Lao Agriculture and Forestry Expenditure Review

PER Workshop May 11-12 May, 2009, Addis Ababa Ethiopia

Name of Country : Lao PDR.Name of Participants : Mr. Khamsay PHOTHIDETH

Mr. Bouavanh CHANTHAVICHITHOrganization of Participant : Department of Planning

Ministry of Agriculture and Forestry

PRESENTATION OUTLINEPRESENTATION OUTLINE

COUNTRY OVERVIEW

STRATEGIC DIRECTION OF AGRICULTURE & FORESTRY SECTOR

AGRICULTUR AND FORESTRY REVIEW( in the period 2006-2010 )

COUNTRY OVERVIEWCOUNTRY OVERVIEW

1. Country: Centrally located in GMR

Area = 236,800 km2

Mountainous, land locked and tropical

2. Population: 5.7 millions

80% in rural areas

2.1% annual pop. growth

4. Economy: Narrow base - resource exploitation

GDP per capita of US$650

GDP growth of 7% annually:

GDP chare:

52% of GDP from agriculture

23% of GDP from industry

25% of GDP from services

Geography and TopographyGeography and Topography

The mountains and plateaus cover an area approximately 80% of the country.

Floodplains compose 20%.

The Mekong is Great River in Laos and flows through 1,898 Kilometers of Lao territory and forms the major portion of the border with Thailand.

Geography and Topography (cont)Geography and Topography (cont)

The territories of the Mekong River in Laos are well endowed with water resources ( about 40%)

which are particularly suitable for agricultural production and enable hydropower projects.

More than 40% of the land is covered by the forestry.

ClimateClimate

The country experiences a tropical monsoon climate with alternating wet and dry seasons

The wet season extends from April to October and is dominated by a southwest monsoon with high rainfall, temperature and humidity.

The annual rainfall ranges from less then 1,400 mm/year in the Northern valleys to over 1,900 mm/year in the South.

PopulationPopulation

The population of Lao PDR is 5.7 millions people, of with 50.2% are female and 49.8% are male, density of population is an average of 24 persons per

square kilometers. 3 mainly ethnic groups in Laos. growing at about 2.1% per year. Majority of the population mainly is Buddhists The urban population is only 20% and 80% of

people live in rural and mountainous areas.

Some potential resources in Some potential resources in agriculture and forestry sectoragriculture and forestry sector

There are some more 4 million hectares of arable and of which only 1.5 million hectares are in use, of which about 800.000 hectares is occupied by crop production.

Forest land covers about 11.2 million hectares which accounts 47% of the total land area.

Some potential resources in Some potential resources in agriculture and forestry sectoragriculture and forestry sector (cont) (cont)

The high potential of water resource which can be used for irrigation purpose and hydro-power as well.

Climatic condition are quite favorable for crops diversification

ECONOMIC ( GDP by sector)-ECONOMIC ( GDP by sector)-

Tax1%Service

25%

Industry22%

Agriculture52%

ECONOMIC ( GDP by sub-- ECONOMIC ( GDP by sub-- sector)- sector)-

Forestry6%

¯È¾-Ä́ É

6%

ì ɼ¤-¦ ñ©

19%

Livestock19%

Crops27%

STRATEGIC DIRECTION OF AGRICULTURE STRATEGIC DIRECTION OF AGRICULTURE & FORESTRY SECTOR& FORESTRY SECTOR

3 Programmers and 20 projects implemented by the Ministry of Agriculture & Forestry

INTEGRATED AGRICULTURAL DEVELOPMENT (Program No 2 of NSEDP)

1. FOOD PRODUCTION PROGRAMME ( Goal No 1 ) 2. COMMODITY PRODUCTION ( Goal No 2 )

INDUSTRY AND FORESTRY MANAGEMENT (Program No 3 of NSEDP)

3. DEFINITELY STOPPING OF SLASH AND BURN CULTIVATION

(Goal No 3 )

POVERTY ERADICATION FOR HOUSEHOLDS COMMUNITY AND

SHIFTING CULTIVATION STABILIZATION (Program No 6 of NSEDP)4. SUSTAINABLE FORET MANAGEMENT AND WELL-BALANCED BETWEEN EXPLOITATION USES AND PROTECTION/COSERVATION

(Goal No 4)

*. 13 MESUREMENTS/PROCEDURES

Priority programs of the Priority programs of the

Agriculture and Forestry SectorAgriculture and Forestry Sector

Food Production; Commercial production; Stabilization and Reduction of shifting

Cultivation; Agriculture and Forestry research Human Resource Development

Agriculture and Forestry sector policy Agriculture and Forestry sector policy

implementationimplementation

The logic is that national macro-economic goals set the framework of national macro-economic programs and policies.

The sub-sector goals for agriculture and forestry make into project goals include the activities goals.

In this respect agriculture and forestry sector will play the key role in the development of the national economy in the context of sustainable resource use and poverty alleviation since most of the poor population are farmers in the rural and mountainous areas.

