11.1 Appendix 1:
Comparing Developments in Agricultural
Extension Services in Lao PDR with Global
Trends: A Literature Review
Michael J. Jones
Peter Case
John G. Connell
May 2013
Vientiane and Townsville
Introduction
This literature review examines Lao agricultural extension practices in the context of global
trends in the field of agricultural development. Contemporary Laos is experiencing an
economic boom driven by investment in natural resource extraction and services, with
annual GDP growth hovering around 8%. At the same time, the population remains
overwhelmingly rural and poor, with most Lao making their living in small-scale agriculture.
As in any country, natural typography and climate, social and economic conditions, and
national and local policy all contribute to the opportunities and difficulties facing farmers.
Yet Laos has a unique advantage in that its extension practices follow, chronologically,
global trends and thus as a nation is well placed to learn from modern theory and practice.
This survey reviews the global trajectory of extension and explores the early history of
extension services in Laos. Contemporary Government of Lao policy is overviewed and
contrasted with evolving understanding of ‘best-fit’ agricultural services.
The conception of agricultural extension globally has experienced a major shift from a near
exclusive focus on technical production issues—and dissemination of technologies
developed by researchers—to one of a dynamic system. This dynamism involves relevant
actors interacting across multiple value chains and exchanging information as technology
and understanding evolve. Such a system is multi-directional, promotes agency, and
respects decision-making at many levels from all sides of the production and exchange
system.
Policy and practice in Laos are also changing rapidly, with a growing recognition of the depth
of the challenge facing efforts to eradicate rural poverty and improve farmer livelihoods.
There remains to be developed, however, a consensus on how to supply the services that
farmers need, particularly answering the questions of who will supply these services and
under what conditions. The concept of pluralism is taking hold as government planners
realize the power and efficiency of the private sector. However, even with the limited incountry experience, Lao leaders can see the shortcomings and need for continued
government service provision and regulation. The role for civil society and farmer
organizations is similarly ill-defined and in flux.
The economic growth that is powering GDP upwards presents possible demand for
agricultural output while private-sector investment in agriculture also presents
opportunities for new production technologies and value chains. Global experience shows
that these opportunities will manifest in terms of better production technologies, better
access to inputs and finance, and better access to markets. However, global experience also
shows that these opportunities are accompanied by social and technical threats: threats to
environmental sustainability, farmer debt and challenges to smallholder farms, market
manipulation and configurations that disadvantage smallholders. Taken together, the
threats could well undermine the viability of smallholder farming in Laos. Global experience,
again, indicates that the ultimate impact on smallholder farmers is not simply a matter of
natural economic forces but, rather, how these are shaped and either exacerbated or
alleviated by policy choices. Thus the future of Laos’ smallholder farmers will be affected
significantly by the choices that policy leaders and international supporters make, the
directions they choose for services to smallholder farmers, and the development of the
agriculture sector.
In writing this literature review, the authors sought sources that could offer insight into
critical factors and which identify concerns and opportunities for Laos. The topic is broad
and the authors intentionally covered a range of issues of crucial importance to extension in
Laos without focusing in-depth on any single issue. For instance, a wealth of literature is
available on how farmer organizations evolve and how government and international
development agencies can support these, but this review can only offer a broad overview of
this issue. The authors thus present a generic context and then frame considerations on
each of the topics covered by referencing selected sources. When synthesized in review,
essential elements from the sources help explain and improve understanding of the issues
discussed.
Sources include published, peer-reviewed international journal articles, newspaper accounts
and stories, in-country articles and unpublished reports. While the authors’ personal
experiences and knowledge of Lao agriculture have influenced interpretation of written
sources, they are not - with a few noted minor exceptions - used to make empirical claims.
2
1
Global Perspective: Rise, Fall, & Rise Again of Public Extension Services
In the post-colonial period of the 50s and 60s, the main objective of ‘agriculture extension’
was increasing agricultural productivity, both to improve farmers’ livelihoods and to enable
exports. While an increase in productivity still lies at the core of extension, other roles are
now also articulated that include poverty reduction and conservation. These all are clear
‘public goods’ and well justify a public sector investment in extension. But during the 80s
the effectiveness of public sector extension began to be questioned, and this was followed
by calls for agencies other than those charged explicitly with extension, to take up functions
previously considered the purview of extension agencies. The pendulum has now swung
back with a renewed interest in public sector extension. This is driven by the concern for
global food supplies, but is accompanied by expectations that extension be reconstructed;
that it be pluralistic, and apply new types of interventions, including farmer organizations
and facilitation of access to markets.
Following WWII most developing countries established formal, government-run extension
systems. Farmers were seen as ‘backward’ and so the main focus of extension was to reduce
the ‘gap’ between existing farm production and the potential production to be gained
through use of modern technology. This technology focus intensified with the advent of
‘high yielding varieties’ (HYVs) for the major staples (rice, wheat and maize). The old
extension systems were underfunded, with untrained staff, and thus regarded as unable to
capitalize on the opportunities offered by the new HYVs, (Lipton and Longhurst 1989,
Birkhaeuser, Evenson and Feder, 1991).
The concept of the Training and Visit (T+V) extension systems was developed to address
these weaknesses. It was characterized by the establishment of contact farmers; a schedule
of regular visits by extension staff; specific technical messages; and the assignment of fulltime, dedicated extension officers. The T+V system became a major tool for increasing
attention and resources for extension, led in the developing world by funding from the
World Bank, with further influence from additional agencies including IFAD and the FAO.
From 1965 – 86, the World Bank invested $1.8 B to establish T+V in 79 countries. Despite its
influence, in 1985 World Bank funding represented only 20% of total funding for agriculture
extension (Birkhaeuser, Evenson and Feder 1991, Anderson and Feder 2003).
Extension during this period relied on simple technical messages that could be disseminated
to contact farmers, which would then spread to other farmers through an ill-defined process
of diffusion. T+V did have significant impacts. The HYV’s for rice and wheat became available
in the 1960s, followed shortly by maize. By the early 90s, HYVs accounted for 70% of the
planted rice and wheat farm area in developing countries, and 57% for maize, (Byerlee,
1994). While there are arguments against extensive cultivation of a limited set of varieties,
this was the route promoted by the majority of development agencies. In a reflection on the
Green Revolution to the Nobel Institute in 2000, Norman Borlaug estimated that had crop
yields remained consistent from the 1950s, an additional 1.8 billion hectares of land in 1999
(over the 600 million hectares) would need to be cultivated to achieve the same world food
harvest (Borlaug 2000). Integrated Pest Management (IPM) although using an extension
process very different from that of T+V is another example where technology-focused
extension has had a major impact on rice production in developing countries.
3
The above are well recognized examples of extension impact. More importantly for
governments is whether extension offers a good return on investment. It was recognized
that many factors affect this, including farm size, the education level of farmers, the
‘newness’ of the technology, among others (Hussain, Byerlee ad Heisey 1993, Anderson
2003). An early meta-analysis of extension effectiveness showed that for 36 of 48 cases
examined, extension had a significant effect on productivity. Only 8 of these provided data
of net returns: 75-90% in Paraguay; 13-500% in Brazil; and 34-80% in a comparative study of
sites across Asia, Africa, Latin America, (Birkhaeuser et al, 1991). While the positive
interpretation of the study was questioned due to lack of clear base lines (Picclotto and
Anderson 1997), a similar and more exhaustive exercise made a decade later (Alston et al,
2000) showed similar results. The Alston research examined 286 studies of the returns to
‘research + development’. Again the rates of return were high, with the median for
extension being 62.9% per year, notably higher than 48% per year for research. Such extant
assessment is difficult, exact figures may be contested, and one of the lessons is the
variability of results obtained from the various extension systems. But despite the inherent
difficulty of such assessment, that extension had positive impact was well accepted through
the beginning of the 1990’s.
Support for extension waned through the 90s. Criticisms, mainly directed at the T+V system,
pointed to the bias of extension workers to support primarily better-off farmers, the rigidity
of the technical messages not applicable in more diverse environments, and that resource
poor farmers could not easily obtain the inputs needed for the recommended practice
(Howell 1982, 1983, Axinn 1988). Notably these criticisms also signaled new expectations for
extension: shifting from a focus on increased commodity production to addressing the
needs of poorer farmers.
Toward the end of the 1990’s the final factors resulting in discontinued international
development support for the T+V system were institutional. A WB study found that only
33% of its successful projects were sustainable (Purcell and Anderson, 1997). The main
factors included the following: (a) difficulty for national budgets to maintain the expensive
system; (b) weak staff capacity; and (c) lack of continuity of extension messages. Added to
this, was the absence of M+E, so that even where results were gained, these could not be
attributed to extension and to ensure political commitment (Anderson and Feder 2005;
Anderson, Feder and Ganguly 2006).
By the end of the 90s extension was often characterized as ‘failing’ or ‘moribund’, (Rivera et
al. 2001). As some developing countries transitioned to post-agriculture economies, the
contribution of agriculture to GDP became less dominant. This suggested to some policy
makers that it might be possible to leap-frog to investing in the industrial and service sectors
as a quicker pathway to modernization. This, combined with the difficulties already
experienced in managing public sector extension, led to creeping ‘agro-skepticism’ amongst
governments in developing countries and their donors.
Over the period of the mid-1980s to mid-2000s overseas direct assistance (ODA) directed
toward the agriculture sector halved, both as a per cent of total ODA and in real terms. IFAD
captures the change in priorities:
The roots of the recent food security crisis go back almost 30 years, when investment in
agriculture started to decline because of the growing perception that agriculture was
unprofitable. In 1979, aid to agriculture was 18 per cent of total assistance. By 2006, it
4
was just 2.9 per cent. Domestically, government investment in agriculture in developing
countries also fell, by one third in Africa and by as much as two thirds in Asia and Latin
America during this period. (IFAD-web)
IFAD connects this decreased investment to a decline in annual food production increases,
from an annual rise approaching 3.5% in the 1980’s to under 1.5% in the mid to late 2000s
(ibid).
Beyond food production, a series of macroeconomic studies showed, that growth in a
country’s GDP attributable to the agriculture sector had three times the poverty reduction
effect than growth in other sectors (industry and services). The studies also showed that
growth in the agriculture sector had unique contributions to overall growth of the economy:
ensuring food supplies and allowing for enterprise growth in rural areas. The effect of these
linkages varies with the labor profile of each sector in any given country. However, these
results suggest strongly that trying to a leap-frog development, bypassing agriculture in
favor of industrial and service sectors, may not serve poverty reduction goals as well as
agriculture-focused growth. In short, agricultural development provides a clearer pathway
towards national economic development. (Bravo-Ortega and Lederman, 2005, Janvry and
Sadoulet 2010, Irz et al. 2001.)
