partnership increases productivity and profits in the lao pdr
DESCRIPTION
In Lao PDR, farmers banded together into production groups rallying around specific homegrown products. Through the support of ADB, the government, and private sector, their productivity improved and their incomes grew, encouraging more groups in the country to replicate their success.TRANSCRIPT
June 2014 | Issue 58 Lao PDR | Agriculture/Partnership
• ThenaturalresourcesoftheLaoPeople’sDemocraticRepublic(LaoPDR),alreadystrainedbyaweakagricultureandnaturalresourcemanagementframework,facedaddedpressurefromtheriseinforeignagricultureinvestmentsandunsustainablefarmingpractices.
• TheGovernmentoftheLaoPDR,privatesector,andlocalcommunitiespartneredtogether—withassistancefromtheAsianDevelopmentBankandtheInternationalFundforAgricultureDevelopment—toprotectthecountry’snaturalresources,increasefarmerincomes,andenhanceagriculturalproductivity.
• Thesuccessofthesepublic–private–communitypartnerships,asinitiallyimplementedin5pilotsites,hasspawned71moresubprojects,nowbenefitting230,000householdsin1,895villagesin42districtsintheLaoPDR.
Partnership Increases Productivity and Profits in the Lao PDR
BACKGROUND
TheLaoPeople’sDemocraticRepublic(LaoPDR)isalandlockedcountryblessedwithabundantnaturalresources.Yet,asof2012,roughlyathirdofits6.5millionpopulacelivesbelowtheinternationalpovertyline.1
Indigenouspeoplecompriseasignificantportionofthoselivinginuplandareastothenorthandsouthofthecountry.Theyforgetheirlivelihoodsfromextremelysmall-scalefarmingandlivestockproductionthatarehighlydependentonforestandwaterresources.Withvirtuallynoaccesstofinancingtopurchaseinputs,nomachineriestoscaleupproduction,andnomarketorientationtomatchdemandandsupplyofproduce,thesefarmersfacethedailyrealitiesofsubsistencefarming.
Therecentyearshavebroughtinmorethreatstotheirsurvival.Heavyforeigninvestmentsontradesreliantonagricultureandnaturalresources—suchasrubber,sugar,andotheragriculturalcommodities—meantlopsidedcompetitionfrombiggerplayers.UnsustainabletraditionalfarmingpracticesmeantstrainingfurthertheLaoPDR’salreadystrainednaturalresources.Theweakinstitutionalandlegalframeworkforsustainableandequitablemanagementofagricultureandnaturalresourcesaggravatedmatters.APPROACH
Transforming the Agriculture Sector. In2009,theGovernmentoftheLaoPDRandtheAsianDevelopmentBank(ADB)initiatedtheSustainableNaturalResourceManagementandProductivityEnhancementProject(SNRMPEP)totransformthecountry’sagriculturesectorintoamorediversified,commerciallyorientedandenvironmentallysustainablesector.TheprojectaimedtoprotecttheLaoPDR’snaturalresources,enhancethecapacityofthestateanditsprovincestodoso,andincreasefarmerincomesandagriculturalproductivity.Itwasimplementedin19districts—12ofwhichareverypoorand7poor—in5provincesintheLaoPDR.Itcovered1,044villageswithatotalhouseholdpopulationreaching56,000.
Win-Win Partnership.Public–private–communitypartnership(PPCP)wastheprincipalstrategyadoptedbytheprojecttoencouragegrassrootstosetupfarmerproductiongroupsintheLaoPDR.Itsoverallgoalsweretoreducepovertyandcontributetoeconomicdevelopment.2
EachpartnerinthePPCPtookitsroleseriously.Thegovernment—comprisingentitiesfromthevillageuptotheprovinciallevels—setupregulationsforsustainabilityandequitabledistributionand
providedtaxbreakstoenticetheprivatesector.Keyplayerswerethevillagedevelopmentcommittees(VDCs),provincialvice-governorsanddistrictgovernors,theDistrictAgricultureandForestryOffice(DAFO)anditsprovincialcounterpart(PAFO),andotherlinedepartments.
Theprivatesector—comprisinglocalentrepreneurs—promotedcommercializationbybuildingthesupplychainfromrawmaterialstofinalproducts.
Finally,thefarmercommunitiesbandedtogethertoproduceasingleproduct,therebyincreasingproductionefficiencies.
Pilot Implementation. ThePPCPwaspilotedinfiveareas—Attapeu,Champasak,Salavanh,Savanakhet,andSekong.Theprojectassistedthesepilotareastosetupfarmerproductiongroupsandprovidedeachgroupwiththeirrespectiverevolvingfunds,rawmaterials,technicalsupport,andsupportforinfrastructuredevelopment.Eachgroupfocusedonasingleproduct.
ThepilotinAttapeuworkedonriceandlivestock,thepilotinChampasakfocusedoncashewproduction,andthepilotinSalavanhcultivatedBongtrees.Meanwhile,thefarmergroupsinSavanakhetandSekongzeroedinonuplandagricultureandricecultivation,respectively.
___________________1ADB.2012.Asian Development Bank and the Lao People’s Democratic Republic Fact Sheet.www.adb.org/sites/default/files/pub/2014/LAO.pdf2Vansy,Vinoth.2013.PPCP Model for Poverty Reduction & Commercialization of Agriculture in the Lao PDR.LaoPDR.
Photo:SNRMPEPAfarmergroupinSavanakhetdiscussestheirprojectundertheSNRMPEP.
