£¤¡¾-¯ñ®¯÷¤ ®øì½-½¡¾-¯ö¡£º¤ Á¢¸¤§¼¤¢¸¾¤
Governance and Public Administration Reform Programme Xiengkhouang
XIENGKHOUANG
GOVERNMENT OF THE
LAO PEOPLE’S DEMOCRATIC REPUBLIC
Improving Governance in the
Non-Timber Forest Products (NTFP)
Sub-sector of Xiengkhouang Province
Mission Report
January 2007
Joost Foppes
Phongxiong Wanneng
Netherlands Development Organization
Executive Summary
At least 50 % of all 36,120 families in Xiengkhouang Province collect Non-Timber Forest
Products (NTFP) regularly. Subsistence use of NTFP may amount up to a value of 2-3.5
million kip or $200-350 per family per year. Cash income from selling NTFP may be
worth 360,000 kip ($36) per family per year, contributes around 30% of the total
family cash income. In remote districts NTFPs may provide up to 80% of family income.
The total value of trade in NTFP exported from the Province is estimated to be around
13,000 million kip ($1.3 million) in 2005. They are second only to corn, which provides
an export income of around 34,500 million kip ($3.45 million) over 2006.
Typical NTFP products from Xiengkhouang include:
(A) Food products: “mak tao” fruits, bamboo shoots, chestnuts, wild tea, passion fruits
(B) Medicinal plants: orchid stems, cardamom, berberine, fern roots, Lao ginseng,
mushrooms, “hom sam meuang”
(C) Tree exudates: agarwood, Boehmeria glue bark, pine rosin, benzoin and “kisi”
dipterocarp damar resin
(D) Fiber products: broom grass, big and small rattan canes, paper mulberry bark.
Virtually all NTFP are harvested from wild resources, there is very little domestication.
The market structure is based on a chain of traders from the village through districts
and provinces to the larger buyers/exporters in other provinces. Most products are
exported to Thailand (food products), China (medicinal plants) and Vietnam (rattan).
The system is regulated by a complex system of permits and quota. A range of fees
and taxes are to be paid to three Government offices: agriculture, trade and finance.
While the official tax rate is about 47%, traders can reduce this burden by exporting
more volume than reported to around 6%. The quota system does several
disadvantages:
 The complex system of permits is time consuming for traders
 The quota does not have any positive effect on NTFP resource management
 The quota system seems to give a low tax revenue rate to the Government of
perhaps 778 million kip ($77,800) or 6% of the export value of NTFP per year
The main problems of village NTFP collectors and traders are:
 Negative trends in NTFP availability
 Low prices, few options to add value by improving product quality
 Limited access to markets and support services
 Over-regulation
There is a strong demand for most NTFP in the surrounding countries. With better
management of natural resources of some products, domestication of others, better
quality control of products, processing to add value and more efficient marketing,
NTFP could become a sustainable source of income for the Province.
Specific solutions for each product will need to be developed on the spot. Several
promising private sector initiatives were observed, e.g. the development of drying
ovens for orchids and corn, packaging of mushrooms, distillation of agarwood oil and
the bottling of passion fruit juice.
Mission Report: Governance and NTFP, January 2007
2
The Private Sector cannot do it all by itself, it will need help from the Government.
The Lao Government envisages putting a number of strategies in place:
 Organizing NTFP village enterprise groups
 Systems for sustainable management of NTFP in forests and fields
 Generating income from integrated NTFP value chains
 Creating an enabling regulatory environment for NTFP enterprises
 Providing Government and private support services
For sustainable NTFP development, district staff needs to support the development of
NTFP enterprise groups at village cluster level. They should assist these groups to
develop strong leadership skills, to develop sound business plans and to develop
sustainable forest management systems.
Extension staff will need considerable capacity building support to be able to learn the
skills necessary to take on their new roles. The GPAR project could assist in this
through a training program for extension workers.
The following recommendations are proposed to the GPAR project:
1: Build the capacity of district extension officers:

GPAR could support the production of Lao language training booklets for
district staff to implement the eleven step process proposed in this report and
use this as a basis for training extension staff.

GPAR could pilot a more frequent and recurrent extension training program for
district staff, linking training events to action in the field through regular
meetings, clear field assignments and frequent farmer exchange events. There
should be and easy system for advancing travel costs.

External expert trainers should be hired to guide this training process, they can
be sourced among forestry research institutes in Vientiane (e.g. NUOL, NAFRI).

The GPAR extension training program should involve district forestry officers,
they should become pioneers in the development of NTFP village enterprise
groups.

GPAR could have a small grant scheme to support temporary placements of
young graduates to work 3 years at sub-district level ($30 /person/month), at
least 2 person per district.
2: Promote the linkage between NTFP enterprise development, sustainable harvesting
and conservation of biodiversity resources

Training district commerce and forestry officers to support NTFP village groups
in analyzing markets, developing viable business plans, and implementing these.

Training forestry officers to support NTFP village cluster groups in developing
sustainable forest management rules, participatory land use planning, agroecological zoning etc.

Piloting new policies where village groups would be rewarded with tax
incentives, e.g. free export permits or village level quota, as a reward for
sustainable forest management and biodiversity conservation.
Mission Report: Governance and NTFP, January 2007
3
3: Support the delivery of basic market information services

The Province Industry and Commerce Office should have a market research unit,
which executes market chain studies, collects information on prices, new
production and post-harvest technologies and disseminates market information
to all interested parties in the province. GPAR should support capacity building
of market research staff and support them to implement value chain analysis
and other information gathering activities.

Such a market research unit should set up a simple market information system,
exchanging market information with district industry and commerce offices,
private entrepreneurs and village producer groups. This system should be
updated initially once per month, later once per week.

The nearest export market is Vietnam, yet very few products are exported
there. The Province should aim at putting up a marketing agent in the
Vietnamese town of Vinh, with the duty to explore the Vietnamese market,
attract buyers and facilitate contracting arrangements.
4: Promote more rational, simplified and enterprise-oriented Government procedures

GPAR should address the key issue of over-regulation and lack of coordination
between departments in the NTFP sub-sector. This is the main governance
issue in terms of improving service delivery of the state to citizens. GPAR
should center a number of its activities around this issue, e.g. drafting
simplified “one-stop-shop” tax and regulatory systems, by facilitating the
adoption of new systems through senior level workshops etc.

GPAR should support the Province Government in finding alternatives to the
present quota system. New systems should be developed and tested where
competition is encouraged, and tax income for the state is increased. The
system should be more transparent on the use of NTFP tax income, e.g. to
improve services delivered to NTFP producers. Tax incentives could also be
given to clusters of villages, who establish and maintain sustainable NTFP
harvesting regimes and verifiable sets of rules and regulations for sustainable
forest management.

GPAR could support the Government in studying and improving all types of
contracts between producers, traders and investors. Contract farming is
becoming more prominent, but often farmers do not share in the benefits. On
the other hand, investors shy away from investing in the NTFP sub-sector as
they feel that contracts are not honoured or upheld.
5: Promote ownership (“chao-ki, chao-kan”) by the Xiengkhouang Province
Government for all these proposed steps to improve governance in the NTFP subsector:

Writing up and agreeing to an annual work plan

Assigning clear tasks and responsibilities for implementing the plan

The GPAR Project could support the Government in this by facilitating several
structured follow-up planning events over the next 2-3 months.
Mission Report: Governance and NTFP, January 2007
4
Contents
1
2
3
4
5
Introduction ................................................................................... 8
1.1
The GPAR Project in Xiengkhouang .................................................. 8
1.2
Governance and Non-Timber Forest Products...................................... 8
1.3
Methodology ............................................................................ 9
The status of NTFP in Xiengkhouang Province ..........................................10
2.1
Mapping of NTFP dependency in 7 districts, 40 zones ...........................10
2.2
The importance of NTFP in family livelihoods ....................................11
2.3
Key products and their uses .........................................................13
2.4
NTFP market volume and value .....................................................14
2.5
NTFP market structure, stakeholders ..............................................16
2.6
Government systems regulating NTFP production and trade ...................18
2.7
Future outlook of NTFP markets in Xiengkhouang Province.....................21
Problems of farmer producers and traders ..............................................24
3.1
Negative trends in NTFP availability ...............................................24
3.2
Low prices, few options to add value by improving product quality ..........24
3.3
Limited access to markets, market information and support services ........25
3.4
Over-regulation ........................................................................26
Vision for the future development of the NTFP sub-sector ...........................27
4.1
Government strategies and expectations ..........................................27
4.2
Organizing NTFP village enterprise groups ........................................28
4.3
Systems for sustainable management of NTFP in forests and fields ...........28
4.4
Generating income from NTFP value chains.......................................28
4.5
Creating an enabling regulatory environment for NTFP enterprises ...........28
4.6
Providing Government and private support services .............................28
Training needs of extension staff .........................................................29
5.1
Training Needs Assessment ..........................................................29
5.2
Roles and responsibilities of extension staff ......................................30
5.3
Human Resource Development ......................................................31
6
Improving governance in the NTFP sub-sector: a draft work plan for the GPAR
project..............................................................................................32
6.1
General recommendations ...........................................................32
6.2
Building the capacity of district extension officers ..............................32
6.3
Promoting linkages between NTFP enterprise development, sustainable
harvesting and conservation of biodiversity resources ....................................34
Mission Report: Governance and NTFP, January 2007
5
7
6.4
Supporting the delivery of basic market information services .................34
6.5
Harmonizing the regulatory environment..........................................34
References ...................................................................................36
List of annexes:
Annex 1: TOR of the mission ....................................................................37
Annex 2: Itinerary of the mission ...............................................................40
Annex 3:
Agenda, list of participants and instruction sheets ...........................41
Annex 4: List of RRA tools to assess NTFP status in villages ................................46
Annex 5: List of NTFP identified in a study on timber and non-timber forest products,
botanical survey, NAWACOP project, Pheng Phaengsingkham, 1997 ......................48
Annex 6: Product Profiles ........................................................................52
Annex 7: Interim report Interviews with traders and Government officers ..............53
Annex 8: Conclusions of a stakeholder meeting, held 15/12/2006 at the Province
Agriculture and Forestry Office, Xiengkhouang Province, to discuss findings of a short
study on the status of the Non-Timber Forest Products (NTFP) in the province,
supported by the Governance and Public Reform Project (GPAR). ........................72
List of tables:
Table 1: Relative importance of NTFP for family income, 40 zones in 7 districts of
Xiengkhouang Province. Ranking by district officers estimates in October 2006 ........10
Table 2: Key Income Sources Ranked by 8 villages in Xiengkhouang Province, November
2006 .................................................................................................11
Table 3: Ranking of family expenditures, 8 villages in Xiengkhouang Province,
November 2006 ....................................................................................11
Table 4: Income estimates of 9 villages in Kham district, April 2006 .....................12
Table 5: List of NTFPs traded in Xiengkhouang Province, ranked to perceived
importance for village income by district staff, October 2006 (highest rank= highest
importance) ........................................................................................13
Table 6: Estimates of volume and value of NTFP trade from Xiengkhouang Province,
2005 .................................................................................................15
Table 7: Comparing NTFP and Maize income to farmers and for export in Xiengkhouang
......................................................................................................15
Table 8: List of NTFP buyers outside Xiengkuang Province .................................16
Table 9: List of NTFP traders at Province level in Xiengkhouang Province ...............17
Table 10: List of district NTFP traders met in Xiengkhouang Province ....................18
Table 11: Price of quota, farmer price and volume of four products .....................19
Table 12: market outlook for promising NTFP products .....................................21
Table 13: Trends of NTFP according RRA surveys in 8 villages, November 2006 .........24
Table 14: District officers ideas on roles, duties and training needs, October 2006 ....29
Table 15: Outline of key steps for an NTFP extension training process ...................33
Mission Report: Governance and NTFP, January 2007
6
Acknowledgements
Consultants wish to thank Mr. Sithone Sorbualapanh, National Project Coordinator of
the GPAR Project, Dr. Suresh Balakrishnan, Chief Technical Advisor of the GPAR
Project and Ms. Nicolette Matthijsen, portfolio manager at SNV Laos, for assigning this
short mission and for their warm support during the implementation. Consultants are
also grateful for the assistance received from various GPAR province coordinators:
Vilakhone Phonpayasith, Phitsamay Thongmanila and Chanthi Palakone. Great inputs
and comments were received from Somsack Chandara, Mike Fennema, Eddie Vernon,
John Connell, Adam Folkard, Wessel Huisjes and Eelco Baan. Special thanks must go to
all the NTFP entrepreneurs, province and district staff as well as NTFP collectors who
shared their valuable time and information with the consultants. They are the true
pioneers of NTFP sub-sector development in Xiengkhouang.
Abbreviations
CRCWC
DAFEO
GPAR
NAFRI
NTFP
NUOL
PACSA
PAFO
RRA
SDC
SNV
TOR
UNDP
Christian Reformed World Relief Committee
District Agriculture and Forestry Extension Office
Governance and Public Administration Reform
National Agriculture and Forestry Research Institute
Non-Timber Forest Products
National University of Laos
Public Administration and Civil Services Authority
Province Agriculture and Forestry Office
Rapid Rural Appraisal
Swiss Agency for Development and Cooperation
Netherlands Development Organization
Terms of Reference
United Nations Development Program
Contacts:
GPAR, Office of Governor, Phonsavanh, Xiengkhouang, Lao PDR,
Tel: (856)213212-3 Fax: 213214 E-mail: gparxk@laotel.com
SNV Lao PDR, P.O.Box 9781, Nongbone Road, Vientiane, Lao PDR
Tel: (856) 21 413290-1 Fax: 414068, E-mail: jfoppes@snvworld.org
Mission Report: Governance and NTFP, January 2007
7
1 Introduction
1.1 The GPAR Project in Xiengkhouang
The Government of Lao PDR launched the Governance and Public Administration
Reform (GPAR) program to build a state administration capable of managing the
development goals of the country. This program is led by the Public Administration
and Civil Services Authority (PACSA) which is part of the Prime Ministers Office of the
Government of Lao PDR. The UNDP supported the design and implementation of GPAR
at the provincial level to strengthen administration with emphasis on coherent
decentralization and effective delivery of public services. GPAR Xiengkhouang is the
third provincial project, and is supported by UNDP, SDC (Swiss Agency for
Development and Cooperation) and SNV (Netherlands Development Organization). The
project is based in the Office of the Governor of Xiengkhouang Province. It started in
November 2005 and will end in November 2009.
The overall goal of the project is to “strengthen the capacities of selected government
institutions at the provincial and district levels to contribute to poverty reduction and
equitable economic growth”.
The project is designed to achieve this goal by strengthening the operational
capacities of selected government institutions at provincial and district levels to:
 respond to citizens’ demands and needs, through inclusive participatory planning
and priority setting, and support to economic development, thereby ensuring
equal access to public services and decision-making for women and men and all
ethnic groups;
 implement decisions and reach provincial and district objectives in a transparent,
coordinated and cost-effective manner; and
 monitor progress in service delivery.
1.2 Governance and Non-Timber Forest Products
Strengthening market oriented agriculture is a key priority for the GPAR project. One
of the key market oriented activities in the sector is in relation to Non-Timber Forest
Products (NTFP). While this sub-sector has not been directly addressed in the project
document, discussions at the provincial level indicated that it would be a thematic
area where substantial benefit or impact would arise. GPAR requested SNV, the
Netherlands Development Organization to field a short consultancy mission with the
following objectives:

to benchmark the current status of NTFP, benefits arising from the same and
constraints experienced in promoting and regulating these products

to examine extension practices in operation now, to promote and support NTFP,
and explore how they could be strengthened

