FAO COUNTRY PROGRAMMING FRAMEWORK

FOR LAO PDR 2013-2015

FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS

MINSTRY OF AGRICULTURE AND FORESTRY, GOVERNMENT OF LAO PDR

December 2013

TABLE OF CONTENTS

Page

Foreword v

Abbreviations and Acronyms vi

Executive Summary x

1. INTRODUCTION

1

PART I: NATIONAL CONTEXT

2

2. SITUATION ANALYSIS 2

2.1 Introduction 2 2.2 Situation and Outlook 6 2.3 Government Policies and National Priorities 10 2.4 Governance System 11

3. DEVELOPMENT CONSTRAINTS AND GAPS

13 3.1 Sectoral Issues 13

3.1.1 Low Agricultural Productivity 13 3.1.2 Weak Implementation Capacity 13 3.1.3 Inadequate Information Flows 14 3.1.4 Constraints on Agricultural Trade 15 3.1.5 Potential for Organic Agriculture 17 3.1.6 Potential for Green Value Chains 18 3.1.7 Challenges in Natural Resource Management 18 3.1.8 Concerns regarding Concession Agriculture 20

3.2 Cross-Sectoral Issues 21 3.2.1 Food Insecurity 21 3.2.2 Low Food Safety Standards 22 3.2.3 Gender Inequities 23 3.2.4 Unemployment, Underemployment and Poverty 23 3.2.5 Risk and Vulnerability 24 3.2.6 Climate Change 24

3.3 Conclusions

25

PART 11: PROGRAMMING FOR RESULTS 25

4. FAO IN LAO PDR 25

4.1 A Brief Overview of FAO in Lao PDR 26

4.2 Coherence with United National Development Assistance Framework

(UNDAF) 27

5. CPF PRIORITY AREAS

28

5.1 CPF Priority Area 1: Improved food and nutritional security through

enhanced policy, planning and implementation 28

5.2 CPF Priority Area 2: Environmentally sustainable production for the market 29

ii

by small farmers using value chain approach

5.3 CPF Priority Area 3: Sustainable natural resource management for crops,

forests, fisheries and livestock

31

5.4 CPF Priority Area 4: Reduced risk and vulnerability to natural and other

disasters through prevention, preparedness, response and recovery

32

6. PRIORITY OUTCOMES AND OUTPUTS 34

6.1 PRIORITY OUTCOME 1 Effective policy instruments and mechanisms for

attaining national food and nutrition security goals are designed and deployed

34

6.1.1 Priority Output 1.1 A national food and nutrition security strategy,

policy, investment plan and its governance framework developed

34

6.1.2 Priority Output 1.2 M&E system for MAF developed in support of

effective monitoring and implementation of projects strengthened

6.1.3 Priority Output 1.3 Enhanced institutional and government staff

capacity for the design and use of the Integrated Food Security Phase

Classification (IPC) for better planning and response with FNS-related

interventions

6.1.4 Priority Output 1.4 Strengthened institutional and staff capacity to

analyse and produce quality and timely FNS statistics in support of better

informed policies and actions

6.1.5 Priority Output 1.5 Support to small-scale, gender-sensitive food

security and livelihood-oriented agricultural programmes for vulnerable

farm households through distribution of inputs, transfer of technologies and

best practices, including traditional knowledge

36

36

37

38

6.2 PRIORITY OUTCOME 2. Strengthened enabling regulatory and

institutional environment for improved access of smallholder farmers to

agricultural markets

39

6.2.1 Priority Output 2. 1 SPS-related legal framework further developed in

compliance with international standards

39

6.2.2 Priority Output 2.2 Improved inspection and testing regime at all

points of AVC to meet Codex standards

40

6.2.3 Priority Output 2.3 Strengthened institutional and technical capacity

in the control and management of FMD and other TAD

41

6.2.4 Priority Output 2.4 Strengthened legal and regulatory framework for

agricultural inputs to promote organic agriculture and GAP

43

6.2.5 Priority Output 2.5 Farmers trained to produce GAP/IPM-certified

agricultural products and farmer-market linkages developed

43

6.2.6 Priority Output 2.6 Institutional and individual capacities of AVC

actors (public, private groups, farmer groups) enhanced in the adoption of

sustainable and innovative approaches and practices to support the greening

of selected AVC, including post-harvest handling and processing, market

linkages and logistics

44

6.3 PRIORITY OUTCOME 3. Strengthened governance – policies, laws,

strategies and community participation for sustainable management of land,

forestry, and fisheries and aquaculture resources

45

6.3.1 Priority Output 3.1 Concession agriculture rationalized within a

general land tenure policy framework and regulations

45

iii

6.3.2 Priority Output 3.2 Capacity for participatory land and other natural

resources management at the local level improved through promotion and

use of field-tested, gender-sensitive, participatory development tools and

approaches

46

6.3.3 Priority Output 3.3 Enhanced ability of communities and the

government stakeholders for inclusive community- based forest

management

47

6.3.4 Priority Output 3.4 Enhanced capacity of communities, local and

central administration in design, prioritization and implementation of

climate change adaptation and disaster management measures in targeted

wetlands

6.3.5 Priority Output 3.5 An implementation strategy for capture fisheries

and aquaculture developed

49

52

6.4 PRIORITY OUTCOME 4. Enhanced capacity of government and

communities to adapt to and mitigate climate change and reduce natural

disaster vulnerabilities related to agriculture, forestry and fisheries

52

6.4.1 Priority Output 4.1 Enhanced capacity of relevant stakeholders to

mainstream DRRM approaches into specific sectoral (agriculture, forestry,

fisheries) and cross-sectoral (nutrition, food security, food safety) plans,

policies and legal frameworks

52

6.4.2 Priority Output 4.2 Developed institutional and technical staff

capacity at national, provincial and district levels for agroclimatic

monitoring, analysing and disseminating information related to climate

variability and its impact on the agriculture sector

53

6.4.3 Priority Output 4.3 Enhanced capacity of communities in the

identification, use and dissemination of location- specific and gender-

sensitive DRRM practices and technologies in the area of agriculture,

aquaculture, fisheries, animal husbandry and NTFPs (through FFS and

enhanced research-extension-farmer interaction)

55

6.4.4 Priority Output 4.4 Enhanced institutional and technical capacity to

effectively and accountably manage food security and agriculture crises –

from disaster preparedness through emergency response to post-recovery

56

PART III: IMPLEMENTATION AND RESOURCE MOBILIZATION 60

7. IMPLEMENTATION ARRANGEMENTS 60

71. Implementation principles 60

7.2 Implementation mechanism 60

7.3 Short-term implementation plan 60

7.4 Funding modalities

61

8. PARTNERSHIPS 62

9. MONITORING, EVALUATION AND REPORTING ARRANGEMENTS

62

REFERENCES

65

iv

LIST OF TABLES

Table Page

1 Global Hunger Index in ASEAN Countries, 1990-2012 (ranked by 2012 GHI)

5

2 Priority Areas and Priority Outcomes of the CPF 34

3 Priority Areas, Priority Outcomes and Priority Outputs of the Country Programming Framework

58

4 UN Partner Agencies for UNDAF and the CPF 63

LIST OF BOXES

Box Page 1 FAO’s Reviewed Strategic Objectives, 2009-2019 26

2 FAO’s Priorities for the Asia-Pacific Region, 2010-2019 26

LIST OF ANNEXES

Annex Page

1 Review of Major Programmes, Laws and Policies in FAO-Mandated Areas in Lao PDR

72

2 Distribution of Government Expenditure across its Four Priority Sectors 83

3 Past and Ongoing Activities of FAO in Lao PDR 84

4 The CPF Priority Matrix 95

5 Country-Level Comparative Advantages of FAO and Other Development Partners

97

6 Relationship between FAO Strategic Objectives/Organizational Outcomes and the Priority Outcomes of the CPF for Lao PDR

104

7 The CPF Results Matrix 106

8 The CPF Action Plan 114

v

FOREWORD

The Government of Lao PDR (GOL) and the Food and Agriculture Organization of the United

Nations (FAO), represented by its Representative in Lao PDR (FAOR), are pleased to jointly launch

the FAO Country Programming Framework (CPF) for Lao PDR for the period 2013-2015, as

stipulated hereunder.

The CPF 2013-2015 is the result of extensive consultations held with a wide range of stakeholders

and partners within the country as well as with the relevant technical units of FAO Headquarters in

Rome and the Regional Office for Asia and the Pacific (FAO-RAP) in Bangkok. The signatories

below express sincere appreciation to all those who made constructive comments and suggestions

throughout the consultative process.