HighlightsKnowledge Showcases
©AsianDevelopmentBank PublicationStockNo.ARM146630-2
KNOWLEDGE CONTRIBUTORS
TheKnowledgeShowcasesSeries,aproductoftheKnowledgeSharingandServicesCenter,highlightsgoodpracticesandinnovativeideasfromADBtechnicalassistanceandotheroperationstopromotefurtherdiscussionandresearch.
www.adb.org/knowledgeshowcaseswww.adbknowledgeshowcases.org
TheAsianDevelopmentBank(ADB)isdedicatedtoreducingpovertyintheAsiaandPacificregion.
Theviewsexpressedinthispublicationarethoseoftheauthor(s)anddonotnecessarilyreflecttheviewsandpoliciesofADBoritsBoardofGovernorsorthegovernmentstheyrepresent.
VinothVansy([email protected])isthenationalprojectdirectoroftheSNRMPEP.HeisbasedintheLaoPDR.
Theprivatesectorentitiesagreedtobuybackinadvancesomeofthefarmers’produce.Thegovernmentprovidedtrainingandfacilitatedexposurevisitssothatfarmerscanappreciateandunderstandsustainablefarmingpractices.
The Partnership at Work.InAttapeu,farmersbandedtogetherintosevenproductiongroupstoproduceauniformtypeofrice.Aprivatecompany—SomphonexayAgricultureDevelopmentCompany—agreedtobuytheirproduceat2,500kipperkilogram,andalsoprovidedon-the-jobtrainingcoursestofarmers.Afteronecroppingseason,productivityincreasedfrom2tonsto5tonsperhectare.Netincomefrom1hectareofricereachedmorethan9millionkip,whilefarmerinputcostwasonlyat2.9millionkip.
ThepilotprojectinSavanakhetintroducedcroprotationbyinitiatingpeanutplantingduringdryseasonandriceplantingduringthewetseason.Farmerswerealsotaughtnaturalsoilfertilitymanagement.Asaresult,in2012,incomesperfamilyincreasedfrom2millionkipto13millionkipperhectare.Inaddition,thefarmerssignedanagreementwithlocalcompaniesforpeanuttrading.Duetocroprotation,riceproductivityalsoincreasedfrom2.4tonsto5tonsperhectare.Theotherthreepilotprojectsalsoreportedincreasedincomesfortheparticipatinghouseholds.
Building the Government’s Capability.TopreparethegovernmentforitscriticalroleinthePPCP,theprojectalsodeliveredtrainingcoursestoassistthevillage,district,andprovincialgovernmententitiestoformulateandenactpoliciesforeffectiveagricultureandnaturalresourcesmanagement.Thesecoursesfocusedonlandsuitabilityassessmentandparticipatorylandusemapping,compliancewithADB’ssocialandenvironmentalsafeguardsandsocialandgenderdevelopmentaspects,investmentappraisal,producerassociationsustainability,andpolicydevelopment.
RESULTS
Thesuccessofthepilotprojectsspawned71moresubprojectsthataimedtoreplicatetheirsuccess.Community-basedandnongovernmentorganizations,lineagencies,existingruraldevelopmentprojectsandruralbusinesspersonsengagedinagriculturaldevelopmentansweredthegovernment’scallforsubprojectsthatcanscaleupthepilotprojectsimplemented,andwhichwillfocusonthreecategories—povertyreduction,commercializationofagriculture,andnaturalresourcemanagement.
Replication. In2012,33subprojectsonpovertyreductionwerelaunchedintheprovincesofAttapeu,Champasak,Salavanh,Savanakhet,andSekong.Ittargeted189,000poorandverypoorhouseholds.Thirtysubprojectsonagriculturewereinitiatedin724villages,benefitting76,000households.Another8projectsonsustainablenaturalresourcemanagementwereimplementedin83villagesin2012,whichbenefitted6,000households.All71subprojectscurrentlyengageandbenefit230,000householdsin1,895villagesin42districtsintheLaoPDR.3
Ownership and Partnership.ThepilotprojectsandthesubsequentrolloutofsubprojectsundertheSNRMPEPpromotedthevalueofownershipandpartnershipamongthegrassroots,privatesector,andthegovernment.This,inturn,hasimprovedfarmingandnaturalresourcemanagementpractices,aswellasincomesintheLaoPDR.ThecapacitybuildingactivitiesfortheVDC,PAFO,DAFO,andthevillagesenhancedthegovernment’scapacitytoprotectitsownnaturalresources,andhasenabledthesegroupstodeveloptheirownplansandvisionsforsustainability.Theprojecthasalsoempoweredfarmergroupstobandtogetherasasetofproducerswhichrallyaroundasingleproduct,usingimprovedandsustainablefarmingpractices.Theprojectalsosupportedtheprivatesectorinexpandingitsownsupplybylinkingthemupwiththefarmergroups.
Thewaytheprojecthasenhancedeachofthesesectors'capacityhasallowedthemnotonlytovaluetheirowntasksandbusinesses,buttheirnaturalresourcesaswell.Bybandingtogetherforawin-winpartnership,eachpartnergrewstrongerthroughincreasedcapacities,efficiency,andincomes.
Related Link• ADB.2009.ADB,JapantoHelptheLaoPDRStrengthenNaturalResourcesManagement.Newsrelease.24February.www.adb.org/news/adb-japan-help-lao-pdr-strengthen-natural-resources-management
Photo:SNRMPEPAfarmerraisesnativechickensinSekongProvince.
HidefumiMarashita([email protected])isawaterresourcespecialistinADB'sSoutheastAsiaDepartment.HeistheprojectofficeroftheSustainableNaturalResourcesManagementandProductivityEnhancementProjectintheLaoPDR.
___________________3GovernmentofLao,PDR,MinistryofAgricultureandForestry,andDepartmentofPlanning.2012.Subproject Launch. www.snrmpep.gov.la/index.php/en/component/content/article/78-subproject/72-sub-project-launch