Potential and Challenges of Agribusiness in...

Potential and Challenges of Agribusiness in Laos

Seiichi YOKOI

Agricultural Policy Advisor

JICA

8 August 2014

Potential and Challenges of Agri-business in Laos

Outline of presentation

• Agricultural Policy of Lao PDR

• Potential and Challenges of Agriculture

• Potential and Challenges of Agri-business

Agricultural Policy of Lao PDR

• Policy directions

– Assurance of Food Security

Rice production > Domestic demand

but significant regional imbalance

Increasing demand for other basic food

–Contribution to national economy

Agriculture production for commercial purpose and inputs to processing industries and services

Potential and Challenges of Agriculture in Laos

• General impression of Laos and its agricultureLaos is: a small country

an agricultural countrya rice producing country

Laos has: hilly and mountainous national landsmall population

Laos’ agriculture uses: limited inputslimited improved varieties

What are TRUE and what are NOT TRUE? What does it mean? Is it good or bad?


• Laos is a small country with small population

Sources: IMF, Japan MOFA

Country/Province Population(million)

GDP(billion USD)

GDP per Capita(USD)

Lao PDR 6.4 9 1,446

Thailand 64.4 366 5,678

Vietnam 90.4 138 1,528

Yunnan Prov.(China)

45.1 163 3,501

Myanmar 63.7 53 835

ASEAN 615.6 2,306 3,745


• Agricultural land is limited andagriculture has a small share in GDP

Source: FAOSTAT Source: Laos’ LSB

0%

20%

40%

60%

80%

100%

1990 2000 2010 2013

60.7

51.8

28.8 23.5

Agriculture

Industry

Service

Tax/duty

Share in GDP by SectorAgricultural land in total land area

0%

10%

20%

30%

40%


• Still a large part of population live in rural area and work in agriculture

Sources: Laos LSB, MAF Source: FAOSTAT

TotalPopulation6.39 million

(2011)

Farmpopulation

working inagriculture2.40 million

(37.5%)

Farm population not working in agriculture

2.11 million (33.0%)

Non-farmPopulation

1.88 million (29.5%)

Farm population4.50 million(70.5%)

Total economicallyactive pop.3.36 million

(2011)

Othersectors

0.85 million(74.8%)

Economicallyactive population

in agriculture

2.52 million(74.8%)


• Laos is a rice producing country

Sources: Laos’ MAF

No. Crop Items

Planted

Area

(ha)

1 Rice 939,100

2 Maize 188,825

3 Vegetables 144,735

4 Coffee 82,145

5Starchy

roots65,995

6 Job's tear 47,160

7 Fruits 37,595

8 Peanuts 24,595

9 Sweet corn 23,205

10 Beans 14,755

Planted areas of major crops Rice production

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2005 2006 2007 2008 2009 2010 2011 2012 2013