Globally, agriculture extension, a backbone of international development support from the
1960s onward, has weathered an existential challenge during the 1990s, during which
international recognition of its value and, accordingly, financial and technical support
declined dramatically. In the late 1990s and 2000s, global food supply and rural
development trends suffered from a lack of growth in the agricultural sector, attributed in
part to the general decline in international development and local government support for
the sector. Thus development assistance organizations have renewed their focus on
supporting agricultural development, reaffirming the centrality of the sector—and the role
of farmers—in the general economic development of a country. Furthermore, new
recognition has focused on the role agriculture plays in equitable development through its
function as an avenue for poverty reduction. The methods and practices of support to the
sector evolved significantly during this renewed focus; Section 5, below, will return to this
topic.
5
2
History of Agriculture Development in Laos: A Small Place for the
Smallholder Farmer
2.1 Lao PDR, A Nation of Smallholder Farmers
Table I: Key Statistics
Indicator
Rural Population as a Percent of Total Population
Farming Households as a Percent of Total Households
Farm Holdings Smaller than 2 Hectares as a percent of total
number of holdings, 1998/99
Agriculture contribution to GDP as a percent
Years
Percent
1975
2010
1998/99
2010/11
1998/99
88.9
66.8
84
77
73
53
(<3ha=73)
60.55
31
2010/11
1990
2010
Data compiled from: Asia and Pacific Commission on Agriculture Statistics 2012, Steering
Committee for the Agriculture Census 2012, Index Mundi, Trading Economics, and The World
Bank.
After a long period of war—during which farmers enjoyed several years of support from
U.S.-backed extension services focused primarily on input provision—the Lao P.D.R. was
established in 1975 as an overwhelmingly rural nation of smallholder farmers. The statistics
in the table above show that while some urbanization has occurred, life for most Lao people
remains rural and based in agriculture. Even urban areas are surrounded by gardens and
small farms, with many peri-urban households continuing to engage in farming activities
(Messerli et al. 2008: 108). The last statistic in the table reveals a striking development that
has changed the shape of the economy. Starting in the early 1990’s the country’s macro
economy has begun a radical transformation from one dominated by agriculture to one
more diversified—agriculture accounted for only 31 percent of GDP in 2010. Mining and
service sectors have boomed, leading the country’s dramatic economic growth which in the
years from 2010 onwards, has averaged over 8 percent annually. At the same time,
agriculture has managed regular growth approaching a respectable 4 percent per year (MAF
Strategy 2010: 1)1.
Despite a major push to promote industrial agriculture, the sector remains dominated by
smallholder farmers, with over fifty percent of farmers managing land of two hectares or
less, and over seventy percent with less than three hectares. Furthermore, on these small
plots of land, farmers continue to engage primarily in subsistence agriculture, producing for
the market only a surplus after producing for their own needs (Eliste et al. 2012: 56).
2.2 Mild Push for Collectivization and Market Control
Covered in detail in Grant Evans’ detailed history, Agrarian Change in Communist Laos, the
first years under the newly formed Lao P.D.R.—1975-1976—the government instituted mild
agrarian reforms aimed at slowly shifting the population toward collectivization, beginning
1
All Lao P.D.R policy documents are listed separately in a table at the end of the reference list.
6
simply with work sharing and planning (1988:3). However, there were tensions among the
views held by various factions regarding national policy supporting farmer organization.
Indeed:
During 1976, the government’s first year of power, little attention appears to have been
paid to the formation of collectivized production groups in agriculture. However, some
over-enthusiastic cadres obviously tried, in some regions and localities, to collectivize
everything and prompted a statement of clarification from the government in May: The
Government’s programme of action states clearly that the people’s right to own
property, money, houses and paddy fields will be respected strictly. (Evans 1988: 4,
original emphases)
Evans posits that the lack of rural refugees in Thailand indicates that this problem was
unlikely to have been widespread throughout the rural areas of Laos. However,
contemporary practitioners supporting agriculture organizations note of a certain
reluctance among many farming communities to consider formal cooperatives. Often times,
farmers and local officials indicate a desire not to repeat the kind of collectivization that
was, at least in some places, pushed at the beginning of the regime [authors’
communications and observations].
In the area of market regulation, some regions, immediately upon independence, adopted
detrimental controls and regulations. Again, Evans relates:
…soldiers spontaneously placed bans on the free movement of trade from the villages to
the city… food supplies dwindled, prices rose and smuggling began. In May 1976
Savannakhet was going hungry when leading cadre realized what was happening and
told the soldiers guarding the entrance to the city to lift their ban; whereupon the
markets filled with food once again.’ (ibid.: 7)
Evans traces the progression of economic theory pursued by the new leaders of the country.
From a focus on state-controlled exchange and distribution which led to a dramatic 10%
economic contraction in the first three years, the party quickly shifted to a controlled
market approach, using traders and entrepreneurs as contracted agents to enable the
exchange of goods among producers and consumers. Heavy emphasis was placed on the
exchange from farm to city as a way of building ties among workers and farmers. We can
see in this period—late 1970s to late 1980s—the foundation for the market approaches
pursued throughout the country today.
2.3 Rise and Decline in Agriculture Investment
While the country’s budget was never large, indications are that it prioritized rural spending
and support for agriculture. In his piece on the history of extension in Laos, Andrew Bartlett
(2011) relates the shift in development resources into the agriculture sector that came as
the country implemented the New Economic Mechanism (NEM) from 1986 onward and
increased its receptivity to assistance from non-communist block countries:
Following the launch of the NEM there was a massive change in the source and type of
external assistance for agricultural development in Lao PDR. While the 1980s had seen a
large number of infrastructure projects funded by the Soviet Union and Eastern Europe,
including the construction of many ‘technical centres’ that still exist, the 1990’s saw a
shift in emphasis towards farmer training funded by the UN and OECD countries. (2011:
4)
7
Bartlett goes on to point out that the development support included a number of projects
focusing on specific aspects of extension and efforts to set up extension systems in general:
training for farmer-led irrigation systems, support for district extension delivery systems,
training for farmers in integrated pest management, and participatory natural resource
management. With support from international agencies, these projects were designed to
include significant participation and empowerment of farmers and farmer-led systems at
the local level.
At the end of the 1990s, the government established the National Agriculture and Forestry
Research Institute, consolidating funding, human resources, and mandates for agricultural
research. In 2001, they followed this with the formation of the National Agriculture and
Forestry Extension Service, consolidating mandates for training support but with few of the
resources needed to effectively support farmers. Again, Bartlett summarizes these
developments:
Whereas the consolidation of research involved bringing staff and facilities, along with
the associated budgets, under the direct command of NAFRI, the consolidation of
extension was – generally speaking - limited to bringing functions and projects under
NAFES. … [However] neither NAFES or the PAFO [Provincial Agriculture and Forestry
Offices] was given a budget for regular activities of the extension units at this level, with
the result that they depended on short-term support from foreign projects. (2011: 7,
original emphases)
Regardless of the differences in support between research and extension, as with the global
picture, this overall support for agriculture development in Laos has declined since the late
1990s with a dramatic decrease in the early 2000s. Public expenditures (including ODA and
the government’s own funds) on agriculture are declining as measured as a percent of GDP,
as a share of total national public expenditures, and relative to the agriculture sector as a
whole. Reported by Cammack et al. in a report for DFID and the World Bank: ‘As a
proportion of total national GDP, agricultural expenditure fell from 4.3 per cent to 1.2 per
cent which portrays a worrying decline in the amount of public resources being spent on
agriculture relative to the value being added by it’ (2008: 19). As a share of public
expenditures, the decline as from 17 per cent to 6 per cent. (Both comparisons are for
2000/1 against 2005/6. More recent data has not been reported.)
The authors go on to explore the geographic element of expenditures: ‘Provinces allocate
less of their budgets to agriculture: in 2001/02 they allocated 37% of their budgets to
agriculture, but in 2004/05 this fell to only 11%’ (ibid.: 3). While this is of concern because
most agriculture spending takes place at the local level, of even more concern is that this
spending is not even taking place in priority development districts targeted because of their
higher poverty rates, but rather, ‘Agriculture expenditure continues to favour the more welloff provinces…’ (ibid.: iv). The authors point to political forces outside those of fighting
poverty and meeting development goals as the reasons for such a pattern.
Similarly, an ADB study (Menon & Warr 2012) clearly reveals that rural spending has
declined as a percent of national GDP over the last decade. The authors go on to posit that
to meet development goals, the country needs to support more rather than less rural
development. They compare the current economic and fiscal situation in Laos to the ‘Dutch
disease’, which is a focus on resource extraction for export and the concomitant contraction
in other sectors. To deal with this situation which puts farmers at a disadvantage,
substantial support would be needed, but budget allocations are exactly opposite this.
8
3
Contemporary Laos: The Big Push
The Lao government has initiated an all-out effort to remove itself from the U.N. list of least
developed nations. Central to the 7th National Socio-Economic Development Plan, this effort
will require meeting several specific indicators focused first on overall economic growth per
capita, but also on a reduction in poverty and risk. The government’s development efforts
seem overly focused on the first, achieving an impressive rate of economic growth of 7% or
better for the last five years while significant swaths of poverty remain and more growing
populations are exposed to risk of food insecurity.
David Fullbrook’s study on food security in Laos, describes the tradeoff the country appears
to be making, favoring heavy-impact resource extraction over food production. Seeking the
state revenues and boost to GDP, the Lao government has, since the early 2000s, engaged in
a ‘big push’ development policy that has facilitated the rapid expansion of mining,
hydropower, and plantation investments. However, Fullbrook cautions the costs are
significant: ‘The march of big-push development amid poor state capacity, weak
administration and piecemeal policy is trampling on the environment and livelihoods
necessary for food security in the name of national development to tackle poverty’ (2009,
online).
3.1 ‘Resource Curse’ and ‘Dutch Disease’: Two Threats to Smallholder Viability
The lesson of history is clear. The inequalities and disempowerment resulting from these
extractive political and economic systems are replicating the “resource curse,” in which
nations become trapped in poverty and are riven by resentment and internal conflict,
with growing risks of political turmoil. (Rights and Resources, 2013: 1)
But what is the ‘resource curse’ and could it apply to Laos? In the first part of his expansive
treatment of the subject, Michael Ross reviews the conclusive economic evidence that the
curse is very real:
Jeffrey D. Schs and Andrew M. Warner in Natural Resource Abundance and Economic
Growth examine ninety-seven countries over a nineteen-year period, using regression
analysis to measure the impact of mineral and other resource exports on GDP growth.
Their study shows that states with a high ratio of natural resource exports to GDPO in
1971 had abnormally slow growth rates between 1971 and 1989. (Ross 1999: 300)
Ross continues to explore the major theories economists use to explain the lack of
development: ever decreasing value of raw commodities in real prices, high volatility in
international commodities, low availability of funds for in-country reinvestment as profits
are exported by foreign-owned companies, and the ‘Dutch disease’ which involves the
stifling influence of the export-oriented boom sector on other indigenous sectors.
With the substantial GDP growth Laos has experienced over the last decade, has it beaten
the resource curse? The high macroeconomic growth rate belies a persistent poverty and
stifling economic conditions for non-resource extraction sectors. Jayant Menon and Peter
Warr (2012) present a convincing argument that, in fact, economic data shows that the
country is in a state that can only be described as ‘Dutch disease’, and that this can explain
the lack of development in non-tradable sectors (the sectors other than the resource
extraction sectors). For Laos, this presents a serious challenge as these are the very sectors
9
that employ the greatest number of people and are the key to the food security of most of
the population.