to develop with technical assistance a suitable operational plan for extension
support in relation to NTFP
The mission was implemented in four weeks, spread over October-December 2006.
This report presents the findings and recommendations of the mission. Detailed Terms
of References for the mission are presented in the Annexes.
Mission Report: Governance and NTFP, January 2007
8
1.3 Methodology
The mission was implemented through four visits to Xiengkhouang Province:
11-13/10/06:
21-28/10/06:
08-18/11/06:
04-09/12/06:
Getting to know the project, making logistical arrangements
Holding a training workshop with province and district staff
Interviews with NTFP producers, traders and extension staff in 3 districts
Develop detailed plan with GPAR, present them in stakeholder workshop
A detailed itinerary is presented in the Annexes.
The mission applied a combination of data gathering, field visits, individual
consultations and stakeholder meetings to:
 Map the range of NTFP being collected, produced and marketed in the province
 Assess the specific constraints experienced by farmers working with NTFP
 Indicate capacity gaps in PAFO/DAFEO’s for providing extension related to NTFP
 Suggest practical steps that can be taken up to strengthen extension related to
NTFP
Mapping of NTFP took place in an initial workshop with DAFEO representatives from
each district to identify key products and issues. A data collection form was
distributed to each district to record trade and use of NTFP in each district.
Consultants also interviewed 21 NTFP traders and Government staff in the Province to
get more details on NTFP marketing. Consultants summarized these data in this report,
adding specific information collected during their field visits to pilot districts.
Consultants also used secondary data on NTFP markets from various sources to assess
the outlook for NTFP markets outside the province (see list of references).
For the assessment of specific farmer constraints, district staff were asked to
implement rapid rural assessment (RRA) surveys in selected villages in 7 districts They
applied a set of RRA tools which they practices in the initial workshop. An overview of
these RRA methods is given in the Annexes.
Consultants also visited three pilot districts of the project (Paek, Khoun and Nonghet).
During these visits they interviewed heads of village cluster development committees
(huana kumban pattana) as well as village NTFP traders. The data from the RRA work
done by the district staff and the consultants own observations are summarized in this
report.
To indicate capacity gaps in PAFO/DAFEO’s in providing NTFP extension, consultants
interviewed farmers, traders, and DAFEO officers. They also had interviews with all
relevant district and province government offices that deal with NTFP production and
trade: Planning, Finance, Trade, Governor’s Office.
Practical steps for strengthening extension were worked out into a draft work plan, in
consultation with the GPAR project management. This plan is presented in the last
section of this report.
Mission Report: Governance and NTFP, January 2007
9
2 The status of NTFP in Xiengkhouang Province
2.1 Mapping of NTFP dependency in 7 districts, 40 zones
In a workshop in October 2006, district officers of 7 districts (all except Thathom
district) mapped 40 administrative zones or “khed” in their districts on district maps.
They also indicated in which zones villagers are most dependent on Non-Timber Forest
Products (NTFP) for their income. Table 1 summarizes that exercise. E.g. in Khoune
district, NTFPs are most important for village income in the Song Siang zone, least
important in the Long San zone. This table is only indicative but could be used to
prioritize zones for NTFP extension development.
Table 1: Relative importance of NTFP for family income, 40 zones in 7 districts of
Xiengkhouang Province. Ranking by district officers estimates in October 2006
(1= most important, 8= least important)
A
Mok Mai District
E
Khoune district
1
Thang Vieng
1
Song Siang
2
Long Mo
2
Keo Set
3
Nam Chat
3
Sam Phan Xay
4
Nam Ngad
4
Xieng
5
Sam Chae
5
Nam Phan
6
Ngan
B
Kham District
7
Nyoun
1
Tha Meuang
8
Long San
2
Boun Thin, Peung Kham
3
Long Khao
F
Paek District
4
Long Mak Thai
1
Sam Nyek Nong Paek
5
Mad Neua
2
Phan
3
Lad Bouak
C
Phaxay District
4
Khang Xieng
1
Somboun
5
Thessaban
2
Kham Sen
6
Tong Hai
3
Sen Oudom
7
Lad Houang
D
Phoukoud District
G
Nonghed District
1
Ang
1
Pak Boun
2
Thai
2
Tham Khao
3
Keung
3
Keo Ban
4
Viengsai
4
Houa Meuang
5
Long Khan
5
Tham Phong
6
Long Hang
7
Soui
40
zones
Mission Report: Governance and NTFP, January 2007
10
2.2 The importance of NTFP in family livelihoods
Data on the importance of NTFP in the family economy were collected in fourteen
villages (two per district) by district officers, using RRA techniques. Groups of
villagers were asked to rank their key sources of cash income (see table 1). On average,
selling livestock is the single most important source of cash income (36%). NTFP are
the second most important source of cash income (28%), followed by rice and other
crops (22%) and various other income sources, e.g. labor (15%).
Table 2: Key Income Sources Ranked by 8 villages in Xiengkhouang Province, November
2006
Village
District
Income categories
Livestock NTFP Crops Others Total
Sanlouang
Khoun
20%
60%
20%
100%
Siviengkham Khoun
40%
30%
10%
20%
100%
Xiengmieng
Mok
33%
17%
42%
8%
100%
Mai
Mok
33%
33%
26%
8%
100%
Pa An
Nonghet
56%
22%
17%
5%
100%
Din Dam
Nonghet
50%
20%
10%
20%
100%
Pha Tay
Phaxay
30%
24%
40%
6%
100%
Na Khae
Phaxay
23%
18%
29%
30%
100%
Average:
36%
28%
22%
15%
100%
(source: RRA surveys implemented by district staff, November 2006)
There is some correlation between NTFP income and buying rice: villages with a high
income from NTFP tend to buy rice as they cannot produce enough themselves (see
table 2). Other villages use their cash income for a variety of goods, quite a large
share of their cash income (24%) is used to by inputs for agriculture (tools, seed,
animals for raising).
Sanlouang
Siviengkham
Xiengmieng
Mai
Pa An
Din Dam
Pha Tay
Na Khae
Khoun
10% 10% 20%
Khoun
10% 10% 10%
Mok
40%
Mok
40%
Nonghet
40%
20% 30%
Nonghet
38%
25% 25%
Phaxay
15% 32% 11%
Phaxay
16%
7% 26%
Average 12%
6% 13% 24%
(source, RRA surveys by district staff, November 2006)
Mission Report: Governance and NTFP, January 2007
20%
30%
17%
17%
9%
20%
20%
10%
10%
17%
8%
8%
9%
5%
40%
40%
30%
30%
10%
25%
17%
8%
37%
TOTAL
Others
Social
events
Animal
raising
School
books
Agricultu
ral tools
Clothes
Medicine
Buy rice
Village
District
Table 3: Ranking of family expenditures, 8 villages in Xiengkhouang Province, November
2006
0%
100%
100%
100%
100%
100%
113%
100%
100%
100%
11
A similar set of data on the role of NTFP in the household economy in Xiengkhouang
was collected by the CRCWC project for nine villages in Kham district, April 2006 (see
table 3). There, livestock contributed 39% and NTFP 27% of cash income.
The CRCWC report also gives estimates of 1,86 million kip or $186 for the actual cash
income per family. Cash income from livestock would amount up to 73,510 kip or $72
per family, and income from NTFP to 504,265 kip or $50 per family per year.
Table 4: Income estimates of 9 villages in Kham district, April 2006
Income
Kip
$
%
Animals
723,510
$72
39%
NTFP
504,265
$50
27%
Rice
230,208
$23
12%
Crops
124,239
$12
7%
Salary
98,660
$10
5%
Labor
87,698
$9
5%
Vegetables
58,465
$6
3%
Handicrafts
32,887
$3
2%
TOTAL
1,859,933
(Source: CRCWC, 2006)
$186
100%
This is just one estimate from one district. The mission could not obtain statistics on
the numbers of families engaged in commercial NTFP collection. NTFP collection
seems to widespread as it is reported in all districts. The CRWRC report mentions
around 40% of families in 9 villages of Kham district getting income from NTFP. For the
whole Province, it would seem justified to estimate that a range of 40-60% of families
is engaged in commercial NTFP collection.
This mission came to an estimate of total income from NTFPs for farmers in the whole
province to be around $652,000 (see table 5, section 2.3 below). There are 36,120
families in the province (Census, 2003). If 50% of them are regularly collecting NTFP
for sale, the income from NTFP would be 360,000 kip $36 per family per year.
These estimates are only indicative. Dependency on NTFP for income may be as high
as 80% in some zones, as suggested by one trader from Thavieng zone of Thathom
district. In some areas of Paek district, where there is no forest, only grassland, there
may be 0% dependency on NTFP for income.
Many NTFP are consumed within the village directly after being collected from the
forest. Little data were obtained on this non-cash income derived from NTFP. From
other parts of Lao PDR, socio-economic surveys usually show this non-cash income
from NTFP to be worth 2-3.5 million kip or $200-350 per family per year (Foppes and
Ketphanh, 2004).
Mission Report: Governance and NTFP, January 2007
12
In other words the replacement value of the direct consumption of goods obtained
from forests and fields is likely to be much greater than the value of cash income. It
would seem reasonable to expect that the same pattern occurs in Xiengkhouang. This
brings home the argument of the forest as a “safety net” for poor, rice-deficient
families.
2.3 Key products and their uses
The richness of NTFP use in the province was documented earlier during a botanical
survey implemented in Xiengkhouang Province (Phaengsinkham, 1997) providing a list
of 159 NTFP being used by local families (see Annex).
District agriculture and trade officers from seven districts listed 27 NTFP regularly
traded in Xiengkhouang province during a workshop, October 25-27, 2006 (see table 4).
Nonghet
Mokmai
Khoune
Phoukoud
Phaxay
Kham
Paek
Table 5: List of NTFPs traded in Xiengkhouang Province, ranked to perceived importance
for village income by district staff, October 2006 (highest rank= highest importance)
No
NTFP Lao Name
NTFP English
Districts:
Name
1 dok peung
orchids
2
6
9 13
7
5
5
2 mak tao
sugar palm fruits
3 10
9
7
7
3 mak neng
Chinese cardamom
4
4
8
4
6
4 pak si khang, thi din
medicinal herb
4
9
12
5 dok khem
broom grass
7
3 11
1
1
6 nor mai hok
bamboo shoots 'hok'
6 10
5
7 nor mai san
bamboo shoots 'san' 10
6
5
8 kheua hem
berberine vine
4
8
6
9 pak khoud
fern roots
1
7
6
2
10 ketsana
agarwood
8
8
11 peuak meuak
Boehmeria glue bark
8
4
12 pom seum
Lao ginseng
5
4
13 nyang pek
pine rosin
8
14 vai thoun
big rattan cane
5
2
15 mak kho
chestnuts
2
3
2
16 chae, miang
local wild tea
6
17 po sa
paper mulberry bark
6
18 hed kheng
mushroom
5
19 mak nod
passion fruit
1
4
20 hed vai, hed kho
mushroom
2
3
21 vai noi
small rattan cane
1
2
23 nyan
benzoin
3
24 nor khom
bitter bamboo shoot
3
25 hom sam meuang
medicinal herb
2
26 ki si
damar resin
1
(source: result of group discussion with 20 district officers, workshop, 21-28/11/2006)
Mission Report: Governance and NTFP, January 2007
ALL
47
36
26
25
23
21
21
18
16
16
12
9
8
7
7
6
6
5
5
5
3
3
3
2
1
13
These products can be grouped according to their use into the following categories:
(A) Food products: “mak tao” sugar palm fruits, bamboo shoots, chestnuts, local wild
tea, passion fruits
(B) Medicinal plants: orchid stems, cardamom, berberine, fern roots, Lao ginseng,
mushrooms, “hom sam meuang”
(C) Tree exudates: agarwood, Boehmeria glue bark, pine rosin, benzoin and “kisi”
dipterocarp damar resin
(D) Fiber products: broom grass, big and small rattan canes, paper mulberry bark.
2.4 NTFP market volume and value
Official statistics on the volume of the trade in NTFP are hard to obtain. Consultants
did not receive any overview of NTFP exports from the Province, only incomplete data
sets from districts.
Traders always mention a much smaller amount in their quota requests than their
actual exports, to reduce the cost of the quota and other taxes. If they would not do
like this, it would be impossible to make a profit. All traders mentioned this, their
estimates for the actual amount ranged from 2-6 times the official amount (see Annex:
Interviews with traders).
To obtain a realistic estimate of the volume of NTFP exported from the Province, the
actual volume was assumed to be 3 times the highest amount mentioned either by
traders or in district statistics (see table 5 below). For some products, where there
was only one trader, who did not have to adhere to a quota, we assume that the
trader mentioned the actual amount (e.g. “mak nod”, several medicine plants).
The 2005 NTFP trade volume estimated by the districts was around 244 tons. Traders
came up to 768 tons. The actual volume could be as high as 2,442 tons (see table 5
below).
A rough estimate was made of the total value of NTFP trade accrued by
farmers/collectors of NTFP. That value is the estimated volume, multiplied with the
farm gate price, which adds up to US$652,000 or 6.52 million kip (see table 5).
Secondly, the value of the product as it leaves Xiengkhouang Province is increased by
quota, taxes, transport costs and the profit of traders. Based on estimates of the exprovince price (price of the product when it leaves the province border), the total
value of NTFP exports from Xiengkhouang Province in 2005 is thus estimated to be
worth US$1.3 million or 12.960 million kip (see table 5).
Mission Report: Governance and NTFP, January 2007
14
Total value
(US$1=
10,000 kip)
Value for
farmers
(US$)
ex Province
price (kip)
farm price
(kip/kg)
English Name
realistic
estimate
Lao Name
traders
No
district
Table 6: Estimates of volume and value of NTFP trade from Xiengkhouang Province, 2005
2 dok peung
3 hed vai, kho
4 kheua hem
sugar palm
fruits
orchids
mushroom
berberine vine
5 vai thoun
big rattan cane
0.0
23.6
70.8
6,000
10,000 $
42,480 $
70,800
6 nor mai hok
bambooshoots
Chinese
cardamom
broom grass
passion fruit
fern roots
paper mulberry
bark
42.0
150
450
1,000
1,500 $
45,000 $
67,500
5.0
4
15
25,000
35,000 $
37,500 $
52,500
12.7
20.5
8.9
42
60
15
126
60
27
1,500
1,500
3,000
2,500 $
4,000 $
6,000 $
18,900 $
9,000 $
8,015 $
31,500
24,000
16,029
0.0
15
45
2,500
3,500 $
11,250 $
15,750
35.6
15
45
2,000
3,500 $
9,000 $
15,750
10.0
0
30
1,000
1,500 $
3,000 $
4,500
0.0
0.4
4
6
1.2
4
6
14,000
3,000
1,500
17,520 $
4,500 $
2,000 $
1,680 $
1,200 $
900 $
2,102
1,800
1,200
0.06
0.06
60,000
100,000 $
360 $
600
0.7
0.5
0.7
0.5
1,000
1,000
1,700 $
1,700 $
70 $
50 $
119
85
0.5
0.5
1,200
1,700 $
60 $
85
768.8
2442.4
2,670
5,306 $
1 mak tao
7 mak neng
8 dok khem
9 mak nod
10 pak khoud
11 po sa
12
13
14
15
16
17
18
19
20
pak si khang, thi
medicinal herb
din
incense glue
peuak meuak
bark
ketsana
agarwood
palad nam
edible algae
mak man kha
galangal fruits
nang bai oua, bai
slipper orchid
lai
pong wan
wild ginger
pong sam sip
medicine
mak kha kai,
Lao ginseng
seum
TOTAL
93.0
345
1035
2,200
3,500 $
227,700 $
362,250
104.7
0.5
21.4
15
2
70
314
2
210
5,000
80,000
3,000
10,000 $
1,000,000 $
5,500 $
156,980 $
16,000 $
63,000 $
313,959
200,000
115,500
354.2
652,144 $ 1,296,029
(source: district statistics and interviews with traders, November 2006)
NTFP are an important source of income for Xiengkhouang Province. Their total value
is roughly half of that of corn, the biggest export product of the Province see table 6).
Maize is limited to around 2,000 families in Kham district, NTFP are produced in all
districts, benefiting some 30-50% of all 36,120 families in the Province.
Table 7: Comparing NTFP and Maize income to farmers and for export in Xiengkhouang
Total value
Volume
farm price
ex Province
Value for farmers
Product
(US$1=
(tons)
(kip/kg)
price (kip)
(US$)
10,000 kip)
NTFP
Maize
2,442
15,000
2,670
1,000
5,306
2,300
$ 652,144
$ 1,500,000
$ 1,296,029
$ 3,450,000
(source: interviews with Mr. Khamkhone, maize trader, and Mr. Khamhou, maize exporter).
Mission Report: Governance and NTFP, January 2007
15
2.5 NTFP market structure, stakeholders
The markets of NTFP in Xiengkhouang Province depend largely on buyers/exporters
from outside the Province. The consultants did not have the time or means to visit this
important group of stakeholders. Table 6 gives a list of outside buyers identified
during interviews and from secondary sources.
Table 8: List of NTFP buyers outside Xiengkuang Province
No
Name
Telephone No
Location
Kasi, Vientiane
Province
Kasi, Vientiane
Province
Vietnam
Key products
agarwood
1
Mr. Sitha
mak tao, khem, po sa
2
Mr. Bounsong
3
Lamvong company
4
Pakading company
5
Kasi Vangvieng company
6
Jingling company
020- 5980822
Pakkading, Bolikhamxay
Kasi, Vientiane
Province
Oudomxay Province
7
Mr. Zhang Fu Chu
13759259189
China
peuak meuak, yang bong*
8
Ms. Xing Zhang
13578115561
China
peuak meuak, yang bong*
9
Mr. Xe Xu Yuen
6918811211
China
peuak meuak, yang bong*
10
Mr. Kanya
020-5782741
Oudomxay Province
po sa, dok khaem*
11
Mr Thongphet
020-5583096
Bokeo Province
mak tao*
12
Mr Vilone
020-5583333
Bokeo Province
mak tao*
13
Mr Pheng
081-212314
mak tao*
14
Lao Agro-Industry
020-502107
15
Sang Thong Dried Fruit
+66-53-441191
Bokeo Province
Kasi, Vientiane
Province
Chiang Mai, Thailand
16
Lampang Foods
+66-54-224158
Lampang, Thailand
mak tao*
17
Mr. Xe Xou Yuen
0691-8811211
Mengla, China
bialai orchids*
18
Mr Francis Chagnaud
021-222622
Vientiane city
benzoin*
19 Mr Somsack Chanthaphonh
*) Source: Vernon, 2006
021-240399
Vientiane city
benzoin*
mak tao
agarwood
agarwood
orchids
mak tao*
mak tao*
Inside the Province, there are two types of traders: traders with an export permit and
traders with a quota for domestic trade only. In Xiengkhouang Province, only one
company has the right to export NTFP directly to Vietnam or China, this is the
Xiengkhouang Export-Import Commerce and Development State Enterprise (“Ladvisakit
kangka pattana ka ok ka khao”). Most of the medicinal plants that are exported to
China, are bought by this company. This company does not buy products from farmers
directly, but buys from other province traders for all products that are under their
quota. Unfortunately, little data could be obtained from this company on the details
of their trade.
About six Province NTFP traders have quota for domestic trade which they obtain
quota from the Province authorities (see table 7). There are a few other buyers at
Mission Report: Governance and NTFP, January 2007
16
province level, they either operate on behalf of the larger traders or they are exempt
from quota because of the small volume of their product.
Table 9: List of NTFP traders at Province level in Xiengkhouang Province
No
Type of
quota
Name
Telephone
Location
Products
1
State Enterprise
Ladvisakit
061-312170
Phonesavanh
city
orchids, medicinal
plants
Export
permit
2
Ms. Khambay
020 5875448
Phonesavanh
city
Domestic
quota
3
Ms. Somphone
mak tao, dok
khaem, kheua haem,
nor hok
mak tao, dok
khaem, kheua haem,
po sa
4
Ms. Thongpet
061-211031
Phonesavanh
city
mak tao, dok khaem
Domestic
quota
5
Ms. Viengsod
020-2318428
Phonesavanh
city
mak tao
Domestic
quota
6
Mr. Bounla
Vilaiphone
020-5067388
Thavieng,
Thathom
district
mak tao, vai thoun
Domestic
quota
7
Mr. Xeng Hong
020-5799333
Phonesavanh
city
nyang paek (pine
rosin) in 2007
Domestic
quota
8
Ms. Sormany
Sophabmixay
020-5189222
Phonesavanh
city
hed vai (seasonable
product, small
volume
9
Mr. Sengphet
061-211236
Phonesavanh
city
mak nod (passion
fruit) from gardens
10
Mr. Khamkhone
Phaioudom
020-5661648
Kham
district
mak neng
(cardamom) in 2007
No quota,
family
business
No quota
needed, sell
juice
Sell to
Ladvisakith
11
Mr. A Tong
Phonesavanh
city
orchids, medicinal
plants
Sell to
Ladvisakith
Phonesavanh
city
Domestic
quota
(source: Province trade office, November 2006)
Province level traders usually are people who have invested in a large truck (10 ton) to
export NTFP and agricultural goods. They spend much energy to get quota for NTFP
from the province. The quota is usually limited to particular districts and zones. This
actually reduces competition between traders. This may be a factor keeping NTFP
farm gate prices low, as farmers can often only sell to one company.
However, traders have two methods to get beyond these restrictions on quantities and
the area where they are allowed to buy. In some cases, traders make multiple copies
of their quota permits and distribute them to many small traders. In this way they can
collect many times more the amount allotted to them in their quota. District officials
can check the permit but cannot check how many of these papers are circulating.
The second mechanism is called “lak seu” or illegal trading. This is a practice where
one quota trader pays smaller traders to buy products in a zone assigned to another
Mission Report: Governance and NTFP, January 2007
17
trader, evading the controls of the district. By offering a slightly higher price, they can
persuade villagers to sell their product to them instead of selling to the trader who
holds the official quota for that zone. Province traders all complain a lot about this
practice and ask for the Province to intervene. However, it would seem that they are
all doing it and in fact it would seem to bring back some competition, which benefits
farmers by giving them a better price.
As soon as Province traders receive a quota, they make agreements with a number of
district or zone traders and send them advance payments, up to one half of the
estimated quantity that each local trader can collect.
At district level, most district traders sell their products to the province traders. They
make agreements with village heads or zone heads who appoint actual village buyers
to collect the product from villagers.
Some district traders seem to be able to sell their products directly to buyers outside
the Province, e.g. a trader from Khoun district sells a number of medicinal plants to
Vietnamese buyers in neighboring Huaphan district. Consultants could not obtain a list
of all district traders. Table 8 presents a list of traders met in each district.
Table 10: List of district NTFP traders met in Xiengkhouang Province
No
Name
Telephone
Location
Products
1
Ms. Chita
020-2423499
Khoun district
mak tao, haem
2
-
Ban Sang King, Khoun
medicinal plants
3
Mr. Kaikeo
Mr. Boua Ya
Xiong
Ban Songsiang, Khoun
mak tao, haem
4
Mr. Sengchan
Ban Mai, Khoun
vai thoun
4 Mr. Po Ou
020-5976411
Ban Chomthong, Kham
orchids, pak si din
(Source: interviews with province and district traders, November 2006)
At village level, usually one or two village buyers collect the production of their fellow
villagers to sell to the district traders. They usually obtain a commission of 100 kip/kg
for this effort.
2.6 Government systems regulating NTFP production and trade
NTFP Production and trade in Xiengkhouang Province are governed by at least three
departments:
(1) Province Agriculture and Forestry Office (PAFO)
(2) Province Industry and Trade Office (PITO)
(3) Province Finance Office (PFO)
Each department issues a number of permits and collects a number of taxes and fees
related to NTFP trade. These are based on regulations issued by the respective line
Ministries to which each department belongs. The diagram below shows the main
documents issued by each department with regards to NTFP trade (see figure 1).
In the case of trading NTFP without quota, the DAFEO will issue a similar letter of
permission for the volume trade, but there is no need to register as a company or pay
quota fees up front.
Mission Report: Governance and NTFP, January 2007
18
Figure 1: Main permits needed for NTFP trade with quota (with prices for “mak tao” fruits)
PAFO:
1. Letter
permission for
the volume of
quota, thamniem
fee 100.000150.000 kip/time
(about 15 days)
2. Letter allow of
NTFP harvesting
25.000 kip/
letter (stamping
fee)
Trade and Commerce:
1. Quota fee and setting for
the NTFP price. (tamniem
fee 15.000 kip/time)
2. Registration trader in NTFP
trading. Service fee 14.000
kip/time
- Stamp fee 8.000 kip/time
Finance Department:
1. Collection Quota
tax follow from
the calculate and
price from the
PITO.
- Quota tax 400
kip/kg
(Maktao)
- Service fee
50.000
kip/time
(Source: Interviews with traders and province/district officers, Xiengkhouang, November 2006)
The price of the quota depends on a negotiation between the Province Commerce
Department and the traders. There seems to be no direct relation between the quota
price, the volume and the farmer price (see table 9 below).
Table 11: Price of quota, farmer price and volume of four products
Product
Quota price
Farm gate price
(kip/kg)
kip/kg
mak tao
sweet palm fruits
400
2,200
kheua haem
medicine vine
200
3,000
dok kaem
broom grass
40
1,500
po sa
paper bark
40
2,500
(Source: Interviews with traders and province/district officers, Xiengkhouang, November 2006)
There seems to be little coordination between these departments, leaving NTFP
traders to deal with a complex and time-consuming regulatory system. This “overregulation is seen as key issue by traders (see also section 3.4 below).
The tax system for NTFP can roughly be divided into two types:
A) Products with export quota at province level (products with big volume, e.g.
“mak tao”, dok pheung, kheua hem.
B) Products without province quota (small volume) e.g. pak khoud, nor mai hok,
mak neng.
Figure 2 below gives an example of system A for “mak tao” palm fruits. Traders have
to register their company and pay the quota fee over the entire amount of their quota
in advance. Their “akone” or income tax is calculated as 10% of their quota fee, not of
the real price of the product. The total of taxes in this chain amounts up to 940 kip/kg.
The tax rate would seem to be very high (47%) compared to the farm gate price of
2000 kip/kg.
Mission Report: Governance and NTFP, January 2007
19
However, traders have two ways of compensating for this high tax rate. Firstly for
every 1 kg registered in the quota, 2-3 kg may actually be traded. That brings the tax
rate down to 16% of the buying price. Secondly, traders mix the palm fruits with water
before sending them out of the province, adding 0,5 kg of weight to each kg of dry
fruits. The actual rate of taxation thus becomes more like 940 kip over 4.5 kg of wet
fruits, sold at 3,500 kip (total 15,750 kip), or 6% of the selling price.
Figure 2: Chain of fees for "mak tao" palm fruits, a product traded under quota
Village tax:
100 kip/kg
(Maktao)
Zone tax:
District tax:
40.000 kip/t or
40 kip/kg
3. Akone 10% of value of
buying quota 400 kip/kg=
4.
Nearly 10 checking points from
village to Vientiane factory:
Each checking point is paid
About 30 kip/kg, total 300 kip/kg
40 kip/kg
Boulana 30 kip/kg
Province tax:
1. Buying quota 400 kip/kg
2. Check volume for the
track 30 kip/kg
(Source: Interviews with traders and province/district officers, Xiengkhouang, November 2006)
While it seems that traders under the quota system have found ways to reduce the tax
pressure, the quota system has several weak points:
 The complex system of permits is time consuming for traders
 The quota figures are not based on any assessment of the NTFP resource
 The quota does not have any positive effect on NTFP resource management
 The quota system seems to give a low tax revenue rate to the Government
 Difficult to check how much of all scattered tax returns to Government coffers
System B, for smaller volume products is illustrated by the case of “pak khoud” fern
stems exported from Khoun district to Vietnam (see figure 3).
Figure 3: Chain of fees for “pak khoud” fern stems, traded without quota
Village tax:
100 kip/kg (pak
khoud)
Zone tax:
40.000 kip/t or
40 kip/kg
District tax:
5. Akone 10% of value of
real price of 3000
kip/kg= 300kip/kg
6. Boulana 30 kip/kg
Nearly 10 checking points from
village to Vientiane factory:
Each checking point is paid
About 30 kip/kg, total 300 kip/kg
(Source: Interviews with traders and province/district officers, Xiengkhouang, November 2006)
Mission Report: Governance and NTFP, January 2007
20
In this case, the trader does not have to pay any taxes at province level, only at
district level. He or she does not have to register as a company and he or she does not
have to pay quota fees. However, the “akone” or income tax is now applied to a rate
of 10% of the actual price of the product.
The sum of all taxes in the case of pak khoud is 770 kip/kg. Compared to the farm
gate price of 3,000 kip/kg, this constitutes a tax rate of 26%. One could argue that
smaller traders without quota are less able to reduce the tax rate on their products
than their colleagues who deal with bigger quantities. Similar to the quota system,
this district level system does not give much incentive to village NTFP collectors to
manage their NTFP resources in a sustainable way.
Looking back at this rather complex regulatory system, the question remains what
would constitute an effective mechanism for tax revenue collection. The total revenue
from taxes over NTFP trade is estimated to be perhaps 6% of the total export value, or
778 million kip ($77,800) for the whole Province. It is not clear to what extent this
income is applied to improve services to the NTFP sub-sector.
By adopting a simplified, one-stop-shop mechanism, not based on “quota” but on
actual amounts and prices, the Government might increase its tax revenue from the
NTFP sub-sector by 20% or more. More efficient tax and permit systems may also allow
the sector to grow quicker, which would also increase the basis for tax revenue.
Finally, many traders observed that the situation in Xiengkhouang Province seems to
be more complex than in any other province. Traders frequently remarked that the
NTFP trade regulation system in Vientiane Province is much more simple and straight
forward. Consultants were not able to visit Vientiane Province to check this. Traders
recommended that Province officials from Xiengkhouang Province might benefit from a
study tour to Vientiane Province and other Provinces to learn about their NTFP
regulatory systems.
2.7 Future outlook of NTFP markets in Xiengkhouang Province
This section gives a short overview of the market outlook for key NTFP in
Xiengkhouang Province, based on interviews with traders. Details for each product are
given in the annex on product profiles.
Table 12: market outlook for promising NTFP products
Product
“mak tao”
palm fruits
A: Products that can be developed immediately with limited support
Weaknesses
Strengths
Opportunities
-supply is shrinking due
-good, stable market
- increase production by
to fires, uncontrolled
-easy to plant or
25% per year through
slash-and burn
protect existing stands. better management of
- 20% of produce is
Trees take 5-10 years to existing stands.
rejected at factory due
grow, produce 2 years
Communities can agree
to rotting, because of
and then die. One tree
on rules to do this.
poor processing in
can produce 60-70 kg.
-reduce losses through
forest and slow delivery - present road network
better harvesting and
to factory
would allow faster
processing in forest,
delivery of product to
cooler storage and
factory
faster delivery time
from forest to factory.
Mission Report: Governance and NTFP, January 2007
21
“mak nod”
passion fruits
“nyan pek”
pine resin
“po sa” paper
mulberry
-little extension, few
nurseries producing
planting materials
- for good results,
farmers may have to
invest in drip irrigation
systems
- so far dependent on
one buyer only
-market not well
understood, nobody
came to buy for over 15
years
-depends much on
existing trees, planting
new trees takes 15
years before tapping
can start
-market not yet sure
-raw material rather
cheap, handicraft
industry depends on
rapidly changing fashion
of overseas clients
“dok kaem”
broom grass
-low price
-laborious process of
beating the seeds out of
the grass flower
“mak naeng”
cardamom
-unstable market
-poor product quality
due to problems with
drying during wet
season
“mak kho”
chestnuts
-low price, unstable
markets
-little processing or
packaging, quality
control
-strong market demand,
good price
-easy to plant, can be
harvested after 6
months, grows well in
this climate
- fruits are processed
into bottled juice with
long shelf life
- trees are already
there, only need to be
tapped
-tapping technique is
simple
- one tree can be
tapped for 50 years or
more
-could provide new
income for hundreds of
families within one
year, thousands of
families on the long run
-natural resource is
there, easy to plant
more, you can harvest
within 1 year after
planting
-markets seem to be
good in nearby
provinces
-plenty of natural
resource
-grows back every year
-potential for home
industry binding brooms
-plenty of natural
resource
-can be planted easily,
takes 3-4 years to
establish, gardens can
be used for 50 years or
more
-low volume, high value
-great demand in China,
Korea
- Good demand
- Resource is
regenerating well
- easy to store over a
longer period
-traders need to be
brought to the province
-once market is
established, it could be
a good income raising
activity for thousands
of farmers
Mission Report: Governance and NTFP, January 2007
-could provide a stable
income for thousands of
families, if a stable
marketing system could
be developed
- finding a more
efficient processing
technique could deliver
more income to
thousands of families
-with more efficient
drying facilities and
more stable market
linkages to Korea and
China, cardamom could
provide good income
for thousands of
families
- could become a
“niche” product with
proper packaging,
labeling and marketing
22
Product
“pak koud”
ferns
“pak si din”
roots
“nor mai”
bamboo
shoots
Various
medicinal
plants
B: Products that need medium term support for development
Weaknesses
Strengths
Opportunities
-Quickly depleted when -good market in China
-research needed to
harvested commercially - grows well on poor
cultivate these ferns on
-nobody has tried to
soils with low pH that
abandoned lands with
plant ferns so far
cannot be used
low soil fertility
otherwise
-grows in 2-3 years
-Quickly depleted when -good market
-feasibility studies
harvested commercially -easy to grow
needed to cultivate
-nobody has tried to
-seems to grow
these roots
pak si din so far
everwhere
-low price
-abundant resources
- more efficient
-vegetable with very
-good market
transport, cool storage
short shelf life (4-6
could improve the
days)
profitability of this
-seasonal supply only
value chain greatly
-general lack of
-Strong market in
Lao should develop
knowledge on the
China, Korea
research units who will
markets of these
-Lao could become the
know the markets of
products
niche market producer
these plants
of these products
C: Products that need long term support for development
Weaknesses
Strengths
Opportunities
-rapid depletion from
-strong world market
-pilot projects could
the wild
demand
start a chain reaction of
- large canes take 15-20 -market pressures for
big rattan cane
years to grow
certified, sustainable
plantations with help
production
from big investors
“dok peung”
-commercial harvesting
- very good price, good
A low-cost laboratory
orchids
causes orchids to
market (China)
for in-vitro
become extinct quickly
- Laos still has a great
multiplication (like in
- only slow propagation
reservoir of wild orchid
Thailand) could turn
methods are applied so
genetic resources
the Lao orchid industry
far
into a multi-million
dollar business
“kheua haem” -low price
-strong market in
Feasibility study could
vines
-rapid depletion from
Vietnam, Laos
indicate the potential
forests by over- cost-effective
for cultivating this plant
harvesting
medicine against
commercially, minimum
-it takes 7-10 years to
intestinal infections
price level, technical
grow to harvestable
-could easily be
support needs etc.
size
cultivated
“hed vai”
So far not possible to
-very high price, good
Technical research into
mushrooms
cultivate these
export potential
the growing habits of
mushrooms outside
this mushroom might
their natural habitat
identify ways to
increase production
(Source: Interviews with traders and province/district officers, Xiengkhouang, November 2006)
Product
“vai thoun”
big rattan
Mission Report: Governance and NTFP, January 2007
23
3 Problems of farmer producers and traders
3.1 Negative trends in NTFP availability
In all villages where district staff performed an RRA analysis, villagers reported on the
trends in availability of NTFP. A summary is presented in table 9 below. Most of the
higher priced products are suffering from rapid depletion (“dok peung” orchids,
“kheua haem” vines, “ketsana” agarwood). This problem does not affect all products,
some have a very gradual decline (e.g. “mak tao” palm fruits, the largest export
product). The supply of some products is stable (e.g. “mak neng” cardamom). One
product, “mak kho” chestnuts, used to be depleted but is now seen to be recovering,
as people do less shifting cultivation, allowing oak trees on which the nuts grow to
come back.
Table 13: Trends of NTFP according RRA surveys in 8 villages, November 2006
Trend
Rapid depletion
Slow depletion
Stable
Get better
Typical
Products
Orchids,
ketsana, kheua
hem, kheua
koud, pak si din
Mak tao, mak
khene, pheuak
meuak, nor mai
Mak neng, Dok
khaem, Po Sa
Mak ko
Reasons
High price, all plants are
taken, no regeneration
Resource reduced by
shifting cultivation
1-harvest fruits only
(cardamom)
2-growing back quickly
(khaem, po sa
Reduction of shifting
cultivation, trees grow
back
Solutions
Forbid wild
harvesting,
campaigns to
promote nurseries
and planting in
gardens
Improved
management, plant
in gardens
No problem for the
resource, promote
marketing
Promote
regeneration by
more control of
shifting cultivation,
promote marketing
(Source: RRA surveys by district officers in 8 villages, Xiengkhouang, November 2006)
3.2 Low prices, few options to add value by improving product quality
Another problem mentioned by village collectors is the low price of NTFP. The causes
are:
 lack of buyers and lack of competition between buyers at village level
 poor product quality, lack of grading or quality control
 very few examples of adding value by processing
Only a few examples were observed of addressing issues of product quality. A good
example is the “mak nod” passion fruit juice processing plant of Mr. Sengphet. With a
few basic machines in a shed behind his house, Mr. Sengphet can transform fruits with
a shelf life of a few days into bottled juice with a shelf life of more than a year. All his
produce is exported to France, the customers cannot get enough of this product. At
Mission Report: Governance and NTFP, January 2007
24
present he produces around 5,000 liter from 20 tons, he estimates he could easily sell
50,000 liters, if farmers could deliver 200 tons of passion fruits per year.
Traders provide special plastic bags for transporting “mak tao” fruits, which are boiled
and cut in the forest. These bags keep the product cleaner than rice bags, they cost
1,000 kip. Yet there are still high losses of harvested “mak tao” fruits due to spoiling
during transport. The product is often kept for many days in hot places. This issue
could be addressed by a more efficient transport system, delivering the product faster
to the factory.
An example of adding value by processing is the drying and wrapping of orchids into
little coils. This adds a lot of value, but it is a very labor intensive process (see case of
Mr. A Ming, in the annex with interviews with traders).
There is a great need for simple processing techniques such as:
 Effective drying ovens for products such as “mak neng”, cardamom and a whole
range of other medicinal plants and barks
 Threshing machines for products such as “dok kaem” broom grass
 Milling machines for “kheua hem” vines, “peuak meuak” bark
 Pulping machines for “po sa” paper bark
 Portable presses to press “mak tao” endosperms out of the fruits
 Cool and clean storage sheds in all zones for products like “mak tao” fruits
Such technologies could scale up the income generation from NTFP immensely. The
Province Industry and Trade Department should have a small industrial research unit
which could find and attract suppliers of these types of technologies in surrounding
countries.
3.3 Limited access to markets, market information and support services
Village collectors have very limited access to market information. Typical examples
were found in the Pak Kae zone of Nonghet district, where road side traders offer
“peuak meuak” bark and “mak neng” cardamom for sale for a very low price: 1,000
kip/kg for “peuak meuak” and 25,000 kip/kg for “mak neng”. These traders find it
difficult to sell these products. In the province of Oudomxay, these products are
exported to China for a very good price. The price of peuak meuak in Oudomxay was
4,000-6,000 kip/kg at the farm gate, 6,000-8,000 at the Chinese border (Vernon, 2006).
The price of “mak neng” has risen to 70,000 kip/kg there this year (Wessel Huisjes,
personal information).
Similarly, in Poukoud district, one village could easily produce 20 ton of “po sa” paper
mulberry bark, but they have not found any buyers. Yet in nearby Luang Prabang
Province, this product is bought in big quantities for a price around 2,000-2,500 kip/kg
at the farm gate and 3,500-4,000 kip/kg at the Thai border (Vernon, 2006).
A third example is the case of the Chinese mining engineer, Mr. Xheng Hong, who
identified a big potential for pine resin (“rosin”) tapping in Xiengkhouang. Pine resin
tapping did occur in the province a very long time ago, but there was no market for
this product for many years. Mr. Xheng Hong claims that this product is an important
component in the production of electrical equipment, e.g. computer mother boards.
He has a buyer in China, he registered as a new business in Xiengkhouang and will
Mission Report: Governance and NTFP, January 2007
25
operating in December 2006. He expects to produce 1,000 ton in 2007. This case begs
the question, why no Lao entrepreneur ever came up with the idea to start this type
of business. Mr. Xheng Hong obviously has the advantage of a good understanding of
the markets for industrial goods in China.
The Province Department of Industry and Trade should have a small market research
unit who collects and disseminates this type of market information throughout the
Province.
3.4 Over-regulation
The overriding problem mentioned by NTFP traders is the issue of “over-regulation”,
the large amount of complex Government permits and taxes they have to deal with.
The complexities of the quota system were explained above (see section 2.5).
Besides having little effect on natural resource management, the quota system seems
to be not particularly effective in generating tax revenues for the Government. It’s
main benefit seems to be that it allows for a large group of province and district
officers to share in collecting tax revenue.
The main longer term problem with the system is that it makes it difficult for local
entrepreneurs to make the jump from collectors of seasonal products to regular
producers of large-scale volumes of products on a basis of regular demand (John
Connel, personal communication).
Suppose that an overseas buyer would like to buy not just 5,000 liters of passion fruit
juice per year, but 5,000 liters per month, or per week? This can only be done if the
local producer can ship out his products without delay, keeping to tight deadlines,
every week, every month. In that case, the trader cannot be waiting for many days to
get all the permits from so many offices for each shipment. A more efficient trade
permit system would seem to be urgently needed. The same also applies to the rapid
growth in maize production and in animal production.
The time consuming nature of the present system is also likely to deter large scale
investors from investing in more efficient transport, storage and processing
installations in the Province.
There is an urgent need for a review of the present trade permit system. The GPAR
project would seem well placed to initiate and support such a process.
Mission Report: Governance and NTFP, January 2007
26
4 Vision for the future development of the NTFP sub-sector
4.1 Government strategies and expectations
The key Government strategies are summarized in the National Socio-Economic Plan
(NSEDP), they are based on poverty alleviation, adoption of sustainable farming
practices and a pro-market approach based on niche markets for agricultural and
forestry products (CPI, 2006).
To realize these strategies, the Government promotes private sector engagement and
development of farmer organizations in clusters of villages. The Lao Extension Strategy
has been adopted as the leading policy document to guide this process. Capacity
building of skilled technical staff to work in extension, in the private sector and as
self-employed small entrepreneurs will be essential for all these strategies to succeed.
Non-Timber Forest Products are a priority sector in the Forestry Strategy 2020, which
is the leading policy document for the forestry sector (MAF, 2004). This strategy
contains several useful guidelines for the organization of sustainable NTFP
management by clusters of villages:

