Download pdf - Country Report: Lao PDR

8/13/2019 Country Report: Lao PDR

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Policy on Rice

Self-Sufficiency in Laos

Department of Agriculture, MAF

Mr.

Khamtanh

Thadavong

, DDG of DOA

Mr.

Somvang

Phanthavong

, DD of Planning &

International Cooperation Division, DOA

Paper Prepared for The 2

nd

ASEAN Rice Trade

Forum

Yogyakarta, 4

-

5 June 2013


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Introduction Lao PDR is predominantly a rural agriculture-based

country, 85% of its population live in rural areas.

Cultivated land covers about 1.2 million ha (5%), rice

occupies 60%-70% of the total crop area.

Population is about 6.51 million (2012)

Agriculture contributes 26.7% to GDP (2011-2012)

GDP per capita: US$ 1,349 (2011-2012)

Rice production since 2001 reached 2.1 million tons of

paddy. Rice is also the staple food crop in Lao PDR, as in

most of the region.

Other commercial crops: coffee, corn, cassava, rubber,tobacco, jobs tears, vegetables, sugarcane and legume

crops

Strategic directions of country: Increased productivity,

sustainability, modernization, safety and clean products


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Rice Production

Areas

in Lao PDR

Mostly in 7

big plains=540,540

ha14 small

plains =23,487 ha


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Year Area

Harvested(ha)

Yield

(Ton/ha)

Production

(Tons, paddy)

Comparison

(%)

2006 796,575 3.00 2,663,700 +3.7

2007 781,243 3.47 2,710,050 +1.7

2008 825,349 3.55 2,927,140 +8.02009 872,896 3.60 3,144,800 +7.4

2010

20112012

855,114

817,250933,767

3.59

3.753.74

3,070,640

3,065,7603,489,210

-2.36

-0.15+13.8

2013

(Target)

960,000 3.96 3,800,000 +8.9

Rice Production 2006-2012

and Target for 2013


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Item 2009 2010 2011 2012

Paddy production (t) 3,144,800 3,070,640 3,065,760 3,489,210

Population 6,165,709 6,230,270 6,361,100 6,514,000

Paddy output less seeds

(about 3%) tons

3,050,456 2,978,520 2,973,782 3,384,534

Net Availability:After loss & wastage

(about13%)+other uses

(2%)

2,592,888 2,531,742 2,527,715 2,876,854

Conversion into rice

(62%) tons

1,607,591 1,569,680 1,567,183 1,783,650

Per capita net

availability (kg)

261 252 246 274

Total requirement/year 1,294,799 1,308,357 1,335,831 1,367,940

Surplus/Deficit (+or -)

(milled rice)

+312,792 +261,323 +231,352 +415,710

Total requirement and estimated net availabilityof rice for consumption, 2009-2012


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Harvested Area and Total Production 2006-2010

-500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

2006 2007 2008 2009 2010

796,600 781,245 825,350 872,205 865,165

2,663,700 2,710,0002,928,100

3,144,800 3,070,000

Harvested Area Total Production


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Irrigation program in the whole country

Total Irrigation projects: 1,550


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Rice production: 2.1 million tons of paddy

since 2000-2001

10

(300,000)

(200,000)

(100,000)

-

100,000

200,000

300,000

400,000

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

Surplus of raw milled rice (tons)

surplus

insufficiency

FAO 2011


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0

5

10

15

20

25

2005 2006 2007 2008 2009 2010

Exports of Glutinous Rice to Vietnam and Thailand

2005-2010 (1000 tons)


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Government Policies and the Rice Sector

Three main key policy reference documents provide a strategic

framework for the rice sector:

1. The political report of the 8th Central Committee to the 9th Party Congress in

2011 recognized the importance of agriculture and forestry as a fundamental

sector of the national economy and called for a fundamental transformation of

the rice industry in Laos to modernize it, and make it more productive and

market-oriented.

2. The 7th national socio-economic development plan (2011-2015) seeks to

achieve sustainable economic growth and to reduce poverty.

3. The agricultural development strategy (ADS: 2010-2020) and the associated

agricultural master plan (AMP) have as its primary goal the attainment of food

security by 2015 in order to meet the necessary calorie intake requirements,

especially in remote rice-deficit areas.


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Rice Sector Target by 2015

MAF has developed the following targets for the ricesector in 2015: Increase of total paddy rice production to 4.2 million

mt from 3.7 million mt in 2010

Increase of planted area to 1.04 million ha from

870,000 ha in 2010 Export of 600,000 mt of good quality, non-glutinous

rice mostly to countries in the ASEAN region and alsoto the international market

Increase of non-glutinous rice production to 30% from10% in 2010

Reduce food insecurity and malnutrition by one-halfthrough increased availability, access to and utilizationof rice and other foods


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A Map of the Policy Goals, Objectives,

Instruments and Responsibilities in the Lao PDR

1/ MoIC Ministry of Industry and Commerce; DTD Domestic Trade Department; IED Import-Export Department; PICD Planning and International

Cooperation Department; MLSW Ministry of Labour and Social Welfare; PG Provincial Government

2/ Strategic Rice Reserve has three components with different institutional responsibilities: (i) rice reserve (including subsidized credit to millers in

exchange for keeping minimum stocks) under MoIC DTD, (ii) seed reserves under MAF responsibility and (iii) rice distribution as part of safety nets underMLSW.


