Socio economic theme: Southern Laos Farming and Marketing Systems Project

Partners

• Faculty of Agriculture – NUOL (staff and students)

• Agriculture and Forestry Policy Research Centre – NAFRI

• University of QLD (staff and students)

• Savannakhet and Champasak PAFO

• DAFO staff from project districts

AGRARIAN SYSTEMS ANALYSIS

MARKET STUDIES

POLICY OPTIONS

FARM AND COMMUNITY

STUDIES

TECHNICAL OPTIONS

Farm and community studies: Developing a household typology

PHASE 1 -Consultation

with DAFO staff regarding

village classification and selection

PHASE 2 -Village

reconnaissance field work

PHASE 3 -Household

survey

PHASE 4 - Case study analysis

PHASE 5 -Monitoring and

Evaluation

Agro-economic zones in Savannakhet

Where would you put the structural boundaries?

0

1000

2000

3000

4000

5000

6000

0 1 2 3 4 5 6 7 8 9 10

Yie

ld (

kg/h

a)

Area (ha)

Self-sufficient line Market orientation

Functional typology

Labour

• Remittance dependent

• Farm labourers ---------------------

• Farming professionals

Semi Subsistence

• Intensive lowland

• Extensive lowland

• Upland/ lowland

• Diversified cropping

• Swidden/NTFP/Collector

• Livestock keepers

Diversified livelihood

Market oriented

• Rice specialists

• Cropping specialists

• Livestock focused

• Agro-forestry

Provisional classification (Savannakhet)

0

10

20

30

40

50

60La

bo

ur

Mig

rati

on

Pro

fess

ion

al

Smal

lsca

lelo

wla

nd

Med

ium

Lo

wla

nd

Tran

siti

on

al

Swid

den

Live

sto

ckke

eper

Low

lan

dN

TFP

Ric

e M

arke

t (2

0%

)

Agr

ofo

rest

ry

Div

ersi

fied

Labour Subsistence Market Diversified

Nu

mb

er

of

ho

use

ho

lds

(n=3

00

)

Lowland Transitional Upland

Household rice security status in lowlands (2010)

0%10%20%30%40%50%60%70%80%90%

100%N

agas

or

Ph

on

egn

anan

g

Ph

ano

mxa

i

Ph

on

tan

Gea

ngX

ai

Kh

amsa

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Ph

alin

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pal

ath

No

ne

Ph

ajao

Bo

un

gkeo

Kh

oke

No

ngb

ua

Hie

ng

Outomphone Phalanxai Phin Phonethong Soukhuma

Pe

rce

nt

of

su

rvey

ed

ho

use

ho

lds

Both Buy Self-suff Sell

IR IRSupISupI RIR TRANTRAN SupI SupIR R

WS paddy yields by rice security status (2010)

0

1000

2000

3000

4000

5000

6000

0 2 4 6 8 10 12

Yie

ld (

kg/h

a)

Area (ha)

Both Buy Self-sufficient Sell Self-sufficient line Market orientation

Constraints

Incentive

Adoption of modern varieties (Champasak)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

5

10

15

20

25

30

35

Cu

mu

lati

ce p

erc

en

t o

f h

ou

seh

old

s (%

)

Nu

mb

er

of

ho

use

ho

lds

Year

Phaling Oupalath None Phajao Boungkeo

Khoke Nongbua Hieng Cumulative adoption

Fertiliser use in the lowlands (SVK &CPP):80% of households (n=360)

Grow paddy rice

(347)

Inorganic Fertiliser

(276)

Seedbed

(171)

Basal

(113)

Top-dress

(64)

No top-dress

(49)

No Basal

(58)

Top-dress

(38)

No top-dress

(20)

None on seedbed

(86)

Basal

(68)

Top dress

(31)

No top-dress

(37)

No Basal

(18)

Top dress

(18)No information

(19)

No Inorganic

(71)

Rate of fertiliser remains low (kgN/ha)

District/Village Only basal Basal + Top dress Only top dress TotalOutomphone 9.9 12.0 8.8 9.4Nagasor 13.1 17.7 8.5 11.3Phonegnanang 5.9 8.2 9.0 7.2

Phalanxai 11.5 13.0 17.8 12.1Phanomxai 16.8 17.6 19.1 14.4Phontan 10.0 8.4 15.9 9.7