Existing legislation secures villager’s access to NTFP and customary use rights are
recognized in the Forestry Law and elaborated in MAF Decision 54/1996 and MAF
Guideline 377/1996. PAFO and DAFO have the mandate to ensure compliance and
also to ensure that uses in conflict with customary rights, such as slash and burn,
forest fire and fish traps are limited.

Additionally, villagers are exempt from natural resource taxes and NTFP sale is
permitted provided that villagers form groups or associations for commercial
collection and that activities follow DAFO approved management plans.

Regulations for NTFP production and marketing must balance marketing
knowledge with resource sustainability. Methods for harvesting level setting and
marketing, which are scientifically based on resource sustainability as well as
based on competitive market mechanisms, need to be developed in stead of the
current system mostly depending on demand.

Currently, there are few government officials responsible for NTFP development
and these are split among a number of agencies with limited capacity, in terms of
both human resources and equipment, to undertake the tasks required. Therefore,
implementation of policy regulating marketing and development of NTFP
resources will require substantial capacity building both within Government and
with respect to other stakeholders, including villagers, traders and
processors.(source: MAF, 2004).
From these general strategies, five key interventions seem to emerge:
 Organizing NTFP village enterprise groups
 Systems for sustainable management of NTFP in forests and fields
 Generating income from NTFP value chains
 Creating an enabling regulatory environment for NTFP enterprises
 Providing Government and private support services
Mission Report: Governance and NTFP, January 2007
27
4.2 Organizing NTFP village enterprise groups
Organizing NTFP enterprise groups at the level of clusters of villages is a key strategy
of the Ministry of Agriculture and Forestry. It has three key elements:
 It would allow NTFP producers to produce sufficient quantities set up to
negotiate effectively with traders
 It is the only level at which a forest with NTFP resources used by several
villages can be effectively managed, e.g. through zonal land use plans
 It provides an efficient basis for extension and exchange of market information
4.3 Systems for sustainable management of NTFP in forests and fields
Market production of NTFP can only be sustained if NTFP resources are well managed.
Village cluster groups should be given incentives and support for developing
sustainable forest management systems and land use plans by:
 Marking and mapping production zones
 Production plans with long term objectives
 Rules, regulations on forest use with clear fines for trespassers
 Forest use plans, rotational harvesting schemes, silvicultural practices
 Monitoring of resources based on verifiable indicators, checked by PAFO
 Rewarding clusters who manage forest successfully with tax incentives, as
prescribed in the Forestry Strategy 2020.
4.4 Generating income from NTFP value chains






Cluster leaders should be trained in market analysis and small enterprise
development skills, resulting in business plans to be implemented
District Trade Officers should be trained as trainers in market analysis and
small enterprise development skills
Diversifying production based on local strengths (“one village, one product”)
Stimulating exchanges between clusters of local innovations and solutions
Studying the potential of linking local production to larger value chains
Attracting outside investors and buyers to clusters of villages
4.5 Creating an enabling regulatory environment for NTFP enterprises



Reduce the complexity of NTFP permit and tax systems, work towards a “onestop-shop” solution
Move away from paid quota to individual traders to free quota for village
cluster enterprise groups who manage NTFP resources successfully
Train extension staff of both forestry and trade offices to become facilitators
of village cluster NTFP enterprise groups
4.6 Providing Government and private support services



