ASEAN Regional Conference On Food Security (ARCoFS)

(Country Paper of Lao PDR)

Ministry of Agriculture and Forestry, Department of Agriculture Penang, Malaysia <<>> 8-10 October 2013

Outline of Presentation

Overview of Agricultural Development, related to FS during the last 5 years(2006 2010) and Target for Next 5 Years (2-011- 2015) Challenges and Opportunities to Achieving Food Security Improvement of Poor Farmers Livelihood Sustainable Agricultural and Food Production Responsible Agricultural Investments and Partnerships for FS and ANR Sector Development Agricultural Innovation and Technology Transfer FS Arrangements in Case of Emergency/Shortage caused by Natural Disaster

Lao PDR: Northern Province Strategy Study: Local and International Border Crossings
Lantui - Paksa

Land-linked advantages

1A Pakha Ban Chom Panghay Pangthong LUANG NAMTHA 1B Boten Bohane PHONGSALY

Sop Hun - Tai Trang 2E Ban Dan - Xiang Khouang Pa hang - Long Sap 13N Pakmong 1C 6 Ban Loi - Nameo (to be soon opened as International Crossing

OUDOMXAI

HOUAYSAI Chiang Khong

2W

XAM NEUA

4B Namngeun - Hoiei Kone 4A

LUANG PHRABANG 7

Xam Tai

PHONSAVANH

Namkan - Nam Can

SAYABOURI 13N Thong Khoun XAISOMBOUN PHONHONG Longsan PAKSAN Bungkane 5

Ban Vang Paksom Kenthao Nong Pheu

VIENTIANE

Thannaleng - Nongkhai

LEGEND National Capital Provincial Capital National Road River International Border crossing National border crossing

Overview on Agricultural Development

Lao PDR covers area of 236,800 km2 Mountainous areas account for 80% and about 20% is lowland area. Cultivated land covers about 1.2 million ha (5%), rice is occupying 60---70% of the total crop area. Population is about 6.51 million (In 2012); GDP per capita 1,349 US$ (in 2011-12). Growth rate is about 8.3% and target for 2012---13 is 1,519 US$. Lao PDR is divided into 17 provinces, 145 districts and 8,615 villages (in 2012) Agri. GDP contributes 26.7% (in 2011--2012) to Nat. GDP, and est. for 2012-13 is about 25.5%.

The Food Situation

Laos has achieved basic self-sufficiency in Year 2000 (300350 kgs of paddy/cap/year), but productivity is still low and deficiency is chronic in the Uplands(2/3 of Laos )However from a nutritional standpoint very much deficient At the national level, approximately 270,000 or 37% of children under 5 (CU5) remain underweight and over the past ten years, this rate has not declined. Chronic malnutrition remains the biggest problem with nearly 300,000 or 40% of CU5 stunted. There is a sharp increase in stunting and underweight between 6 and 24 months.

Food security and diversification: 23% of the population is undernourished. The most significant constraint to the availability of food in Laos is the low level of domestic production of food items. The low level production is mainly the result of low levels of productivity and high risks in the agricultural sector.

Rice Production has attained overall the country since 2000-2001. It achieved to 2.1 million tons of paddy
400,000

surplus

300,000

200,000

100,000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

(100,000)

insufficiency
(200,000)
(300,000) Surplus of raw milled rice (tons)

FAO 2011 6

GDP Share in the year 2011-2012

39.1%
26.7%

28.2%
Agricultural
7

Industry

Services

Plan VII : 2011-2015 ANR sector will perform over 4% of annual growth (overal GDP growth > 8%) 1- Food security and rice reserve: - Consumption target at 300-350 kgs/cap/yr for rice paddy and 50-60 kg/cap/ yr for protein(meat,fish, ), - Expect to have excess up to 1 million tons minimum, no more significant rice and food deficit in Laos in 2015 -Rice reserve 60 to 120.000 tons and rice seed reserve over 10.000 tons(on going to prepare rice reserve at 30.000 tons) 2- Promote value chains, incl. in uplands ( take advantage of New Asean Charter & Economic-Social Pillars; Regional Economic Integration; Dynamic East Asia Economy esp. about PP&PP) reach rural poor areasincrease income 3- New employment opportunities for the upland and remote rural poor to reduce Shifting Cultivation 4- Forest cover up to 65% : REDD+ & climate change program