This document, co-owned by the GOL and FAO, presents the broad commitment of FAO, subject to

the availability of the required funding, to assist the GOL in its efforts to achieve development

objectives articulated in recent strategy and national policy frameworks for agriculture. It also

complements and contributes to the strategic objectives of the UN common system as expressed in the

current UN Development Assistance Framework (UNDAF) for Lao PDR.

By endorsing the CPF, the GOL is committed to providing collaboration, to the fullest possible extent

with regard to available capacity and resources, to facilitate the achievement of the objectives and

actions proposed in this document.

The implementation of the CPF will be pursued in partnerships as broad as possible and in alignment

with the joint efforts of the GOL and its development partners for enhanced coordination and aid

effectiveness. The GOL and FAO look forward to seeking collaboration and support from concerned

partners vis-à-vis the successful implementation of the CPF 2013-2015.

For the Government of the People’s

Democratic Republic of Laos

For the Food and Agriculture Organization

of the United Nations

Name:

Title:

Name:

Title:

vi

ABBREVIATIONS AND ACRONYMS

ADB Asian Development Bank

ADS Agricultural Development Strategy

AEC ASEAN Economic Community

AFD Agence Française de Développment

AFTA ASEAN Free Trade Area

AIP Agricultural Investment Plan

AMP Agricultural Master Plan

AMS Agro-Meteorology System

ANR Assisted Natural Regeneration

ASEAN Association of Southeast Asian Nations

AU$ Australian dollars

AusAID Australian Agency for International Development

AVC Agricultural Value Chain

CA Conservation Agriculture

CBED Community-Based Enterprise Development

CC Climate Change

CPF Country Programming Framework

CSO Civil Society Organization

CU2 Children Under Two Years Old

CU5 Children Under Five Years Old

CFS Committee on World Food Security

DAEC Department of Agricultural Extension and Cooperatives (MAF)

DAFO District Agriculture and Forestry Office

DEC Dietary Energy Consumption

DMH Department of Hydrology and Meteorology

DLF Department of Livestock and Fisheries (MAF)

DoA Department of Agriculture (MAF)

DoF Department of Forestry (MAF)

DoI Department of Irrigation (MAF)

DoPC Department of Planning and Cooperation (MAF)

DRM Disaster Risk Management

DRR Disaster Risk Reduction

DRRM Disaster Risk Reduction Management

EC European Commission

EFA Essential Fatty Acid

FAO Food and Agriculture Organization of the United Nations

FAO-RAP FAO Regional Office for Asia and the Pacific

FAOSTAT FAO Statistical Database

FAOR FAO Representative

FBS Food Balance Sheet

FDI Foreign Direct Investment

FFS Farmers’ Field School

FIM Forest Information Management

FIVIMS Food Insecurity and Vulnerability Information and Mapping System

FLEGT Forest Law Enforcement Governance and Trade

FMD Foot-and-Mouth Disease

FMM FAO Multi-Partner Programme Support Mechanism

FMU Forest Management Unit

FNS Food and Nutritional Security

FS2020 Forestry Strategy 2020

FSCAP Forest Sector Capacity Development Project

vii

ABBREVIATIONS AND ACRONYMS

GAP Good Agricultural Practice

GCCA Global Climate Change Alliance Programme

GDG Gender Development Group

GEF Global Environment Facility

GDP Gross Domestic Product

GHI Global Hunger Index

GIS Geographical Information Systems

GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit (German Agency for

International Cooperation)

GMP Good Manufacturing Practice

GMS Greater Mekong Subregion

GOL Government of Lao PDR

GPO Good Practice Options

Ha hectare(s)

HACCP Hazard Analysis Critical Control Point

HPAI Highly Pathogenic Avian Influenza

IADGs Internationally Agreed Development Goals

IBRD International Bank for Reconstruction and Development

IBSA India Brazil and South Africa Trust Fund

IFAD International Fund for Agriculture Development

IGETI Integrating Gender Equity in Territorial Issues

ILO International Labour Organization

IOM International Organization for Migration

IPC Integrated Food Security Phase Classification

IPPC International Plant Protection Convention

IPM Integrated Pest Management

IRRI International Rice Research Institute

ITC International Trade Centre

IUCN International Union for the Conservation of Nature

JFPR Japan Fund for Poverty Reduction

JICA Japan International Cooperation Agency

JSDF Japan Social Development Fund

LECS4 Lao Expenditure and Consumption Survey IV

LFAP Land and Forest Allocation Programme

LFNR Lao Front for National Reconstruction

LIPS Livelihood Improvement Project for Southern Mountainous Area

LPRP Lao People’s Revolutionary Party

LSIS Lao Social Indicatory Survey

M&E Monitoring and Evaluation

MA&D Market Analysis and Development

MAF Ministry of Agriculture and Forestry

MEA Multilateral Environmental Agreements

MEM Ministry of Energy and Mines

MDG Millennium Development Goal

MDG1 First Millennium Development Goal

MICS Multiple Indicator Cluster Surveys

MIS Management Information System

MLSW Ministry of Labour and Social Welfare

MOE Ministry of Education

MOH Ministry of Health

MOHA Ministry of Home Affairs

MOIC Ministry of Industry and Commerce

MOJ Ministry of Justice

viii

ABBREVIATIONS AND ACRONYMS

MONRE Ministry of Natural Resources and Environment

MPI Ministry of Planning and Investment

MPWT Ministry of Public Works and Transport

MRC Mekong River Commission

MT Metric tonne

NABP National Agricultural Biodiversity Programme

NACA Network of Aquaculture Centres in Asia-Pacific

NAFES National Agriculture and Forestry Extension Service

NAFRI National Agriculture and Forestry Research Institute

NAPA National Adaptation Programme of Action to Climate Change

NBS/AP National Biodiversity Strategy to 2020 and Action Plan to 2010

NCAW National Commission for the Advancement of Women

NCRDPE National Committee for Rural Development and Poverty Eradication

NCSA National Capacity Self-Assessment

NHS National Household Survey

NDMC National Disaster Management Committee

NDMO National Disaster Management Office

NGO Non-Governmental Organization

NGPES National Growth and Poverty Eradication Strategy

NLMA National Land Management Authority

NMTPF National Medium-term Priority Framework

NNC National Nutrition Commission

NNP National Nutrition Policy

NNS/PoA National Nutrition Strategy and Plan of Action

NPA Non-Profit Association

NRM Natural Resource Management

NSEDP National Socio-Economic Development Plan

NTFP Non-Timber Forest products

NUDP Northern Uplands Development Programme

NUOL National University of Laos

OA Organic Agriculture

ODA Overseas Development Assistance

OHCHR Office of the United Nations High Commissioner for Human Rights

PAREDD Participatory Land and Forest Management Project for Reducing Deforestation

PAFO Provincial Agriculture and Forestry Office

PDR People’s Democratic Republic

PM Prime Minister’s Instruction

PNTD Participatory Negotiated Territorial Development

POP Persistent organic pollutant

PoWPA Programme of Work on Protected Areas

PROFIL Promotion of Organic Farming in Lao PDR

PROSA Programme Sectoriel en Agroécologie (an AFD assistance project)

PRRS Porcine reproductive and respiratory syndrome

REDD+ Reducing Emissions from Deforestation and forest Degradation

RVS Risk and Vulnerability Survey

SCC Strategy on Climate Change of the Lao PDR

SD Strategic Direction

SDC Swiss Agency for Development and Cooperation

SDNSS Strategy for the Development of the National Statistical System

SEAHMI Subregional environmental animal health management initiative for enhances

smallholder production in Southeast Asia

SME Small and Medium Enterprise

SNV Netherlands Development Organization

ix

ABBREVIATIONS AND ACRONYMS

SO Strategic Objective

SPS Sanitary and Phytosanitary

SUN Scaling-up Nutrition

SuNPAM Sustainable Management of National Protected Area Project

TAD Trans-boundary animal disease

TCP Technical Cooperation Programmes

TDF-1 Trade Development Facility Phase 1

TWG Technical Working Group

UNCTAD United Nations Conference on Trade and Development

UNDAF United Nations Development Assistance Framework

UNDP United Nations Development Programme

UDIN Integrated Upland Development in Nonghet

UN-AIDS Joint United Nations Programme on HIV/AIDS

UNCDF United Nations Capital Development Fund

UNEP United Nations Environment Programme

UNESCO United Nations Educational, Scientific and Cultural Organization

UNFCCC United Nations Framework Convention on Climate Change

UNFPA United Nations Population Fund

UN-Habitat United Nations Human Settlements Programme

UNICEF United Nations Children’s Fund

UNICRI United Nations Office on Drugs and Crime

UNIDO United Nations Industrial Development Organization

UNISDR United Nations International Strategy for Disaster Reduction

UNODC United Nations Office on Drugs and Crime

UNV United Nations Volunteers

USAID United States Agency for International Development.