Menon and Warr explain the nature of the challenge:
The proceeds from the Lao People’s Democratic Republic’s (Lao PDR) natural resourcebased exports accrue primarily to the government. Over the 8 years preceding 2011,
total government revenue increased from 11% to over 19% of gross domestic product
(GDP), due almost entirely to revenues derived from mining and hydropower. The effect
on the Lao people depends on how the government uses these revenues. (2012:
Executive Summary.)
As we have seen elsewhere, the government offers decreasing support to the very sectors
disadvantaged by the outsized growth of the extractive industries. So rather than supporting
farmers through this experience, the government is withdrawing support. This presents a
threefold problem for Lao’s farmers: 1) they are disadvantaged by the growth of the
extractive industries (the Dutch disease), 2) they are receiving less support than ever, and,
3) the growth sectors in Laos—mining, hydropower—employ few local workers. Menon and
Warr suggest retraining and education programs to support Lao people not currently
working in the growth sectors to facilitate shifts in employment. They do not detail the
types of programs nor do they identify the jobs they would suggest the newly trained
workers to occupy. There is no great demand for more workers on the very efficient mines
or hydropower dams and plantation work is scarcely seen as a viable livelihood.
Fullbrook explains why this policy, putting extractive industry ahead of agriculture and food
production, entails significant risk:
Dams, mines and plantations under the current free-for-all are tearing holes in the
natural food-producing safety net of fields and forests that, until now, has been there to
catch people when severe weather, blight or recession knocks them down.
Where the safety net is torn, the alternative is to join the exodus of people from rural
areas — taking with them deep wisdom borne of generations of working with their local
ecology to farm, fish and forage — in search of livelihood security, on or off the land. If
that unique, ecosystem-specific knowledge is not recorded prospects will dim for food
security and the culture and craftsmanship of smallholder sustainable agriculture. With
fewer hands and fewer fields and forests for producing food, Laos will be unable to
escape growing dependence upon imports to feed its people along with the exposure
that brings to global uncertainties of availability and price. (2009, online)
What we have are two very strong arguments for greater investment in the agriculture
sector:

For the jobs—agriculture employs most people in Laos and this is not easily going to
shift in the short term, even if this were desirable.

For the food—to keep Lao sufficient in producing its food as a nation isolates Lao
from the growing uncertainties of the global food markets.
3.2 Industrial Agriculture Versus Small-holder Farming
As discussed above (Section 1.2.1), Lao was founded as a nation of smallholders and
remains thus today. However, developments in the agriculture sector may not allow this
characteristic to persist. Government policy and actions both support smallholder farmers
and undermine them by promoting industrial-scale, FDI-led, commercial agriculture.
10
Loss of Land, Loss of Livelihoods
Industrial agriculture is primarily characterized by large holdings. Throughout the country,
government actors (central, provincial, and district alike) facilitate the consolidation of
smallholdings into larger plots of land for concession to international investors—some in the
tens of thousands of hectares. Resting on ideological foundations of early regime efforts at
collectivizing agriculture lands and taking up new marching orders embedded within the 7 th
NSEDP and ADS which call for modernization and increased use of technology through
foreign investment, this strategy is turning significant tracts of Lao’s best farm land into
industrial plantations. Several mechanisms are used to secure the land, including contract
farming and, the most insidious, land concessions.
3.2.1
Alastair Fraser consulting for the Asian Development Bank and analyzing the impact of FDI in
Southern Lao provinces, explained why these land concessions can be so damaging. In
addition to serious concerns about the environmental impact of the conversion of lands
suitable to rice paddy into other commercial crops, he found that:
‘While some of these companies are supporting smallholder “outgrowers” most are
taking land that had formerly been used for food production and some are clearing and
converting forest land contrary to government policy’ (2009: 14).
Farmer reactions include some taking up wage labor on the industrial plantations, but most
reportedly opt for leaving for work elsewhere (Thailand being the most common destination
for temporary wage workers) or opening up new forest land to replace land they lost to
industrial concessions.
3.2.2
Turning Land Into Capital
This strategy of providing access to land for international investors is promoted and
discussed openly by central-level government officials. Promoted as a tool for leveraging
needed investment to improve the productivity of Laos’ agriculture lands, the policy has
deep roots in communist theory.
In his treatment of Laos’ policy on ‘Turning Land Into Capital’, Ian Baird details how the a
unique concept of economic development that can be explained by classic Marxist theory
has played out in two southern Laos examples of land concessions. The immediate focus of
policy may well be to improve the productive use of land, generating greater economic
activity and, eventually, higher taxes. However, an equally compelling reason, as described
by Baird, is more evolutionary:
… drawing the Lao labour force into the market economy is, for many reasons, one of
the key justifications amongst officials in Laos for the present land concession system.
Entering into agreements that disempower indigenous peoples and even the state is
frequently accepted due to the belief that such sacrifices are at worst, a necessary evil,
something that is needed to propel Laos into the modern world and eventually out of
poverty. (2011: 12)
For this theory to work, and for such plantations as will replace the former smallholdings to
contribute to poverty reduction, there would need to be a way for the former farmers to
become enriched in the process.
In the most thorough examination of plantation work as a livelihoods replacement for
smallholder farmers, Molina (2011) details a series of disturbing conditions. The findings are
based on study of working conditions on plantations established on concessions comprised
11
of former smallholder farming lands in three districts across two Southern provinces. In
conclusion, the author finds little to recommend the development model:
The ‘job’ itself is irregular and insecure in all but one plantation, the pay barely covers
family expenses, and some of the work practices are arguably discriminatory,
exploitative and abusive. Since the company and recruiters bring in labour from other
places too, the villagers must also compete for the jobs and share their reduced village
natural resources (including food) with rural migrant workers and their families. (Molina,
2011: 29)
In this study, the plantation has clearly not provided viable alternative livelihoods for the
smallholder farmers displaced by the plantations.
Magnitude of the Land-Concession Problem
Attention has turned recently to examination of the extent to which FDI has taken authority
over Laos’ land resources. The task is rather challenging because of the lack of a central
information repository, lack of standard land registration and measurement, failure to
gather data on the dimensions of concessions and actual implementation, and the various
forms under which external entities gain access to Lao land. Despite the research
challenges, Campbell et al. offers the following estimate of concessionary land acquisition
and control:
3.2.3
… we can estimate that foreign concessions account for between 10-14 per cent of the
total area of agricultural land in Laos. This is likely to be a conservative estimate of total
control… since it does not include estimates of control via contract farming.’ (2012: 15)
In the first comprehensive study of the spatial element of land-based concessions and leases
in Laos, a coalition effort involving the Ministry of Natural Resources and the Environment
(MONRE) the Swiss-based Center for Development and Environment, GIZ, revealed for the
first time the disturbing extent of the effectiveness of the government’s efforts to put land
in foreign hands for development:
Governance structures and institutions have struggled to keep apace with the expansion
in land investments witnessed in the Lao PDR over the last decade. Five per cent of the
total land area of the Lao PDR has already been granted to investors for development…
This exceeds even the total area of 0.97 m ha under rice cultivation, the main crop
grown nationally. (Schonweger et al.: 75)
They went on to indicate the threats that these concessions have on Lao’s politicaleconomic status:
Areas under investment tend to be fairly accessible… Foreign investment, particularly
from China, Thailand and Vietnam, by far outweighs domestic investment in terms of
area. This effectively removes a considerable amount of the country’s most valuable
land from either state or local communities’ use, and could weaken the government’s
capacity to address wider land management issues. The scale of land already granted
therefore calls into question the sovereignty of the GoL, and the extent of its control
over the country’s most productive lands and resources. (ibid. 2012: 75).
Questionable Increase in Value Commercialization vs. Upland Rice Farming
The primary reason given for granting concessions at discounted rates is that this is the only
way the agriculture land can be brought into higher productivity. This strategy rests on an
assumption that FDI can actually increase the actual output from agricultural lands. This
3.2.4
12
turns out to be a questionable assumption with little evidence base. Alastair Fraser,
assessing the impact of FDI on Lao agriculture output, indicated a less than positive overall
impact on the sector: ‘…it seems likely that any increase due to the FDI has been offset by
reductions in output from the traditional sector’ (2009: 13).
Much smallholder agriculture production in Laos remains informal and will not show up on
national economic accounts. Thus a shift into a plantation-based system could appear to
generate increases in economic productivity whereas in reality the consequences are less
clear. Raghav Gaiha and Samuel Annim created a data analysis tool to address the issue and,
applying this to national economic data from Laos, found that:
As far as the value of crops is concerned, (i) the overall effect of public investment in
agriculture is positive but small; (ii) somewhat surprising is the mild negative effect of
FDI, implying substitutability between public investment and FDI and/or land
concessions for, say, rubber plantations that encroach on areas used for growing crops;
and (iii) the large positive effect of trade share (as a proxy for trade liberalisation).
(2010: 38)
Not only is a conversion into an industrial model of agriculture putting smallholder farmers
out of business by taking the best land, dominating local markets with effectively subsidized
goods (no or reduced taxes, public land grants, international investment incentives from the
investor’s government), in all likelihood it is not even increasing the total output of value
from the agriculture sector.
Importantly from the point of view of extension interventions, however, Gaiha and Annim
found that government investment in agriculture had a small but positive impact on
agriculture output, leading them to suggest that government investment in the sector could
help overcome the negative impacts of FDI.
Joost Foppes studied the degree to which rural people in Laos rely on wild forest and river
foods to meet their nutrition and food security needs and estimated the economic value of
these food sources. As he notes, ‘the value of forest foods consumed in Laos can be
estimate to be at least US$ 640 million per year’ (2007: 10). Together with fish, the collected
and caught wild food sources added up to USD 1.1 billion in 2006, a full 32% of the GDP. This
illustrates the intimate connection rural families have with their forest and rivers.
Upland rice farming, practices on a shifting basis, remains the dominant agriculture system
employed in the uplands of Northern and Southern Laos. While policy pressures have
decreased the overall area of upland shifting rice cultivation, the practice is growing in some
areas. Kaspar Hurni et al. (2013), looked carefully at various spatial imaging sources to verify
that this practice is still widespread throughout the country. Far from being a source of
concern, it could be argued that this finding indicates this farming system is still widely
viable. As Foppes found, it is a method of cultivation that integrates sustainably with the
local environment and provides an abundance of nutritious food from both cultivated and
fallow fields (ibid).
Moratorium on Plantation Concessions (Rubber, Paper)
In response to growing concern about the size and impact of land concessions and out of
concern for national land sovereignty as raised by the report by Schonweger et al. (2012),
the Lao government has recently announced a temporary moratorium on some forms of
land concessions. Prime Minister Order Number 13NA, issued in June 2012, halts new land
3.2.5
13
concessions for mining, rubber, or wood-pulp plantations, the three largest types of
concessions. Ostensibly to allow for study and a reconsideration of the value of such
concessions, there remain a backlog of concessions already granted—but yet to be acted
on—that are unaffected by the decree. Another reason for the decree is to avoid the
embarrassing situation of overlapping concessions and concessions of existing farm land
without permission or cooperation of the existing farmers.