Generating the support capacity at province level to collect, analyze and
disseminate information on value chains of NTFP and basic processing
technologies (trade research unit)
Set up a Market Information Systems (MIS) at the province and district trade
offices with direct links to village cluster groups
Develop Government support schemes to promote the opening of drying ovens,
clean packing mechanisms, cool storage and rapid transport by entrepreneurs
Mission Report: Governance and NTFP, January 2007
28
5 Training needs of extension staff
5.1 Training Needs Assessment
District staff from the forestry and trade departments of seven districts joined a
workshop on 24-27 October 2006. They were asked to discuss their future roles, duties,
required skills and training needs. The outcomes of this discussion are summarized in
table 12.
It would seem that district staff have difficulty to discuss their roles and duties in the
same terms as the strategy of the Ministry. They find it especially difficult to
distinguish between knowledge and skills, they could not identify any skills required to
do their job well.
Table 14: District officers ideas on roles, duties and training needs, October 2006
Organization
1 Province
Agriculture
Roles, duties
1 Management and Conservation
of Forest Resources
2 Monitoring of resource
3 Extension, training in good
forestry methods
2 Province
Industry and
Commerce
1 Controlling and Managing
Properties
2 Finding markets
3 Checking that companies follow
their contracts
4 collecting market and price
information
5 sending market information to
district
1 Monitoring and calculating tax
income
2 Support income generation for
the Province Government
1 Forest management
2 Checking trade in forest
products
3 Extension
4 Monitoring and checking forest
condition
3 Province
Finance
4 District
Agriculture
5 District
Industry and
Commerce
6 District
Finance
Mission Report: Governance and NTFP, January 2007
Skills required
-knowledge on all
these topics (it is
still weak)
Training needs
1 techniques of
forest management
2 forest survey and
monitoring methods
3 knowing the use of
all NTFP
1 Quality control
methods
2 knowing the uses
of NTFP
3 methods of finding
markets
4 defining clear
roles of each
organization
Same as Province
Agriculture above
Same as Province
above
Same as Province
above
29
Most of the roles identified by the district staff were in the realm of management of
resources and control of trade. They did not mention any roles in terms of supporting
village cluster groups, enterprise development, or providing other support services.
Most of the training needs that district staff themselves could identify are phrased as
technical skills. They did not mention any social, economic of extension skills. They
also could not differentiate between the roles of the Province and the Districts.
These issues may need to be addressed by more training and awareness raising
workshops to be organized by the Ministry. GPAR could assist in this process.
5.2 Roles and responsibilities of extension staff
Based on the Government strategies and the vision for NTFP development outlined in
chapter 4 above, the main new role for extension staff will be to support NTFP
enterprise groups at village cluster level. This section outlines these key roles and
responsibilities as well as key competencies that would be required from district staff
to assume this new role.
For sustainable NTFP development, district staff needs to support the development of
NTFP enterprise groups at village cluster level. They should assist these groups to
develop strong leadership skills, to develop sound business plans and to develop
sustainable forest management systems.
To be able to do this, district officers should learn to strengthen group building
processes such as:
 Agreeing on the division of responsibilities within the group
 Conducting Participatory Rural Appraisals
 Setting goals, planning activities
 Decision making
 Organization, administration, implementation, (participative) monitoring,
evaluation and reporting.
Secondly, district staff should be able to support NTFP groups in developing successful
businesses:
 Initial selection of key products based on criteria
 Conducting resource surveys and market chain surveys for selected products
 Analyzing markets and identifying business opportunities
 Making a business plan
 Negotiating trade agreements with NTFP traders and companies
 Identifying trainers and learning new technical skills where appropriate
 Obtain financial support where necessary
 Implementing and monitoring activities
Thirdly, district staff should be able to support village cluster groups to develop sound
and sustainable management systems for forests and NTFP resources:
 mapping and delineating forests and other NTFP production areas
 develop use rules and regulations and enforce them
 design sustainable management regimes for key NTFPs and monitor them
Mission Report: Governance and NTFP, January 2007
30

assist village groups in obtaining tax incentives as a reward for sustainable
forest management.
5.3 Human Resource Development
Obviously all these new roles and responsibilities will require a lot of inputs from
district staff. The main departments to implement this work would be the DAFEO and
the District Industry and Trade Departments. How many people would be required and
how could their activities be funded?
In the case of the DAEO of Nonghet district, there are has 18 staff members (see also
the interview with Mr. Saikeulor, head DAFEO, in the annexes). Of these only 6 belong
to the Hmong ethnic group, which makes up 65% of the population of Nonghed district.
There are only 2 women among the 18 staff. The reason is that new recruits are
required to have a diploma in agriculture, most graduates from the university and
colleges belong to the Lao loum ethnic group. Of the 18 staff, 13 are extension
workers, 5 are administrative staff. The extension workers are still divided into
forestry officers, agriculture officers (crops and livestock) and irrigation officers.
There are only 3 forestry officers.
The district plans to have 17 village cluster groups for agricultural development. Only
five have been set up so far. District extension officers are supposed to move out and
be based permanently in the 17 clusters. The DAFEO estimates it would need at least
33 staff to service all these groups. None of the staff have received any skills training
to learn how to support cluster groups or provide extension services to them.
At the moment, forestry staff seem to do little else than the occasional checking of
illegal logging and collecting forestry taxes. Most of the GPAR activities and funding
seemed to have benefited the livestock and crops officers. GPAR could use some of its
funding to support district forestry officers to identify NTFP production and market
options and to guide the setting up of NTFP producer groups, using the methods
developed by the CIAT-SADU project. They would need some training support to start
this process.
It would also be good if the project could provide funding for young university or
college graduates to spend one year as volunteer staff with the district agricultural
office, to learn the ropes of extension work and to provide the district with much
needed extra man-power to set up producer groups.
Mission Report: Governance and NTFP, January 2007
31
6 Improving governance in the NTFP sub-sector: a draft work
plan for the GPAR project
6.1 General recommendations
GPAR could support the Province of Xiengkhouang in improving governance in the NTFP
sub-sector in four ways:
1: Building the capacity of district extension officers
2: Promoting linkages between NTFP enterprise development, sustainable
harvesting and conservation of biodiversity resources
3: Supporting the delivery of basic market information services
4: Promoting more rational, simplified and enterprise-oriented Government
procedures
More detailed recommendations for each of these four action areas are given in the
sections below.
6.2 Building the capacity of district extension officers
The main aim of GPAR support to NTFP extension and training activities would be to
assist district extension staff to learn how to become effective facilitators of NTFP
enterprise groups at the level of clusters of villages (“kum ban settakit”).

GPAR could support the production of Lao language training booklets for
district staff to implement the eleven step process proposed in this report and
use this as a basis for training extension staff.

GPAR could pilot a more frequent and recurrent extension training program for
district staff, linking training events to action in the field through regular
meetings, clear field assignments and frequent farmer exchange events. There
should be and easy system for advancing travel costs.

External expert trainers should be hired to guide this training process, they can
be sourced among forestry research institutes in Vientiane (e.g. NUOL, NAFRI).

The GPAR extension training program should involve district forestry officers,
they should become pioneers in the development of NTFP village enterprise
groups.

GPAR could have a small grant scheme to support temporary placements of
young graduates to work 3 years at sub-district level ($30 /person/month), at
least 2 person per district.

Key steps of a process for developing successful NTFP enterprise groups are
indicated in table 15 below. It is recommended that GPAR hires local
consultants from NUOL or NAFRI to develop training materials and a work plan
for each of these steps. The limited time available for this mission did not
allow for that to be done here.
Mission Report: Governance and NTFP, January 2007
32
Table 15: Outline of key steps for an NTFP extension training process
1 Setting up groups
2 Rapid Rural Analysis, selecting priority products
3 Resource survey
4 Market survey
5 Agreeing on forest management plan, use rules, regulations
6 Analyzing market data, writing business plans
7 Stakeholder workshop, agreements with traders
8 Technical training, securing financial support
9 Implement businesses
10 Monitoring and evaluation
11 Giving successful business groups tax reductions, quota waivers
For 2007, it would seem possible to start such a process in at least three districts,
targeting on at least one successful cluster enterprise group per district, partnering at
least 2-3 villages per cluster. In 2008 and 2009, the training model could be applied in
all districts, adding new clusters and expanding the number of villages per cluster.
A great number of extension staff would be required to assist village groups to take
these eleven steps. The GPAR project should focus not only on district forestry
extension officers but also on district industry and commerce officers. Additionally
some young graduates from university or college could be enrolled in a GPAR
supported apprenticeship program to live with village groups and support them.
Initial training workshops are needed to raise awareness among staff of their new roles,
as well as all the new knowledge, skills and attitudes required. New apprentices need
to be recruited. A set of skilled trainers needs to be identified, preferably at province
level, specialist trainers may also need to be hired from Vientiane.
Once all these players are in place, a system of monthly training events is proposed,
following the eleven steps of the village business group development process outlined
above, one step per month. Extension staff should develop clear work plans for
implementing each step during each training event. They should also be provided with
the means (tools, inputs, per diem) to actually put into practice what they have
learned. The GPAR project should set aside a specific support budget to this purpose.
To keep the entire process on track, it would seem advisable that the trainers keep
close contact with the activities in the field through regular field visits. Last but not
least, regular exchange visits should be held between NTFP enterprise groups to learn
from each others experience and monitor progress in a participatory manner
Mission Report: Governance and NTFP, January 2007
33
In short a number of capacity building activities would be required to support
extension staff to adopt their new roles of enterprise group facilitators:
 Workshops to raise clarity on roles and responsibilities of extension staff
 Recruitment of graduate volunteers
 Recruitment and training of trainers
 Monthly training workshops for extension workers
 Monitoring visits of trainers to sites
 Quarterly exchange visits between cluster groups
6.3 Promoting linkages between NTFP enterprise development,
sustainable harvesting and conservation of biodiversity resources

Training district commerce and forestry officers to support NTFP village groups
in analyzing markets, developing viable business plans, and implementing these.

Training forestry officers to support NTFP village cluster groups in developing
sustainable forest management rules, participatory land use planning, agroecological zoning etc.

Piloting new policies where village groups would be rewarded with tax
incentives, e.g. free export permits or village level quota, as a reward for
sustainable forest management and biodiversity conservation.
6.4 Supporting the delivery of basic market information services


Market Research Unit: Training existing staff of the Province Industry and
Commerce Department to set up and manage a small market research unit.
With support from a trade consultant, this unit should make at least one visit
per year to Vietnam, China, Thailand and surrounding provinces in Laos to
analyse value chains of selected products. The unit should produce regular
market updates on selected products, lists of names and telephone numbers of
traders.
Market Information System: the market research unit should supply
information to and collect information from district commerce offices,
commercial traders and village producer groups on a monthly basis. Various
systems for sharing information should be tested (newsletter, bulletin boards,
radio broadcasts). At least once per year stakeholder meetings should be
organized at the province level, to review and improve market information and
identify new issues and activities. Similar meetings should also be convened at
district level. Exchange visits between producer groups and traders should be
supported.
6.5 Harmonizing the regulatory environment

Tax and trade regulations review: A specialist in rural tax systems should be
hired to review the entire agricultural tax system and develop a number of
alternatives, based on principles of reducing tax burden and red tape to
citizens, increasing the revenue for the Government, transparent use of tax
revenue and applying tax revenues to improved delivery of services to citizens.
A number of workshops should be organized with senior staff of all departments
involved to use the specialist recommendations for adopting changes in the tax
collection system.
Mission Report: Governance and NTFP, January 2007
34

One stop shop strategy: Based on a review of the regulatory system, the GPAR
project should pursue the principle of “one-stop-shop” to assist the Province
Government in reduce the amount of documents required for NTFP traders and
to come to one central place where traders can get all their paperwork done in
one visit in a time-efficient manner. A consultant should develop such a onestop-shop system based on a consultative review of the present system,
followed by a number of workshops with heads of departments to agree on
adopting the new system.

Contracting policies: GPAR could support the Government in studying and
improving all types of contracts between producers, traders and investors.
Contract farming is becoming more prominent, but often farmers do not share
in the benefits. On the other hand, investors shy away from investing in the
NTFP sub-sector as they feel that contracts are not honoured or upheld.