USD United States Dollars

UXO Unexploded Ordnance

VG Voluntary Guidelines

WATSAN Water and Sanitation

WB World Bank

WFP World Food Programme

WFS World Food Summit

WHO World Health Organization

WREA Water Resource and Environment Administration

WTO World Trade Organization

x

EXECUTIVE SUMMARY

The Country Programming Framework (CPF) is the tool used by the Food and Agriculture

Organization of the United Nations (FAO) to define its medium-term response to the assistance needs

of member countries in pursuit of national development objectives that are consistent with the FAO

Strategic Framework and Regional Priorities, the Millennium Development Goals (MDGs) and other

Internationally Agreed Development Goals (IADGs) and strategic objectives of the United Nations

Development Assistance Framework (UNDAF). It replaces the National Medium-term Priority

Framework (NMTPF) as the FAO planning instrument. The CPF for the Lao People’s Democratic

Republic (Lao PDR) outlines the joint Government of Lao PDR (GOL) and FAO medium-term

priorities for FAO’s technical assistance over the period 2013-2015. It was formulated by a joint

national and international team through a process of literature review, semi-structured interviews with

key resource persons from GOL, FAO, other UN agencies, other development partners and civil

society. Successive drafts of the document have benefited from the comments of GOL and FAO’s

national, regional and headquarters offices.

The CPF begins with a situation analysis, which first examines key features and trends of the

economy, outlining a considerable degree of success on both economic and social fronts, including

impressive economic growth and progress on poverty reduction; the country is assessed as being

“well on track” or having “already achieved this target” to meet the MDG on poverty (UNDP, 2013).

However, on the negative side, high levels of poverty reduction have not translated into significant

reductions in the country’s seriously high levels of food insecurity and undernutrition, and Lao PDR

is assessed as being “seriously off track” in terms of meeting the MDG on hunger. Most diets are

seriously deficient in micronutrients, while intake of macronutrients is unbalanced because dietary

energy consumption is dominated by rice, while protein intake is below requirements and

consumption of fats and edible oils is seriously deficient. Moreover, impressive aggregate

performance in the area of poverty reduction disguises serious and growing income inequality,

particularly in terms of gender, ethnicity and location. Meanwhile, MDG targets on reversing

environmental loss and reducing the rate of biodiversity loss are also assessed as being “seriously off

track”.

Agriculture dominates the economy, and while the agricultural growth rate is higher than that of the

population, this is largely explained by rapid expansion of concession agriculture which includes

industrial tree plantations such as rubber and eucalyptus. Eighty percent of farmers are still

subsistence producers, and their production is dominated by rice. Rice has been an important success

story in Lao PDR, with rapid growth transforming the country from a net importer to a significant

exporter during the past two decades. However, other developments have had negative consequences

for dietary balance. Concession agriculture has denied local populations access to traditional sources

of income and nutrient-rich foods from communally owned resources, particularly forests. Similar

concerns have been expressed regarding the effect of water diversion projects on the aquatic

environment, even though large-scale hydropower dam construction is subject to environmental

impact assessments. The horticulture, livestock and fisheries subsectors all suffer from low

productivity. Some vegetables are grown under irrigation, but most available water is used for rice. In

aquaculture there are problems such as lack of access to high quality fish feed and fingerlings outside

of the most accessible areas. Veterinary provision is low, animal disease outbreaks are common,

animal mortality rates are high and feed provision is problematic.

The GOL has adopted a wide range of policies at the national, sectoral, subsectoral and cross-sectoral

levels in response to these challenges. The country’s overarching development goals are to reduce

xi

poverty, achieve growth with equity and meet the MDGs, with the aim of graduating from the “Least

Developed” category of countries by 2020. Key challenges recognized in the current five-year 7th

National Socio-Economic Development Plan (2011-2015) include the need for a “more visible shift”

of employment from farm to non-farm sectors, addressing environmental issues and mitigating the

impact of climate change. One of the seven “directions” of the Plan addresses rural development and

poverty eradication, the aim being to reduce income inequalities between rural and urban areas,

between geographical areas and between rich and poor. In 2011 the Ministry of Agriculture and

Forestry (MAF) adopted a Strategy for Agricultural Development to 2020. This lays out four

developmental goals, namely: (i) improvement of livelihoods through agriculture and livestock, with

food security as its first priority; (ii) increased and modernized production of agricultural commodities

and “pro-poor green value chains” based on smallholders’ organizations and partnering with the

private sector; (iii) sustainable production patterns, including stabilization of shifting cultivation and

climate change adaptation measures adapted to local agro-ecological conditions; and (iv) sustainable

forest management to preserve biodiversity and significantly increase forest cover to benefit rural

communities and public and private processing enterprises.

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. One of the reasons this persists is that, while the country is rich in policies, it is

unusually weak in terms of policy implementation capacity, with a seriously under-resourced

extension system, an underdeveloped private sector, and weak civil society. Another factor

constraining efforts to address outstanding problems is that agricultural information systems are at

best nascent. A corollary of subsistence orientation is that agricultural trade is underdeveloped, and

the country is poorly placed to meet the challenges of either competing with imported produce from

neighbouring countries, or meeting the increasingly high quality (including food safety) standards

demanded by importing countries. The country has comparative advantage in a number of areas, such

as organic agriculture, but lack of technical and knowledge capacity constrains its ability to capitalize

on this by meeting the necessary standards. Natural resource management and governance is a huge

problem area, with serious issues in such areas as deforestation, forest degradation, aquatic resource

degradation and loss of biodiversity. The policy of giving out agricultural concessions to foreign

direct investment (FDI) has boosted agricultural exports, but has also added greatly to problems of

land and forest depletion and degradation and land-related conflicts. At the social level, gender

inequality is rife and unemployment – particularly youth unemployment – is growing. All of these

challenges are exacerbated by the fact that Lao PDR is very vulnerable to disasters, including weather

events such as typhoons, flooding and droughts, rodent and pest attacks, and animal disease

epidemics. Weather-related risks pose the most widespread problems and the frequency and intensity

of these problems is likely to increase as a consequence of climate change.

FAO has a global and regional mandate to address issues such as those outlined above and to assist

governments in areas such as policy formulation, capacity building and policy implementation. FAO

has been operational in Lao PDR since 1975 and has had an in-country Representative Office since

1980. During this period it has worked closely with GOL and other development partners to

implement a wide range of interventions in agricultural development (including livestock, fisheries

and forestry), food and nutritional security, natural resource management, and improving information

flows. The CPF aims to build on these experiences in close collaboration with GOL.

The CPF formulation process has identified four priority areas in which FAO should work with GOL

in the medium term. These are based on a careful balancing of: (i) the issues identified above; (ii)

Government policy; (iii) FAO’s comparative advantage and its global and regional priorities; and (iv)

the UNDAF for Lao PDR. The priority areas are:

xii

Improved food and nutritional security through enhanced policy, planning and implementation

mechanisms

Environmentally sustainable production for the market by small farmers using a value chain

approach

Sustainable natural resource management for crops, forests, fisheries and livestock

Reduced risk and vulnerability to natural and other disasters through prevention, preparedness,

response and recovery

Areas such as gender and youth employment are not listed as such among the priority areas, because

they are overarching themes which will be central to activities, outputs and outcomes of all priority

areas. However, capacity development, which includes gender aspects, is given specific attention due

to the serious limitations noted above. It will form a key part of all outputs and activities under CPF

implementation.

From the four priority areas, four priority outcomes and 20 priority outputs have been derived. Each

of the outputs is analysed from the viewpoints of rationale (i.e. why it is a priority) and relevance to

government policies and a set of supporting activities is given. The outcomes are as follows.