Rice Sector Target by 2015

MAF has developed the following targets for the rice sector in 2015:
Total paddy rice production increased to 4.2 million mt from 3.07 million mt in 2010 and 3.4 million mt in 2012 Planted area increased to 1.04 million ha from 870,000 ha in 2010. 500,000-600,000 mt of good-quality, non-glutinous rice would be exported, mostly to countries in the ASEAN region but also to the international market. Non-glutinous rice increased to 30% from 10% in 2010 Food insecurity and malnutrition would be reduce by one-half through increased availability, access to and utilization of rice and other foods.

Challenges and Opportunities to Achieving Food Security

Multiple path exist for achieving food security

High diversity of existing rural land use systems Aim for family-based food security Aim for community-based food security National food security derived from an integrated food supply Shifting cultivation chain analysis

Agroforestry

Analysis => awareness of strengths and opportunities Analysis => investments to overcome weaknesses and threats

Food security is more than rice : increased commodity & trade = increased income & safety nets

Mixed farming

Existing Opportunities

Regional (GMS) comparative advantage factors: Ability to produce natural/conventional and organic products Land available for smallholder farmers and intensive / plantation-style mega-projects Availability of NTFPs and other niche products for niche markets (natural & domesticated species, indigeneous species). Lao PDR has more than 15,000 Varieties of rice (second country after India). Lao commodities are in high potential in regional markets: Field crops: maize, cassava, peanuts, soybeans, sesame, etc. Tree crops: rubber, Eucalyptus, teak, agar wood, etc. Horticulture crops: coffee, tea, vegetables, fruit Industrial crops: Jatropha, sugar cane Specialty crops: NTFPs Livestock: cattle for meat; buffalo for hides; pigs / chickens as natural / wild products. ASEAN development gap:

CLMV vs. advanced ASEAN (Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand) allow for complementarities

Regional Economic Integration :

Opportunity for the Lao PDR :
Turn land-linked transport corridors into economic corridors : increase in land-based investments (concessions, contract farming.. ) to produce & supply food & ANR goods to the Region & World

Rice Rubber

Vegetables

Maize NTFP

13

Improvement of Poor Farmers Livelihood

The Improvement of Livelihood has Food Security as its first Priority for Poor Farmers
1- Through agriculture and livestock activities(Agricultural diversification): this approach will be promoted in order to enable improvement the nutritional well-being of people, to meet food products requirements/markets. 2- Food security and livelihood improvement is linked to ensuring good management of agricultural land, good soil management, use of improved seed, application of suitable fertilizer packages, and IPM. 3- Farmers practicing irrigated agriculture will be given more training in on-farm and in field-water use and community management of irrigation structures, to increase productivity and yield. 4- Local breeds of livestock will be cross-bred to increase productivity and disease resistance to ensure resilience to climate change. 5- Basic veterinary services and vaccination programs will be strengthened to support animal disease control. 6- Agricultural research, extension, and development will aim to increase productivity, reduce of cost production, and enhance quality to improve market competitiveness.

Sustainable Agricultural and Food Production

The Govts Vision and Development Goals:

1- The Governments vision for the development of agriculture, forestry, natural resources management and rural development is based on the holistic concept of long-term, sustainable development, including economic, social and ecological dimensions. 2- The strategic direction for ANR sector is to ensure a successful gradual transition from subsistence into commercial smallholder production. 3- Modernization of lowland market-oriented agricultural production, adapted to climate change and focus on smallholder farmers. 4- Create value-added food and agri.products aimed at reducing rural poverty, maintaining food security, and applying results-based management to the natural resources that provide the foundation for sustainable agricultural and rural development. 5- Conservation of upland ecosystems, ensuring food security and improving the livelihoods of rural communities. 6- The structure of ANR sector can be grouped by two different inter-dependent systems: lowland and upland & highland agr.production(more specific areabased approaches)