Promoting ownership (“chao-ki, chao-kan”) by the Xiengkhouang Province
Government for all these proposed steps to improve governance in the NTFP
sub-sector:
o
Writing up and agreeing to an annual work plan
o
Assigning clear tasks and responsibilities for implementing the plan
o
The GPAR Project could support the Government in this by facilitating
several structured follow-up planning events over the next 2-3 months.
Mission Report: Governance and NTFP, January 2007
35
7 References
Anon. 2003 “National Population Census, Lao Peoples Democratic Republic”.
CPI, 2006 “ The Sixth Five Year National Socio-Economic Development Plan 2006-2010”
(NSEDP), Committee for Planning and Investment, Lao People’s Democratic
Republic, Vientiane, October 2006,
CRCWC, 2006 “Observations and Conclusions from Village Survey Data of the Christian
Reformed World Relief Committee (CRWRC) Xiengkhouang, April 2006”
Unpublished field notes.
GPAR Xiengkhouang, 2006 “Project Inception Report, April 2006”.
Connel, John G., 2006 “Assessment and Strategy for participatory planning”
consultancy report for GPAR, Xiengkhouang, February 2006.
Connel, John G. 2006 “Short consultancy on: Roadmap of activities and support
required, Review of proposal for agriculture extension activities in 2006 and
Issues and Options for Strengthening women staff in extension” consultancy
report for GPAR, Xiengkhouang, April 2006.
Foppes, Joost and Sounthone Ketphanh, 2004 “NTFP use and household food security
in Lao PDR”. Paper prepared for the NAFRI/FAO EM-1093 Symposium on
“Biodiversity for Food Security”, Vientiane, 14-10-2004.
Graaf, Martin de, 2003 “Technical Report No 1: Capacity Building”. Micro-Project
Development through Local Communities (MPDLC), Project supported by the
Commission, LAO/RELEX/1999/0030, July 2003
Hellberg, Ulli, 2005 “Development of Sustainable Supply Chains for NTFP and
Agricultural Products for the Northern Districts of Sayabouri Province, Lao PDR”.
IFAD/GTZ Programme RLIP – RDMA, Rural Livelihood Improvement Programme Integrated Rural Development in Mountainous Areas in Northern Lao P.D.R.
Programme. Results of a mission carried out 6 to 25 November 2005.
MAF, 2004 “Forestry Strategy to the Year 2020 (FS2020) of the Lao PDR”. Ministry of
Agriculture and Forestry, Lao People’s Democratic Republic, Vientiane, June
2004.
Phaengsinkham, Pheng, 1997 “A botanical survey of timber and non-timber forest and
garden products”. Report produced for the NAWACOP project.
Vernon, Eddie, 2006 “Marketing Analysis Report”. Oudomxay Community Initiatives
Support Project OCISP, Component: 2: Agricultural Development and Natural
Resources Management. Department for Planning and Cooperation, Oudomxay
Province. Project Code: IFAD Loan No. 586LA, UNOPS No. LAO/02/F01, LD No.
LAO/412, January 2006.
Mission Report: Governance and NTFP, January 2007
36
Annexes
Annex 1: TOR of the mission
Approach to strengthen extension approach to promote NTFPs
Title:
NTFPs
Project:
Location:
Duration:
Technical assistance for strengthening extension for promoting
GPAR Xiengkhouang – Strengthening Public Administration for Poverty
Reduction and Equitable Growth (UNDP 00041021)
Phonsavanh, Xiengkhouang Province, Lao PDR
About 26 days
Introduction
The Governance and Public Administration Reform project in the Xiengkhouang
Province (GPAR Xiengkhouang) aims to strengthen the operational capacities of
government institutions at local levels and to contribute to poverty reduction and
economic growth. GPAR Xiengkhouang is jointly supported by the Swiss Agency for
Development and Cooperation (SDC), the Netherlands Development Organisation (SNV)
and United Nations Development Programme (UNDP).
The project aims to strengthen the operational capacities of selected government
institutions at provincial and district levels of administration to:
a. respond to citizen’s demands and needs, through inclusive participatory planning
and priority setting and support economic development, thereby ensuring equal
access to public services and decision making for women and men of all ethnic
groups
b. implement decisions and reach provincial and district objectives in a transparent
and coordinated manner, and
c. monitor progress in service delivery
The project commenced activities from September 2005. Inception activities have
been completed and project implementation has commenced. Activities for
strengthening agriculture development commenced in February 2006.
Requirements
The project envisages substantial strengthening market oriented agriculture is a key
priority for the project. One of the key market oriented activities in the sector is in
relation to NTFPs. While this sub-sector has not been directly addressed in the project
document, discussions at the provincial level indicated that it would be a thematic
area where substantial benefit or impact would arise. Given the profile of expertise
available within the project at this stage, it will be useful to have the approach to
extension to promote NTFPs developed with the help of additional short term
technical expertise in this thematic area.
Objectives for the Study
The technical assistance is expected to contribute to assessment and making
recommendations for strengthening extension services for promoting NTFPs within the
Mission Report: Governance and NTFP, January 2007
37
framework of the GPAR project in Xiengkhouang. The consultancy will have three main
objectives:
 to benchmark the current status of NTFPs, benefits arising from the same and
constraints experienced in promoting and regulating these products
 to examine extension practices in operation now, to promote and support NTFPs,
and explore how they could be strengthened
 to develop with technical assistance a suitable operational plan for extension
support in relation to NTFPs
Specifically, the study will need to:
 map the range of NTFPs being collected, produced and marketed in the province
 assess the specific constraints experienced by farmers working with NTFPs
 identify policies or practices, if any, that support or constrain development of
NTFPs
 indicate capacity gaps in PAFO/DAFEOs for providing extension related to NTFPs
 suggest practical steps that can be taken up to strengthen extension related to
NTFPs
Deliverables from this mission
The team will deliver:
a. detailed work plan and schedule for this mission
b. draft of findings and recommendations
c. draft report at point of debriefing
d. final report on assessment and suggestions.
The above need to be part of a draft report to be submitted and presented to the
stakeholders, including relevant provincial authorities and UNDP before concluding the
mission. A final Report is to be presented in an agreed time frame.
Work Plan
On commencing the assignment, the team will be briefed by the UNDP Programme
Officer at Vientiane. Upon arrival in Xiengkhouang, the Team will prepare a detailed
work plan after consultation with the Senior Technical Advisor for approval by Project
Management.
In order to achieve the above, the study team is expected to:
 gain clear understanding of the project document
 have detailed briefing and discussion with the GPAR Project and the Provincial
Agriculture and Forestry Office
 conduct exploratory workshops with staff of agriculture development offices and
farmers in collaboration with PAFO
 undertake field visits at provincial and sample districts
 discuss preliminary findings with a focus groups of stakeholders
 provide draft of findings and recommendations to the GPAR project, prior to
debriefing
 provide a detailed report within agreed time frame
On completing the assignment, the Study Team will debrief the project and submit the
draft report prior to departure from Xiengkhouang. This will be followed by a
debriefing to the UNDP Programme Officer at Vientiane.
Mission Report: Governance and NTFP, January 2007
38
Study Team
The study will need to be carried out by a two member team consisting of an
international consultant as Team Leader and a national consultant as Team Member.
The international consultant (Team leader) should have the following knowledge
 Direct regional and international experience in working with NTFP promotion
 Adequate exposure to extension approaches (local experience would be
desirable)
 Proven capability in assessing and suggesting practical measures in relation to
agriculture sector
 Capability in process facilitation
 Strong oral and written English communication skills,
 Track record in working collaboratively with a number of different
stakeholders.
 Sound judgment, flexibility and adaptability, cultural sensitivity.
The national consultant should have a substantive expertise in
 Good knowledge of organization and functioning of agriculture sector in Lao PDR
(previous experience in Xiengkhouang would be very useful)
 Experience in working with NTFP related development interventions in Lao PDR
 Track record in working with extension services
 Previous experience of collaboration with foreign technical assistance and
communication facilitation between nationals and international consultants;
 Strong oral and written English and Lao communications skills, and ability to
translate documents and interpret communications from Lao to English and from
English to Lao
 Flexibility adaptability and ability to be a strong team player;
The Team members will have collective responsibility in any reports and other outputs.
Duration of the Mandate and Work Plan for the Study
The Study will complete this work through a mission of approximately 4 weeks
duration at Xiengkhouang.
Reporting Relationship
The Study Team will work in close coordination with the Senior Technical Advisor and
report to the NPD/NPM. While on mission in Xiengkhouang, the project support team
will assist with logistics (arrange transportation, set up meetings, etc.). The Study
Team will work closely with counterparts in relevant Offices of the Provincial
Administration in the course of the mission. The Study Team will meet with the
concerned Programme Officer at UNDP at the start for a briefing meeting and for a
debriefing on completion of the assignment.
Assumptions and dependencies
The Study Team is subject to all applicable regulations on working conditions for
international Advisors working for GPAR Xiengkhouang. The GPAR project and offices
of departments and districts observe a five day working week, from Monday to Friday.
GPAR Xiengkhouang (UNDP 00041021), Project Support Unit, Phonsavan, Xiengkhouang
April 24, 2006
Mission Report: Governance and NTFP, January 2007
39
Annex 2: Itinerary of the mission
First visit 11-13/10/06: Getting to know the project, making plans
Wednesday 11/10/06: Travel by air to Xiengkhouang late afternoon
Thursday 12/10/06: Introduction meeting with GPAR management, reading documents,
meetings with heads of Province Trade, Agriculture and Finance Departments
Friday 13/10/06: Prepared detailed work plan for intro workshop with district staff,
travel back to Vientiane in the afternoon.
Second visit 21-28/10/06: Training workshop with province and district staff
Saturday 21/10/06: Travel by air to Xiengkhouang late afternoon
Sunday 22/10/06: Preparing flipcharts, instructions, overhead presentations
Monday 23/10/06: Continued preparations, check venue
Tuesday 24/10/06: Opening workshop, introductions,discussions on training needs
Wednesday 25/10/06: continued discussions, training on RRA tools
Thursday 26/10/06: training on RRA tools, planning field work
Friday 27/10/06: reviewing workshop results, preparing follow-up work
Saturday 28/10/06: visits to NTFP traders, flying back to Vientiane
Third visit 08-18/11/06: Field interviews with NTFP traders and Government staff
Wednesday 08/11/06: Travel by air to Xiengkhouang late afternoon
Thursday 09/11/06: Organizing advances and instructions for field work to districts
Friday 10/11/06: Interviews with 6 NTFP traders in Phonsavanh city
Saturday 11/11/06: Interviews with 4 NTFP traders and producers in Phonsavanh
Sunday12/11/06: Travel to Khoun district, interviewing 2 traders there
Monday 13/11/06: Travel to border Thathom district, interviewing mak thao producers
Tuesday 14/11/06: Travel via Kham to Nonghet district, interviewing traders
Wednesday 15/11/06: Interviewing traders in Nonghet
Thursday 16/11/06: Interview DAFEO Nonghet, maize dryers in Kham
Friday 17/11/06: Interview trader in Paek (Phonsavanh) start writing report
Saturday 18/11/06: Visit pine resin and agarwood traders, fly back to Vientiane
Fourth visit 04-08/12/06: Finalize report, discuss recommendations with GPAR
Monday 04/12/06: Travel by air to Xiengkhouang late afternoon
Tuesday 05/12/06: Writing report, discussions with GPAR team
Wednesday 06/12/06: Writing report
Thursday 07/12/06: Writing report
Friday 08/12/06: Writing report, fly back to Vientiane
Fifth visit 17-19/12/06: Present findings in stakeholder workshop
Thursday 14/12/06: Travel by car to Xiengkhouang
Friday 15/12/06: Facilitating wrap-up stakeholder workshop
Saturday 16/12/06: Travel back to Vientiane by car
Mission Report: Governance and NTFP, January 2007
40
Annex 3:
Agenda, list of participants and instruction sheets
NTFP workshop for district staff, 24-26/10/06
Governance and Public Administration Reform (GPAR) Project
Agenda for a Workshop on:
“Rapid Appraisal of the potential and constraints of Non-Timber Forest Products
Development in Xiengkhuang Province”,
Paek District, 24-26 October 2006 (3 days)
Day 1:
Item
Registration of participants
Opening remarks
Agenda and objectives of the workshop
Understanding Non-Timber Forest Products
Instructions for preparing posters
Working in district groups and one province group:
mapping out our NTFP knowledge
(a) for district staff
 list and rank NTFP in your district
 discuss potentials for market development
 key constraints for NTFP production and trade
(b) for province staff
 steps in starting and registering new business
 steps and required documents in NTFP trade
 rules for managing NTFP resources by
communities
 training needs of government staff to better
support the NTFP sub-sector
Coffee break
Presenting posters by 8 districts, 15 minutes each
Lunch break
Presenting posters by districts (continued)
Discussing province poster: 5 minutes presentation and
15 minutes discussion on each of the 4 questions
 steps in starting and registering new business
 steps and required documents in NTFP trade
 rules for managing NTFP resources by
communities
 training needs of government staff to better
support the NTFP sub-sector
Tea break
Discussing province posters (continued)
Time
8.00-8.30
8.30-8.45
8.45-9.00
9.00-9.20
9.20-9.30
9.30-10.30
Summary, closing of the day
15.45-16.00
Mission Report: Governance and NTFP, January 2007
10.30-10.45
10.45-12.00
12.00-13.30
13.30-14.15
14.15-15.00
15.00-15.15
15.15-15.45
Who
Sithone
Phongxiong
Joost
Phongxiong
8 District
groups and 1
province
group
Each district
Each district
Facilitators:
Sithone,
Joost
Sithone,
Joost
Sithone
41
Agenda GPAR NTFP workshop 24-26 October (continued)
Day 2:
Item
Instructions for collecting secondary data
Coffee break
Instructions (continued)
- Planning data collection work
Lunch break
Learning how to use 8 RRA tools for village data
collection on NTFP
1 Wealth ranking of families in a village
2 Listing of NTFPs according to use
3 Ranking of NTFP
Tea break
4 Calendar of NTFP and farming work over the year
5 Trends in NTFP resource and markets
Questions from participants, summary of the day
Time
8.30-10.30
10.30-10.45
10.45-12.00
Who
Joost
Joost
12.00-13.30
13.30-14.00
14.00-14.30
14.30-15.00
15.00-15.15
15.15-15.45
15.45-16.15
16.15-16.30
Joost
Phongxiong
Joost
Time
8.30-9.00
9.00-9.30
9.30-10.00
10.00-10.15
10.15-11.30
11.30-12.00
12.00-13.30
13.30-13.45
13.45-15.00
15.00-15.15
15.15-15.55
Who
Phongxiong
Joost
Phongxiong
15.55-16.00
Sithone
Phongxiong
Joost
Phongxiong
Day 3:
Item
6 Rapid NTFP Problem Analysis
7 Participatory mapping of NTFP collection areas
8 Income and Expenditure ranking
Coffee Break
Instructions how to write summary NTFP RRA report
Wrap-up, questions from participants
Lunch break
Instructions for preparing field plans
District teams preparing plans for field work
Tea break
Short presentations of RRA work plans (5 minutes per
district, 8 districts)
Closing remarks
Mission Report: Governance and NTFP, January 2007
Joost
Joost
Phongxiong
Per district
42
List of participants, NTFP workshop, 24-26/10/2006
No
1
Name
Mr. Dangdouan Khounvilay
2
Mr. Sengchane Phanthavong
Position
Head of financial
office
Head of trading office
3
Mr. Bounnoy Manokhoun
Head of trading office
4
Mr. Khamla
Head of trading office
5
Mr. Viengthong Muannavong
Head of trading office
6
7
8
9
Mr. Khamchan Phanthavong
Mr. Bounnyou Thammavong
Mr. Sengboun Myxay
Ms. Malay
10
11
12
13
Mr.
Mr.
Mr.
Mr.
Technician, DAFO
Technician, DAFO
Technician, DAFO
Technician, Trading
office
Technician, DAFO
Technician, DAFO
Technician, DAFO
Head of trading office
14
Mr. Khamla Phoumanyvong
15
Mr. Bounthay Sysoulith
Head of financial
office
Provice trading staff
16
Mr. Bounmy Keophakdy
Deputy of Trading
17
18
19
20
21
22
23
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Deputy of PAFO
PAFO staff
GPAR advisor
driver
Technician, DAFO
NTFP advisor
NTFP advisor
Viengsamay Simphasit
Daosavaeng Sythanaxay
Chanthamone Xayadeth
Khamphong Phoumachan
Khamsy Chanthavong
Phiksavan Thongmanida
Somsack Chandala
Songkham
Syvixay
Joost Foppes
Phongxiong Wanneng
Mission Report: Governance and NTFP, January 2007
Organization
Khoun district
financial office
Mokdistrict trading
office
Khoun district
trading office
Phaxay district
trading office
Pouched district
trading office
Nonghed DAFO
Phoukoud DAFO
Kham DAFO
Kham district
trading office
Paek DAFO
Mok DAFO
Phaxay DAFO
Paek district
trading office
Paek district
financial office
Province trading
office
Province trading
office
PAFO
PAFO
SNV
Poukoud DAFO
Khoun DAFO
SNV
SNV
Telephone
020.5661996
020.5472556
020.5824097
020.7845819
020.2151786
020.2152311
020.2344471
020.5761294
020.5068422
020.5661142
020. 5660738
020.5661487
020.5660651
020. 5874454
020. 5660624
020. 5561242
020. 5660165
020. 5707284
020. 5876259
020.5473621
020. 5508760
020. 2243283
43
Instruction sheets for GPAR district/province level workshop on NTFP,
Phonsavanh, 24-26/10/2006
Exercise 1: Mapping our knowledge on NTFP use and regulations
A
District Teams:
1) listing and ranking NTFP in your district
Please list the main NTFP found in your district. Rank them in order of importance. For
each product, can you give the reason why they are important. For each product,
please indicate where the main collection areas are (clusters of villages).
Type of NTFP
Importance (rank)
Why?
Where?
1
2
3
4
..
2) Listing and ranking groups of villages where NTFP are important
Please list the areas or clusters of villages in your district. Rank them in order of
importance. For each area, explain what is important: the role of NTFP in the income
of villagers or the abundance of NTFP in that area.
Area (cluster)
Importance (rank)
Income aspect
Abundance aspect
1
2
3
4
..
3) Sketch all areas/groups on a district map
4) Discuss strengths and weaknesses of NTFP marketing, summarize on flipchart
B
Province Teams:
1) steps in starting and registering new business
Please list all organizations involved in registering a new business. For each of them
explain their roles. List all documents required from each organization, indicate how
much time is required to approve each document and the fee to be paid for each
document.
Organization
Role
Documents
Time required
Fee
1
2
3
4
..
Mission Report: Governance and NTFP, January 2007
44
2) steps and required documents in NTFP trade
Tyoe of NTFP
1
2
3
Documents
Organization
A
B
C
1
2
3
A
B
..
A
B
..
1
2
..
1
2
..
Fee to be paid
…….kip
Total cost
Total of all
fees
3) rules for managing NTFP resources by communities
Use the following key questions to discuss the NTFP resource management situation:
A: what are the existing regulations regarding NTFP resource management?
B: What problems do you observe in the implementation of these regulations?
C: To what extent can district officers monitor the implementation?
Please record your main findings on a flipchart.
4) training needs of government staff to better support the NTFP sub-sector
Please identify the key organizations who have a role to support the NTFP sub-sector,
both at province and district level. For each organization, please identify their main
roles. For each role, indicate what are the key skills required. For each required skill,
identify the main training needs.
Organization
1 Province Agriculture
2
3
4
5
1
2
3
4
5
Roles, duties
1
2
..
Skills required
Training needs
Province Trade
Province Finance
Province Planning
…
District Agriculture
District Trade
District Finance
District Planning
….
Mission Report: Governance and NTFP, January 2007
45
Annex 4: List of RRA tools to assess NTFP status in villages
1. Building rapport
Good RRA work depends heavily on appropriate behavior and attitude of project staff.
Such behavior includes:
• building rapport with men and women, rich and poor, young and old, etc.;
• being friendly, interested, culturally sensitive, relaxed, open;
• listening and probing;
• taking advantage of local events rather than staging events and activities;
• engaging in conversations that have a two way exchange of information;
• being patient but proceeding at moderate pace;
• seeking views of weaker, less powerful groups;
• sharing information;
• learning from people, not lecturing;
• being nice to people, and avoid placing them in situations in which they feel
uncomfortable;
• giving people time to communicate and consider ideas;
• scheduling RRA activities so they fit in with seasonal and daily routines of people.
It is advised to stay overnight in the village. This not only allows to do most of our
group activities when most people were available, i.e. in the evening, but it also gives
an opportunity to build rapport. Also its allows catch up with people in the morning
before they went to their fields. Staying in the village also allows to calibrate local
product measures.
2. Semi-structured interviews with key informants, cross-checking
At first entry into a village, it is advised to interview the village authorities. Such
interviews also creates an understanding of the nature of the team’s task and provide
the team with preliminary data on NTFP use. These data are often useful to crosscheck with data derived from other methods. The technique of a semi-structured
interview includes preparing a checklist of questioned beforehand, using open-ended
questions that seek explanation rather than a yes or a no answer. For example it is
beter to ask “where do you collect NTFPs ?” rather than “do you collect NTFPs from
the protected forest?” This technique can also be used for interviewing local traders in
NTFPs.
3. Structured group meetings
A lot of RRA work is done in structured group meeting, usually in the evenings, when
people have time to join. During such meetings the team can build rapport, do sketch
mapping, listing and ranking of NTFPs, income/expenditure ranking, wealth ranking.
These meetings require a good facilitator. Try to work with groups of men and women
separately to allow different roles, knowledge and opinions to become visible. In
mixed groups, women do not always have an opportunity to make themselves heard.
4. Participatory sketch mapping
Ask men and women separately to draw participatory maps of their village and
surrounding collection areas. People can choose to use either local material such as
sand, sticks, stones, or paper and markers, provided by the project, to draw maps.
This activity is a good starter activity, because it creates a fun atmosphere and allows
many persons to participate. These maps show where the most important village
Mission Report: Governance and NTFP, January 2007
46
land use areas are, what products would be collected from each of them. Such
information is a good starting point for further data gathering.