2.1 2.2 2.2 2.3 2.5 2.3 2.3

2.8 2.7

0.3 0.3 0.3 0.4

0.5 0.5 0.5

0.5 0.4 0.2 0.2 0.2

0.2 0.2

0.2 0.2

0.2 0.2

Upland rainfed paddy Dry season paddy Lowland rainy season

Mill

ion

to

ns


• Laos also produces commercial crops

Sources: Laos’ MAF

0.0

1.0

2.0

3.0

4.0

5.0

20052006

20072008

20092010

20112012

2013

0.70.7

0.7 0.8 1.00.9 1.2

0.9 1.3

0.40.4 0.6

0.9 0.80.9

0.9

0.9

1.0

0.20.2

0.3

0.4 0.4 0.8

1.2

1.1

0.9

0.2 0.3

0.4

0.4 0.4

0.6

1.0

1.3

1.5

Starchy roots

Sugarcane

Maiz

Vegetables

Mill

ion

to

ns


• Laotian farmers use local and improved varieties

Source: Laos’ NAFRI

Types of rice

Types of variety

Commodity production areas

Food production areas

Non-stickyrice

Improved breeds

• VTE450‐1• DTK13

Local varieties

• Chao Hom Maly,• Chao Hom Savanh,• Chao Kam Hom

• Chao Na• Chao Deng• Chao Lao Soung

Sticky rice Improved breeds

• TDK8, TDK11• VTE450‐2• PNGs• TSNs

• TDK1‐sub1• TDKs• PNGs• TSNs

Local varieties

• Hom Nang Nouane• Hom Sang Thong• Kai Noi• Nio Kam Hom

• Naxang• Mouang Nga• Ta Khiat• Kai Noi


• Laotian farmers use more inputs but still limited

0% 20% 40% 60% 80% 100%

Southern region

Central region

Northern region

National Total

Chemical only Chem.+Org. Organic only No fertilizer

Fertilizer users

in 1998/99 and 2010/11

Temporary crop growers who used fertilizers

0

10

20

30

40

50

60

1998/99 2010/11

Organic only

Chemical/Chem.+Org.

Fertilizer users by region (2010/11)

%

Source: Laos’ MAF


• Challenges of Laos’ agriculture– Small country with small population

– Hilly and mountainous national land

– Limited use of improved varieties

– Limited use of inputs


• Potential of Laos’ agriculture– Small country with small population

Neighboring countries with big market potential

– Hilly and mountainous national land

Different climate areas, various genetic resources

– Limited use of improved varieties

Abundant traditional varieties/genetic resources

– Limited use of inputs

Possibility of organic agriculture


• Large market potential in neighboring countries

Sources: IMF, Japan MOFA

Country/Province Population(million)

GDP(billion USD)

GDP per Capita(USD)

Lao PDR 6.4 9 1,446

Thailand 64.4 366 5,678

Vietnam 90.4 138 1,528

Yunnan Prov.(China)

45.1 163 3,501

Myanmar 63.7 53 835

ASEAN 615.6 2,306 3,745


• Large neighboring countries

Possibility to gain markets

Good markets in size and purchase power

Agricultural production in Laos is small

No need of big market share

Niche markets would be good targets

Needs to Can import necessary materials

No need to produce everything domestically

No need to import from far countries


• Different climate conditions

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Precipitation (mm)

0

5

10

15

20

25

30

35

40

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dic

Pakse (Max)

Paksong (Max)

Pakse (Min)

Paksong (Min)

AltitudePaske 107mPaksong 1,284m

Temperature (℃)

Source: climate-data.com


• Laotian farmers use local and improved varieties

Source: Laos’ NAFRI

Types of rice

Types of variety

Commodity production areas

Food production area

Non-stickyrice

Improved breeds

• VTE450‐1• DTK13

Local varieties

• Chao Hom Maly,• Chao Hom Savanh,• Chao Kam Hom

• Chao Na• Chao Deng• Chao Lao Soung

Sticky rice Improved breeds

• TDK8, TDK11• VTE450‐2• PNGs• TSNs

• TDK1‐sub1• TDKs• PNGs• TSNs

Local varieties

• Hom Nang Nouane• Hom Sang Thong• Kai Noi• Nio Kam Hom

• Naxang• Mouang Nga• Ta Khiat• Kai Noi

• Limited use of input so far

Possibility of organic farming

But

Confusion in interpretation

Kasikam insi (Laotian) ≠ organic

How to develop markets?

A separate problem…

Abuse of chemicals (in non-organic agriculture)



• Potential of Laos’ agriculture– Potential markets in neighboring countries

– Various products from different climate areas

– Abundant traditional varieties/genetic resources

– Possibility of promoting organic agriculture


• Large markets in neighboring countries

Potential: to gain high value markets

• No need to gain big share

• Niche markets would be a good target

Challenges: to Identify commodities and markets

• Quality control

• Stable supply

to improve logistics

• Cold chain


• Various products from different climate areas

Potential: to develop unique products

• What are Laos-like products?

Challenges: to establish brand names

• Quality control

• Designing and packaging

• Consumers’ interests and trust

• Funding (Private sector)


• Abundant traditional varieties/genetic resources

Potential: to utilize indigenous genetic resource

Challenges: to Identify useful resources

• Food, medicine, cosmetics, etc.

to develop new plant varieties

• Fitting Lao climate

• With new functions

• Funding


• Possibility of organic agriculture

Potential: to establish as an export commodity

Challenges: to strengthen certification system

• Certification at the international level

to improve quality

• Production skill

• Quality control

• Funding

Thank you

Potential and Challenges of Agribusiness in...

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