Existing concessions would be left unchanged, and concessions for other projects would not
be affected.
Whatever the underlying motivations and ultimate impact, the decree reveals that the
highest levels of government are concerned about the impact of such concessions.
Alternative approaches, including contract farming, farmer production groups and
cooperatives, and courting high-quality FDI willing to engage with existing farmers all
present promising paths to realizing higher productivity and processing but without the risks
of disassociation of farmers from their land and expatriation of control over Lao land. The
decree provides space and opportunity for these other strategies. However, if action is not
taken to make significant progress on these matters, there is a danger of history repeating
itself. In other words, there could be a resumption of land concessions at the same pace as
before after a cooling-off period.
This was the case in 2007, after a similar moratorium was announced at that point, as
discussed in a Vientiane Time article:
Prime Minister Bouasone Bouphavanh released a notice suspending new land
concessions over areas of more than 100 hectares in May following a national land
management meeting in Vientiane, which concluded that the number of concessions
being granted over large tracts of land was having a negative impact on the environment
and local communities. (Phouthonesy 2007)
Land concessions were reportedly continued despite the orders, though there may have
been a slowdown. The 2012 decree is stronger, and gained more attention. It may offer
more opportunity for changing tactics to leverage FDI for agriculture development.
Perhaps as a reaction to recently released studies showing the extent of Laos’ land involved,
or perhaps out of growing awareness of how they compromise Lao farmer productivity, or
perhaps for a stop to all new land concessions for rubber, eucalyptus, or mining. There was
a similar ban in 2008 that had little impact, but there is substantially more attention being
given to the issue on the part of the Lao Government at present. This, in large part, is
because of the influence recent studies, such as those mentioned above, have had on policy
thinking.
3.3 Market Manipulation
Contemporary Laos’ policy toward the agricultural sector began with an acknowledgement
of a role of private sector actors and the acceptance that farmers would interact with such
traders to facilitate delivery of output to centers of demand. With the New Economic
Mechanism, the country further relaxed controls on private sector actors and reduced
subsidy to state businesses. However, serious market distortions continue. Folkard et al.
related the main types of market distortions encountered when undertaking their field
study of farmers organizations in Laos:
14



Trading concessions and monopsony—give favored traders unfair terms of trade
when buying from farmers
Closed markets—prevent farmers from accessing potentially more lucrative
markets outside the jurisdiction
Competing production—under favorable conditions such as tax exemption
and/or free land grants, outside interests flood local markets with produce
offered at unreasonably low prices, undermining local farmer profit
opportunities.
Folkard et al. (2011) continued to present that this market manipulation undermines the
opportunities for farmer cooperation:
Other sites where this was not the case [where markets were not open] did not have
effective, operational FOs. These ‘closed’ or distorted market systems occurred in a
variety of ways, including concessions, monopsonies, and exclusive trading rights,
occurring singly or in concert. Thus the existence of ‘open markets’ will strongly affect
whether FOs can be established or function to farmers’ benefit. (2011: 24)
Opportunities—for farmers to cooperate by bulking products, negotiating for reasonable
prices for their goods, facilitating more efficient transactions, and orienting production to
regional markets with strong demand—were severely limited or undermined by these
market-distorting policies.
Justified early in the country’s development as a way to coordinate trading to provide
incentives for traders to extend buying and selling into the remote areas, the practice has
since become a major constraint on development as farmers experience restricted prices
and limited services that could otherwise contribute to improved innovation and
productivity. (See for example, Yang et al.’s 2010 detailed presentation of the stifling effects
on trade of government-granted monopsony.)
The CIAT-managed, SDC-funded, Small-scale Agro-enterprise Development in the Uplands
Project dealt directly with the modern manifestation of these practices. As presented in the
project case study, Learning Alliance on Agriculture Marketing (undated):
During the implementation of the SADU III project it became obvious that working on
smallholder access to markets in districts under a monopsony policy was close to
impossible. With the local authorities selecting and endorsing exclusive buyer rights to
only one buyer for their produce, farmers were literally price-takers with no means to
bargain for a fair price for their produce. In addition, the monopsony arrangement killed
all incentives for quality enhancement or product diversification.
The SADU project conducted research in a few districts, exploring those with open and
others with closed markets. It compared the economic consequences of a monopsony
versus a more open market system. The research revealed that the monopsony policy
not only has a negative impact on the price per unit and overall farmers’ income but also
on the overall tax revenues accrued by the local authorities. Total volumes produced
and traded, and thus tax revenues, were considerably higher in districts applying an
open market policy than in districts applying a monopsony. The facts and figures were
presented and discussed at a Learning Alliance meeting in July 2010, which resulted in
the partial opening up of districts previously holding on to a monopsony policy. (SADU
‘Case Study—Learning Alliance’)
15
3.4 Persistent Poverty
With the impressive growth in GDP facilitated by the government’s openness to FDI, one
might reasonably ask what impact this has had on poverty. Poverty in Laos is widespread,
with food insecurity a prime issue for more than a third of all households (National Nutrition
Survey).
Samantha Wright wrote for the WFP of the impacts on food security of the rapid transition
from subsistence-oriented farming to a commercially-oriented system. She focused on
changes to the vulnerability and coping strategies of impacted households and found
significant changes. She identifies three main reasons for reduced food security in this
situation: 1) farming families loose access to their land completely and have no alternative
on which to rely; 2) weakened coping strategies resulting from reduced access to forests
and other natural resources—traditionally the primary source of food when production
patterns do not meet all needs; and, 3) increased vulnerability as a less diverse set of
activities dominate livelihoods, replacing the former significant agricultural and economic
diversity (2009: 49). These three mechanisms are closely interrelated and arise primarily out
of the pressures and constraints farmers increasingly face. Wright explains that farmers with
higher initial levels of assets may eventually realize greater wealth and food security if their
commercialization strategies are successful. These wealthier households are often located
along roads and have access both to commercially-valuable productive land and secondary
land on which they can rely for food security. Secondary land functions, in the short term, to
provide increased food security until farmers’ new commercial crops produce yields and, in
the long term, serves as a back-up source of food. These findings concur with similar
findings identified by Jones et al. (2013).
As presented in section 1.1 international studies associate agricultural development with a
comparatively large impact on general economic growth (Bravo-Ortega and Lederman,
2005, Janvry and Sadoulet 2010, Irz et al. 2001). This holds for Laos, in which a particularly
large multiplier effect is measured by Gaiha and Annim (2010): economic data regressions
for Laos came up with a multiplier of 1.59 for the agriculture sector, indicating a 1% rise in
agriculture value-added relates to a 1.59% increase in GDP. The authors estimate that, with
support focused on irrigation and access to inputs, the agriculture sector could grow at an
annual rate of just under 5%, making a contribution to national GDP growth of just under
8%. Even more critically, the authors found a strong correlation between agriculture growth
and poverty reduction: ‘The poverty-agricultural value added elasticities are consistently
much larger than poverty-GDP elasticities, confirming the key role of agricultural growth in
reducing poverty’ (2010: 39).
In their Socio-Economic Atlas of the Lao PDR, Messerli et al. (2008) describe several aspects
of poverty relevant to agriculture extension. While the country remains rural with many
poor, remote areas, the authors draw attention to the fact that many poor—in fact more
than half of all poor people—live in areas less remote from district and provincial centers.
This has implications for agriculture service delivery and efforts to reduce poverty. As the
authors observe:
… from a service provider perspective, so to speak… it is much easier to reach the poor
in the less poor, more developed, and more densely populated areas than it is in the
poor and sparsely populated areas. To reach the same number of poor people in poor
remote areas is significantly more expensive than reaching this number in highly
populated areas. (2008: 134).
16
Taken together, the elements of the Big Push and their cumulative impact on land and
resource availability present a major challenge for Laos’ smallholder farmers. If current
trends continue, the existence of Laos as a nation of smallholder farmers will come into
serious question. The presentation of economic conditions referred to collectively as ‘Dutch
disease’ present a new set of challenging trade and resource conditions to smallholder
farmers; only affirmative and substantial policy action can address these. Diminished
availability of land and other productive resources due to land concessions, the massive size
of extraction and hydropower projects, and favoritism shown to large-scale farming are
policy-driven developments that undermine other support to smallholder farmers. These
development pose imminent threats to the continued viability of the smallholder farming
model. The next sections explore whether parallel developments in policy and current
extension practice offer sufficient counterforce.
17
4
Lao Support for Smallholder Farmers: At a Crossroads
A consistent theme in literature discussing both the situation in Laos and globally is that the
extent to which ‘development’ benefits rural farming populations is largely determined by
the capacity of governing institutions to promote transparency, accountability, and good
governance in the use of state resources, ensuring a reinvestment of funds into agriculture
and other rural development activities. Thus we see that it is largely a policy choice as to
whether or not Lao’s smallholder farmers will receive the services and support they need to
maintain viable livelihoods and participate equitably in growth and developments.
Without changes in policy and new and more support, the future for smallholder farmers in
many countries is rather bleak, as reported by Hazell and Diao:
Agricultural marketing chains are changing dramatically in all types of countries. The
small farmer is increasingly being asked to compete in markets that are much more
demanding in terms of quality and food safety, more concentrated and integrated, and
much more open to international competition. (2005: 29)
At the same time, budgets supporting agriculture are decimated, decreasing public support
to smallholder farmers.
Within this context, there is a growing view that most smallholders do not have a viable
future in farming, and that agricultural development should now focus on larger and
commercially oriented farms that can successfully link to the new types of market
chains. (ibid.: 29)
The decrees and other policy documents discussed above present the possibility that Lao
P.D.R. may dedicate resources and shape opportunities to ensure not just that small farmers
remain viable, but that they form an integral piece of economic development in Laos and its
effort to graduate from least developed country status. While mineral extraction and
hydropower may be the big macro growth drivers in Lao, it is clear that to reduce poverty in
rural areas and provide the more equitable distribution of the benefits of development,
sectors with broader bases of economic participants will need to play a much bigger role.
Hazell et al. (2010) propose that in such a climate of macro growth driven by resource
extraction—and the common increase in currency exchange rates and availability of cheap
imported commodities and food stuffs—small farm growth will have the best chances when
oriented towards high value domestic markets.
However, two questions need to be answered before a sanguine appraisal could be made:
first, are policies to support smallholder farmers historically effective; and, second, can a
policy enacted in Vientiane translate into actual support for smallholder farmers throughout
the country?