5. Calendars of NTFP use
Ask groups of men and women separately to indicate key agricultural and NTFP
collection activities throughout the year. Such calendars give an indication of the
seasonality of NTFP collection and they may add to an understanding of gender
differences in NTFP activities.
6. Listing and ranking of NTFPs
Ask separate groups of men and women to write down which NTFPs used by them and
to rank them according to priority. The listing of NTFPs often creates long lists of
products. Criteria used and discussed by villagers for ranking NTFPs are: importance as
a food resource, income source, or other inputs to the household. A group member
who can write writes down the NTFPs. Little drawings can sometimes be added for the
benefit of those members who could not read. Ranking can be done by assigning
counters, e.g. pebbles, maize or tamarind seeds, to each identified NTFP.
7. Ranking of income and expenditure
In a similar way to ranking of NTFPs, you can ask men and women separately to list
and rank their household income sources and categories of expenditures, to get an
estimate of relative importance of income derived from NTFPs, compared to livestock
sales and other cash income.
8. Wealth ranking
The technique of wealth ranking is a quick method to find out in which way rich and
poor households differ and to assess the relative wealth status of each household
(Grandin, 1988). It consists of writing all the names of each family on separate small
cards, and subsequently asking informants to place these cards in piles according to
the relative wealth of each family. Results are recorded in a list of names. Informants
are then asked to describe the characteristics of each group and these wealth criteria
are also recorded. This process is repeated several times and in the end an average
rank from all lists is calculated for each family. The resulting list of families may then
divided into new categories, according to natural breaks, at least as many as in the list
with the smallest number of categories. This results in a breakdown of the village into
groups from wealthy to poor, which can be used for subsequent sampling.
9. Forest walks, rapid forest inventories
A small group of villagers is asked to show the team some of the important areas
for collecting NTFPs by making a forest walk. During these walks, ask villagers to show
the team useful products encountered along the trail. The team should stop at
relevant places and make notes on forest characteristics that can be observed easily
such as main tree species, soil cover and crown cover, density of key species, tree
sizes, villagers observations on occurrence of NTFPs, size of the area, local name etc.
10. Problem analysis
Draw a simple table on a flipchart with the headings: 1 Product, 2 Problems, 3 Causes,
4 Solutions and 5 Who Should Act. Facilitate a discussion and let villagers fill the chart.
Ask probing questions to analyze the deeper causes behind issues, before brainstorming about possible solutions. Identify what stakeholders should act to solve issues.
Mission Report: Governance and NTFP, January 2007
47
Annex 5: List of NTFP identified in a study on timber and non-timber forest
products, botanical survey, NAWACOP project, Pheng Phaengsingkham, 1997
No
Local Name
Scientific Namw
Family
Use
1
Ben R
Melastoma sp
Melastomataceae
Edible fruit used for making paint
2
Bone
Colocasia antiquorum
Areceae
Young leaves eaten cooked
3
Deua pong
Ficus hispida
Moraceae
Young Fruit eaten raw
4
Dou khang
Tristania merguansis Griff
Myrtaceae
Poles and fencing
5
Foi Lom
Usnia sp.
Usneacea
Medicine
6
Hai
Ficus glaberrima
Moraceae
Fruits eaten by birds/animals
7
Hai
Ficus beng halensis
Moraceae
Fruits eaten by birds/animals
8
Hai Daeng
Moraceae
Fruits eaten by birds/animals
9
Juglandaceae
Firewood,charcoal
Hang Od
Ficus altissima
Engelhardtia colebedrookiana
Lind
10
Homa Sum Muong
Flemin gialatifolia
Leguminosea
11
Hua Nam khor
cephalenthus occitalis
Annonaceae
Medicine
12
Ka Lam Dok
Brassica oleraceae var botrytis
cruciferea
Young leaf fower eaten raw/cook
13
ka Lam Houa
Brassica oleraceae
cruciferea
Young eaten cooked
14
ket Lin
Magnonia strobilifera
Leguminosea
15
Kha
Alpina sp.
Zingiberaceae
Edible shoot,Medicing
16
Khai
Augenia sp
Myrtaceae
Firewood
17
Kham
Indigofera sp
Leguminosea
Leaves for dye
18
Khang Hi Hak
osbeckia chinensis
Melastomataceae
19
Khem
Thysanolaena maxima
Gramineae
20
Khuea Nam Nai
Mucuna priens
Leguminosea
Poissinous
21
Khuea phi Phuane
Uvaria macrophylla
Annonaceae
Fruits eaten when ripe
22
Khi Onh
Urena lobata
Malvaceae
Medicine
23
Kho Haip
Litsea sp
Lauraceae
charcoal
24
Khouay Mai
Dendrobium
Orchinaceae
Decorative
25
Khua Ham Noi
Passiflora foetita
Passifloraceae
Young leaf eaten cooked .Med
26
Ko Daeng
castanopsis Hystrix DC
Fucaceae
Important firewood
27
Ko nam
castanopsis sp
Fucaceae
Important firewood
28
Ko Sa
Quercus sp
Fucaceae
Important firewood
29
Ko Ta Mu
Lithocarpus polystachyus
Fucaceae
Important firewood
30
Kokeuang
costus speciosus
Zingiberaceae
Med .Plant
31
Kud Khi Khed
Lycopodium sp
Lycopodiaceae
Decorative
32
Lao
Saccharum arumdinaceae
Gramineae
33
Mai Ban
Bauhiana sp
Leguminosea
Flower eaten cooker/firewood
34
Mai Ban
Melenorrhoea sp
Anacardiaceae
Poicinous
35
Mai Ban Bai
Archidendroncrypria
Leguminosea
Bark use for making paint firew
36
Mia Bong
Bambusa sp
Gramineae
Young shoot eaten cooked.con
37
Mai Cha Hor
Maesa ramentacea
Myrsinaceae
Firewood Edicine
38
Mai Fain
Prodium serratum
Burserceae
Fruit eaten raw stem for constr
39
Mai Hing
Keteleeria davidiana
pinaceae.
Important timder, oil
40
Mai Houa Lone
Prkia specoisa.
Leguminosea
firewood
Mission Report: Governance and NTFP, January 2007
48
41
Mai Ka Bor
Dalbergia cultrata
Leguminosea
timber, firewood
42
Mai Kanh Pong
43
Mai Kao
Wendlandia tintoria
Rubiaceae
firewood
44
Mai ket Lin
Rhus sp
Anacardiaceae
Construction
45
Mai Khao Lam
cephalostachyum
Gramineae
Young shoot eaten
46
Mai Khayeua
47
Mai Khi Mot
Glochidion
Euphorbiaceae
48
Mai Khoung
49
Mai Kiou
50
Mai Lanh
51
Mai Leub Lang
Garinia sp
52
Mai Mak Len
53
54
firewood
firewood
firewood
Gramineae
Celtis sinensis per
Ulmaceae
Firewood
Gramineae
Young shoot eaten cooked
Guttiferae
Firewood
Fracourtia rukham
Fracourtiaceae
Fruti eaten when ripe, constr
Mai Mi
Millitia atropurpurrea
Leguminosae
Firewood
Mai Mi Nu
Schinma wallichii
Schima sp.
Theaceae Poisinous, timber
55
Mai Miang Kai
Schinma sp
56
Mai Mua
Spondias axillaris
Anacardiaceae
Edible fruits, firewood
57
MAI Muat
Aporusavillosa
Euphorbiaceae
Firewood
58
Mai Nang Mon
59
Mai ngane
Vitex sp
Verbenaceae
Firewood
60
Mai Pha Khang
Albizzia chinensis
Leguminosae
Firewood
61
Mai Khai Ban
BamBusa nana
Gramineae
Young shoot eat cooked. Con
62
Mai Phao Hong
63
Mai Pho
Ficus religiosa
Moraceae
64
Mai Pod Kiat
65
Mai Posa
Braussonitia papyrifera
Moraceae
Edibke fruit, bark for string/papere
66
Mai Sa Laeng
Eugenia sp.
Myrtaceaae
Edibe fruit when ripe, const. firew
67
Mai Sair
Mallotus sp.
Euphorbiaceae
Firewood
68
Mai Tab Tao
Croton sp.
Euphorbiaceae
Firewood
69
Mai Tang
Schefflera elliptica
Araliacaea
Firewood
70
Mai Tao Tiou
Cratoxylon sp.
Hypericacaea
Polsinous, firewood
71
Mai Ti Tong
Phoebe lanceolata
Lauraceae
Firewood
72
Mai Xang Phai
Bambusa brumiana
Gramineae
Young shoot eaten cooked. Con
73
Mak Chong
Prunus sp
Rosaceae
Fruit and Yg leaf eaten raw/cooked
74
Mak Feuang
Averrhoa carambola
Osalidaceae
Fruit eaten raw
75
Mak Hai
Ficus annuus
Moraceae
Fruit eaten by birds/anilals
76
Mak Heio
Eleocharis toberosa
Cyperaceae
Tude eaten raw or cooker
77
Mak Hour
Walteria americana
Moraceae
Fruit eaten when ripe
78
Mak Hour
Robus sorbifolius
Moraceae
Fruit eaten when ripe
79
Mak Hang
carica papaya
80
Mak Khai
Prunus persica
Moraceae
Fruit eaten ripe.Firewood.Fence
81
Mak Kham
Tamarindus indica
Leguminosae
Fruit & Young eaten r/c
82
Mak Kham Pom
Phyllanthus emblica
Euphorbiaceae
Edible Fruit .Firwood
83
Mak Khat
Aspilanthes asmelle
Compositae
Young leaves eaten cooked
84
Mak Kheine
Zanthoxylum limonella
Rutaceae
Fruit eaten raw/cooked .Mad.
Firewood
Firewood
Firewood
Firewood
Firewood
Mission Report: Governance and NTFP, January 2007
Yg leaf/flower eaten cooked
49
85
Mak eing Fa
Soranum torvum
Solanaceae
Edible fruit, med,Plant.
86
Mak Kheing Khom
Solanum trilobatum
Solanaceae
Edible fruit, med,Plant.
87
Maik Kheua Khun
Solanum ocultertissimum
Solanaceae
Fruits eaten raw Medicine
88
Mak Kheung
Nacuteregam sp
Rubiaceae
89
Mak ouay
Musa sapientum
Musaceae
Fruit eaten when ripe
90
Mak Kue
Solanum sp
Solanaceae
Fruits eaten raw or cooked
91
Mak Lin Mai
Oroxylum indicum
Bignoniaceae
Fruits eaten when cooked,Med
92
Mak Lod
Elaeagnus conferta
Elaeagnaceae
Fruits eaten ripe
93
Mak Muang
Mangifera indica
Anacardiaceae
Fruit & Flowereaten raw/cooked
94
Mak Nod Kheua
Cayratia sp
Ampelidaceae
Yng leaf eaten raw. Fruit eaten rip
95
Mak Peine
Gacinia gracilis
Gttiferea
Fruit eaten raw
96
Mak Pet
Capsicum frutescens
Solanaceae
Fruit & Young leaf eaten r/c
97
Mak Taeng
Cucumis sativus
Cucurbitaceae
Fruits eaten raw or cooked
98
Man Dang
Ipomoea barbatas
Convolvulaceae
Tude & young leaf eaten cooked
99
Man Phalang
Solanum tuberosum
Solanaceae
Tude eaten cooked
100
Man Theuan
Prunus Puddum Roxb
Rosaceae
101
Man Tonh
Manlihot esculenta
Euphorbiaceae
Tube, Yng leaf, flower eat cooked
102
Mone
Morus alba
Moraceae
Frut eaten ripe. Leaves for feeding
103
Mu Nao
Mallotus sp.
Euphorbiaceae
Firewood
104
Nad
Blumea balsamifera
Compositae
Med. Plent
105
Nam Ki Heit
Rosa cripnophylla
Rosaceae
106
Nang Na
Anneslea fragrans wall
Theaceae
Firewood, charcoal
107
Nha chick chor
Vetveria sp.
Gramineae
Young leaves for feeding animals
108
Nha Dok Khao
Chromolaena odorata
Compositae
Medicine
109
Nha Feri
Vetiveria zizanioides
Gramineae
Medicine
110
Nha Heing Fa
111
Nha kha
Gramineae
Medicine
Medicine, for roofing eaten cooked.
Med
112
Nha Khonh
113
Nha kiou
Ageratum conyzoides
Compositae
Medicine plant
114
Nha La Mang
Crassocephalum crepidoides
Compositae
Young leaf eaten cooked
115
Nha Phak Khuay
Eusine indica
Gramineae
Youn leaf eaten cooked. Med.
116
Nhan
Styrax tonkinensis
Styracaceae
Commercial tree, oil
117
Nom Ma
Ficus ichnopada
Moraceae
Medicine plant
118
Ob Xang
Pieris ovalificnale
Ericaeae
Medicine, Charcoal
119
Oil
Saccharum officinale
Gramineae
Sugar, Medicine
120
Paek Sam Bai
Pinus kesiya
Pinaceae
Important timber, oil
121
Peng
Phoenix sp
Palmae
Fruit eaten ripe, Yg shoot eat rw
122
Pha Nang Oua
Anaetochyrus sp
Orchidaceae
Medicine
123
Phak Bong
Lpomoea aqquatica
Convolvulaceae
Young leaf eaten raw or cooked
124
Phak Bua
Allium cepa
Gramineae
Leaves & tube eaten raw/cooked
125
Phak Hom Pom
Coriandrum sativum
Umbelliferae
Young leaf eaten raw or cooked
126
Phak Kat Khao
Diplazium esculentum
Athyridaceae
Young eaten raw or cooked
127
Phak Kat Na
Brassica sp.
Cruciteerae
Young leaf, fower eaten cooked
Imperata cylindrica
Gramineae
Mission Report: Governance and NTFP, January 2007
50
128
Phak Kud
Sphenomeris chinensis
Lindsaeaceae
129
Phak Kud
Adiatum Stenoclamys
Adiataceae
130
Phak Kud
Pteris phuluangensis
Pteridaceae
131
Phak Kud
Dichlanopteris linearis
Gleicheniaceae
132
Phak Kud
Anisocampium cunmingianum
Athyridaceae
133
Phak Kud
Microsodium sp
Polypodiaceae
134
Phak Kud
Microlepida sp
Denstaediaceae
135
Phak Kud
Angiopteris evecta
Mattiaceae
136
Phak Kud Kheua
Lygodium flexuoxum
Schizaeaceae
137
Phak Kud Tonh
Cyathea sp.
Cyathiaceae
138
Phak Nam
Lasia spinosa
Araceae
Young leaves eaten cooked
139
Phak Nok
Celtella asiatica
Umbelliferae
Medicine, leaf eaten raw/cook
140
Phak Salad
Latuca indica
Cruciferae
Young leaf eaten raw or cooked
141
Phak Si
Foiniculum vulgare
Umbelliferae
Young leaf eaten eaw or cooked
142
Phak Thiem
Allium sativum
Liliaceae
Young leaf/tube eaten raw/cooked
143
Phua
Cyperus procerus
Cuperaceae
Leaves use to weave mat
144
Sa long Khong
Memecylum edule
Euphorbiaceae
Firewood, charcoal
145
Sa Nhan
Styrax annamensis
Styracaceae
Firewood, fencing
146
Sar Chouang
Cinnamomum iners
Lauraceae
Medcine. Constructin, firewood
147
Si Khai
Andropogon citratus DC
Gramineae
Medicine. Tube for food ingredient
148
Somkhor
Vaccinium exaristum Kurz
Ericaeae
Edible fruits, charcoal
149
Som Moon
Elaeocarpus siamensis
Elaeocarpaceae
Young eaten raw. Construction
150
Bridelia sp.
Euphorbiaceae
Construction, firewood
151
Som Sua Ton
Somkang/Nho
Som
Morinda sp.
Rubiaceae
Young leaves eaten raw
152
Tang
Leea sp.
Leeaceae
153
Tang
Aralia armata
Araliaceae
young shoot eaten cooked
154
Teuil
pandanus sp.
pandanaceae
leave use to weave mat
155
Tong
Aralia armata
Araliaceae
Firewood
156
Tonh Khor
Livistonia speciosa
Palmae
Fruit & shoot eaten cooked
157
Vai Hang Nu
Calamus javensis
Palmae
Young shoot eaten cooked Con
158
Ya Hua
Smilax china
Smilacaeceae
Medicine
159
Ya Hua
Smilax sp.
Smilacaeceae
Medicine
Mission Report: Governance and NTFP, January 2007
51
Annex 6: Product Profiles
1) “mak tao” sweet palm fruits (Arenga westerhouttii)
This is the most important NTFP exported from Xiengkhouang Province, with an
estimated annual production of more than 1,000 ton and a value of US$3.6 million.
Most of this product is exported to Thailand through two traders in Kasi district,
Vientiane Province: Mr Sitha and Mr Bounsong. The third buyer is the factory in Ban
Keun, Vientiane Province, where the product is tinned into 5 liter tins known as “pip”.
In Thailand this product is known as “luk chit”, it is consumed in a type of desert
called “khanom wan” which consist of coconut milk and shaved ice, mixed with
various colourful ingredients. It is assumed that 90% of the product consumed in
Thailand is derived from Laos. Other Lao Provinces producing “mak tao” include:
Sayabouri (800-1000 ton), Oudomxay (1,000 ton) Bokeo (1,200 ton) and Khammouan
(unknown quantity). The total export from Laos to Thailand may be as high as 5,000
ton per year (Vernon, 2006).
The main problems in the trade of “mak tao” are:
1) Supply is shrinking as wild stands become smaller. “Mak tao” stands are
vulnerable to fire, uncontrolled slash-and-burn practices reduce wild “mak
tao” forests.
2) Around 20% or more of the produce delivered to the factory and to traders is
rejected because of bad quality. Poor storage in hot conditions is the main
cause of rotting of the product. Basic processing steps like boiling fruits,
pressing the endosperm and packing in bags take place in the forest with
primitive equipment, this is another factor causing poor product quality.
The main strength of the product are:
1) there is a good market for this product, with constant demand.
2) it would be easy to plant “mak tao” or protect existing stands from fire. It
takes 5-10 years for the plant to mature, after which it produces fruits for 2
years, than it dies. Old trees are replaced by young ones as plenty of seedlings
are formed from fruits. One tree can produce 60-70 kg of peeled fruits.
The opportunities for the product are:
1) regenerate and protect “mak tao’ stands, protecting them from fire.
Communities can agree on rules about communal management of divide stands
into individual family plots. Annual production could be increased with around
25 % per year, doubling in four years to 2,000 tons.
2) Reduce losses from spoiled produce by timely harvesting, improved boiling,
cutting and packing methods, improved (cooler) storage facilities
3) Delivery chain could be speeded up of (transport and permits) from the forest
to the factory. The road network is basically there, the main problem remains
in organizing the transport more efficiently. Reducing losses from 20% to 10%
would add 100 tons to the existing production level per year.
Mission Report: Governance and NTFP, January 2007
52
Annex 7: Interim report Interviews with traders and Government officers
working in the NTFP sector in Xiengkhouang Province. 18/11/2006
Joost Foppes and Phongxiong Wanneng, SNV Laos, for the GPAR Project.
1. Introduction
This report summarizes data collected from twenty interviews with traders, product
processing companies and government officials in the Non-Timber Forest Products
(NTFP) sub-sector in Xiengkhouang Province. The interviews were mainly held in three
districts: Paek, Khoun and Nonghed. There are also two interviews with companies in
Kham district where product drying ovens are found and one from Thathom district.
The main aim of these interviews was to obtain information on the status of NTFPs,
their economic importance for the population, key issues of village producers and
traders and all the regulations and taxes that are applied. Secondly, some information
was collected on the roles of extension officers and their training needs.
The data are not analyzed yet, only a short summary of key findings is presented here.
The analysis will be done in a final report that will combine these interview data with
questionnaire surveys and rapid rural NTFP surveys implemented by district staff in all
but one of the eight districts of Xiengkhouang Province (Thathom could not be
reached). The final report will be presented in December 2006.
This work was undertaken as part of a short consultancy mission on governance and
NTFP in Xiengkhouang Province, commissioned by the Governance and Public
Administration Reform (GPAR) project.
2. Itinerary
Wednesday 8/11/2006: By air to Phonsavanh, Paek district, Xiengkhouang Province
Thursday 9 /11/2006: Arranging district field work in Khoun, Phaxay districts
Friday 10/11/2006: Interviews with traders in Paek district
Saturday 11/11/2006: Interviews with traders and companies in Paek district
Sunday 12/11/2006: Travel to Khoun district, interview with traders
Monday 13/11/2006: Travel to ‘mak tao’ harvest sites, interview traders/collectors
Tuesday 14/11/2006: Travel via Kham district to Nonghed district.
Wednesday 15/11/2006: Interview traders in Pak Kae zone, Nonghed district
Thursday 16/11/2006: Travel via Kham district, interview companies, to Phonsavanh
Friday 17/11/2006: Writing field notes, interview companies
Saturday 18/11/2006: Interview companies, fly back to Vientiane.
3. Ms. Khambay, mak tao trader, Phonsavanh city, Paek district, 10/11/06
Ms. Khambay and her husband, Mr. Sengpeth (tel. 020 5875448) in Phonsavanh city,
Paek district, Xiengkhouang Province, have been trading NTFP since 1995. They work
together, they do not hire any personnel. The main NTFP traded by them are:
1
2
3
4
Mak tao sugar palm fruits, 50 tons in 2005, buying price in Paek 3000 kip/kg
Dok khem broom grass, 10 ton in 2005, buying price in Paek 2500 kip/kg
Kheua hem medicinal vine, 20 ton in 2005, buying price in Paek 3000 kip/kg
Nor hok bamboo shoots, 150 ton in 2005
Mission Report: Governance and NTFP, January 2007
53
They also trade in garlic (20 ton in 2005) and they intend to start trading pos a (paper
mulberry) next year.
When Ms. Khambay mentioned that the official amount of mak tao bought under her
quota was 50 tons, her husband mentioned that the unofficial amount they sold might
be as high as 300 tons.
Ms. Khambay sees the future for NTFP trade in products like no mai, dok khem and
mak tao because there is no problem with the supply. Kheua hem vines are declining
rapidly.
The main production areas where Ms. Khambay buys her mak tao palm fruits are:
1) Tavieng area, Tathom district (before this year, not this year, see below)
2) Khoun district
3) Mok district
4) Namchat area, Poukhoud district
5) Kham district
The main clients who buy products from Ms. Khambay are:
1) Hongan Utsahakam Ban Keun, a fruit tinning factory buying mak tao, and no mai
2) Mr. Sitha in Kasi district, Vientiane Province, he buys mak tao, khem and po sa
3) Mr. A Tong, Chinese trader here in town, buying kheua hem vines
The main issues in the trade are:
1) Quota from the government are often issued too late, sometimes only one
month before the harvesting season. This makes it difficult to organize advance
payments needed to buy products. It also makes it difficult to get a loan from
the bank, which usually takes two months.
2) The quota are not a serious number, quota are never used to actually manage
off-takes of NTFP from the forest. Their main function is to give the
Government a quick advance tax payment.
3) The Government does very little to support farmers or traders, they only
collect tax. They do not do much extension efforts to manage NTFP resources
better or help us to improve product quality.
4) The competition is fierce, there are about seven similar traders who receive
quota from the government. One example is Mr. Bounla, who last year built a
bridge for the government in Thathom district. In return he received the
monopoly over buying all NTFP from that district, Ms. Khambay cannot go there
anymore.
5) The tax system is very complicated, time consuming and expensive. For 1 kg of
palm fruits, sold at 3,000 kip/kg, the total value of all taxes are 400 kip/kg and
transport are 300 kip. The selling price is 4000 kip/kg. The taxes are around
10% of the selling price.
6) Losses of product due to low quality. Every year, the losses due to rotting of
the product amount up to 10-20%. If unripe fruits are boiled by the villagers,
they will go black and cannot be sold. If overripe fruits are used, they may go
red and are also difficult to sell. If fruits are not stored in cool places, they
start to rot.
Mission Report: Governance and NTFP, January 2007
54
The capital needed to make advance payments to villagers for buying NTFP adds up to
about 175 million kip ($17,500). It comes from three sources:
1) personal capital: 100 million kip (57 %)
2) advances from the client company (no interest): 25 million kip (14%)
3) loans from the bank (20% interest): 50 million kip (28%)
They get two types of plastic bags from the factory to pack the mak tao fruits, one
water-tight clear inner bag and a rougher, rice bag for the outside. Each bag costs
1,000 kip, so Ms. Khambay has to spend 2,000 kip per (double) bag. One bag can pack
around 50kg.
For the future, Ms. Khambay would like to see better protection of mak tao resources
by villagers. She also intends to sell posa paper mulberry bark to Mr. Sitha in Kasi.
There are plenty of posa resources in Xiengkhouang Province.
Ms. Khambay makes the following recommendations for improving NTFP production
and trade:
1) We need NTFP processing factories here in Xiengkhouang, especially tinning for
mak tao palm fruits and bamboo
2) Could Xiengkhouang province simplify its tax procedures like they have done in
Vientiane province?
4. Ms. Somphone, NTFP trader in Phonsavanh town, Paek district, 10/11/06
Ms. Somphone and her husband, Mr. Khamsao, have been trading NTFP for four years.
We interviewed Mr. Khamsao, as his wife had just gone to Kasi with a truck load of
mak tao fruits. They are trading in the following products:
1)
2)
3)
4)
mak tao palm fruits, 100 ton in 2005
dok khem broom grass, 30 ton in 2005
po sa paper mulberry bark, 15 ton in 2005
kheua hem medicinal vines, 10 ton in 2005
The main production areas are:
1) mak tao palm fruits: Khoun, Kham, Mok, Phaxay districts
2) dok khem broom grass: Kham district
3) posa paper mulberry bark: Kham district
4) kheua hem medicinal vines: Thatom and Kham district
The competition is fierce, as mentioned by Ms. Khambay, one trader has monopolized
Thathom district. Now Mr. Khamsao buys his mak tao fruits from Bualapha district in
Khammouan province, where there are still plenty of these fruits. The district staff in
that province do not yet know much about this product, Mr. Khamsao spends a lot of
energy to extend basic harvesting techniques and quality criteria there.
The knowledge of mak tao harvesting and quality criteria was obtained by Mr.
Khamsao from one trader in Luang Prabang province.
The main quality criteria are:
Mission Report: Governance and NTFP, January 2007
55
1) Villagers should harvest fruits when they are ripe, not earlier and not later. We
can know whether fruits are ripe by cutting a few fruits and opening them.
When they are not ripe, the flesh is soft and small. When they are ripe they are
big and not too soft, not too hard. They are over-ripe when they become as