1. Effective policy instruments and mechanisms for attaining national food and nutrition

security goals are designed and deployed. There are five outputs under this outcome:

A national food security strategy and plan of action and its governance framework developed

M&E system in MAF developed for effective monitoring and implementation of projects strengthened

Enhanced institutional and government staff capacity for the design and use of the Integrated Food Security Phase Classification (IPC) for better planning and response

with Food and Nutritional Security (FNS)-related interventions

Strengthened institutional and staff capacity to analyse and produce quality and timely FNS statistics in support of better informed policies and actions

Support to small-scale, gender-sensitive food security and livelihood-oriented agricultural programmes for vulnerable farm households through distribution of

inputs, transfer of technologies and best practices, including traditional knowledge

2. Strengthened enabling regulatory and institutional environment for improved access of smallholder farmers to agricultural markets. There are six outputs under this outcome:

Sanitary and phytosanitary-related legal framework further developed in compliance with international standards

Improved inspection and testing regime at all points of agricultural value chain (AVC) to meet Codex standards

Strengthened institutional and technical capacity in the control and management of foot and mouth disease (FMD) and other trans-boundary animal disease (TAD)

Strengthened legal and regulatory framework for agricultural inputs to promote organic agriculture and Good Agricultural Practice (GAP)

Farmers trained to produce GAP/integrated pest management (IPM)-certified agricultural products and farmer-market linkages developed

Institutional and individual capacities of AVC actors (public, private groups, farmer groups) enhanced in the adoption of sustainable and innovative approaches and

practices to support the greening of selected AVC, including post-harvest handling

and processing, market linkages and logistics

xiii

3. Strengthened governance – policies, laws, strategies and community participation for

sustainable management of land, forestry, and fisheries and aquaculture resources.

There are five outputs under this outcome:

Concession agriculture rationalized within a general land tenure policy framework and

regulations

Capacity for participatory land and other natural resources management at the local level

improved through promotion and use of field-tested, gender-sensitive, participatory

development tools and approaches

Enhanced ability of communities and the government stakeholders for inclusive

community-based forest management

Enhanced capacity of communities, local and central administration in design,

prioritization and implementation of climate change adaptation and disaster management

measures in targeted wetlands

An implementation strategy for capture fisheries and aquaculture developed

4. Enhanced capacity of government and communities to adapt to and mitigate climate

change and reduce natural disaster vulnerabilities related to agriculture, forestry and

fisheries. There are 4 outputs under this outcome:

Enhanced capacity of relevant stakeholders to mainstream disaster risk reduction and

management (DRRM) approaches into specific sectoral (agriculture, forestry, fisheries)

and cross-sectoral (nutrition, food security, food safety) plans, policies and legal

frameworks

Developed institutional and technical staff capacity at national, provincial and district

level for agroclimatic monitoring, analysing and disseminating information related to

climate variability and its impact on the agriculture sector

Enhanced capacity of communities in the identification, use and dissemination of

location-specific and gender-sensitive DRRM practices and technologies in the areas of

agriculture, aquaculture, fisheries, animal husbandry and non-timber forest products

(NTFPs) (through farmers field schools (FFS) and enhanced research-extension-farmer

interaction)

Enhanced institutional and technical capacity to effectively and accountably manage food

security and agriculture crises – from disaster preparedness through emergency response

to post-recovery

Implementation of the CPF will be guided by a set of principles, namely: alignment with national

priorities; adoption of a programming approach in collaboration with government and other

development partners; mutual accountability and transparency; centrality of the overarching theme of

capacity-building; gender mainstreaming; decent employment and poverty reduction; and the

incorporation of sustainability and a viable exit strategy into all interventions. CPF implementation

will be under a Steering Committee co-chaired by MAF and FAO and draw its membership from

relevant stakeholders. A short-term implementation plan will be developed, an important focus of

which will be resource mobilization. All activities under the CPF and the CPF itself will be carefully

monitored, while mid-term and end-of-programme reviews will discern key lessons to be incorporated

into the next CPF.

1. INTRODUCTION

The Country Programming Framework (CPF) is the tool and process used by the Food and

Agriculture Organization of the United Nations (FAO) to define the medium-term response to the

assistance needs of member countries in pursuit of national development objectives that are consistent

with the FAO Strategic Framework and Regional Priorities, the Millennium Development Goals

(MDGs) and other Internationally Agreed Development Goals (IADGs), and strategic objectives of

the United Nations Development Assistance Framework (UNDAF). It replaces the National Medium-

term Priority Framework (NMTPF) as the FAO planning instrument. The CPF outlines the priorities

for collaboration between FAO and the government and the outcomes to be achieved in the medium-

term (4-5 years, aligned to national planning cycles) in support of national agriculture, rural

development and food security objectives expressed in national development plans and policies. In

accordance with the recommendations of the FAO Strategic Evaluation (August 2010), the name of

the NMTPF has been changed to CPF, and it is required for all countries receiving FAO support.

The CPF for Lao People’s Democratic Republic (Lao PDR) outlines the joint Government of Lao

PDR (GOL) and FAO medium-term priorities for FAO’s technical assistance over the period 2013-

2015. It was formulated by the FAO Representative (FAOR) in the country with the assistance of one

international and one national specialist. The design was carried out in two phases. In the first phase a

zero draft of the CPF was produced through a process of literature review covering government policy

documents and other source material, complemented by a series of meetings with resource persons

from a wide range of organizations, including GOL, donor agencies, FAO staff based in Lao PDR and

in the region, Lao PDR-based staff of other UN agencies, the staff of projects and programmes in

food, agriculture and rural development and other persons familiar with these sectors in-country. The

list of documents and websites consulted is shown in the References section. The main result of the

first phase was the identification of Priority Areas.

A preliminary version of the zero draft was shared with the MAF, which distributed copies to relevant

parties. A “brainstorming” session with MAF and other government agencies concerned with food,

agriculture and rural development was held at MAF’s Department of Planning to discuss this draft.

This session, chaired by the Director-General of the Planning Department was the first part of an

iterative process of dialogue and consultation with stakeholders through which the final draft CPF was

developed for approval by the GOL and FAO. The zero draft was later amended to reflect these

discussions and incorporate the views of the GOL. This amended zero draft was then circulated

among relevant staff of the FAO Country Office, the Regional Office for Asia and the Pacific (FAO-

RAP) in Bangkok and the FAO Headquarters in Rome. Comments from this consultation exercise

were then incorporated into a further amendment of the draft.

The second phase began with the identification of priority outcomes and outputs of the CPF, which

were derived from the Priority Areas identified in the first phase. The most important activity of this

period was a series of interviews and discussions with a wide range of senior staff of GOL in

departments and divisions of the various ministries responsible for developing strategies and policies

and implementing activities that fall within the identified Priority Areas. Strategy and policy

documents of these government agencies were collected, analysed and incorporated into the draft. A

series of outputs was developed under each of the outcomes on the basis of departmental strategy

papers and information supplied by senior departmental staff. This was supplemented by interviews

with other key stakeholders among non-governmental development partners and a continued literature

review.

2

On this basis a first draft of the CPF was developed. The draft was subsequently discussed at a CPF

Stakeholders’ Consultation Workshop held in Vientiane Capital. This engaged a wide range of

representatives of government line ministries and their departments, donor agencies and international

non-governmental organizations (NGOs). The next draft (Version 1.1) incorporated suggestions and

comments received at this workshop. Version 1.1 was then circulated among relevant FAO staff at

headquarters, regional and national levels for further comments and inputs. The present draft

incorporates these comments.

PART I: NATIONAL CONTEXT

2. SITUATION ANALYSIS

2.1 Introduction

Lao PDR continues to develop rapidly in terms of economic indicators, and has transformed itself into

a lower middle income country in recent years.1 Real gross domestic product (GDP) growth in the six

years from 2006 to 2011 was approximately eight percent per annum. Despite heightened uncertainty

in the global economy, the World Bank’s (WB) medium-term growth projection for the period of

2013 to 2015 is 7.5 percent per annum. The Asian Development Bank (ADB) estimates the figure at

7.7 percent in 2013 and 2014. According to WB estimates, per capita income reached USD 1 030 in

2010 and USD 1 260 in 2012, compared with USD 581 in 2006.2

GDP per capita has exceeded plan

targets in two of the three financial years covered by the plan to date and is expected to exceed the

planned 7th National Socio-Economic Development Plan (NSEDP) target of USD 1 700 per capita.

For the fiscal year 2012-2013 the GDP per capita income has reached approximately USD 1 490.3

This dynamic economic growth has resulted from high levels of foreign investment, particularly in

hydropower and mining (which together also accounted for the bulk of export earnings), as well as

forestry, construction and, to a lesser extent, agriculture. Rising world prices for Lao PDR’s main

mineral exports, copper and gold, have helped boost the growth rate (MPI 2012).

Alongside impressive performance in overall economic development, the country has made progress

in rural development and has made advances in terms of poverty reduction. The national poverty rate

declined from 33.5 percent in 2002-2003 to 20.5 percent in 2012-2013 against a 7th NSEDP target of

less than 19 percent (MPI 2013). The poverty gap ratio has also declined steadily, from 8.0 to 6.5

percent between 2002 and 2007, and is on course to reach the target of 6.0 percent by 2015 (MPI

2011). A number of initiatives have strengthened communities at the local level, including the

establishment of the Village Poverty Reduction Fund in 1 900 villages in 21 districts across five

provinces. Financial operations of the Fund amounted to USD 16.6 million in 2011 with an additional

USD 25 million committed for phase two of the Fund. There has also been expansion of rural

financial services and loans for cultivation, livestock raising and small business development.