Lao Smallholder agriculture is in transition

Food security based systems

housing Low land RICE (1 crop/y) water Up land rice field

animal grazing field

natural forest

Food security based integrated with commercial agriculture

Upland rice

Low land RICE (2 crop / y) water

housing

Agro-- forestry (veg. fruit tree)

Horticulture

Crop Rotation

Animal grazing

Natural Forestr y

18

Responsible Agricultural Investments and Partnerships for Food Security and ANR Sector Development

Imperatives of Regional Integration

1- Continued investments : PIP, ODA but focus on FDIneed new

policies, regulations and incentives, e.g. land lease policies like leasing irrigated agriculture land, nucleus estates 2- Institute new cross border links, building a new Asean Economic & Social Community transport corridors & economic corridorsincreased connectivity & integration 3- Collective effort in preventing or mitigating on new risks support to SPS 4- Sustain Technology Development through increased intra-Asean; Asean Plus Three & Cooperation with all DPslessons learned from the past : varietal improvement, supply chain dvpt, cattle dvpt, NTFPs dvpt( PP & PP ) 5- Effective engagement with small holders and larger holders need to realize Decrees on Associations & Cooperativesto promote SMEs & producers to private businesses partnerships ( key to poverty eradication)

Future Needs for Public Investment and Foreign Direct Investment in Agriculture

Financial investments required to support the 7th NSEDP ( 2011-2015 ) :

Public

investment: 10% Community-based / micro-finance: 10% ODA: 20% FDI: 60%

Approximately 1 Billion USD needed in agriculture and forestry sector for the coming 5 years
21

Public and private investments needs to be synergized for successful regional and global integration

Lao PDR has become WTO membership, need to improve and upgrade laws and regulations, . . In order to meet WTO requirements. Lao agriculture and forestry need to upgrade its capacity to meet : GAP standards SPS standards Organic Agriculture standards (OA) Fair trade standards Livestock health standards, etc..

Agri-business : North
Organic

tea to China Rubber to China Maize to China, Thailand, Viet Nam Soybeans to Thailand White sesame to Thailand NTFPs to China, Japan, Korea Beginning of supply chains mostly unprocessed products or early stage of processing - Cross-border trade - major incentive

Agri-business : Central
Maize

to Thailand Sugar Cane complete supply chains shaping Sweet corn to Europe Vegetables to Europe Peanuts to Thailand Cassava to Thailand, China Black glutinous rice to Europe, some organic

Agri-business : South SME supply chains

Okra to Japan supply chain Coffee to Hongkong, Europe, Thailand supply chain Cabbages to Thailand, Viet Nam Bananas to Thailand, Viet Nam Cotton indigo products to Japan Peanuts to Thailand, Viet Nam Cassava to Viet Nam Rubber to Viet Nam supply chain Soybeans to Thailand, Viet Nam

The Cast of Characters :

Success stories

Coffee

Sugar cane

Dao Heuang (Champasak) Sinouk (Champasak) Lao Mountain Coffee Outspan Coffee (Singapore)

Mitr Lao (Thailand) in Savannakhet Savan (Thailand) inSavannakhet

Jatropha

Vegetables

Kolao (Korea) in Vientiane Province

Lao Agro Industry (Vientiane Tree plantations Province) Oji (Japan) in Borikhamxay, khammouane) Mme. Inpeng (Champasak) Birla (India) in Savannakhet Taniyama-Siam (Sekong)

Textiles

Sun Paper (China) Savannakhet

Laha (cotton indigo) Cassava (Savannakhet) Yetao (China) in Savannakhet Lao Sericulture (Mulberries) Henan (China) inSavannnakhet (Xieng Khouang) Tenghui (China)in Savannakhet

Benzoin

Hu Phu (Viet Nam) in Salavan

Agroforex (France) in Huaphan

Emerging & Growing Supply Chains

P-P & P-P ( Tighten Value Chains)

Public & Public: Government to Government MOU: Lao Government and Partner Government Public & Private: Government to private company: MOU: Lao Government and Private company Private & Producers: Private company to producers (Contract farming) Example : Case of rice or any commodity production in a given Province.