hard as wood. We can only use the ripe fruits, the others will rot after boiling
or take a wrong color.
2) the fruits should be boiled well to avoid rotting and to facilitate peeling
3) fruits should be taken out of the boiling water, not be left long time in the
water after boiling
4) fruits should be cut and peeled immediately after boiling
5) peeled fruits should be kept in plastic bags, without adding water
6) bags with peeled fruits should be stored in cool places
NB. Point 5 is not so clear. Traders add water to the product before selling to the
traders in Kasi. They make money from adding water to the product. They do not wish
villagers to add the water because they would loose profit from adding weight by
water. We do not know whether adding water would make the product more durable,
if yes, this could be something to advocate in the extension work.
The main buyers are the same as Ms. Khambay, there is one more trader in Kasi
besides Mr. Sitha there is also Mr. Bounsong.
The working capital of Mr. Khamsao and Ms. Somphone is composed as follows:
1) their own money 50%
2) advances from client companies 30% (no interest)
3) loan from the bank 20% ( with 20 % interest per year)
The main bank for these type of loans is the Agricultural Promotion Bank (APB).
The main production areas for mak tao in Khoune district are:
1) Sang Douan
2) Nam Pan
3) Nam Song Siang
4) Xieng Khong
5) Vieng Thong
Mr. Khamsao buys mak tao fruits at 2,200 kip/kg from village traders. Of this, 200 kip
is kept by village level traders, who buy the product for 2,000 kip from the villagers.
By adding water, Mr. Khamsao increases the volume of the product from 1 kg to 1.5 kg.
This helps in recovering the high tax and transport costs of 1,250 kip per kg. The
product is sold at 3,000 kip/kg in Kasi, Vientiane Province and 4,500 kip in the tinning
factory in Ban Keun, Vientiane Province.
The taxes are quite high. First of all, to get a quota from the Government “kha seu
kota” or “phatang”, a trader must pay to the province trade department a fee of 400
kip/kg. For the 100 tons quota for Mr. Khamsao this amounts up to 40 million kip or
$4,000.
Secondly there is the forestry royalty “kha borana” to be paid to the Forestry
department of 30,000 per ton (30 kip/kg).
Mission Report: Governance and NTFP, January 2007
56
Thirdly, there is the income tax to be paid to the Province Finance Department, “kha
akone” of 10% of the “price” of the product. However, the “price” used to calculate
this tax is usually said to be 400 kip/kg which is the “price” of the quota fee (40
kip/kg). N.B. The real product price is 2,000-3,000 kip/kg.
Fourthly, there is the village tax to be paid by traders to the village authorities where
the product is bought, 100 kip/kg.
Fifthly, there are many checkpoints along the road where additional fees and fines
need to be paid, perhaps up to a total of 90 kip/kg.
This bring us to a total of 660 kip/kg of taxes and fees to be paid or around 20% of the
product price of 3,000 kip/kg.
The main problem in the NTFP trade according to Mr. Khamsao is the lack of control of
so called “illegal traders”. These are people buying and selling NTFP without having a
Government quota permit. Mr. Khamsao estimates that about 50% of the trade passes
through these illegal traders, he wishes that the Government would take stronger
action to stop these people. Discussing this question more, we understand that these
traders are mostly acting on behalf of other main traders who have a quota. So this is
mainly a problem among competing traders with a quota, it does not affect the total
volume of the trade. The point of Mr. Khamsao can be understood as saying he
believes he looses 50% of his quota potential to the competition.
Mr. Khamsao likes the idea of setting up an association of NTFP traders in
Xiengkhouang, if it could help them to settle these competition issues.
N.B. From the point of view of small farmers and NTFP collectors, it would be better if
quota were not linked to particular areas. If traders would be left free to compete in
all areas, the price would go up and this would benefit the producers. It would force
the traders to compete on product quality, not on who ever can pay the most money
up front to get a quota.
5. Ms. Thongpet, NTFP trader in Phonsavan town, Paek district, 10/11/2006
Ms. Thongpet and her husband, Mr. Somwang (061-211031) have been trading in NTFPs
from their home in Phonsavan, Paek district, Xiengkhouang Province since 2002. We
interviewed Mr. Somwang as Ms. Thongpet was on her way to Kasi district to sell a
truckload of mak tao palm fruits. The main products they trade in are:
1) mak tao sweet palm fruits, 15 ton in 2005, 10 ton in 2006
2) dok khem broom grass, 2 ton in 2005, 3 ton in 2006
Mr. Thongpet acknowledges that the real amount sold by them might be double or
three times higher than the amount mentioned in the quota. It is a common practice
among NTFP traders is to sell around double or three times the amount mentioned in
the quota. In other words, tax is only paid over one half or one third of the actual
traded volume. If traders do not do this, it would be impossible to make a profit. Over
2005, the profit they made was around 5-6 million kip ($500-600) says Mr. Thongpet.
They mainly buy from the districts of Nonghet, Mok, Khoun, Kham and Phaxay. They
buy mak tao fruits for 2,200 kip/kg at village level. The costs of tax is 600 kip/kg, the
Mission Report: Governance and NTFP, January 2007
57
transport is 300 kip. The total cost per kg dry product is of 2,200+600+300=3,100
kip/kg.
By adding water they increase the volume from 1 kg to 1.5 kg. The wet product is sold
at 2,700 kip. So 1 kg dry fruits get sold as 1.5 kg wet fruits for 1.5x 2,700 kip or 4,050
kip per kg dry product, a considerable gain compared to the total cost of
2,200+600+300=3,100 kip/kg.
Mr. Thongphet also showed us the various documents required to be an NTFP trader:
1) business license
2) annual quota contract
3) List of all quota for each product allowed to be bought in the province
4) List of amounts allowed to be bought in each district
6. Ms. Viengsod, NTFP trader in Phonsavanh town, Paek district, 10/11/2006
Ms. Viengsod (020-2318428) and her husband, Mr. Saikham Malavan, have been trading
mak tao palm fruits and maize from their home in Phonsavanh, Paek district,
Xiengkhouang Province, since 2004. Before that, Ms Viengsod used be a partner in the
business of Ms. Khambay.
In 2005, Ms. Viengsod exported 80 tons of mak tao to Kasi and transported 200 tons of
maize from Oudomxay and Luang Prabang Provinces to Vietnam. They own a large 15
ton Isuzu truck. For 2006, their quota for mak tao is only 40 ton.
Their only buyer of mak tao fruits is Mr. Bounsoung (Bolisat Khamla) in Kasi district,
Vientiane Province. He sells all his products crossing the Mekong river in Ban Wang,
Salakham district in Vientiane province, to Ban Som in Loei province in Thailand.
They observe the market to be constant, supply is becoming a little bit more difficult
lately. In the past they used to buy a lot of mak tao from Thatom district, but now
that quota is taken up by Mr. Bounma. They would estimate the total production of
mak tao fruits from Xiengkhouang could be easily up to 1,000 ton per year. Thatom
district only provides around half of that amount or 500 ton.
The competition is heavy, especially from Mr. Bounma and Ms. Khambay. Ms Somboun
also has a strong network in many districts.
They heard that the Ban Keun tinning factory seems to have some chemical that can
be used to improve the product quality by making black or red fruits white again. They
would like to know how they can obtain and use this product.
They explained that most medicinal NTFPs (orchid stems, various roots) cannot be
traded by them as the State Buying Company (Visahakit Kanka Pattana) is the only one
who has the quota rights for these products.
7. Ms. Sormany, buyer of mushrooms in Phonsavanh town, Paek, 11/11/06
Ms. Sormany Sophabmixay (020-518922) is the main buyer of “hed vai” matsutake
mushrooms in the province since at least 10 years. They fetch a high price of 1 million
kip ($100) per kg, but the supply is limited to around 2 tons per year. These
Mission Report: Governance and NTFP, January 2007
58
mushrooms grow in specific patches of ‘mai ko” (chestnut) forests. These mushrooms
seem to live in symbiosis with chestnuts (several species of the genus Castanopsis, oak
family, Fagaceae) and cannot be cultivated. Therefore there is little prospect of
increasing the volume, the main action to be taken to ensure the present volume is to
protect the forests where these mushrooms occur.
Ms. Sormany dries the mushrooms and sells them like that. Some are also soaked in
alcohol to produce a medicinal drink, promoting long life.
8. Mr. A Ming, orchid farm in Phonsavanh town, Paek district, 11/11/06.
Mr. A Ming is a Chinese citizen from Fujan Province on the coast of China. He has been
cultivating several orchid species in Xiengkhouang province since 2004. It concerns
Dendrobium orchids of which the stems are used in Chinese medicine, mainly for
respiratory ailments.
He rents 1.5 ha of land from a local sawmill for $300 per person. He covered the area
with shade netting, installed a water pump and made long tables from scrap wood of
the saw mill (mostly pine wood) to grow orchids on. In the dry season, the orchids are
watered two times per day. A total of 2,500 kg of wild orchids were purchased as
planting material for around 40,000 kip/kg ($4/kg). The total investment in the
plantation was around $50,000.
Two species of Dendrobium orchid are cultivated:
1) “Phi kong tae” (Lao) or “Zhen pi” (Chinese), Dendrobium parishii. This is an
expensive type of orchid, it sells at 150,000 kip or $15 per kg in dried
unprocessed form. If tied in little spirals, the price goes up tenfold to around
1.5 million or $150 per kg. This process is very labor intensive, one person can
produce around 3-4 kg per day. Around 500 kg were planted so far.
2) “Pheung leuang” (Lao) or “ghuan pi” (Chinese), Dendrobium Chrysantheum. So
far around 2,000 kg were planted, the selling price for dried stems is 40,000 kip
or $4 per kg.
After only two years in production, the farm produced $40,000 in income, the
investment has almost been gained back. While the business seems very profitable, Mr.
A Ming and his wife are considering returning to China for two reasons. Firstly, there
are no schools and there is no good health care for their young son. Secondly, as a
foreigner Mr. A Ming is not allowed to have any property in Laos, he cannot even buy a
motorcycle or a car. Mr. A Ming has similar plantations back home in China and in
Myanmar. He plans to devote more time to those plantations in the future.
The yield of orchids grown in the farm was around 500 kg per 2,500 kg planted in the
first year (over 1.5 ha). In the second year, the yield was around 700 kg, it is not
expect to get much higher in the third and fourth year. In other words, it would take
around four years to produce the amount used as planting material.
9. Mr. Sengphet, passion fruit juice maker in Phonsavanh town, Paek, 11/11/2006
Ms. Khamhou and her husband, Mr. Sengphet (tel. 061-211236) in Phonsavanh town,
Paek district, have been producing and bottling juice of passion fruits (Passiflora)
since 1999. When they are producing juice, they hire about 10 helpers. They buy
Mission Report: Governance and NTFP, January 2007
59
around 20 tons of passion fruits per year. From 20 tons, they can produce around 5,000
liters of passion fruit juice. In the future, the company expects to produce 50,000
liters, they could absorb 200 tons of fruits per year if farmers would supply them.
There is no competition, they are the only business buying passion fruits.
Passion fruits are bought form farmers for 1,200-1,500 kip/kg according to quality.
There are at present nine villages selling passion fruits, all in the Sampanxay area of
Khoun district.
Most passion fruit plantations do not last longer than three years, because of poor
management. With the right pruning and fertilization, they could last much longer. In
the first year after planting, the production is low, in the second year it reaches its
maximum (yield/ha?)
Around 4 kg of fruits can produce one liter of juice. One bottle contains 700 ml. and
sells at a price of 14,000 kip/bottle (20,000 kip or $2 per liter). All juice is sold
through the Lao Farmer Group of Dr. Sisaliao in Vientiane, who exports the product to
France. This company provides also all the inputs (machinery, bottles etc) for Ms.
Khamhou’s business, they also take care of all the transport, paper work and taxes.
10. Ms. Chita, NTFP trader in Khoun district, 12/11/2006.
Ms. Chita (020-2423499) is leading a family business in NTFP trade in Khoun district.
Her family has run this business since 10 years. In the first years, their main business
was in “mak neng”, green Chinese cardamom (Amomum villosum), however the
market for this product declined over the last few years. Now they are trading the
following products:
1)
2)
3)
4)
5)
“mak neng" cardamom, 4 ton in 2005, 2 ton in 2006, price 13,000 kip/kg
“dok peung” orchid stems, 15 ton in 2005, no quota in 2006
“kheua hem” vines, 40 ton in 2005, 16 ton in 2006, 4,000 kip/kg
“mak tao”, 15 ton in 2005, 10 ton in 2006, 2,200 kip/kg
“bia nang oua” slipper orchids, 150 kg in 2006, 100,000 kip/kg ($10/kg)
Most of the “mak tao” comes from the south of the district towards Thathom district.
From 2000-2004 they could not buy this product because of security problems in that
area. Ms. Chita does not have a quota for these products, she sells to the bigger
traders in Phonsavanh town: Ms. Bay, Mr. Khamphou and Ms. Somphone. She does not
pay quota fees, this done by the people who buy from her.
The main markets are Vietnam for “mak neng”, China for orchids, the tinning factory
in Ban Keun for mak tao. The availability of most products from the wild seems to go
down. Ms. Chita believes that the highly priced “bia nang oua” slipper orchids could
easily be cultivated, but nobody has started doing that yet.
The main competition consists of three other registered traders in Khoun district and
around 4-5 “illegal”buyers who buy on behalf of other traders.
The main issues in the NTFP trade mentioned by Ms. Chita is that the zone officers
nowadays raise tax as well, she feels this is too much, e.g. kheua hem she has to pay
40,000 kip/ton to them.
Mission Report: Governance and NTFP, January 2007
60
Ms Chita explained the chain of taxes and fees which apply to “mak tao” palm fruits
(see diagram below).
Diagram: Chain of taxes for “mak tao” palm fruits from Khoun district.
Village (Ban)
Zone (Khed)
Village tax:
100 kip/kg
Zone tax: 40
kip/kg
District (Meuang):
1: burana, 30 kip/kg
2: pasi akone 10% of
buying price (40
kip/kg, based on
“price” of 400 kip/kg
Province
(Khweng):
Quota fee:
400 kip/kg
For some medicinal products, e.g. orchids, kheua hem, some roots etc that are
exported to China and Vietnam, only one company has the quota and that is the
Province State Enterprise “Visahakit Kankha Pattana”, which is run by the father of Ms.
Chita, Mr. Kamphou. They subcontract smaller buyers, e.g. Mr. A Tong, a Chinese
medicine buyer, to do the actual trading under their quota.
The main market information needs for Ms. Chita are:
information on new buyers, markets, prices
information on quality standards, requirements of NTFP
information on processing techniques
At present, the only sources of market information are her clients, the traders who
buy her products.
Every year, Ms. Chitha raises funds to make advance payments to producers. For “mak
tao”, 50 % of these funds come from her family, 30% is advanced by the clients and
20% is borrowed from the bank.
The Government provides no support to district traders. The best thing the
Government could do to improve their services would be to reduce the tax level with
20% so that district traders can give a better price to farmers. Secondly the
Government could play a more active role in finding new markets for NTFP.
The quota system has benefits for those who manage to get them, in that it allows
them to trade large quantities of products. The weak point is that it is very costly for
traders, they have to pay in advance, before they receive income from the trade.
Besides NTFP, Ms Chitha also trades in rice and maize. Most of the rice is bought by
Province Police and Military at set prices. The maize is exported to Vietnam. For these
type of agricultural products, the taxation is lighter than for NTFP, you do not have to
pay income tax (“akone”), forestry royalties (“burana”) and no quota fee.
Mission Report: Governance and NTFP, January 2007
61
11. Mr. Kaikeo, NTFP trader in Khoun district, 12/11/06.
Mr. Khaikeo is a small registered trader of NTFP in Ban Sangking, Vieng zone, Khoun
district. He and the other people in his village belong to the Khamu ethnic group. He
has been trading NTFP since 2003. He trades in a number of products, many of them
are medicinal plants not seen in other places:
1) “kheua kout” fern stems, 15 ton in 2005, buying price 3,000 kip/kg, selling
price in Houaphan 6,000 kip/kg
2) “mak ma kha” galangal fruits, 6 ton in 2005, 8 ton in 2006, buying price 1,300
kip/kg, selling price 2,000 kip/kg
3) “palad nam” edible algae, 4 ton in 2005, 600kg in 2006, buying price 3,000
kip/kg, selling price 4,500 kip/kg
4) “pong wan” wild ginger, 700 kg in 2005, buying price 1,000 kip/kg, selling price
1,700 kip/kg
5) “pong sam sip” tubers, 500 kg in 2005, buying price 1,000 kip/kg, selling price
1,700 kip/kg
6) “mak kha kai” or “seum”, Lao ginsheng, 500 kg in 2005, buying price, 1,200
kip/kg, selling price 1,700 kip/kg
7) “nang bai oua”, slipper orchids, 60 kg in 2005, buying price 60,000 kip/kg,
selling price 100,000 kip/kg
Mr. Khaikeo found Vietnamese buyers for these products by traveling to Samneua town
in neighboring Houaphan Province. None of these products passes any quota. It seems
he makes a good profit as Mr. Khaikeo does not have to pay quota fees and related
taxes for his products. Mr. Khaikeo only pays three types of taxes to the district:
(1) income tax (akone) 10% of the actual buying price, paid to the district finance
office
(2) the forestry fee (burana) 30 kip/kg, paid to the district forestry office
(3) a car checking fee (ka kuad kha) 50 kip/kg, both paid to the district forestry office.
(4) trade permit (bai sang lakha), 20,000 kip per “freight” (one freight can be anything
between 1-10 ton, so this is equivalent to around only 2-20 kip/kg)
The difference between his buying price and his selling price ranges between 50-100%.
The Vietnamese buyers actually come to the village to buy the product, so the
transport cost is not a concern for Mr. Khaikeo.
For the future there is still a lot of “pong wan” and “kheua kout” in the forest and the
market seems good. Mr. Khaikeo also plans to bring three new products on the market,
of which there are plenty but he has not found a buyer yet:
1) “phom houa doud deua” a medicinal tuber
2) “pak wan pa”, a tree producing edible leaves
3) “peuak meuak” glue bark from Boehmeria malabarica
Mr. Khaikeo receives about half of his capital in advance from his Vietnamese buyers,
the other half he advances himself. This arrangement forms a type of insurance for Mr.
Khaikeo and his village collectors, e.g. if the traders drop the price after villagers
collected the product, at least they have half of the price already in their hands.
Mission Report: Governance and NTFP, January 2007
62
The main thing that the Government could do to improve NTFP trade would be to
provide small traders like Mr. Khaikeo with documents to prove they have a buyer.
This would make it easier to convince village producers to collect and sell their
products to buyers like Mr. Khaikeo.
12. Mr. Boua Ya, mak tao buyer in Nam Song Siang, Khoun district, 13/11/06.
Mr. Boua Ya is a trader in “mak tao” palm fruits in Ban Nam Song Siang, in the zone
with the same name in Khoun district. He and all the other people in his village belong
to the Hmong ethnic group.
Mr. Boua Ya showed how the product is processed in the forest. Fruits are boiled in a
pot over a wood fire. The boiled fruits are cut open with a knife, each fruit contains
three seeds. The seeds are pressed out of the fruits with a simple press made out of
two pieces of wood tied together with a string. The seeds are gathered in a plastic bag.
The main problem in controlling the quality of the product is to harvest fruits when
they are ripe, not earlier and not later.
Mr. Boua Ya also mentioned how he aims to protect the patch of forest upstream from
the bridge over the Nam Song Siang stream. “mak tao” grows on big palm trees in the
evergreen forest. The main threat are forest fires, the palm trees are highly
inflammable in the dry season as their stems are wrapped in old leafsheets. Most
“tao” palms die because of fires caused by shifting cultivation. Mr. Boua Ya has
protected his garden for three years now from fire. The forest floor is dotted with
young seedlings and “tao” palms of various ages.
It takes 5-10 years for the “tao” palm to mature: 5 years in a sunny spot, e.g. after
shifting cultivation, 10 years in a shaded spot in the forest. In 5 years, the tree will be
around 5 meters high. In the shaded spots, 10 year old trees can be up to 10 meter
high. It would also be very easy to propagate the “tao” palms from seed. One tree can
produce about three strings of fruits in two once it starts to produce fruits. The tree
dies after that. One tree produces around 60-70 kg.
Mr. Boua Ya can be regarded as a local innovator, he came up with a good way to
manage his NTFP resource. For this management system to work, it would seem
necessary to divide palm forests into plots with individual ownership. Groups of
owners can then agree on rules to harvest all at the same time, to avoid immature
harvesting. They can also agree on rules and fines on how to avoid forest fires.
As a trader, Mr. Boua Ya buys and sells officially around 10 tons of “mak tao” per year.
This all takes place during the short harvesting season of November-December. He
buys “mak tao” for 2,100 kip/kg. He pays 200 kip/kg for labor to load bags onto trucks.
The transport cost is about 100 kip/kg. The zone (group of 10-20 villages) committee
takes 100 kip/kg.
All of Mr. Boua Ya’s product is sold to Ms. Bay in Phonsavanh. There are around 100
families from five villages selling their product to Mr. Boua Ya, on average one family
sells 2-3 tons. Based on that estimate, the actual volume sold by Mr. Boua ya would be
more likely to be around 20-30 tons per year.
Mission Report: Governance and NTFP, January 2007
63
13. Mr. Sengchan, zone leader, Ban Nam Pan, Thathom district, 13/11/06.
Mr. Sengchan is the chief of the village of Ban Nam Pan. He is also the chairman of the
zone of Thavieng in Thathom district. His village borders on the zone of Nam Song
Siang in Khoun district. The zone collects a tax on NTFP trade of 150 kip/kg. This
income is used to pay salaries of village chiefs and zone committee members.
Mr. Sengchan is also a part-time NTFP trader, buying and selling “vai thoun” big
diameter rattan canes. One carload can contain 3,600 stems, one stem of 5 meters is
bought for 8,000 kip. The rattan is all sold in Paksan town, Bolikhmxay Province.
Mr. Sengchan sees the main role for the zone committee to protect the natural
resources in their area. He wishes to promote the protection of the forests and
wildlife in his area. The biggest threat to wildlife consists of “heo” snare traps, which
he wants to ban. He also wishes to promote the cultivation of coffee in this area. He
believes it will grow well as there are still some old coffee bushes surviving in the area
which were planted by the French in 1958.
14. Mr. Po Ou, orchid dryer, Ban Chom Tong, Kham district, 14/11/06
Mr. Po Ou (020-5976411) is a buyer and dryer of orchids in Kham district. In June 2006