Economic growth has been steady and stable, and the impact of the recent global financial crisis on

the economy has been less severe than for neighbouring countries. Economic growth, which is linked

to larger surrounding economies (China, Thailand and Viet Nam), will likely remain robust for the

1 This is based on the World Bank classification of a lower middle income country as one whose per capita

national income is in the range USD 1 026 to 4 035. 2 Data:worldbank.org/country/laos-pdr

3 Ministry of Planning and Investment, Background Document, 11th High Level Round Table Meeting, 19

November 2013

3

near future with increasing foreign direct investment (FDI) in crops, industrial forestry, hydropower

and mining. However, the GOL recently identified three major constraints on growth, namely:

taxation, access to finance and an inadequately educated workforce (MPI 2012, citing GIZ and WB

sources).

On the negative side, impressive achievements in terms of economic growth and poverty reduction

have not translated into significant reductions in the country’s seriously high levels of food insecurity

and undernutrition. As the background document for the 2013 Round Table Implementation Meeting

noted, “The nutrition target is off track, with stunting in children remaining one of the country’s

biggest challenges. An estimated 44 percent of children under five years of age are stunted, with

serious consequences for the quality of the country’s human resource capital. Lao PDR has made

steady progress towards universal primary education coverage, but low survival rates to secondary

education pose a risk to MDG achievement. Lao PDR will need to address the high primary school

dropout rates, low secondary enrolment rates, slow improvement in literacy rates and the quality of

education. Gender parity has improved at primary level although is less evident at secondary level”

(MPI 2013).

Widespread inequalities and disparities exist in Lao PDR, imposing serious challenges to the

achievement of sustainable development and the MDGs. Despite progress made, poverty – like food

insecurity – is still widespread and largely defined by ethnicity, gender and geography (ADB 2011b,

p.3; Bestari et al. 2006, p.12). For instance, 75 percent of male members of agricultural households

who are over 10 years old are able to read and write without difficulty, compared with 57 percent of

female members, and school attendance among boys is much higher than among girls (FAO & MAF

2010, pp.5, 11-18; GOL 2006, pp.1-2). Moreover major inequalities exist between female- and male-

headed agricultural households4 with respect to land, livelihood diversification and cash income.

There are generally smaller holdings by area, fewer plots of land, fewer income-generating livestock,

fishery and forest-related activities, and lower crop marketing rates in female- than male-headed

agricultural households. Female-headed agricultural households also generally spend a larger

proportion of cash income on food and have less access to safe drinking water sources than their male

counterparts (FAO & MAF 2010, p.53).

According to the National Nutrition Strategy (NNS), over the period 2000-2007, during which total

GDP more than doubled, undernutrition among children under five years old (CU5) fell by just three

percentage points, from 40 to 37 percent, but more recent figures indicate that the problem of

underweight among CU5 declined from 31 to 26.6 percent between 2005 and 2012 (LSIS 2012). Even

if the latter set of figures is correct, the rate of improvement is still unacceptably low. Progress on

stunting has also been very slow, with prevalence falling from 48 percent (MICS) in 2005 to 44

percent (LSIS) in 2012. This means the country is seriously off track in terms of meeting the national

MDG target of 24 percent by 2015.

These rates are even higher among rural remote upland communities populated by non-Lao speaking

ethnic groups. Micronutrient deficiencies are also among the challenges that must be addressed,

because over 40 percent of CU5 suffer from anemia and 45 percent are vitamin A deficient. Chronic

child undernutrition remains one of the country’s most serious problems, with nearly 300 000 CU5s

(40 percent) stunted. The NNS reported that:

45 percent of CU5 and 23 percent of women suffer from vitamin A deficiency

41 percent of CU5 and 63.5 percent of CU2 suffer from anaemia

4 About 10% of Lao households are headed by women and these are concentrated in urban areas. Less than 5%

of all agricultural households are headed by women, the majority being widows and Lao Loum (lowland

dwelling Tai peoples), and only 9% of all agricultural holdings are managed by women.

4

22 cent of women aged 15 to 49 suffer from iron deficiency

54 percent of children suffer from Soil Transmitted Helminthes (parasitic infection)

23 percent of the population is undernourished

The latest MDG progress report on Lao PDR provides a mixed picture with respect to achievements

on the Goals that are of relevance to hunger, poverty, the environment and water and sanitation

(WATSAN) in rural areas. The MDG targets are off track in five areas: (i) MDG 1 (malnutrition); (ii)

MDG 2 (low education survival rates); (iii) MDG 4 (CU5 mortality rate; (iv) MDG 5 (maternal

mortality); and (v) MDG 9 (unexploded ordnance (UXO)). For MDG 1, the fact that the country is on

track to meet the 2015 target of reducing poverty by half, but “seriously off track” in terms of

reducing hunger by half is puzzling, given that, according to Engel’s Law, there is a positive

correlation between poverty level and income elasticity of demand for food.5 The fact that the rural

WATSAN targets are off target is of close relevance to food security, because poor water and

sanitation tend to translate into high increased incidence of diarrhoeal disease, which inhibits food

absorption, thereby compromising food utilization.

The fact that the target on environmental loss is “seriously off track” is explained by loss of natural

forest cover (including serious loss due to “slash and burn” agriculture), extraction of high-value

timber species, excessive gathering of firewood and construction material in some areas, land-based

speculative investments6 and land conversion, continuing soil erosion, hunting and habitat loss.

According to recent report of the Ministry of Planning and Investment (MPI): “Lao PDR’s forest

resource, which once covered about 70 percent of total land area, had declined to 42 percent by 2002

and is about 40.3 percent in 2010 based on the MAF definition of forest of 20 percent crown cover”.7

The GOL recognizes this as a grave concern and has initiated efforts to address such issues through,

for example, the Lao PDR National Protected Area System and a National Production Forest System

aimed at implementing sustainable annual timber quotas. If the current trend continues, the country’s

last remaining natural forests may disappear by 2070, or earlier.

Widespread soil erosion, especially in the uplands, and shorter fallow periods under shifting

cultivation are leading to declining agricultural productivity. On top of the loss of forest, wetlands and

grasslands habitat, hunting and illegal trade are having a detrimental effect on Lao PDR’s 1.6 percent

share of globally threatened species (MPI 2011, pp 24-25). It may be added that, in terms of total

forest cover, loss of natural forest cover is in the process of being offset by an expansion of industrial

tree plantations in the form of tree crops such as rubber and eucalyptus. However, this process itself

imposes environmental costs in the form of biodiversity losses as this expansion may involve

clearance of natural or secondary forests. The GOL is encouraging sustainable rubber plantations for

smallholders as a poverty reduction measure because rubber can generate more income per hectare

than more traditional cash crops. However, rubber prices are volatile and are currently in decline due

to the ongoing economic downturn.

Table 1 depicts the trends in food security and nutrition in Lao PDR in recent years, using the Global

Hunger Index (GHI).8 The Table also places these trends in a regional context by including other

5 i.e. the poorer the household the greater the proportion of any income increase tends to be spent on food. Lao

PDR is not unique in this respect; the same problem of hunger and undernutrition not declining in tandem with

poverty reduction is found in other Asian countries, such as India. 6 Land-based plantation investments are allowed on degraded lands, but due to poor mapping resources, etc.

many investments also occur in non-degraded forested areas. 7 According to the FAO definition of forest (which is based on 10% crown cover, 0.5 ha minimum area,

inclusion of bamboo and sustainable plantations as forest) forest cover in Lao PDR is 68%. 8 The GHI combines three equally weighted indicators in one index. These are: (i) the proportion of undernourished people as a percentage of the population; (ii) the proportion of CU5 who are underweight; and

5

Association of Southeast Asian Nations (ASEAN) countries. Although Lao PDR has not fared as well

as the other countries listed, it has succeeded in bringing its GHI down from “alarming” to “serious”

over the period shown.