Partner Govt : varieties & breeds; technology; capacity building Partner country Private Sector : capital; market; certification Lao Govt & Private Sector complement : land lease; policy & other investment incentives; TA; capital & internal market; liaising & business support

P-P & P-P

Case Study: Taniyama-Siam, Thateng District, Sekong Province

Okra: Sekong to Japan in 72 hours

Barren land available as a land concession

30 year renewable lease 30 ha 1,000 ha Operate as a nucleus estate Contract farming outreach program with local farmers Lease land from farmers Use farmers as workers while transferring technology increase income & food security

Investment Potential in Lao PDR in ANR Sector

Vientiane Pro

Savanakhet Pro

Rubber tree, Sugar cane and Rice

Maize
Vientiane Capital

Livestock, Rice and Industry

Champasak Pro

Mekong Fish indigenuos, Cofee and Vegetable

Agriculture and Forestry Land in Perspective

Agriculture and Forestry Land area for promotion and attraction investment: Total land area: 2.36 mil ha 1) Agriculture land: 1.8 mil ha, incl.: - Field crops land: 0.78 mil ha - Fruit tree crops land: 0.78 mil ha - Pasture land: 0.23 mil ha 2) Industrial trees plantation: 0.56 mil ha 3) Barren land : 7 million ha ( North, East )

Agricultural Innovation and Technology Transfer

Agricultural Innovation

National rice research program, area-based approach Agricultural technologies (production, post harvest, agro-processing, land use planning, ) Variety improvement (flood and drought tolerant rice varieties, high yielding, seed corn,), Farming diversities (agro-forestry, mixed farming, ) Animal improvement (Cattles, pig, fish, feeds, vaccine,) Agricultural infrastructure facilities development , focusing on existing schemes.

Technology Transfer
National agricultural extension strategy/program (through extension network to village/cluster level) Technical service centers (now: 216 centers at provincial, district and village cluster levels ) Farmers organization(group, association, by product: crop, livestock,...) Public-private-villager agricultural extension partnership Extension infrastructure and revolving fund Farming technologies and marketing information Seed distribution and production system Agricultural input support program

Food Security Arrangements in Case of Emergency/Shortage caused by Climate Change Effects

In Case of Emergency caused by Natural Disasters

-

National Committee on Management of Natural Disasters National Emergency Rice Reserve National Rice Seed Reserve Revolving Fund/Micro finance Irrigation systems and agri. Inputs supply Asking for assistance from APTERR, other donors, . . .

Sharing Food Security Information

Through ASEAN Network/ International Org./Financ.Instit.

ASEAN Food Security Reserve Board (AFSRB annual meeting) ASEAN Food Security Information System (AFSIS), APTERR Sharing with FAO, WFP, WB, ADB,IRRI, in the Country based and Regional, Sharing with MIP, MCI, (in the country)

Conclusions

Food security remains in Lao PDR an important challenge and Lao PDR Greater investment in food and agriculture as well as in natural resource management is fundamental to meeting the MDGs, in particular the goals concerning poverty, hunger, and health. Food security can only be achieved in Lao PDR if a broad range of stakeholders are partnering and aligning to a common objective. NGOs need to be more present, working efficiently at community level, and increasing local authorities capacities FDI and Domestic investment can play an important role in boosting agricultural production, importing food safety standards, .. Increase focus on food security in environmental impact assessments (EIA) for investments in agro-based industries and plantations, bio-fuel industries, mining, hydro-power and others Lao PDR need to enhance its responses to regional challenges (e.g. AIFS, SPA-FS) Lao PDR National strategy needs to be further articulated with the regional food security strategy

Lao Agriculture is Open to Cooperation & Investment

 Thank you For your attention