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Trade policy measures andnational rice reserves

Bilateral trade agreements and regional trade relations(between Laos Vietnam and neighbouring countries,

including formal trade agreements, export quotas, and

border trade.

Trade bans at the provincial and national levels where

rice production is not sufficient for consumption and

during periods of natural calamities and economic crisis.

Rice reserve policy includes three components: (1)National Rice Reserve under the responsibility of MoIC,

(2) Seed Reserves (MAF), and (3) emergency rice

distribution programme (MLSW).


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Rice Sector Performance

Rice has been a top priority for the Government of the

Lao PDR since the First NSEDP (1981-1985).

Rice is not only associated with cultural traditions in the

Lao PDR, but has also been of prime political

importance throughout the countrys history.

Lao rice production started to increase significantly in

the 1990s, which occurred along with the expansion of

irrigated areas and increase in yields mainly due to the

scaling up the use of improved varieties. The production increase was driven by both

improvement in yields and expansion in rice growing

areas, in clearly distinct phases.


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0

200

400

600

800

1,000

1,200

0

500

1,000

1,500

2,000

2,500

3,000

3,500

1961

1962

1963

1964

1965

1966

1967

1968

1969

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Harvested area ('000 ha) -right hand axis Paddy output ('000 tons)

Expansion of dry season rice

through irrigation investmentArea in thousand haOutput in thousand tons

mid 90s - release and

distribution of improvedLao g lutinous varieties

early 80s - loosening of

price controls

Cooperative movement

Historical evolution of Laos rice production

and harvested area, 1961-2011


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Laos historical per capita rice consumption

according to FAOSTAT(1961-2007), kg/person


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Per Capita Rice Consumption(kg raw milled rice), based on Lao

Expenditures and ConsumptionSurvey (LECS)

LECS 3(2002/2003) LECS 4(2007/2008) % change

Lao PDR 145.2 179.1 +23

Urban 139.8 130.1 -7

Rural 147.1 199.0 +35


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Expected rice consumption per

capita by 2015 and 2020 (kg)2007/2008 2015 2020

Lao PDR(whole country)

179.1 168 162

Urban 130.1 125 122

Rural 199.0 192 187


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Emerging Challenges

The country does not have a comprehensive rice policy that cuts

across different government institutions, which sometimes have

conflicting policy/political objectives on taxes, prices, credit,

markets, trade, etc.

Policies on promoting rice production and rice market and trade

seem to be separate.

Growing competition between rice and other crops (coffee,

rubber, bananas, maize and cassava) has caused the shift of rice

growers to other crops, reducing areas planted to rice for

household food consumption. The proportion of rice farming to households decreased from

77% (1998/99) to 71% (2010/11) (Agriculture Census, 2010-11).

Climate change


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Emerging Challenges (contd)

Labor shortages and resulting increase of costs of farm labor due

to the ongoing shift of farm labor to non-farm sectors.

Current (trade policy) focuses on keeping domestic rice price low

(non-incentive), which may not be optimal in a situation of

increasing rice surpluses.

Increasing job opportunities (non-agriculture sector).

Modern processing/milling and postharvest facilities are not

developed, with very limited investments, resulting in the low

quality of milled rice.

Investments on extension service are limited.


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Options for ImprovingRice Sector Policies

Facilitate Trade in Paddy and Rice: Create a transparent trade (export) environment for

both white rice and paddy, with clear and easily

monitored rules at the borders.

Substitute all bans at central and provincial levels

with an indexed variable export tax.

Establish a clear coordination of arrangements

between MOIC and MAF to determine particulartrade policy decisions.

Establish better information base on production,

consumption, and trade flows.


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Options for ImprovingRice Sector Policies (contd)

Allow formal and informal exports of paddy: Laos borders two large rice exporting countries, Vietnam and

Thailand, with highly competitive milling and transport

infrastructures. The main constraint for export of Lao milled rice is the high

cost of milled rice relative to quality, but cheaper production

costs of paddy than its competitors (Vietnam and Thailand).

Thai and Vietnamese traders are interested in importing cheapglutinous rice from Laos that they mill in their countries.

Overcoming milling constraints would require significant

private sector (both domestic and foreign) investments inmedium- and large-scale modern mills.


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Strengthen Emergency Rice Seed and Food Reserves:

Emergency rice seed and paddy reserves for populationsaffected by natural disasters and target food aid groups

It is suggested that a reserve of 30,000 to 60,000 tons may be

able to meet the food security needs of such groups. Improve the efficiency and effectiveness of public investments

(need more balance between extension andirrigation/infrastructure):

Improve the efficiency of budgetary allocations toagriculture, need to balance approach between investmentsin (1) extension, technology development and transfer (goodseed), postharvest management, credit, development ofnational rice standards, and (2) irrigation.



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Establish the foundation for the development of the rice seedsector key to achieving production targets/productivitygrowth:

Identify options for improved planning and coordination of

the work between DOA, NAFRI and NAFES Review and rationalize the seed production stations

Identify options for private sector involvement

Establish National Seed Board (NSB)

Allocate annual funding for core seed production (Basic Seed,R1 and R2) at about 300-350 tons by 2015

Encourage and support the development of the private seeddistribution system and piloting of privatization or state-owned enterprise of some seed stations



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Rocket festival in Laos


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Thank you for your kind attention