Hazell et al. identified several policy areas wherein governments have in the past
successfully supported smallholder entry into commercial commodity production. They
point to the ‘green revolution’ successes wherein governments supported farmers with
access to credit, inputs, and technical assistance. They point also to state action through
marketing boards together with private sector in interlocked credit, input, and marketing
schemes. However, they raise concerns that many market chains are not conducive to such
arrangements in cases with high sunk costs in processing, high competition from
larger/commercial farms, and the lack of natural monopsony. Rather than create artificial
18
monopsonies, as Lao has been wont to do to the detriment of smallholder farmers, the
authors suggest a new approach:
Private actors are thus unlikely to solve coordination problems, but the state, especially
in Africa, has only been able to undertake this role at high and usually unsustainable
cost. A key challenge to small farm development is therefore to develop new
coordination systems involving combinations of government agencies, civil society,
farmer organizations, and agri-business firms. (2010: 1357)
Much of the literature on strategies to supporting farmer organizations and smallholder
farmers focuses on compensating for market failures: the reason smallholder farmers are in
trouble is not because they are less efficient, but because market failures and market
perversions favor the inherently less efficient industrial farms. (As presented in section 1.3.2
above, in Laos, various policies have favored large commercial farmers despite the fact that
evidence shows this strategy does not produce greater overall value.) According to this
literature, effective policy is not so much a matter of supporting smallholder farmers as it is
one of not undermining them. In a series of policy documents—decrees, strategies, and
plans—the government has laid out pieces of a policy that can support smallholder farmers.
4.1 The National Growth and Poverty Eradication Strategy (NGPES)
This document, adopted in 2003 by the National Assembly, and developed by the
government supported by the donor community, forms an overarching strategy under
which all development plans fit. The expressed dual objective is to enhance growth and
reduce poverty. An explicit aim is to reduce dependence on overseas direct assistance. The
overall intention of the strategy is to detail how the country will realize the goal of
graduating from the group of LDCs by 2020; this goal was stated in the 1996, 6 th Party
Congress.
The NGPES establishes as the main objective of the agriculture and forestry sector to
improve household food security through ‘enhanced market-based farming’, reduced
‘disparities between lowland and sloping land farming’ and ‘sustainable forest and
watershed management’ (p. 7). It states in no uncertain terms that:
A top priority for the Government of the Lao PDR is to modernise the agriculture and
forestry sector in a manner that fully meets sustainable practices and that achieves food
security and better livelihoods for all Lao people … The Government is firmly of the view
that more progress in modernising the sector can and must be made, while respecting
the traditions of the Lao way of life and the rich diversity of its ethnic minorities. (p. 53).
The call for modernization, the respect for traditions, and the ideal of supporting ethnic
minorities are solid elements of a good strategy. It is only when the NGPES begins to focus
on a key aspect of this modernization—reduction in the shifting and subsistence nature of
agriculture in Laos—that concerns are raised. The document explains the need for stabilizing
not only agriculture but farming communities; for communities moving in search of
improvement are, ‘in general poor, living in remote, scattered communities, with very
fragile livelihood systems and without access to the needed social services’ (p. 56).
Thus the strategy proposes that, ‘the area-focused approach will help foster and achieve
transition from subsistence level rural activities to more market-oriented production
favouring accumulation of wealth and private initiatives’ (p. 57). While the strategy does
acknowledge the limited resources available to support this concept, it does no
acknowledge the conceptual and practical challenges in translating this policy into equitable
19
development practice. From Bechstedt’s report, ‘Impact of Public Expenditure on Ethnic
Groups and Women’, the following extract makes clear the ideological aspect of this
approach that threatens sensitive implementation:
…interviews with GoL officials from 7 District the official GoL policy line was confirmed
which unisonous discriminates and devaluates traditional forms of agriculture, namely
subsistence-based, swidden agriculture vis-à-vis commercial, market oriented
production. While the first is considered to be backward and outdated, the latter is
viewed in terms of progress and modernity. (2007: 62)
In this same document, the authors are strongly critical of the way this ‘area focused’
development has been implemented:
…what it is that actually makes for the wellbeing of those regarded as poor. District-wide
redrafting of human and economic landscape with top-down technocratic decisions
about relocating villages within the context of what is called ‘Focal Area Development’
or ‘village consolidation’, leasing of tens-of–thousand of hectares of land –decisions like
this are made without any consideration of the enormous implications that this has for
the affected rural communities. (p. 174)
Nonetheless, the NGPES provides a framework encouraging sustainability, equity, and
respect for diversity while pursuing poverty reduction and economic growth. The
documents discussed below all fit within the framework established by this document.
4.2 NSEDP: Aim to Graduate from LDC Status by 2020 and What this Means
The Seventh National Socio-Economic Development Plan (2010-2015) is the guiding
document that aims to put into action efforts to realize the country’s long-term
development goals:
This five year plan is part of the long term goal of the country to implement its policy of
national development, achieve economic growth of at least 8% annually, reduce
poverty, achieve the Millennium Development Goals by 2015 and construct basic
infrastructure for industrialisation and modernisation in the times to come. (Executive
Summary: 11)
The plan calls for development of the country towards modernization, use of technology,
with good government and cooperation with neighbors. The plan orients the development
activities to help realize the country’s goal of graduation from the U.N.’s list of least
developed countries by 2020. The critical orientation concerning agriculture and extension is
that the plan stresses technology and large projects in order to realize necessary growth
quickly, with a less clear focus on smaller ‘production units,’ as relayed in the seventh of
seven directions:
(7) Implement industrialisation and modernisation strategies in a progressive way, and
develop focused sectors and regions in which to have favourable conditions and positive
factors, so as to reduce the gap between development levels with other countries at
regional and international levels quickly. Focus on large projects to achieve fundamental
growth, and be able to integrate internationally, promote production units and small
and medium enterprises, to use new techniques and technologies, in order to increase
production quality and efficiency. (Executive Summary: 13)
Half-way through the implementation of the plan, in mid-2012, the government organized a
mid-term evaluation, measuring progress to date against the various goals, grading the
continued relevancy of various approaches, and making a series of recommendations. While
20
the evaluation generally found that, at the macro level, the country is making significant
progress toward goals, captured overall by an annual growth in GDP of over 8%, there
remain many challenges in reaching the social goals. In early draft form, the review raises
serious concern about the uneven development in geographic, ethnic, and sector terms. The
review suggests Lao may be experiencing ‘Dutch disease’ and concomitant
underdevelopment of non-resource extraction sectors (sectors other than hydropower,
mining, logging); sectors with large employment and more evenly spread returns, such as
agriculture are experiencing lower development than mining, hydropower, and associated
supply and service sectors.
In the recommendations section, the reviewers suggest that in order to reduce disparity in
development opportunity, the country evaluate systems for transferring resources into
agriculture:
Given the lagging growth in the agriculture sector, continued low productivity and heavy
reliance on agriculture for livelihoods, agricultural growth should be stimulated through:

Preparation of a roadmap to delivery of core public agricultural goods as defined
in the WTO agreement under the green box (extension, public veterinary
services, phyto-sanitary, food safety and agricultural information services)
coupled with commitments to ensure adequate budgetary resources. A linked
analysis should be made of the feasibility of using earmarked revenues from the
resources sector for their delivery. (Mid-term Review of 7th Five-year SocioEconomic Development Plan: 13-10)
What neither the original NSEDP nor the MTR address adequately is the changing
composition of the agriculture sector. While the MTR raises concerns about the
disadvantages to farmers caused by land concession-based FDI, and questions the directions
of contract farming, it supports the overall direction towards large-scale commercialization
and even encourages greater agglomeration of land to form larger commercial farms (pp. 414). It seems to support the proposition that Lao farmers will be better off as laborers.
Evidence presented earlier in this survey clearly contradicts this view.
4.3 Strategy for Agriculture Development (ADS)
Situated under the NSEDP in policy hierarchy, sits the Ministry of Agriculture’s draft sector
development strategy (2011 – 2020) along with in implementation plan (2011-2015), and an
investment plan (fund sourcing) (2011-2015). These three documents, still working their
way through the approval process, present a comprehensive vision of how the government
would like the sector to develop. The overall call is for a transition into a more modern
sector that uses technology and good practices to transition from self-sufficiency to
engagement in local and international markets. The goals and content are strongly
progressive, creating a vision of supporting smallholder farmers to engage equitably and
productively with private sector actors in a well-functioning market that brings resources
and opportunity together in a more productive system. At the same time, the strategy
proposes to addresses environmental sustainability and social equity through mechanisms
such as improved value-chain governance and ‘good agriculture practices’. The goals as
stated in the 10-year strategy, give a clear sense of the visionary and optimistic tone:
Goal 1: The improvement of livelihood (through agriculture and livestock activities) has
food security as its first priority.
21
Goal 2: Increased and modernized production of agricultural commodities will lead to
“pro-poor and green value chains”, targeting domestic, regional, and global markets,
based on organizations of smallholder farmers and partnering investments with the
private sector.
Goal 3: Sustainable production patterns, including the stabilization of shifting cultivation
and climate change adaptation measures, are adapted to the specific socio-economic
and agro-ecological conditions in each region.
Goal 4: Sustainable forest management will preserve biodiversity and will lead to
significant quantitative and qualitative improvements of the national forest cover,
providing valuable environmental services and fair benefits to rural communities as well
as public and private forest and processing enterprises. (p. ix)
The Agriculture Master Plan proposes a series of steps to put in action the strategy. It takes
up the eight programs identified in the strategy:
1)
2)
3)
4)
5)
6)
7)
8)
Food production
Commodity production and farmer organizations
Sustainable production patterns, land allocation and rural development
Forestry development
Irrigated agriculture
Other agriculture and forestry infrastructure
Agriculture and forestry research and extension
Human resource development. (p. x)
For number seven, the plan sets a fairly outdated objective:
The General Objective is to conduct “Applied Research for Development”, and translate
the results directly into the widespread dissemination of needs based, gender and areaspecific and market-oriented extension packages, covering the technical content of all 4
sector goals, referring to crop cultivation, livestock / animal husbandry, aquaculture and
fisheries as well as community based forestry. (p. XVI—emphasis original)
This assumes an old model separating research from extension activities wherein the
researcher is responsible for developing solutions and a separate extension system is
responsible for disseminating these. The next section will present an overview of more
participatory, demand-driven approaches. These are already practiced in Laos and
elsewhere, and evidence suggests that they offer better value for money.
4.4 NAFES/DAEC
Formed in 2001 and put in charge of coordinating the extension of improved practices
around the country, NAFES has been at the forefront of developing and promulgating a set
of services to support smallholder farmers around the country. With the approval of the 7 th
NSEDP and the draft ADS, leaders at NAFES set out to develop a strategy to identify key
areas in which the agency could help improve service delivery to farmers. The strategy is
captured in a matrix as below:
22
This document puts smallholder farmers as the central target group, explicitly directing
services to help them attain equitable engagement with the changing sector and remain not
just a viable production structure, but a key to sustainable and productive agriculture.
In order to realize better support for smallholder farmers, the strategy makes clear that the
work of extension involves supporting farmer organizations and helping smallholder farmers
engage with markets/agribusiness. The programs embody a pluralistic system, by
delineating between government-run services and other forms of support, including farmer
organizations, private sector, and information networks.
Explicit in the document is a rejection of the notion that agriculture extension’s primary role
is to ‘disseminate’ the results of research. This conforms well with the evolving conceptions
of extension as a service connecting farmers in a dynamic network involving research,
private sector actors, and other value chain actors (discussed more fully in Section 5). The
document remains in draft form, though elements are frequently cited in internal discussion
and workshops.
