Lao PDR’s rice-based agriculture

Although gradually declining in terms of its contribution to GDP in recent years, agriculture continues to play a major role in Lao PDR’s economy. In 2010, the sector contributed to an estimated 25.5 percent of GDP and absorbed an estimated 75 percent of the total workforce. Women farmers are responsible for over half of all agricultural activities. Lao PDR achieved rice self-sufficiency around 2000, a major milestone in the history of the country. Today, 72 percent of the total cultivated area is dedicated to rice. Most of the provinces that are deficit in rice are surplus maize producers. Other important economic crops include coffee, sugarcane, cassava, sweet potato and industrial tree crops (such as rubber, eucalyptus and acacia).

A rich natural resource and bio-diverse country

Lao PDR is a country rich in biodiversity. It is estimated that biological resources contribute over 66 per cent to GDP. Furthermore, they provide indispensible benefits for the rural poor as agro-biodiversity is a source of food, nutrition and income. In the area of forestry, for instance, some non-timber forestry products (NFTP) such as animals, bamboo and rattan shoots, fruits, greens, honey, khem grass are sold in local markets and some are traded internationally. Additionally, non-wood forest products, including edible insects, provide 60 per cent of the monetary income of rural villages. An estimated 40 percent of protein consumption derives from fisheries, making it the main source of animal protein.

The gradual shift to commercialization

Agriculture production is becoming increasingly commercialized. Currently, 33 percent of farmers are producing mainly for sale. Yet, around 80 percent of the rural population is still subsistence farmers, depending on heavily rice-base agriculture, raising livestock and relying on collection of food from the wild to supply it with nutrient-rich foodstuffs. Similarly, livestock production has become increasingly commercialized in recent years, driven by a regional demand that is projected to grow at between 3.5 and 4 percent per annum in the present decade. Use of chemical fertilizers, has traditionally been low, however, with the spread of agricultural concessions, an increased trend in their use has been registered. To date approximately 1.1 million hectares, or roughly five percent of the country’s territory have been approved for concessions and leases.

An expected graduation

The overarching development goal of the Lao PDR is to reduce poverty, achieve growth with equity and meet the Millennium Development Goals by 2015. Lao PDR also aims of graduating from the ‘Least Developed’ category of countries by 2020. Agriculture is expected to play a key role in achieving poverty reduction. Key challenges are recognized in the current five year National Socio-Economic Development Plan (2011-2015), while rural development goals are outlined in the Ministry of Agriculture and Forestry’s Agricultural Development Strategy 2011-2020 (ADS) and grouped around: agricultural modernization and commercialization, enhanced food security, improved productivity and quality, optimal use of natural resources and improved livelihoods for farmers. Improving the management of agricultural concessions and promoting investment in priority and remote upland areas are key priorities.

Limitations to development

A wide array of constraints and gaps hinder poverty reduction and the attainment of food and nutritional security in Lao PDR. At the level of food availability a key constraint is low agricultural productivity. The country is poorly placed to meet the challenges of either competing with imported produce from neighboring countries, or meeting the increasingly high quality (including food safety) standards demanded by importing countries. Another factor constraining efforts to address outstanding problems is that agricultural information systems are at best nascent.

Serious issues regarding deforestation, forest degradation, aquatic resource degradation and loss of biodiversity have been observed. The policy of giving out agricultural concessions to foreign direct investment has boosted agricultural exports, but has also added greatly to problems of land and forest depletion and degradation and land related conflicts. All of these challenges are exacerbated by the fact that Lao PDR is very vulnerable to disasters, such as weather events such as typhoons, flooding and droughts, rodent and pest attacks, and animal disease epidemics.