ProjectProject/ budget allocation/ budget allocation

Degree No 58/PM (PIP management) Project types:

I: ≥ 50 billion( MPI & Government)

II :>5 ≤ 50 billion (MPI)

III:< 5 billion ( line agencies, local governor ) Priority: 3 Programmers and 20 projects implemented by

the Ministry of Agriculture & Forestry Tools for screening: PCM, PIN,PCAP and M&E.

Agriculture and Forestry ReviewAgriculture and Forestry Review( in the period 2006-2010 ) ( in the period 2006-2010 )

PUBLIC INVESTMENT 448.968,16 billion kip per year;

Managed by the Ministry is 157.744,46 billion kip, ratio covering 35% of all fund in the whole sectors;

managed by the local is 291.223,71 billion kip, ratio covering 65% of all fund in the whole sectors

THE SPECIFIC FUND for forest and forest resources development related to the management of environment has the amount about 10-15 billion kip per year

Agriculture and Forestry ReviewAgriculture and Forestry Review

( in the period 2006-2010 )( in the period 2006-2010 ) DONOR SUPPORT: 69 cooperation projects has

the amount of 247 million U.S. dollars 56 projects are free grant project has a amount of

116 million U.S. dollars 13 projects are loaned project has a mount of more

than 104 million U.S. dollars

Agriculture and Forestry ReviewAgriculture and Forestry Review

( in the period 2006-2010 )( in the period 2006-2010 ) COMPANY INVESTMENT: 627 companies

with the total amount of more than 5 billion U.S. U.S. dollars

367 are invested by national private company

260 are invested by foreign companies

Agriculture and Forestry ReviewAgriculture and Forestry Review

( in the period 2006-2010 )( in the period 2006-2010 ) A total amount on supplying raw material for

processing factory and transferring to the trade is 434,8 million U.S. dollars covering 87% of plan (500 million U.S. dollars/ year)

Agricultural commodity 301 million US. Dollars Livestock and fishery 102,4 million US. Dollars Forest and non-timber forest products 31,4 million US. Dollars

Agriculture and Forestry ReviewAgriculture and Forestry Review

( in the period 2006-2010 )( in the period 2006-2010 ) The export of goods is 282 million U.S. dollars

exceeding 41 % of plan (200 million U.S. dollars/ year)

Agricultural commodity 182,8 million US. Dollars Livestock and fishery 24,6 million US. Dollars Forest and non-timber forest products 74,6 million US. Dollars

ACTUAL MAF LINES OF PLANNING AUTHORITYACTUAL MAF LINES OF PLANNING AUTHORITY There is a close work relation with the MPI (The MPI set

up macro economic, establish multi year planning framework and set annual planning criteria to the Ministry agency).

DOP has the direct relation with the Director General and the Minister of MAF (The DOP formulates sect oral strategy and issues planning guidelines to technical department and integrates sub-sect oral plans into agriculture and forestry plan and forwards to MPI).

All organization of the MAF (issue guideline and planning parameters to province agriculture and forestry services and forwards sub-sect oral plan to DOP).

ACTUAL MAF LINES OF PLANNING AUTHORITY ACTUAL MAF LINES OF PLANNING AUTHORITY

(cont)(cont) At the local authority there are 18 PAFSO and 142 DAFO

(PAFSO issues planning guidelines for DAFO and village committees and forwards provincial agriculture and forestry sub-sect oral plans to respective MAF Department).

There are about 11.400 villages, (the village committees and DAFO prepare and forwards district and village data, information and plans t0 PAFSO).

ORGANIZATION CHART OF THE MAF2.doc

THE PROBLEMS THE PROBLEMS

Comparative quality of Agriculture and Forestry sector annual plans

Requirement plan element Maxi mum

Plan year

2005 2006 2007 2008 * Sector strategy 5 3 3 3 4 * Sector gools 5 2 2 3 4 * Tie-in to National Macro-economic Framework 5 1 2 2 3 * Programming/Budgeting Approach Complete Resource Identification (Natural, Material, financial and human)

5 1 2 2 3

* Analytical approach to resource allocation 5 1 2 2 2 * Implementation plan 5 1 2 2 3 * Verifiable indicators 5 1 1 2 3 * Monitoring and Evaluation 5 1 1 2 2

The average result: 2,75 that is poor cooperation and poor coordination on planning and management in agriculture and forestry sector.

The constraintsThe constraints Low capacity in management planning, financing and statistics Low capacity in technical and management fields No clear job description for institutions and staff Limited incentive and low salary Limited educational level (36% university graduate plus 30% with

high education) Potential manpower with 65% under 35 year of age Staff with limited field experience in some institutions Budget limitation for increasing and mobilize staff Practically no carrier development program especially staff who are

assigned to remote area Low capacity of Subject Matter Specialist (SMS) at provincial level