The drafting of the strategy took place before NAFES was reorganized as the Department of
Agricultural Extension and Cooperatives, yet anticipated the expanded mandate for the
agency. Promotion to a full department of the agency, along with inclusion of a major focus
on supporting farmer organizations reaffirms the commitment of the government to
supporting smallholder farmers. The newly organized department comprises various new
divisions in additional to conventional administrative offices: a division focused on
supporting and regulating farmer cooperatives and promoting agribusiness, a division on
mechanization, a division for information dissemination. The department carries over a
division on extension services..
While it has been nominally promoted to a full department, the agency retains the
limitations of NAFES, specifically that it lacks control of a native budget line for activity
implementation and lacks a clear line of authority over district or provincial extension
activities. Even with the limitations, the agency’s focus on promoting information exchange
23
and supporting farmer organization are promising. While it will continue to rely heavily on
international development assistance to fund any significant activities, the restructure may
allow the agency to attract and cultivate long-term support for these two crucial aspects of
extension.
4.5 Policy on Cooperatives and Associations
Laos has a long history of supporting farming organizations, dating back to the earliest days
of the P.D.R. However, this support has been neither consistent, nor always productive:
‘Collectivization of farmer production means failed. Collectivization of land was particularly
not successful’ (Vision and Strategy for Developing Farmer Organizations, Slide 5). The
ministry has recognized these challenges, while also recognizing the need for support and
legal structures to enable and encourage farmer organizing. Without supportive
organizations, farmers remain too exposed to inequitable negotiation, unable to capitalize
on easy production coordination strategies, and unable to access resources and training.
Thus the draft MAF strategy on supporting organizations stresses self-determination,
function over form, and assisting farmer organizations with critical training while not setting
targets. At the same time, the situation in the provinces and districts is very tenuous, with
some districts already setting numeric targets for the number of groups formed [personal
conversations with district officers].
MAF policy promotes two types of farmer organizations, with prime-ministerial decrees
defining the valid functions and forms each can take:


Farmer associations for non-profit-generating, coordinating, information sharing,
and representation functions
Farmer cooperatives for profit-generating, resource-sharing, and
production/processing coordination functions.
The two forms are similar and can have many cross-over functions. However, only
cooperatives are structured to allow profit sharing among members and leaders, while
associations can earn profit only if this is put toward fulfillment of missions but not
distributed toward members. The Prime Minister Decree number 115, promulgated in April
2009, covers the range of non-profit associations, from rural farming, to urban interestgroupings. The document clarifies that associations are to be self-determined, function
democratically, and formed voluntarily. Associations are intended to support farmers,
provide services, advocate, network, share information and learning, and help members
coordinate among themselves, with other groups, and with the private sector. Associations
are also able to represent their members to government, and protect member rights and
interests.
The cooperatives decree establishes cooperatives as voluntary organizations formed by the
members as a ‘collective enterprise’ engaging in sharing capital, experiences and
techniques, for a production, trade, or service. As with associations, cooperatives are to be
democratic and formed and run by the members for the members.
The policy documents indicate that MAF, through NAFES—reformed as the Department of
Agriculture Extension and Cooperatives (DAEC) in 2012—and provincial and district offices,
fill two main roles vis-à-vis associations and cooperatives: promotion and regulation. Both
these functions are to be filled in the same body, housed in DAEC. Promotion and support
will include organizations, finance, and technical support. Regulation will cover registration
24
and the body will be empowered to ensure all associations and cooperatives comply with
relevant regulations.
There is no clear discussion within published government documents or concern raised
internally about the potential conflict of housing promotion and regulation functions in the
same agency. Likewise, there is no concrete plan for supporting farmer organizations
generally, or cooperatives and associations. The details of how to work out the policy
remain in flux. Several studies and reports suggest certain directions, and these are
presented in the section on farmer organizations below.
25
5
Services that Support Smallholders
The NGPES, NSEDP, MAF sector plans and strategies, and NAFES strategy, universally
indicate that the central mechanism through which extension will contribute to realizing
national development goals is through improving productivity. Similarly, at a global level,
scientists explore how to increase the total agricultural output (and feed more people) by
looking at the difference between possible yield and actual yields; they then seek to identify
the most critical constraints that keep production from reaching its potential, i.e., the
‘global yield gap analysis.’ Hengsdijk and Langeveld (2009) reviewed a large body of
scientific evidence and solicited input from leading scientists to identify the magnitude of
the global yield gap and to categorize the constraints that prevent higher productivity.
While they acknowledged conceptual challenges in disaggregating the factors that prevent
increased yields, they did establish the main reasons for the yield gaps in rice, maize, and
wheat: limited water, limited nutrients, inadequate crop protection, insufficient application
of mechanization or labor, and deficiencies in knowledge that prevent application of
appropriate technologies otherwise available. These effectively correspond to the objectives
of agriculture development globally through the mid 1990’s and are reflected in the
development strategies for Lao’s agriculture sector.
Extension has traditionally focused on the knowledge factor, disseminating information on
available solutions. However, as we have indicated in Section 1) of this document, this
narrow focus on extension did not hold up to the growing expectations for extension,
primarily with respect to helping poorer farmers, meeting poverty reduction goals, and
contributing to sustainability and equity. These goals are central in all the Lao strategy
documents described in Section 4) above. Thus a different approach to extension is needed.
Throughout the late 1990s and 2000s, the development community has been active in
supporting an expanded and revised conception of extension, as described below.
5.1 Innovation Systems
A central shift in conception of agriculture extension is from a view of knowledge as static
and developed by experts to one of knowledge as dynamic and in constant development by
a range of actors at various levels of a production chain. International development
assistance, in the past, funded large research structures to develop technical production
knowledge and then provided very modest support to ‘extend’ that knowledge to farmers.
International development policy increasingly recognizes the shortcomings of that system,
and favors a more dynamic, multi-stakeholder system of give and take. This dynamic system
views knowledge and technology as in constant development by the many actors that apply
it, and the complexity of connections among all actors within an economic system is more
critical than the role of one actor such as a research institute.
The set of potentially important actors in an innovation system differs from the string of
suppliers and clients arranged along a classic value chain or the set of organizations
involved in public sector research. There is no assumption that an innovation process
starts with research or that knowledge feeds directly or automatically into new
practices, processes, or products. Instead, the knowledge and information flows at the
heart of an innovation system are multidirectional. They open opportunities for
developing feedback loops that enhance competence building, learning, and
26
adaptation…. As traditional barriers to trade and investment have been dismantled,
innovation-based competition has diffused around the globe. (World Bank 2006: 14-15)
Extension, in this conception, is no longer a linear dissemination of results from research,
but becomes a facilitation of exchanges among many actors concurrently developing and
improving technology and practice. This realization is only now gaining traction among
government and planning officials in Laos, though the service delivery landscape for farmers
is already shifting dramatically. In a study conducted for the Government-Donor Sub
Working Group on Farmers and Agribusiness (Jones et. al. 2013), clear evidence was
gathered from over twenty examples from Northern, Central, and Southern Laos, that
farmers already gain more technological knowledge from private sector actors and private
sector actors have more influence over farmer production patterns than government or
NGO sector service providers. However, the implications for extension systems have yet to
be realized in practice.
For extension [rather than for development in general], the implications may be even
more extensive. Extension investments should create the capacity to identify new,
promising alternatives at the farm level and ensure that they are supported in the right
way (for example, through NGOs, by engaging private companies or farmer
organizations, or by providing market information). The Bank should support
investments that encourage pluralism in service providers and in organizations that have
the attitude and the ability to find the right approach in different situations. Investments
in such models will by definition be more flexible and less defined in terms of the
concrete number of agents or vehicles that will be acquired. To counterbalance the risks
involved in such flexibility, governance and accountability should receive additional
attention. (World Bank 2006: 114)
A more recent World Bank publication makes more specific recommendations:
 Research, education, and extension investments are necessary components but
have not been sufficient for agricultural innovation to occur. Other conditions
and complementary interventions are needed.
 In addition to a strong capacity in R&D, components of effective agricultural
innovation are collective action and coordination, the exchange of knowledge
among diverse actors, the skills, incentives and resources available to form
partnerships and develop businesses, and enabling conditions that make it
possible for actors to innovate. These conditions and complementary
interventions have not been consistently addressed to date.
 Innovation and business development by different stakeholders does not occur
without complementary investments to create a supportive environment.
Enabling conditions in a given context depend on a (innovation) policy mix,
innovation governance, a diverse set of regulatory matters and other
investments with synergistic effects. (World Bank 2011: From the Overview.)
Birner et al. (2007) provide a convenient comparison of how the relationships among
institutions vary between the older concept of knowledge as a static package once
developed for dissemination, and a new concept of knowledge as constantly undergoing
innovation:
Specifically, the concept of an “agricultural knowledge and information system for rural
development” implies the integration of agricultural research, agricultural extension,
and agricultural education. The concept of the “agricultural innovation system,” on the
27
other hand, implies a wider range of organizations and stakeholders involved in
agricultural innovations along agricultural value chains. (2007: 2)
5.2 Pluralistic Extension Services
The World Bank effectively introduced a new comprehensive approach to agriculture
development through its world development report ‘Agriculture for Development’ (2007).
This document provides a framework by defining three agricultural worlds: the
agriculturally-based, transition, and urbanized countries. Expanding dramatically from the
narrowly-focused T+V system, the report examines all aspects affecting agriculture
development. Public sector extension is no longer a sole actor on the extension stage, but
remains a key element in agriculture development. There are consistent calls from many
agencies now for major institutional changes to extension and for it to become: (a)
pluralistic, in that various extension systems should be employed to fit each context; and (b)
decentralized, so that it can be more responsive to local requirements.
The pluralism described by the World Bank is similar in tone to the dynamic mix of actors,
playing unique and complementary roles required to facilitate the agricultural innovation
systems Birner et al. described, involving a mix of actors at any geographic and
administrative level: private sector, government agencies, international and local nongovernment organizations, farmer organizations, and undefined networks and actors.
Rather than a defined, universal system, pluralism is very much about diversity and dynamic
systems, as described by Birner et al. writing for IFPRI:
Past experiences clearly show that importing standardized models of extension to a new
context is not a promising strategy, even when the imported models are viewed as “best
practice.” What is important is to build capacity among policy planners and extension
managers to identify modes of providing and financing extension that best fit the
specific conditions and development priorities of their country. (2007: 1)
In a seminal paper, Umali-Deinger (1997) proposed a fourfold typology of different types of
agricultural services: public goods, common pool goods, toll goods, and private goods. This
allowed different modes of extension delivery to be seen not as replacements for the public
sector, but, rather, as contributing according to varying contexts. This analysis enabled
various extension providers to be conceived and viewed as complementary. The
catchphrase for extension changed from ‘best practices’ to ‘best fit’ of the service for the
context.