Table 1. Global Hunger Index in ASEAN Countries, 1990-2012 (ranked by 2012 GHI)

Country

Global Hunger Index (GHI)

1990 1996 2001 2012

Malaysia 9.0 6.7 6.6 5.2

Thailand 15.1 11.8 9.2 8.1

Viet Nam 25.6 21.4 15.5 11.2

Indonesia 18.5 15.4 14.2 12.0

Philippines 19.9 17.6 14.2 12.2

Cambodia 31.8 31.5 26.0 19.6

Lao PDR 28.6 25.2 23.6 19.7 Source: Drawn from data in IFPRI et al 2012 Table 2.1; countries are ranked in ascending order of 2012 GHI

Notes:

1. The Index is rated on a five-point scale: (i) ≤ 4.9 ‘low’; (ii) 5.0-9.9 ‘moderate’; (iii) 10.0-19.9 ‘serious’;

(iv) 20.0-29.9 ‘alarming’, and (v) ≥ 30.0 ‘extremely alarming’

2. Brunei Darussalam and Singapore are excluded from the table because their GHI is now ≤ 4.9; Myanmar is

excluded because of lack of data

Rice is the staple food of most households in Lao PDR, accounting for approximately 67 percent of

average total dietary energy consumption (DEC). FAO Statistical Database (FAOSTAT) data indicate

that in 2007 per capita consumption of rice in Lao PDR was among the highest in the world, with an

average of 163 kg per capita/year (second only to Viet Nam’s 166 kg).9 FAO estimates, using the Lao

Expenditure and Consumption Survey (LECS) IV data, indicate that carbohydrate consumption,

largely derived from rice, had reached 79 percent of DEC, compared with a World Health

Organization (WHO)-recommended maximum of 75 percent. Protein consumption is at the low end

of the acceptable range, while intake of essential fatty acids (EFAs) is 11 percent of DEC, compared

with a recommended level of 15 percent. Hence the average diet is unbalanced in terms of the three

macronutrients. Inadequate consumption of EFAs, apart from its direct impact in terms of dietary

balance, also has secondary effects on micronutrients, because it leads to low body fat, which in turn

compromises the body’s capacity to store the fat-soluble vitamins (A, D, E and K). Moreover, while

micronutrients (e.g. from fruit) are available to many people in the Lao PDR, they cannot be absorbed

efficiently without oils and fats. Products from terrestrial (non-timber forest products (NTFP)) and

aquatic (frogs, mollusks, crustaceans, insects, arachnids, etc.) biodiversity can provide such oils and

fats, but aquatic biodiversity is under threat due to population increase, disturbances from mining,

hydropower development and seepage of agrochemicals, especially pesticides, into waterways in

areas of concession agriculture (see below). The abundance of NTFP, an important food security

safety net, has also decreased due to forest loss and commercialization of some species.

2.2 Situation and Outlook

(iii) the mortality rate of CU5. By using a range of indicators the GHI reflects the multi-faceted nature of

hunger. 9 The 2012 Lao PDR Rice Policy Study looked at a number of estimates of rice consumption in Lao PDR and

found they varied from 112 to 179 kg of raw milled rice/capita/annum. The FAOSTAT estimate is in the middle

of this range, and is used here because FAOSTAT estimates have the advantage of being comparable across

countries.

6

Although gradually declining in terms of its contribution to GDP in recent years, agriculture continues

to play a major role in the economy, with a growth rate of 4.1 percent during the 6th NSEDP, which

declined to 2.9 percent over the first three years of the 7th NSEDP. The sector contributed an

estimated 25.5 percent of GDP and absorbed an estimated 75 percent of the total workforce in 2010

(7th NSEDP, October 2011).

10 (The sectoral growth rate fell to 2.9 percent in FY 2011/13, the first

three years of the 7th NSEDP, but this is still above the population growth rate of 2.3 percent.) The

main achievement of the agriculture sector has been food self-sufficiency, with additional capacity for

export. At the same time, production of cash crops, crops suitable for processing and livestock has

expanded. The sector is becoming increasingly commercialized, yet around 80 percent of the rural

population is still subsistence farmers, who depend on heavily rice-based agriculture, raising livestock

and relying on collection of food from the wild to supply them with nutrient-rich foodstuffs. This

subsistence orientation is partly due to lack of transport infrastructure, as around 20 percent of the

population lacks adequate access to roads. Rice cultivation remains the single most important national

economic activity, with this crop accounting for 72 percent of the total cultivated area. Around 71

percent of all households practice rice cultivation.

Gender-specific consideration of agricultural activities is crucial, given that women farmers are

responsible for over half of all agricultural activities and make up 54 percent of the total agricultural

labour force (NSC 2004). Lao women contribute significantly across the sector, undertaking most of

the planting, weeding and harvesting activities, tending especially to the care of small livestock and

undertaking much of the management of fish ponds and fish culture in rice fields, and in processing

and marketing of fish.11

During most of the 1990s rice production in Lao PDR lagged behind consumption, and there was a

deficit in the range of 100 to 250 thousand tonnes a year during most of that decade. However, over

the period 1991-2011, Lao rice production increased by a factor of 2.7 to reach around 3.3 million

metric tonnes (MT) of paddy in 2011. This represents an average of 5.1 percent annual growth (in

compound terms), which is one of the highest growth rates in the region. This closed the deficit by the

end of the century, and there was a mounting level of surplus every year until by 2011 it had reached a

remarkable 350 thousand tonnes, so that rice self-sufficiency at national level “is now a stable reality”

(FAO-WB-IRRI 2012, p.24). The main drivers of this increase are an expansion in irrigated area,

adoption of high-yielding varieties and adoption of improved farm management practices (Lao

Census of Agriculture 2010/11; MAF 2010c). However, this growth was far from uniform across the

country: ten provinces are in rice surplus, while six are in deficit. Counterbalancing this, most of the

provinces that are deficit in rice are surplus maize producers. Maize has approximately the same

caloric value as rice (FAO-WB-IRRI 2012).

Other important economic crops include coffee, sugar cane, cassava, sweet potato and industrial tree

crops (such as rubber, eucalyptus and acacia). Use of chemical fertilizer, pesticides and herbicides has

traditionally been low, as farmers have been wary of chemical inputs, unconvinced as to their efficacy

as well as averse to the additional financial inputs needed. Fertilizer use is still mostly limited to

paddy nurseries, vegetables and some cash crops, and extensive use is made of farmyard manure

dropped from mainly free-ranging livestock. There is, however, an increasing trend towards the use of

pesticides and herbicides with the spread of agricultural concessions and as a result of the increasing

number of farmers acting as contract growers for local agricultural concessions. In many areas such

arrangements are the main point of contact between private investors and farmers. An important

10

In terms of government structure, the agricultural sector in Lao PDR is defined very broadly to embrace

crops, livestock, fisheries, irrigation and forestry. This definition is used throughout this report. 11

Sources: Population Census 2005; Country Profile 2010.

7

problem here is that imported agrochemicals are not labeled in the Lao language, so that farmers are

not aware of recommended dosages and application practices.

The growth of agricultural concessions is relatively recent, but it has been very rapid, and is generally

funded by investors from China, Viet Nam and Thailand, with a smaller number from Korea, Japan,

India, Europe and the Middle East. To date, approximately 1.1 million hectares (ha), or roughly five

percent of the country’s territory have been approved for concessions and leases. As this excludes

logging concessions, contract farming and hydropower projects, this estimate is considered

conservative (Schönweger et al., 2012). Official data on the extent of the phenomenon are limited but

field evidence indicates it is having negative implications on rural livelihoods. The trend in land

concessions is likely to grow, but the rapid expansion of this form of agriculture has led to problems

that need to be addressed and new mechanisms need to be devised to regulate this part of the sector.

The problems include loss of traditional access rights to NTFPs, loss of land traditionally farmed by

local people, erosion of biodiversity and all of the problems associated with monoculture (GTZ 2009).

These have manifested into numerous land-related conflicts now occurring throughout the country. A

positive step has been the GOL’s suspension (Prime Minister’s Decree No. 13 11/06/2012) of further

rubber, eucalyptus and mining concessions until 2015 in order to take stock of past concessions and

better manage future ones. In addition, during 2013, the first ever National Land Policy was drafted

and debated by the National Assembly; it was expected this will be passed at the end of

2013.Following this are planned revisions to both the Land and Forestry Laws. New mechanisms

need to be devised to regulate investment in agriculture within a framework of good governance and

equality. Experience suggests that, if well regulated, income from sustainable biodiversity-sensitive

investments can improve livelihoods, create revenue and jobs, and encourage modern farming skills,

such as in agroforestry and agrosilvipastoralism.

Livestock and fisheries are essential to small farmers across the country. Produce from these

subsectors contributes significantly to household incomes, and to the national economy. Livestock

numbers have increased during recent years at a growth rate ranging from three to five percent per

annum. The main animals reared are buffaloes, cattle, pigs and poultry, with goats also gaining in

popularity. Livestock production has become increasingly commercialized in recent years, driven by

increasing domestic and regional demand. Regional demand for livestock products is projected to

grow at between 3.5 and 4 percent per annum in the present decade, and Lao PDR has the potential to

meet much of this demand, but only if current problems can be addressed (see §3.1.4 below).