Phin 9.6 16.3 8.0 2.2Khamsa-e 7.3 0.6GeangXai 9.6 16.3 8.4 3.6

Phonethong 8.0 28.0 15.2 15.4Phaling 6.4 26.3 17.2 19.3Oupalath 18.1 29.8 23.5 21.8None Phajao 5.3 6.1 2.4

Soukhuma 11.1 24.9 10.7 13.0Boungkeo 16.2 32.1 13.5 19.5Khoke Nongbua 11.3 24.7 16.0 12.9Hieng 6.3 10.7 4.3 5.7

Grand Total 10.3 21.1 13.1 11.2

Cumulative distribution of kgN/ha

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

0 20 40 60 80 100 120

Pro

b

KgN/ha (Basal + Top-dress)

All paddy Apply N

Mechanisation – Land preparation

District/Village Own Tractor Buffalo Hire Tractor Buffalo/HireOwn Tractor and Buffalo NA

Outomphone 78% 18% 2% 0% 0% 2%Nagasor 77% 17% 3% 0% 0% 3%Phonegnanang 80% 20% 0% 0% 0% 0%

Phalanxai 56% 19% 20% 3% 0% 2%

Phanomxai 60% 13% 23% 0% 0% 3%

Phontan 52% 24% 17% 7% 0% 0%

Phin 85% 9% 6% 0% 0% 0%Khamsa-e 88% 8% 4% 0% 0% 0%GeangXai 81% 11% 7% 0% 0% 0%

Phonethong 43% 47% 3% 5% 1% 1%

Phaling 59% 21% 10% 7% 0% 3%Oupalath 45% 45% 0% 7% 3% 0%

None Phajao 24% 76% 0% 0% 0% 0%Soukhuma 69% 6% 16% 8% 1% 0%Boungkeo 67% 7% 20% 3% 3% 0%

Khoke Nongbua 67% 7% 13% 13% 0% 0%Hieng 75% 4% 14% 7% 0% 0%

Total 64% 21% 10% 4% 1% 1%

Barriers to market development

Labour

• Remittance dependent

• Farm labourers ---------------------

• Farming professionals

Semi Subsistence

• Intensive lowland

• Extensive lowland

• Upland/ lowland

• Diversified cropping

• Swidden/NTFP/Collector

• Livestock keepers

Diversified livelihood

Market oriented

• Rice specialists

• Cropping specialists

• Livestock focused

• Agro-forestry

Internal and external constraints

Farming system

• Soil fertility

• Water

• Rice quality

External

• Price of output

• Price of inputs

• Infrastructure

• Processing

• Taxes and trade restrictions

Source: Annual report 2010, PICO of Savannakhet province

18%17%

14%

7% 7% 7% 7% 7%6%

4%3%

2%1% 0.3%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

Pro

du

ctio

n (

Ton

s)

Rice production share by district, 2010

1.2. Trade in Agricultural sector

Savannakhet rice production

Location of studies

• The study area has the geographical position advantage for the

expansion of exports to Vietnam as it located on road n. 9 which

links the study area to Quang Tri province via Lao Bao –

Dansavanh cross border ;

• 20 % of rice collected by rice millers in study district is export to

Vietnam

• The study area has approximately 14,000 metric tons of rice

surplus every year. This is an opportunity for farmers to supply

local mills in their own district;

• The horizontal integration between traders can facilitate the

trade negotiation in the market level

– Rice millers group

Potential

• Seasonality of supply source: it is increasing the difficult to

source the rice in study area

– > 50% of rice is collected outside the study area ;

• Price fluctuation due to production levels and policy decision

– Low production (drought or flood)

– Banned of rice exports

– 1700 kip/kg (2009), 3500 - 4200 kip/kg (2010) and 1800 kip/kg (2011)

• Difficulty to set up quality standards recognized by

international actors due to poor processing facilities in the

rice mill;

– High percentage of broken piece, low percentage of whole grain (35%)

– High humidity of polished rice (> 16%)

• Market fragmentation due to the lack of horizontal linkage in

the supply site (non formal farmer’s organisation)

Major constraints

Rice marketing chain

• Strengthening the horizontal linkage in the supply site:

Farmers in the study area should have a formal collective

action in order to facilitate the purchase of rice by

traders, whilst giving them “a bargaining power”;

• Improving the vertical linkage: the vertical linkage can be

leveraged to increase the flow of information to farmers. If the

information transfer between farmers and traders is better

organized and linked, farmers can orient their production to

meet the market demand rather than produces for home-

consumption;

• Improve processing knowledge and facilities to be able to

ensure quality recognized by international standard.

Recommendations

Further information