he constructed a simple drying oven made of bricks, designed by a Chinese trader who
buys orchids from him. Since June 2006 until now (five months) he was able to
produce 10 tons of dried orchids.
Mr. Po Ou buys fresh orchid stems for 1,500-2,000 kip/kg, the dried orchid stems go
for 12,000-14,000 kip/kg. It takes around 4 tons of fresh stems to produce 1 ton of
dried stems. The oven is run on firewood, it takes about 6m2 of wood to dry 1 ton of
orchids in 1 week. The cost of firewood is 300,000 kip/m2. This service seems highly
profitable:
Buying fresh orchid stems 5 tons:
Firewood 6 m2:
Total costs:
Selling 1 ton dried orchids:
Profit:
5
million kip
1.8 million kip
6.8 million kip
12-14 million kip
5.2-7.2 million kip ($520-720)
The oven is also used to 15 tons dry “pak si din” Chinese medicine roots so far, they
were sold at 17,000 kip/kg dry. The buying price is 3,000 kip/kg, it takes 5 kg of wet
product to get 1 kg of dry roots. Another product dried were red chillies. Next year he
also plans to dry cardamom (August-September), it takes around 4 kg of wet
cardamom to make one kg of dried cardamom.
15. Various traders, Khed Pak Kae, Nonghed district, 15/11/06
We stopped at the road side in Ban Pak Kae, 34 km after Kham district, 60 km to
Nonghed district, to interview traders on NTFP. On lady was selling “peuak meuak” a
bark of a small tree (Boehmeria malabarica). The bark contains glue, used to make
incense sticks. While this is a popular product in Oudomxay province, here it seems no
traders are interested to buy the product. The asking price was 1,000 kip/kg,
compared to 6,000 kip/kg in Oudomxay (see Vernon, 2006).
Mission Report: Governance and NTFP, January 2007
64
Another lady had been selling 1.5 ton of “mak neng” cardamom (Amomum villosum) in
2005, the price was 25,000 kip/kg. This year, there were no buyers. She believes she
could easily sell 5 tons or more if there would be buyers.
These examples show that there are NTFP which are not registered but which are
being sold informally in quite large numbers. Most income in this area is made from
growing corn (maize) which is all exported to Vietnam.
16. Mr. Khamchan, District Forester, Nonghed, on the corn trade, 15/11/06
Mr. Khamchan Panthavong, a district forestry officer of Nonghed district, provided an
insight into the corn trade in his district, allowing a comparison between the case of
NTFP and that of an agricultural product.
The main tax paid on corn is the income tax (“akone”) of 5% or 50,000 kip per Hyundai
3 ton truck. At the Vietnamese border, the following taxes apply per car:
1) “kha ekasan kanka” trade tax:
25,000 kip
2) “kha pai den” border fee for the driver
5,000 kip
3) “talangsit kongrot” car checking fee:
50,000 kip
4) kha tamnieng” stamp:
30,000 kip
TOTAL
110,000 kip
The key principle is that these fees are not based on the real weight of the truck, even
though there is a weighing bridge station at the border checkpoint where all cars have
to pass. The weighing bridge belongs to the roads department, they raise a fee for
“overweight” based on the amount of kilometers traveled, this can be anything
between 50,000-500,000 kip per car. This tax income is supposed to be used to
maintain and repair the road.
The buying price for corn in Nonghed district is around 950 kip/kg. All corn is
offloaded at a village 4 km behind the Lao-Vietnamese border in Vietnam, called Ban
Tin Tiao. This is where the corn gets loaded on to Vietnamese trucks.
The main difference between corn and NTFP is that much less tax is due for corn than
for NTFP. For maize, only “akone” income tax is paid and at 5%, not 10%. For NTFP
one also has to pay the trade tax of 400 kip/kg and the “burana” or forestry fee.
Mr. Khamchan also explained how much time he spends on various forestry tasks. Per
year, he may spend around 20 days to make inspections on illegal logging. He may
spend another 20 days doing special duties, like escorting our mission around the
district today. The rest of his time is mainly spent at the office, writing reports. There
is little work done in extension, there is no tree nursery, no reforestation work.
He does not work full hours at the office, he also spends time on his farm to provide
food for his family. The forestry section so far did not receive much assistance from
the GPAR project, compared to livestock and agriculture.
It would seem that there is a large scope for district forestry officers to be trained to
do NTFP extension work, to support NTFP production and selling groups in clusters of
villages. The GPAR project could provide some dedicated training courses and a small
Mission Report: Governance and NTFP, January 2007
65
part of its agricultural support budget for some pilot NTFP activities to be
implemented by such clusters.
17. Mr. Saikeulor, Head District Agriculture, Nonghed district, 16/11/06
Mr. Sakeulor, has been the head of district agriculture in Nonghed district for many
years. He explained that the main NTFP in his district are:
1) “mak neng” cardamom, around 5-6 tons are exported to Vietnam informally by
villages near the border with Vietnam (Nam Neun area). There is a good
potential to increase the production, as there is plenty of this product in the
wild. In other years, the production is higher than this year, it seems that the
production was affected by long dry period this year.
2) “dok peung” orchid stems, around 20-30 ton are exported to Thailand. While
this is important, it seems the natural resource will be depleted soon, the
Government will not issue quota for this product anymore.
3) “mak tao” palm fruits, 15 ton was the quota in 2005, in reality Mr. Saikeulor
admits the amount exported may be 30 ton or more. All of this goes to
Thailand.
While the district officially has 10 administrative zones, there is a new plan to divide
the district into 5 agricultural extension zones:
1)
2)
3)
4)
5)
Pak Khae
Cham Meun
Pha Waen
Khang Phanieng
Phieng Houng
Officially, 17 clusters of villages “koum pattana ban” were set up, however most are
not really active yet, only one is working actively, in the Pak Khae zone. District
extension officers are supposed to move out and be based permanently in the 17
clusters. The DAFEO estimates it would need at least 33 staff to service all these
groups. None of the staff have received any skills training to learn how to support
cluster groups or provide extension services to them.
The main activities are planting corn (maize), raising livestock, producing rice and
small selling/buying business. A second group is being set up in the Khan Phanieng
zone, where the district staff assist villagers to plant new varieties of peach in
orchards, using funds from the GPAR Project. Mr. Saikeulor already planted his own
orchard some six years ago, he gets an income of 6-7 million kip ($600-700) per year
from 144 trees. The fruits are ripe in March.
The district agriculture and forestry office has 18 staff members. Of these only 6
belong to the Hmong ethnic group, which makes up 65% of the population of Nonghed
district. There are only 2 women among the 18 staff. The reason is that new recruits
are required to have a diploma in agriculture, most graduates from the university and
Mission Report: Governance and NTFP, January 2007
66
colleges belong to the Lao loum ethnic group. Of the 18 staff, 13 are extension
workers, 5 are administrative staff.
The main training needs of the staff for NTFP is to learn to protect NTFP resources.
Forestry staff should be used more to implement land allocation, to set up tree
nurseries and to learn to collect basic data on NTFP.
At the moment, forestry staff seem to do little else than the occasional checking of
illegal logging and collecting forestry taxes. Most of the GPAR activities and funding
seemed to have benefited the livestock and crops officers. GPAR could use some of its
funding to support district forestry officers to identify NTFP production and market
options and to guide the setting up of NTFP producer groups, using the methods
developed by the CIAT-SADU project. They would need some training support to start
this process. It would also be good if the project could provide funding for young
university or college graduates to spend one year as volunteer staff with the district
agricultural office, to learn the ropes of extension work and to provide the district
with much needed extra man-power to set up producer groups.
18. Mr. Khamkhone, maize dryer, Kham district, 16/11/06
Mr. Khamkhone Phaioudom (020-5661648) is the former Deputy Governor of
Xiengkhouang Province. He also used to be Head of Province Agriculture for many
years. Now he has retired from the Government and started his own agricultural
business, drying corn (maize). Based at Kham district, he set up two corn drying ovens
at the site of a former rice mill. Each oven costs about $12,750 to build ($25,500 total
investment.
Heaters are using “than hin” brown coal (lignite) which is bought locally for only 500
kip/kg. It takes 200 kg of coal to dry 15 tons of corn in 6-10 hours. The dryer could not
be operated economically without the coal, fuelwood would be far too costly. Heat is
produced in small ovens, electric fans blow hot air underneath large drying plates,
made of perforated iron.
The drying time depends on the initial moisture content of the corn. If corn arrives
with a moisture content of 32 %, it takes 10 hours to dry. If corn arrives with a
moisture content of 18%, it takes only 6 hours to dry. The maximum moisture content
for dried corn is 14%. Mr. Khamkhone uses an expensive grain moisture meter from
Europe ($1,800) to measure moisture content of corn dried at his factory.
Mr. Khamkone considers himself a pioneer of corn growing in Kham district. He sells
hybrid seed from Vietnam to farmers since 2004. The variety used is called LVN10 sold
by the Southern Seed Company from Ho Chi Minh City (+84-8-84 44 633).
In 2004, he sold 700 kg, in 2005, 3000 kg, in 2006, 17 ton. This illustrates the rapid
growth of corn cultivation in the district. Mr. Khamkone estimates 26 villages or 3,000
families are growing his corn, covering some 3,000 ha. The average yield is 6 ton/ha.
Corn has a big impact on family income, an average family earns 7-10 million kip
($700-1,000) per year from corn growing.
Fresh corn is bought at 1,050 kip/kg, dried corn is sold at 1,150 kip/kg. The weight
loss is equivalent to the reduction in moisture content. E.g. if 1 ton is dried from 18%
Mission Report: Governance and NTFP, January 2007
67
to 14%, you will loose 4% of the total weight and end up with 9,600 kg. Sold at 1,150
kg, that would give 110,400 kip/ton, or a gross margin of 54,000 kip/ton (110,400105,000).
The estimated production costs consist of the coal (7,000 kip/ton), and the labour.
Around 45 people work for 20,000 kip/day to man two ovens for one drying cycle at 15
tons/oven. That gives a labour cost of 2*15/(45*20,000) or 30,000 kip/ton. Total
production costs of coal and labour are 37,000 kip ton. The average profit is around
(54,000-37,000=) 17,000 kip/ton.
The estimated gross volume of corn dried in 2006 is around 18,000 ton. With a profit of
17,000 kip/ton, that gives a profit of 306 million kip ($30,600) for the service of corn
drying in 2006. That is more than the total investment of $25,500. This seems a very
profitable business indeed. As Mr. Khamhone said: many people dream about getting
dollars from America or Europe, but the dollars can be found right here in our country!
For 2007, Mr Khamkhone plans to set up more drying stations in other districts. He also
plans to buy cardamom to use in his dryer during the wet season. The price of
cardamom this year is very high, as there is not enough supply, but he has to wait till
next season to benefit from this price increase.
19. Mr. Bounla Vilaiphone, NTFP trader, Ban Thavieng, Thathom district, 17/11/06
Mr. Bounla Vilaiphone (020-5067388) has been trading NTFP from Thathom district
since 2002. After the dissolution of the Saysomboun Special Zone in 2005, Thathom
district became a part of Xiengkhouang Province. During the same period, Mr. Bounla
was asked by the Province Authorities to construct a bridge linking the district to
neighboring Bolikhamxay Province. The cost of the building the bridge was around 680
million kip ($68,000). Not being able to pay in cash, the Province gave Mr. Bounla
instead the sole rights to export NTFP from Thathom district.
The main products traded by Mr. Bounla are:
“mak tao” palm fruits, 100 tons in 2005, 250 tons in 2006, according to quota
“vai thoun” big rattan canes, 20,000 stems in 2005, 300,000 stems in 2006.
This makes Mr. Bounla the biggest trader of “mak tao” in the province. He runs his
business through seven village buyers. The main production areas for mak tao are the
zones of Thavieng and Nyam (Ban Nyamchaleunsai). For rattan, the main zones is
Thavieng, especially Ban Kao and Ban Nakeng.
Mr. Bounla estimates that NTFP provide more than 80% of the cash income of the
villagers in these zones of Thathom district. On average, a family may earn 3 million
($300) per year from selling NTFP.
Mr. Bounla proposes a number of ways to improve the quality of “mak tao”:
1) only take ripe fruits, do not harvest too early or too late
2) immediately cut and press the fruits after boiling, do not leave the bolided
fruits in water, this causes bad smell
3) Pack the pressed fruits without delay in clean plastic bags and close them well
4) Store packed fruits in cool places, not in the sun
Mission Report: Governance and NTFP, January 2007
68
The main client is the factory in Ban Kheun, who selects strictly on quality. On
average, of every 10 tons of fruits delivered at the factory, 2 tons are rejected, that is
a loss of 20 %.
Mr. Bounla only uses his own money to run the business, he does not borrow from
anybody.
The Government could do three things to improve income generation from NTFP for
poor families:
1) reduce taxes, they are too high and too complicated
2) provide extension support to improve product quality and reduce losses
3) promote proper management of existing palm stands and promote plantations
of more palm trees
Diagram: Chain of fees for “mak tao” as explained by Mr. Bounla
Village:
1. village collector:
100 kip/kg
2. Village tax:
100 kip/kg
Khoun district:
Pass, checking
Point tax:
300 kip/kg
Thathom district:
1. Quota 400 kip/kg
2. Akone tax
300 kip/kg
4.
3.
Checking point
Meuansoi:
Province level:
1.Province checking
point 30 kip/kg
5. Boulana tax (PAFO)
300 kip/kg
300 kip/kg
6.
20. Mr. Xheng Hong, pine rosin company, Phonsavanh town, Paek, 18/11/06
Mr. Xheng Hong is a Chinese mining expert from the Yunnan Ashan mining company
from Kunming, China (Director: Mr. Wang Chun Hua, based in Vientiane, tel: 021313568, 020-5799333). The company has mining concessions in Champasak and
Phongali. Mr. Xeng Hong came to Xiengkhouang Province to look at mining prospects.
He observed that large stands of natural pine forest are left unused, while there is a
good market for pine rosin in China. Pine rosin. “yang pek” in Lao, “song sieng” in
Chinese, is a key ingredient in the electronics industry, it is used to make computer
motherboards and other computer parts. He has received all necessary permits from
the Province Government to start a business tapping pine trees in Paek district. It took
four months to get all the paper work done, he plans to start next month. There is a
business plan in Lao language among these papers.
In China, one person can tap up to 500 trees and produce up to 1,000 kg per day. For
Laos, he estimates one person could produce around 25-30 kg per day. A tree of 15
years old could give 2-3 liters per day. The price would be 2,500-3,000 kip/kg.
For 2007, Mr. Xeng Hong expects to export 1,000 ton, every year after that he expects
to increase the production with 1,000 ton. He expects to employ initially about 400
persons to do the tapping, getting up to 1,000 labourers after 3 years.
Mission Report: Governance and NTFP, January 2007
69
21. Mr. Mostafizur Rahman, agarwood distiller, Phonsavanh town, Paek, 18/11/06
Mr. Mostafizur Rahman (020-2431159, 061-212350), a citizen of Bangladesh, has been
distilling agarwood in Xiengkhouang province since 2000. Agarwood are small pieces of
black resinous wood growing scattered in some trees of Aquilaria sp. The product is
very sought after in Arab countries. An oil can be distilled from the lower grade wood,
selling at a prices of up to $10,000 per liter. The market is strong and the demand is
getting higher as it becomes harder to find good quality agarwood.
Mr. Mostafizur invested in a factory with a great number of distillation kettles.
However there is a serious problem with the supply of raw material. In 2005, he could
buy only 3 tons, in 2006 only a few hundred kilograms. The agarwood delivered at the
factory does not have a good quality, it seems the good material is really finished.
Now he can only produce lower grade oil that sells for 100,000 baht per “ben”, a
bottle of 360cc ($7,300/liter).
At present, the company buys agar wood at a price of 14,000 kip/kg. From 100 kg of
raw wood, around 24 grams of oil can be produced.
There is scope for plantations, but investors need to take a long term perspective as it
may take twenty years or more to get trees with the right type of agar wood. The
company is selling seedlings in every district, the price is 5,000 kip/seedling. They sold
around 30,000 seedlings this year. It may take about 15 years to get a tree of 15 cm in
diameter. Such a tree sells at present for about $60 per tree.
Besides raw material supply, the main problem is the high amount of taxes and fees.
Roughly speaking Mr. Mostafizur used to spend around 50 million kip ($5,000) per year
on all taxes and fees. Of these, roughly 10% are paid “under the table”.
On the international market, Laos used to be the only commercial source of this
product. Now, Malaysia has started to export agar wood as they open up more and
more forest in remote areas.
22. Conclusions
Some 21 interviews were held with traders and government staff in the NTFP subsector in Xiengkhouang Province. They provided a wealth of information on the status
of NTFP trade, which needs to be analyzed and compared with secondary data. The
main constraints for NTFP collectors and traders seem to be:
1)
2)
3)
4)
5)
over-regulation (confusing tax and quota system)
lack of access to markets (low price, no buyers)
some NTFP resources are almost finished
lack of information on new options
very few employment opportunities
The key support and training needs for the extension staff seem to be:
6) lack of staff for extension
7) need to learn how to be provider of knowledge services
8) need to learn how set up and support farmer groups
9) need to learn to link farmers to markets
Mission Report: Governance and NTFP, January 2007
70
Initial recommendations for the GPAR project
1: GPAR needs to have a more frequent and recurrent extension training program for
district staff, with regular meetings, clear field assignments and easy system for
advancing travel costs
2: forestry officers need to be more involved in the GPAR extension training program,
they should become pioneers in the development of NTFP village enterprise groups,
through a special training program and a small budget for field activities
3: forestry officers could support NTFP village groups in analyzing markets, developing
viable business plans, developing sustainable forest management rules, participatory
land use planning, etc.
4: GPAR should have a small grant scheme to support temporary placements of young
graduates to work 3 years at sub-district level ($30 /p/month), at least 2 person per
district.
5: GPAR should support districts and province to set up simple market information
systems which is updated initially once per month, later once per week.
6: GPAR should address the key issue of over-regulation and lack of coordination
between departments in the NTFP sub-sector. This is the main governance issue in
terms of improving service delivery of the state to citizens. GPAR should center a
number of its activities around this issue, e.g. drafting simplified “one-stop-shop” tax
and regulatory systems, by facilitating the adoption of new systems through senior
level workshops etc.
7: GPAR should support the Province Government in finding alternatives to the present
quota system. The present system does not encourage competition between buyers of
NTFP, this depresses the price for village producers. New systems should be developed
and tested where competition is encouraged, and tax income for the state is increased.
The system should be more transparent on the use of NTFP tax to improve services
delivered to NTFP producers.
Mission Report: Governance and NTFP, January 2007
71
Annex 8: Conclusions of a stakeholder meeting, held 15/12/2006 at the Province
Agriculture and Forestry Office, Xiengkhouang Province, to discuss findings of a short study
on the status of the Non-Timber Forest Products (NTFP) in the province, supported by the
Governance and Public Reform Project (GPAR).
1
Participants agreed with all the key findings of the mission on the status of
NTFP use in the districts and their importance for the family economy.
2
Several districts are ready to implement the NTFP extension process proposed
in the study (especially Mok Mai, Khoun, Nonghet). They request support from
the GPAR Project to:
a. Provide training materials (e.g. a booklet in Lao language, explaining
the steps of the process),
b. Organize training events to guide district extension workers,
c. Provide some small funds to support field implementation.
3
A pilot study should be launched in the Nam Song Siang zone of Khoun district
to develop and test a set of local land use regulations aimed at protecting NTFP
resources, especially protecting mak tao palm trees from forest fires.
4
The main issue brought forward by the NTFP traders present at this meeting is
the costly, time-consuming and complex system of permits, taxes and
checkpoints. All participants agreed that the Province Authorities should
review and simplify this system, aiming towards a “one-stop-shop” mechanism.
They request support from the GPAR project to facilitate this regulatory review
process.
5
Traders also request more support from the Government to enforce the
sanctity of contracts. Investors are not willing to invest in NTFP value chains as
long as they cannot be sure that contracts will be respected.
6
The Province Industry and Commerce Office should have a market research unit,
which executes market chain studies, collects price information and
disseminates market information to all interested parties in the province.
7
The nearest export market is Vietnam, yet very few products are exported
there. The Province should aim at putting up a marketing agent in the
Vietnamese town of Vinh, with the duty to explore the Vietnamese market,
attract buyers and facilitate contracting arrangements.
8
Some traders felt that the study focused mainly on products already traded,
they propose that there may also be a market potential for lesser known
products, e.g. sticklack, benzoin, ricinus beans, that needs to be explored.
9
This meeting provided a unique opportunity for local entrepreneurs to meet
and discuss issues with local Government officials. All participants would like to
have more meetings like this in the future, they request support from the GPAR
Project to facilitate this kind of stakeholder workshops more often.
10 It is important that the Xiengkhouang Province Government takes full
ownership (“chao ki, chao kan”) of all these proposed steps to improve
governance in the NTFP sub-sector by:
a. writing up and agreeing to an annual work plan
b. assigning clear tasks and responsibilities for implementing the plan
The GPAR Project should support the Government in this by facilitating
structured follow-up planning events over the next 2-3 months.
Mission Report: Governance and NTFP, January 2007
72