An estimated 40 percent of protein consumption derives from fisheries, making it the main source of

animal protein for the great majority of people. This subsector also contributes very significantly to

the supply of oils, fats and micronutrients, which are lacking in most diets. The area allocated to fish

ponds has been growing. They are mainly managed by women, and have become an important source

of income and food. Production from this source is mostly for domestic consumption, although

women also tend to process and market some of the fish from their fish ponds. There is also a

significant commercial fishery in the Nam Ngum Reservoir. Commercial aquaculture has undergone

remarkable development in recent years, but only in parts of the country with reliable access to

markets and that have a ready supply of fingerlings and fish feed. Generally, however, yields from

aquaculture are low and production is at best semi-intensive, the exception being foreign-operated

commercial aquaculture ventures which local producers are finding it difficult to compete with. Over

70 percent of farming households in Lao PDR fish part time on a seasonal basis, largely from open-

access sources. There is a corresponding need for government recognition of the benefits of wetland

and protected areas for fish production, and the conservation of natural fish habitats. With open access

fisheries, provincial governments are responsible for enforcement of regulations (e.g. closure during

the spawning season) and provision of extension advice and other support (e.g. government

8

hatcheries). There is a pressing need to reverse the trend of water resource degradation which is

having a negative impact on aquatic ecosystems. However, there is currently little capacity to perform

these tasks effectively, and individual catches are declining. In a context where population is rising at

an estimated 2.3 percent per annum, the number of fishers is also rising and the country is so heavily

dependent on fisheries for nutrition, this situation gives rise to very great concern.

Some vegetables are grown under irrigation in the dry season, but by far the most important irrigated

crop is rice, mainly through the provision of supplementary water in the wet season. The 2010/11 Lao

Census of Agriculture reported that 191.8 out of 986.6 thousand ha (19.4 percent) of rice was grown

under irrigation in that year (SCAC 2012 Table A1.19). The GOL has invested heavily in

improvement of the irrigation system and has repaired damaged systems, including damage occurring

during natural disasters since 2007. Irrigation coverage is low by regional standards, however, and

lack of irrigation is regarded by farmers as the greatest single constraint on increasing agricultural

production. In the 2010/11 Lao Census of Agriculture, 59 percent of farmers in all parts of the country

named lack of irrigation as the main constraint, compared with 43, 29, 25 and 10 percent for inputs,

land, markets and labour, respectively. Concerns about lack of irrigation were most common in the

southern region, where the average figure was 71 percent (SCAC 2012 Table A2.11).

Forestry has always been a major contributor to the GDP of Lao PDR, and remains an extremely

important national resource. As well as contributing to the economy directly, forests make an indirect

contribution, particularly through their role in water control, absorbing water during the rainy season

and releasing it in the dry season, thus reducing rainy season flooding and augmenting dry season

flows. Timber revenue contributes to government revenue and has the potential to supply raw

materials for value addition and employment in the form of timber processing industries. However,

governance of the forestry sector has proven to be a challenge, with supplies to processors fluctuating.

Management of the processors themselves has also been difficult and many of them are operating

without proper licenses.

For most of the rural poor, the forest provides many indispensible benefits. The collection of nutrient-

rich food, medicines, and firewood, is largely the work of women. Collection of construction

materials and wild animals from the forest is largely men’s work. On average, NTFPs account for 40

percent of a rural household’s annual income. There is a significant difference in earnings from forest

products between male- and female-headed households, and for households in the south compared

with other regions of Lao PDR. NTFPs are mostly used for subsistence, although some are sold in

local markets and some are traded internationally. The main NTFPs include forest animals, fish,

bamboo and rattan shoots, fruits, greens, honey, khem grass (for producing brooms), paper mulberry,

cardamom and malva nuts (as condiments and medicinal products), benzoin, peuak meuak, resins and

leo resins (for the chemical and perfumery industries). However, as noted earlier, forest cover has

been declining rapidly in recent years, and this is having a negative impact on NTFP production.

Lao PDR is a country rich in biodiversity, and this resource contributes hugely to the national

economy. Biodiversity in agriculture provides crucial ecological services such as crop pollination,

seed dispersal and pest control. In forestry it provides a wide range of valuable timber species and

NTFPs. However this rich resource is at present under threat by a combination of over-extraction and

destruction of habitat for other purposes. The forces that contribute to this include illegal logging, the

disappearance of the traditional usufruct rights of ethnic peoples, along with their resource-protection

measures, and the commitment of land to foreign investment in concession agriculture with the

consequent spread of monoculture. This situation is not helped by the weak policy and law

enforcement environment and lack of legal recourse. Even within smallholder agriculture, biodiversity

is being lost, as thousands of rice landraces are increasingly being replaced by a limited number of

high-yielding varieties.

9

The 2012 issue of the UN Asia Pacific Disaster Report (ESCAP-UNODRR 2012) notes that Lao PDR

suffers annual disaster losses that average no less than 0.7 percent of GDP. Moreover, the incidence of

natural disasters appears to have been increasing, with more frequent typhoons, droughts, heavy flash

floods, and other flooding. There have been three typhoons in the past four years. This is of course too

short a period to be indicative of longer term trends, but it is consistent with evidence from around the

world that the incidence of severe cyclonic storms (cyclones, typhoons and hurricanes) seems to be

increasing. Isolated small-scale disaster events, such as rodent outbreaks, continue to have profound

impacts at the community level. Improved communications and increased food availability may help

in managing these events but, due to increased event intensity and frequency, to what degree they can

help is not well understood at this time. Given the gender-differentiated impacts of natural disasters,

and the greater vulnerability of women and children in such events, disaster management would need

to account for and set in place gender- and age-sensitive measures.

Overall nutritional status in Lao PDR has remained unsatisfactory over recent decades. Diets are poor

in qualitative, as well as quantitative terms. The high rate of child malnutrition – particularly among

children between one and five years of age – over the last ten years continues to pose a challenge to

health and well-being (Kamiya 2011). The most significant constraint to food availability is the low

level of domestic production of non-rice food items, resulting from falling per capita availability of

agricultural land, low productivity and high risk in the agriculture sector. These conditions are

exacerbated by natural resource depletion and loss of traditional access rights, which threaten food

availability from common property resources.

There are important challenges to be faced in aquaculture and natural fisheries. These include limited

access to land suitable for fish pond construction, vulnerability to natural disasters, habitat loss,

shortage of fish feed and of fingerlings of suitable species (especially in less accessible areas) and

lack of reliable information. In gender terms, although women play a key role in fish production, they

are especially disadvantaged in terms of both time constraints (they have to perform multiple gender-

specific tasks in and around the household) and in terms of lack of access to training and information.

The livestock sector is beset by problems. One that has been prominent of late is Highly Pathogenic

Avian Influenza (HPAI). However, with technical assistance from various international agencies,

including FAO, this threat has so far been contained. Several other animal diseases are prevalent. For

instance, there has been a worryingly high mortality rate from swine cholera, especially in the north;

blue-ear disease of pigs and foot-and-mouth disease (FMD) in buffaloes appear to be spreading.

Vaccination of livestock is still very limited. Animal mortality rates could be greatly reduced through

improved veterinary programmes and better husbandry practices. There is also a misunderstanding

among most of farmers of the risk of animal diseases, and they sometime resist control measures on

the grounds of cost. This could lead to export restrictions in the future and a limit to trade through

official and formal channels (FAO/WFP 2011). A key underlying problem is shortage of veterinarians

(there is no training school in-country).

Two further unrelated issues add to an already complex picture. One is unexploded ordnance (UXOs).