Conceptualizing the various functions and conditions in which services are delivered can
allow matching needs to providers. Analysis suggests a pluralist structure for extension
services: the public sector can provide or fund services where market failure exists, and
other actors can fill needs where markets are functional. Other actors could include the
following: private sector actors, NGOs’, cooperatives, or voluntary organizations (Anderson
and Feder 2004). The market versus market failure context is a useful distinction but, at the
same time, needs to be treated with caution. There remain conceptual challenges, and
there is no call for the public sector to pull out or even reduce its role for two primary
reasons: 1) there will remain many areas with people central to development goals who
continue to be overlooked by private sector actors and, 2) in areas with active private
sectors, farmers will face new challenges in defining and realizing strategies for equitable
engagement. There will be communities who will not be well serviced by private sector
actors, and some assistance will still be needed (Dinar 1996, Rivera, Qamar and Crowder
28
2001, Alex et al. 2002). Thus an important role for the public sector in delivering and shaping
services remains.
In Laos, with its tremendous economic, social, geographic, and agricultural diversity the
concept of diverse service providers may be even more apt than in more homogenous
countries. However, despite featuring the word prominently in literature and promotional
materials, Lao’s foremost extension capacity building project was never able to even clearly
define, let alone adequately support, a pluralistic extension system (Bartlett 2012). The
concept was open to various interpretations and only towards the end of an eleven-year
project have central level actors begun to understand pluralism as involving multiple sectors
and actors in designing, developing, delivering, and accessing ‘services’ (Schmidt and
Fischler 2012).
In their study for the Sub-Sector Working Group on Farmers and Agribusiness, Jones et al.
(2013) found that the reality in Laos far outpaced the realty in centralized agriculture
agencies. In every one of six provinces examined, farmers accessed a diverse network of
service providers: (a) private entrepreneurs for inputs on credit and information about how
to use them, (b) large corporations for long-term investment and packaged production
technologies, (c) national and local non-government organizations for advice about how to
interact with private sector, (d) government, and government actors to help make
introductions and back-up agreed terms of trade, and (e) their own organizations to access
technical experts, organize access to inputs and credit, and to organize production and
marketing for better positioning in the market chains. While the team found an impressive
array of available services, these services were neither consistently available nor of
consistent quality. Furthermore, lacking experience and in the absence of helpful support,
farmer organizations were as of yet unable to fully support farmers in coping with the many
new challenges presented by the rapidly commercializing sector; farmers remained exposed
to inequitable terms of trade, continued to face difficulty accessing needed inputs, and
received virtually no advice on sustainable and productive practices (with the notable
exception of two non-government organizations providing such advice in very limited
geographic areas). The diagram below shows a possible configuration of pluralistic services
in Laos, including the unique strengths each sector can bring to service delivery.
29
5.3 Market Development
Two other major recent shifts are for extension to facilitate formation of farmer
organizations and to engage with markets in various ways, such as, value-chain
interventions, contract farming, public-private partnerships (Rivera et al 2001, Alex et al,
2002, Rivera and Qamar 2002, Farrington, et al. 2002). Such intervention should also mean
that public funds invested in extension should have more leverage and wider impacts
through the out-scaling actions of the farmer organization and private sector/Public Private
Partnerships (PPP). Explicit co-funding by the private sector would make more efficient use
of public sector funds.
The opening up of the Lao economy through the new economic mechanisms in the early
nineties has slowly taken hold and, combined with the determined promotion of investment
opportunities, has created a new market dynamism in the Lao economy (see for example,
Fullbrook’s (2011) discussion of the ubiquitous trading in agriculture goods by both large
and small private sector actors). The agriculture strategy calls for helping farmers take
advantage of these commercial opportunities in their effort to ‘modernize’ and improve
productivity. Food security can move from a near exclusive focus on producing food on
diverse farms to producing commodities and entering into the marketplace.
However promising for lifting productivity and offering farmers a more resilient system with
access to education, health, and other services, this move is not without major threats to
smallholder farmers. The main forms of market engagement by Lao farmers, discussed in
various literature—see, for example, Fullbrook (2011), Jones et al. (2013), SADU (undated),
the Best Practices study included with this report—include the following:





Contract farming, or ‘agreement’ farming wherein terms of trade and any
support from an entrepreneur or company are agreed prior to cultivation
Selling in open markets, unfettered by government constraints on the terms of
trade
Selling in controlled markets, in which government agents assist the parties by
setting terms of trade that often include restricting the number of legal buyers
and the terms of trade
Collaborating with other farmers (formally or informally) in establishing trade
agreements with traders (coordinated marketing groups), may or may not
include coordinated production
Cooperating together in processing and selling under contracts, or working on
plantations (usually on land conceded by the government to an international
investor).
With the exception of the last case, all the above are readily found practiced by farmers
throughout Laos.
Each has unique advantages and disadvantages. It is beyond the scope of this literature
review to examine each in detail, but it is clear that farmers face a number of obstacles to
realizing equitable engagement and improved food security with each of the above
mechanisms. Threats include untenable farmer debt (Kemp 2012), erosion of soils (Viau et
al. 2009), and general decrease in productivity of land from the use of unsustainable
production practices recommended by private sector actors with limited time horizons
(Fullbrook 2009), unfair terms of trade that keep farmers from realizing fair returns (Jones et
30
al. 2013), land for debt swaps that threaten farmer sovereignty, inappropriate
recommendations and lack of education on precautions for chemical use.
To minimize the risks posed by these threats and help farmers equitably engage in markets
will require significant support to farmers and their organizations. DAEC has produced
informational materials under the tag line, ‘Think before you sign’ to help farmers evaluate
the risks and benefits of any offered contract deal, and to know their rights before engaging.
They have also drafted guidelines for facilitating contract farming. However, these are yet to
be widely taken up, and not fully understood by extension officers. In the absence of
functioning systems to advocate and represent farmers’ interests as they engage in
markets—such as could be provided by experienced farmer organizations—farmers may not
have the resources to remain viable. In short, at present there is a meager set of tools and
capacity aids in place to realize the ambitious goals set forth in the agriculture development
strategy and the DAEC strategy, i.e., to support equitable and effective market engagement
under a protective umbrella of value chain governance.
5.4 Support to Farmer Organizations
In the rapidly evolving agriculture sector farmers are gaining access through new channels
to technical knowledge and information and taking advantages of new opportunities with
markets. However,
… as Olivier De Schutter, the UN's special rapporteur on the right to food, has argued, it
is unrealistic to seek sustainable progress in combating rural poverty simply through
technology. Just as important are what he calls the political economy of food systems
and the question of bargaining power. He points out that small-scale farmers are often
not organised enough to have a strong bargaining position in the food chain. They buy
their inputs at retail prices and sell their crops at wholesale prices, because they cannot
negotiate fair prices. De Schutter argues that farmers must be encouraged to form cooperatives and unions, and governments encouraged to involve such organisations in
the design and implementation of public policies. (Tran, 2012: website)
Building on the theme that innovation comes from connections and multi-directional
interaction, one of the key forms of support to farmer organizations is strengthening of
networks. Geographic and social isolation in Laos (rooted in language diversity, economic
striation, poor road and communications infrastructure) have inhibited farmer access to
information and knowledge exchange. Even though road systems have expanded
dramatically in the last decade and cellphone coverage reaches even remote areas, group
networks start out at a low level. Douthwaite et al. (2006) review an instructive case of how
social network mapping in Colombia by two CIAT projects helped identify key areas for
supporting farmer groups in accessing the important sources of knowledge and other
resources. Their work identified sources of information exchanges and discussed strategies
for strengthening and building on these. Through their work, famer organizations became
stronger and were able to link members to important technical and other development
information. Similar work in Laos has been undertaken by PADETC [personal conversations],
identifying how connected community members are. Application to farmer organizations
will be a logical progression from this kind of development.
In a valuable study about what happens to farmer organizations when support structures
are removed, Abaru et al. (2006) found that only those organizations that developed from
the inside-out had staying power. In an era of market liberalization and decreased support
31
for cooperatives, this study indicated that organizations which were built over the long
term, with time for selection and development of leadership, based on common activities,
engaging in markets, and supported by demand-based services were most viable and
competitive with long-term engagement of members. The authors described how groups
established locally around farmer-identified interests could sustain themselves and build
further:
… farmers’ organizations that are small and homogenous, mobilize their own resources
and produce a marketable product continue to grow as common interest groups and
join up into inter-group associations even after the departure of [project-funded support
structures]. (Abaru et al. 2006: 1)
In a study for the government-donor roundtable, SWGAB, a team led by John Connell and
Adam Folkard discovered a surprising wealth of diversity within farmer organizations in
Laos. The team found farmer organizations filling various roles from accessing inputs
provided by projects to organizing for coordinated production and joint marketing. They
found that those organizations working to coordinate member activity oriented towards
markets had the most staying power and demonstrated potential for dynamic growth.
Members in these organizations pooled their resources, dedicated time to collaboration,
and worked together for a benefit they created—better market opportunities—rather than
one handed out by an agency or organization. They added value for the farmers and,
importantly, also benefited traders/buyers by improving sales efficiency. They even helped
coordinate production to match market demand and needs which, again, improved benefit
for farmers and traders alike (Folkard et al. 2011).
The best practices review completed for this project (ACIAR Project no. ASEM/2011/009),
also showed that farmers did, in fact, improve the bargaining position for all the members.
In the case of Ban Hoy commercial vegetable producers group, previous to organizing,
traders commonly repressed prices, granting higher prices only to farmers with inside
knowledge of recent price changes in end markets. Once organized, sub-group leaders
would regularly follow-up prices at the destination markets and be prepared to ensure that
group members received appropriate prices that reflected the latest price changes in the
larger markets.
Together, these two examples demonstrate that organized farmers can be in a much better
position to benefit equitably from market opportunities: they can facilitate more efficient
trading, improve the production to match market demand, and can ensure members receive
appropriate pricing.
A question raised in the Folkard et al. study—and one of particular concern during
presentation and discussion of results—is whether farmer organizations formed with a
technological orientation can evolve to take on the more expansive roles of representing
members, mobilizing resources, accessing information, and negotiating with private sector
and government representatives. The authors posited that it may well be plausible for many
farmer organizations to evolve, but only if conditions are amenable, for example, if
members perceive a benefit, and support is both adequate and accepting of such transition.
In their fascinating and enlightening collection published in the Journal of Peasant Studies,
edited by Eric Holt-Giménez (2010), activists, academics, and farmer leaders share their
experiences at the nexus of two very different but objectively united farmer movements.
They ask whether two movements setting out to support smallholder farmers—one
32
founded by and run by farmer organizations to advocate for farmers’ interests, typified by
Vı´a Campesina; and the other, comprising farmer organizations and INGOs working to
develop and share sustainable agriculture (technologies), typified by Campesino a
Campesino—can find common ground and cooperate on their objectively common goals.
Exploring a range of experiences, the authors relate that, at times, the two movements
undermine and conflict. Only in a few cases do the movements become mutually beneficial.
The collection provides valuable lessons for Laos, including the functioning of farmer
organizations. Following is a quotation of a leader of the largest farmers’ movement in Latin
America:
Farmers helping their brothers, so that they can help themselves. . . to find solutions and
not be dependent on a technician or on the bank: that is Campesino a Campesino.
