Development Strategy of Five Selected Sectors in the Lao People's Democratic Republic (2020-2025) ; ERIA Research Project FY2018 ; No. 07

In: http://hdl.handle.net/11540/11157

Abstract

Agriculture in the Lao People's Democratic Republic (PDR) is characterised by food self sufficiency and dominated by small, family owned operations. Farmers sell surplus agricultural products left over after their own consumption to local markets to earn money, while agricultural exports other than the staple food of rice are produced mainly on plantations funded by investment from other countries. Thanks to diverse temperature zones and abundant precipitation, the Lao PDR is rich in land suitable for stable agricultural production. However, the current division of farmland into small plots makes it difficult to improve farming efficiency through mechanisation. Large scale farming is also difficult under the current scenario of farmland development. In the food processing sector, Lao companies produce items such as canned corn and processed coffee products. However, other products fail to reach the safety or quality standards required for export to developed countries. Since, in principle, products intended for consumption in developed countries must be produced at plants certified by the International Organization for Standardization (ISO) or the like, export opportunities in the Lao PDR are presently very limited. Although various agricultural products that could be used as materials for processed food products are grown, it is difficult to secure a massive stable supply of these in the absence of market functions for collecting products. Further, the presence of intermediaries and consignees in the supply chain has raised the cost of available products for a massive supply. These problems have become a bottleneck for the food processing sector in the Lao PDR.