During the military conflict in Indochina in the 1960s and 1970s, Lao PDR was the scene of extensive

ground battles and intense aerial bombardment. Around two million MT of bombs were dropped on

the country during 1965-1975, especially in areas adjacent to Viet Nam. An estimated 30 percent of

those bombs failed to detonate on impact, leaving a legacy of UXOs that continues to kill and maim

today. The aggregate casualty load is in excess of 13 000 people. In addition, according to the 2012

agricultural census, the total area of agricultural land left unsafe through UXO contamination is more

than 170 000 ha. A survey conducted in 1996 on the socio-economic impact of UXOs in Lao PDR

found that 25 percent of all villages were affected. In rural communities, high levels of poverty and

risk were found to be clearly linked to high levels of UXO contamination: “Villagers living in such

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impoverished conditions often find that they are confronted with ‘enforced risk-taking’. They either

continue to live in acute poverty and in many cases chronic malnutrition, or risk injury and death by

working UXO-contaminated land.” In some areas collection of UXO scrap metal for sale has become

common, raising huge safety concerns. Clearance efforts are ongoing, but they are small in relation to

the scale of the challenge.12

The second issue is opium production. This is a traditional cash crop in some northern districts; since

2001 the GOL has been making efforts, supported by the UN Office on Drugs and Crime (UNODC)

and by the European Union (in Huaphan Province), to find alternative livelihood opportunities for

growers. The strategy initially met with a good degree of success, to the extent that by 2006

production had fallen to the point that the government could declare the country to be effectively

opium-free, whereupon efforts were scaled back. However, the problem has since become resurgent.

According to UNODC, the area under opium reached an estimated 1 500 ha by 2008 and is now

thought to exceed 4 000 ha. The challenge is to find legal crops that can compete economically with

opium and this is very difficult when the price of opium is now so high and the production areas

remote, so that only very high value crops are economically viable. This, it must be added, is a global

issue, and governments, not only in Lao PDR, but in many parts of Asia – and South America in the

case of cocaine – have faced severe difficulties in trying to identify economically-attractive legal

alternatives.

2.3 Government Policies and National Priorities

The overarching development goals of the Lao PDR are to reduce poverty, achieve growth with

equity and meet the MDGs, with the aim of graduating from the “Least Developed” category of

countries by 2020 (MPI 2011). This section examines policies and priorities at the macro level insofar

as they affect agriculture, national resource management (NRM), food and nutritional security,

poverty reduction and similar concerns, as delineated in the current (7th

) five-year plan. Sectoral and

subsectoral planning in these areas is analysed in Annex 2 of this document, which also addresses

policies in the related areas of biodiversity, disaster risk reduction (DRR) and disaster risk

management (DRM), and climate change (CC). Key features of the overarching policy document in

the agricultural sector, the Strategy for Agricultural Development 2011-2020, are also examined

below (see §3.1 and 3.2)

The 7th

National Socio-Economic Development Plan (2011-2015) takes as one of its “Strategic

Directions” the achievement of the MDGs on poverty reduction by 2015. It forecasts a growth rate in

the agriculture and forestry sector of at least 3.5 percent over the plan period (down from 4.1 percent

in the 6th NSEDP, but still above the rate of population growth). The share of agriculture in GDP is

projected to continue to fall (to 23 percent) because the rate of GDP growth is projected to be at least

8 percent. Key challenges recognized for the plan period include the need for a “more visible shift” of

employment from farm to non-farm sectors, addressing environmental issues and mitigating the

impact of climate change. One of the seven “directions” of the Plan addresses rural development and

poverty eradication, the aim being to reduce income inequalities between rural and urban areas,

between geographical areas and between rich and poor. Moreover the Plan highlights the promotion

of inclusion, especially of women, and ethnic groups in remote areas of the country. The Plan sets

ambitious targets with respect to growth of rice and livestock production. There are equally ambitious

targets for poverty reduction, improved nutrition (measured in terms of falling rates of child stunting

and underweight) and better access to clean water and sanitation. The environmental losses of recent

years are projected to be reversed. By 2015, 3.9 million ha of degraded forest are to be rehabilitated,

and a further 200 000 ha replanted, thus increasing forest cover to 65 percent.

12

The statistics and citations in this paragraph are based on Sisavath 2006.

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Rural development is to be addressed by an “area-focused” development approach, targeting remote

areas where ethnic minorities predominate, and where poverty is endemic, as well as areas which have

high growth and development potential. This approach is to be implemented by priority programmes

and projects for rural resettlement, “greening the country”, linking agricultural production to

processing and service industries and continuing the policy (introduced in 2004) of establishing model

villages and clusters of development villages (Kumbans). Measures to achieve this include relocating

government experts to grassroots levels, strengthening institutional capacity, gender sensitization,

resource mobilization and utilization, designing special interventions for poor people and ethnic

groups, and translating rural development/poverty eradication programmes into funded projects.

Directions for the agriculture and forestry sector are centred 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. In terms

of measures to be taken, the focus is on modern technology to improve productivity (with strong

emphasis on irrigation), policy reforms (such as tax incentives) to expand market networks, human

resource development at all levels (e.g. by sending government specialists to areas where there is

insufficient expertise), measures to improve the quality of agricultural produce (e.g. improved sanitary

and phytosanitary (SPS) measures) and reforestation by planting “appropriate” tree species, and

stabilizing shifting cultivation.

The goal of the earlier National Growth and Poverty Eradication Strategy (NGPES) was “to halve

poverty levels by 2005 and eradicate mass poverty by 2010”, and the Strategy assigned a key role to

agriculture in achieving these aims. What has transpired has been that, as noted earlier (§2.1), the

country is on track to meet the MDG 1 target of halving extreme poverty by 2015, but is seriously off

track in terms of reducing hunger by half by the same year.

2.4 Governance System

FAO’s partner ministry is the MAF. A Prime Minister’s Decree adopted on 28 June 2012

(Organization and Function of MAF) revised the organizational structure of the ministry at the central

level into 12 sections, eight of which are concerned with specific subsectors or research and outreach.

These are:

Department of Agriculture

Department of Livestock and Fishery

Department of Irrigation

Department of Forestry

Department of Forestry Inspection

Department of Agricultural Land Management and Development

Department of Agricultural Extension and Cooperatives

National Agriculture and Forestry Research Institute (NAFRI)

Other relevant government bodies are the MPI, the Ministry of Industry and Commerce (MOIC) (for

issues of agricultural trade) and the Ministry of Health (MOH) (for nutritional and food safety issues).

The newly formed Ministry of Natural Resources and Environment (MONRE) is also likely to

become a key player, particularly since it has been assigned responsibility for all forestry resources

except “production forests” (i.e. those where logging under license is permitted). Control over

production forests remains with MAF. MONRE is also responsible for a range of other environmental

issues, including water resources, land management, environment, CC, meteorology and hydrology,

DRM, environmental quality monitoring and research, environmental and social safeguards, and data

and information management. It is the GOL’s point of liaison with the Mekong River Commission

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and operates a geographical information systems (GIS) database on environmental resources.

However, the National Geographic Department which is currently updating Lao maps did not become

a part of MONRE as part of the recent reorganization, instead remaining part of the Ministry of Home

Affairs (MOHA).

A policy of decentralization has existed in Lao PDR for some time. For purposes of planning and

budgeting, the province is regarded as the strategic unit, and the district as the budget-planning unit.

This practice was formalized and regularized in 2000 under Prime Ministerial Instruction No. 01,

which acknowledged and addressed a number of weak points and failings in the system, and aligned

decentralization more closely to the then recent acceptance of the market mechanism as a basic

driving force of the economy. The purpose of the Instruction can be summarized as: (i) “to extend the

scope of rights and increase responsibility (and) awareness at the local levels and the grassroots”; (ii)

“to support the sustainable socio-economic growth of the local levels and grassroots”; and (iii) “to

transmit the Party's policies and state plans to the implementing units at the local levels and elaborate

the policies into guidelines for the formulation of plans and budgets, starting from the grassroots

level” (GOL 2000 pp 1-2). In February 2012, the Central Party (Politburo) issued Resolution No. 3

with the instruction to build provinces as “strategic units”, districts as “comprehensively strengthened

units”, and villages as “development units”. The resolution requires providing a framework for

sharing responsibilities across different levels in the administration and assigns executive functions to

the districts in implementing development programmes. Fifteen ministries are identified to pilot this

policy (called the Sam Sang initiative) in 51 districts covering 105 villages. The Sam Sang pilot

requires local authorities to undertake greater responsibility in the development of the plans,

mobilization of revenues, allocation of resources and expenditure of budgets.

At the local level there is a Provincial Agriculture and Forestry Office in all 17 provinces and a

District Agriculture and Forestry Office in 139 districts. All of them are seriously under-resourced

except when there is a donor-supported project or programme in operation.

In Lao PDR the government and the Lao People’s Revolutionary Party (LPRP), are closely

interrelated. Government and Party efforts are bolstered by the Lao Front for National Construction,

(LFNC) which is affiliated to the LPRP, and acts as a mass organization whose role is to involve non-

party members in government and cultural affairs. Parallel organizations are the Lao Women’s Union,

the Lao People’s Revolutionary Youth, the Lao Federation of Trade Unions, and the Lao National

Federation of Veterans. A number of international NGOs (local NGOs are called Non-Profit

Ass