(Holt-Gimenez 2010: 204)
Laos has struggled since the early 2000’s to set up a ‘village extension system’ to fill a similar
role. The defining elements of the Campesino a Campesino movement is that it is formed by
and for farmers, not as an extension of the government system.
Whether advocacy- or practice-oriented organizations have greater impact is not the issue.
It is clear that they objectively form a co-dependent relationship.
Though the farmer-to-farmer-NGO partnership has been highly effective in supporting
local projects and developing sustainable practices on the ground, unlike Vı´a
Campesina, it has done little to address the need for an enabling policy context for
sustainable agriculture. Given the unfavourable structural conditions, agroecological
practices have not scaled up nationally to become the rule rather the exception. … On
the other, their effectiveness at developing sustainable agriculture at the local level has
kept its promoters focused on improving agroecological practices rather than addressing
the political and economic conditions for sustainable agriculture. (Holt-Gimenez, 2010:
206-7)
At the same time, an advocacy movement without the practice orientation will struggle to
find sustainable practices and technologies if they rely only on traditional research
approaches. Thus it is encouraging to read in this same collection of the experience related
by Pimbert and Boukary (2010), in Mali. They coordinated among advocacy and practice
organizations to make agriculture research responsive to farmers through a participatory,
multi-sector research steering group, producing research more salient to smallholders’
production issues and pulling both sides of the equation together. This provides a
compelling example of how cooperation can improve the impact of practice and advocacy
work.
Lao is at a very early stage in legalizing and formalizing farmer organizations, yet it is
appropriate to acknowledge the dual focus likely to develop among farmer organizations
and take appropriate steps to build collaboration. A significant step in this direction was a
conference among farmer organizations, held in August 2012 and supported by DAEC. Over
33 farmer organizations from 15 provinces gathered to discuss their opportunities,
challenges and options for addressing these. While recognizing the recent positive steps in
extension towards supporting farmer organizations, the farmers produced a statement
articulating their concerns and interests, and asking the government to take steps to assist
with these.
33
The congress produced a ‘Farmers Statement’, covering a range of issues relevant to
farmers’ capacity to equitably participate in development. Among other issues, they asked
for the opportunities to be involved in negotiating the terms of trade (under contract
farming), rather than simply being takers of a pre-arranged deal. They also asked for more
capacity building in organizational development so they could build stronger organizations
and raised concerns about high input prices and unfair practices that push farmers into
debt. As a final request, they asked for support to form a national Farmers’ Union or
Federation, to coordinate interests nationally and participate in national policy
development. While there is no legal obligation of the government to respond to such a
document, it is remarkable that these organizational representatives came together in a
national forum and, while also discussing technical issues, delved directly into issues of
enabling environments and conditions, value chain governance, and equity in agribusiness.
5.5 Demand-Driven Extension
Aside from benefits of advocacy and participation, farmer organizations are seen as a way to
influence service delivery to be more responsive to farmer needs, to become more
‘demand-driven,’ or to respond to the interests and needs of farmers and to be somehow
accountable to farmers. The challenge is evident enough: an environment in which poor
farmers are recipients of services paid for, organized, and delivered by organizations and
agencies not institutionally accountable to the farmers, what mechanisms can make such
services respond to farmer interests?
In Birner and Anderson’s (2007) treatment of steps to make extension more demand driven,
they first offer a convincing analysis of the need to make extension services more directly
relevant to farmers. Their study covered a broad range of service providers in India,
including television, input suppliers, government extension officers, and other farmers. A
key observation was that:
The perceived quality of most of the information provided was rated as either good or
satisfactory, but only around 60 percent of the farmers actually tried the technologies
recommended by extension workers. This points to problems regarding the practical
relevance of the advice provided by extension agents. (2007: 10)
In other words, in sixty percent of the cases, farmers did not even attempt to apply the
lessons from the extension services, and it raises the question as to what percentage of
farmers realized benefit from the interventions. In a less developed system with less
competition for farmer interests, it is unlikely that the situation in Laos is substantially
better than that in India. How, then, to increase the responsiveness of service providers, and
how to make the services rendered, especially technical/practice support, more practical?
As Jones et al. (2013) showed, farmer organizations and private-sector service suppliers
were almost always engaged in supplying information of direct relevance to farmers. Publicsector extension, however, is likely to face issues similar to those in India.
The government’s agriculture development strategy proposes greater involvement of the
private sector, in part to improve responsiveness, and in part to leverage private-sector
funds. However, in the many areas in which there is general lack of interest from the private
sector (such as primarily subsistence-oriented farming, or commercial farming in a situation
difficult for an investor to secure monopsony rights) this solution will likely not apply—
indeed these are characterized as ‘market-failures’ in service provision.
34
A complete analysis of the efficacy and shortcomings within Lao’s extension service system
has not been carried out. However, Birner and Anderson (2007) provide a useful framework
for considering. They point to several reasons for the unresponsiveness of the current
system: poor information flows, lack of incentive structures within the staff management
system, capture of services by large-scale farmers, distraction of public officers into nonservice activities, bureaucratic obstacles, financial shortfalls, and crowding out by private
suppliers. All of these, except the last, are likely to obtain here in Laos as well, and so the
solutions proposed by the authors could find salience here:




Decentralization/de-concentration
Contracting
Innovative funding
Improved management approaches.
The first is the focus of much recent attention and effort within the greater Lao government
system. The much discussed, ‘Sam Sang’ (three foundations) reform is intended to devolve
more authority and decision-making power to district level. In a complementary move, the
UN’s GPAR program is increasing financial support directly to districts in an effort to spur
local accountability and innovation. The second and third suggestions are receiving little
attention—the Agriculture Investment Plan notwithstanding. The sponsoring project for this
report is focused largely on the last suggestion.
There are additional approaches to ensuring services respond to farmers’ needs. Birner and
Anderson (20007) suggest looking to the third sector. Jones et al. (2013) found this a
promising strategy as evidence from the field suggests that, with support, farmer
organizations and NGOs could form a more responsive service delivery mechanism, a very
good complement to the private sector’s more limited interests in productivity.
Sanne Chipeta (2006), writing for the Neuchatel Group, makes a strong case that it is
difficult if not impossible to have services responding to farmer demand if farmers are not
demanding any services. This observation is apt for Laos, as many farmers have not received
valuable services and thus would have little experience on which to base an interest or
desire for more services. The idea of farmers paying for their services seems even more
fanciful, until one considers the promise of ‘para-vets’ or village veterinarians providing
vaccination and basic treatment services to livestock owners. As explained in a report from
the SADU project (Case Study: Achieving Reliable Animal Health Services), farmers are
accessing basic animal health services provided by trained semi-professional providers at
the village (or group of villages) level; farmers are paying for these services themselves. The
key to making this system work is that the farmers are orienting their livestock raising
practices, particularly cattle, toward markets, with strong expectations of a decent profit.
Jones et al. (2013) reported on another example of farmers accessing services and paying
for these themselves. In Bokeo Province, an informal group of farmers began investigating
rubber production. They had heard of the promising returns if a farmer could get access to
inputs and advice, and make it through the initial investment period. Joined together as an
association, these farmers helped each other source the best seedlings they could find and
then networked with existing technicians in the private sector on whom they could call for
advice. These technicians helped farmers apply a set of best cultivation practices and even
helped with techniques to solve a threatening disease outbreak in 2012. The farmers paid
35
for all the services themselves, including the transportation and daily fees for the
technicians who came from a neighboring province.
Yet, for every case of Lao farmers organizing successfully to access services and engage with
markets, there are many more cases where farmers experience negative impacts from
market actions (again, see Fullbrook 2009 and Kemp 2012 among others). There remains a
strong interest in and need for stronger accountability mechanisms and broader application.
This applies to the conditions of market failure or market ‘success’ alike.
36
6
Conclusion
In Laos, as in many countries with rich natural mineral and energy (hydropower) wealth, the
country’s economy is growing faster than benefits accrue to the majority rural, agriculture
population. On the contrary, they face many threats from the expanding economy and
concomitant trade and fiscal changes, as explained by the ‘Dutch disease’ theory. The choice
of how to react and shape the forces and what resources to make available to farmers is a
question of policy and service delivery. Extension services around the world have evolved to
focus on supporting poor, smallholder farmers take advantage of evolving opportunities
presented by changing economies while navigating threats posed by the same changes.
Extension has come to be understood as a system to support continuous innovation
involving many different value-chain actors (pluralism) with a component helping farmers
engage equitably with market forces (value chain governance) and supporting farmer
cooperation (farmer organizations).
Lao extension has embraced similar conceptual advances, expanding beyond an exclusive
focus on technical production issues and reforming the national extension service to include
agribusiness services and support to farmer organizations. This move is a critical element of
helping maintain the viability of smallholder farmers. However, a refined conception is
insufficient; substantial resources are flowing into the country and out through the
extraction and service sectors, yet little of this makes its way to the agriculture sector.
Indeed, support for the sector has decreased rather than increased. Even with a more active
private sector investing in modernization of agriculture production, Laos’ smallholder
farmers need assistance in navigating the new opportunities and dealing with the threats.
The expanded conception of extension in Laos, if resourced and funded, could make a
difference for Laos’ farmers. Support to equitable market engagement could help farmers
organize and take advantage of new markets and new resources. Government or third-party
services could help farmers avoid the pitfalls of mono-crop commercial production and
associated environmental damage. Similar services could help farmers better understand
market negotiations and how they can more effectively match production to market needs,
allowing farmers a fairer share of market value. However, such support will require
resources and an increasing, rather than decreasing, share of the national budget.
In addition, there remain large areas of Laos and many communities outside the interests of
private sector investors. Marginalized farmers remain poor and live with low levels of food
security. Supporting their development, in line with national policy for poverty eradication,
is a public good and will require public funding.
Where extension is effective, there is a strong need to quantify, record, and evidence this
effectiveness to national policy and decision-makers and to international donors. Without
this evidence, there will not be continued support for public extension services. Within the
conclusions of the highly detailed study of Laos’ public funds committed to agriculture,
commissioned by the World Bank, is the sensible argument that data on the impact of
agriculture spending will be key to addressing the downslide of sector funding:
Effective management is [a] strong argument for improving the availability of
management information. However, in agriculture it is doubly important if MAF is to
37
demonstrate to central government and donors that agricultural projects can be
effective in achieving national goals. (Cammack et al. 2008: iv)
In conclusion, the rapid economic growth in Laos means dramatic increases in public
resources. If directed towards agricultural extension services that follow global trends by
helping farmers address market and organizational issues, then development opportunities
may be extended to the large rural farming population. A viable future exists for Laos’
smallholder farmers, but only with strong support. The foundations for effective support
exist in the country and political will, in combination with continued international support,
may build on those foundations to establish a responsive, pluralistic extension system that
meets farmer needs. Constructive and practical actions of this sort will be essential if
smallholder farmers are to be enabled and empowered to take advantage of the many
development opportunities in the country.
38
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