s rubber is grown and exported from the Far East with Malaysia and Indonesia together accounting for more than 92% of the world rubber production. Liberia, at its peak, accounted for a mere 3% of the world’s rubber supply, the bulk of that destined for American factories.

The prospects for natural rubber on the world market are good and improving and Liberia could find this beneficial if it can gear itself to take advantage of the ending of the conflict to lever itself into increased rubber production. Several rubber concessions have re-opened and many traders and exporters still operate in the rubber sector. The local price has nearly doubled in Liberia since the end of the war – coincidentally since the commencement of the war in Iraq and the increase in the world petroleum price. Just as major consumers of petroleum products are looking for new supply sources, so are they looking for cheaper alternatives to petroleum products such as synthetic rubber. Natural rubber stands to gain from this situation.

A cursory examination of the rubber sector in Liberia would seem to indicate that the sector has outlived its usefulness. That a large proportion of the rubber farms had been abandoned by absentee owners and that the exploitation of planted rubber in Liberia had decreased to about 14%³¹ at the onset of the war would indicate waning interest in rubber farming. But the rubber sector has been wrongly stigmatized by the few dozen high profile planters who made fortunes in rubber in the 50s and 60s; ignored are the thousands of jobs and livelihoods that depend on the sector, whole generations whose lives have been shaped by rubber, and thousands more whose assets and capital are inextricably tied to rubber. The war has been highly damaging to the rubber sector and to the already over-age trees but the fact remains that the rubber sector did sustain the economy through the war, the initial peace, the renewed war and new peace.

The lack of employment opportunities offered to the ex-combatants in 1997³² contributed largely to the resumption of hostilities in 2000, a mere three years after elections. The provision of gainful and sustainable employment or at least of appropriate livelihood alternatives to combatants—or other disenfranchised—is arguably the most important lesson that can be learned in any disarmament process. This highlights the suitability of the rubber sector in Liberia for a key role in the reconstruction, in spite of its anomalies and complicated operational environment. Surprisingly, economic planners and reconstruction experts have ignored this potential growth source; have focused instead on interventions that are less economically viable for the nation and/or for the individual citizens. Conventional development wisdom points to the importance of markets and the private sector for livelihood development³³.

Post-conflict reconstruction necessitates exploration of policies that promote and support agricultural livelihoods, exploiting the rubber sector as it exists, as the one that provides the most livelihoods, and does this in complement to food production. Important lessons from previous reconstruction processes and from the Liberian historical perspective are being overlooked and the potential consequences are costly and devastating.

The Results Focused Transitional Framework³⁴ that is meant to be the backbone of the reconstruction process for Liberia makes no mention of the possibilities afforded to rural livelihoods through the rubber sector. One of its ten goals, the Restoration of Productive Capacity and Livelihoods, speaks of the rehabilitation of rice and other food crop plantations through the creation of income and other employment opportunities, ignoring the principal agricultural product that has for generations managed to do just that. According to a livelihood study in 2002, when the population in the rubber belt region of Liberia stood at 1.8 million, all households in the study area derived more than half of their income from the rubber sector³⁵. Even considering the highly transient nature of this population and that population displacement makes the figures less reliable, current population maps show that the rubber belt still corresponds to the most densely populated parts of the country. Further, it corresponds to the areas where the majority of demobilized fighters hope to settle³⁶. Given these facts, a demobilization that focuses on reintegrating ex-combatants into their desired communities and equipping them with seeds and tools for food crop farming, is not taking into consideration the land use of the area they are being reintegrated into. Land use in the rubber belt is devoted to rubber and, although intercropping is common, it cannot happen on a large scale without complete destabilization of property rights and livelihoods³⁷. Why then encourage ex-combatants to embrace an unrealistic and non-viable way to earn their living?

6.0 CONCLUSIONS AND RECOMMENDATIONS

Liberia’s reconstruction requires ‘thinking outside of the box’ in order to be effective and sustainable. The current frameworks for rehabilitating the economy, for reintegrating the ex-combatants into society and for making the peace a lasting one have been designed using traditional ways of thinking. The exploitation of Liberia’s natural resources—most especially since diamonds and timber, other principle earners of foreign exchange are both sanctioned and their export prohibited—has limited impact on employment provision or on the economy as a whole, even were it permitted.

A livelihood is sustainable if it can withstand trends—such as the economic decline that most people have faced over the past 25 years—and shocks—of war, of sudden and complete asset loss, of the statelessness that has continually been inflicted on them. The significance of the rubber sector is that it has continued to provide livelihoods for thousands of people—indeed for the majority of those living in the most densely populated areas—throughout the war. Reconstruction plans must recognize the resilience inherent in the sector and in the people who live by and through it; must put aside biases against perceived irrelevance of this plantation industry and seek out positive aspects to build upon. It is the only major export sector of any significance that remains functional.

The recommendations in this paper will focus mainly on the application of creative solutions—based on rubber livelihoods—for the national reconstruction plan. Building on these solutions, multiplying its effects across the economy, programme simulations can be adapted and repeated in other sectors. The key is to understand people’s livelihoods and the coping strategies that they apply in order to sustain life.

1. A $30 million fund should be established and carved out of the reconstruction budgetary package for livelihoods based interventions. This would represent only a fraction of the $520 million pledged for the process but, if applied wisely, could be more pivotal in ensuring a lasting peace than the entire rest of the budget.
2. This fund should be administered by an advisory board comprised of key donors—the US Agency for International Development’s Office for Transitional Initiatives, the European Commission, main donor governments—the UN agencies—including the World Bank, UN Development Programmes (UNDP), UN Office for Project Services (UNOPS), the Food and Agriculture Organization (FAO), the International Labour Organization (ILO), and the Office of the Special Representative of the (UN) Secretary General, the Government of Liberia—through the ministries of Agriculture, Commerce, Finance and Planning and the private sector, the main concessions like Firestone and Liberia Agriculture Corporation (LAC), and the Rubber Planters Association (RPAL). The board can be expanded later to include other relevant partners in the development process.
3. The rubber sector livelihoods component should be ideally operated by UNOPS under the supervision of the Advisory Board. Certain aspects of the programme such as monitoring and supervision should be handled by the RPAL and other aspects such as the training and technical expertise can be jointly implemented by the concessions, the RPAL and the Central Agricultural Research Institute (CARI).
4. Programmes are to be designed and elaborated to apply this fund to implementation. For the rubber sector, there are several possibilities:

            (A) An Ex-Combatants (X-Com) Programme, which
            is elaborated in greater detail through the simulations
            below;
            (B) A programme focused on alternative uses of the
            overage rubber trees in adaptations that focus on
            optimizing the livelihood benefits from charcoal
            production, from construction or industrial uses of
            rubber wood, and so forth. This is touched on in
            some of the simulations below.
            (C) A programme for replanting rubber trees;
            (D) A programme for training farm managers and other
            skilled workers in latex production, in management and
            accounting practices, in bud-grafting and planting
            techniques, in proper tapping, harvesting and marketing
            of rubber.

5. Creative interventions are to be designed for other sectors of the economy and could begin with a complete mapping of resources and livelihood options that are used by the mainly rural population to sustain their lives. Many of these resources can be better exploited through innovative product promotion schemes. For example, Liberia is rich in flora that have other uses besides as timber or firewood: the production of essential oils, shea butter, cork products; as preliminary possibilities.