Upland Development Strategy for Agriculture and Rural Development, 2015-2020 2nd Draft Northern Uplands Development Programme Department of Planning and Cooperation Ministry of Agriculture and Forestry 11 July 2013

Outline of the Presentation Major revisions to the draft Upland Development Strategy Context of the Uplands in Lao PDR Definition of the Uplands Resource base and production systems Past performance and recent developments Policy framework Legal framework Proposed Second Draft: Upland Development Strategy Vision Objectives Principles Target beneficiaries Pillars Cross-cutting aspects Institutional roles Indicators Operational framework Next steps

Context

Definition of the Uplands Area of multi-dimensional marginality Characterized by remoteness, diverse ethnicity, language, and culture Comparatively high level of poverty Livelihood dominated by pockets of food insecurity and shifting cultivation Bio-physical factors Elevation above 200 m.a.s.l. Rugged dissected terrain Steep slopes, narrow valleys Large diversity of upland rice varieties

Resource base and production systems NORTH North Soils suitable for cash crops and animal husbandry Annamite Uplands Acid soils: limited potential for high value agriculture Potential for large livestock Bolovens Plateaux Rich soils Elevation: 500-1,500 m.a.s.l. Rainfall: 2,500-3,000 mm/yr Annamite Uplands BOLOVENS PLATEAUX

Past performance and recent developments Northern uplands Natural forests degraded by logging, shifting cultivation, rubber plantations, hydropower Opium production Annamite uplands High UXO, low rural population density, high poverty, tree plantations, hydropower, fisheries, large livestock rearing Bolovens Plateaux Wide range of farming systems Tree crops: coffee, fruit Horticulture: tea, cardamom, vegetables Declining shifting cultivation Medium to large scale agriculture land concessions for coffee, cassava, and rubber Capital, chemical, and mechanical intensive agriculture

Past performance and recent developments Policy push factors Poverty reduction through market orientation Stabilizing farming systems Land allocation, focal area development Opium reduction Increase in forest cover: 70% by 2020 Promotion of land-based FDI in upland areas: 45% of all investment is in unstocked forest or shifting cultivation areas Improved access to regional markets Demand pull factors Increased demand for niche market products in domestic and regional markets Increasing demand for upland commercial crops in nearby markets: cassava, rubber, fodder maize, sugar cane, bananas, coffee, tea, NTFPs

Past performance and recent developments Constraints to upland agricultural and rural development Minimal farmer experience with modern agriculture Traditional agricultural production Monocropping: rice security Low labor productivity and availability Minimal access to agriculture information Lack of land tenure security Complex business investment regulations Small and inexperienced upland domestic enterprises Weak financial services in upland areas Trade logistics at upland border districts are inadequate

Past performance and recent developments Regional opportunities and challenges Northern Uplands Build on commercial agricultural production for China, Thailand, Vietnam markets Harmonized standards for commodities Cassava, maize, bananas, livestock, citrus Niche rice varieties Build on quality agricultural products for heritage, nature, & agro-tourism Branding of indigenous products Textiles, organic tea and coffee, clean temperate climate fruit and vegetables Agroforestry : teak, fruit trees, NTFPs, herbs, essential oils, livestock GMS agribusiness trade clusters Preliminary agro-processing Semi-finishing of primary products Joint venture with neighbor country enterprises: cool store, silos, logistics, storage facilities Local & International Border Crossings in Northern Lao PDR

Past performance and recent developments Regional opportunities and challenges Annamite Uplands Produce commercial agriculture products for Vietnam; rice, cassava, fodder maize, tobacco, fisheries, livestock GMS agribusiness trade clusters Preliminary agro-processing Semi-finishing of primary products Joint venture with Vietnamese enterprises: silos, logistics, storage facilities Establish upstream linkages for the Vung Ang Economic Zone, Ha Tinh Province, Vietnam

Past performance and recent developments Regional opportunities and challenges Bolovens Plateaux Build on high value horticultural products and niche crops Coffee, tea, fruit, clean agriculture products, certified Halal and organic vegetables Implement Lao Coffee Strategy Agribusiness trade cluster Champasak - Ubon Preliminary agro-processing Joint venture with neighbor country enterprises: cool store, silos, logistics, storage facilities Promotion of PPP GOL-GOT LNCCI-Thai Chamber of Commerce Champasak-Ubon universities

Policy framework Political Report to the 9th Party Congress, March 2010 7th National Social and Economic Development Plan Decree No. 16/PMO 2012 on Three Builds (sam sang) Rural Development and Poverty Eradication Five-Year Plan (2011-2015) Agricultural Development Strategy to 2020 Agriculture Master Plan, 2011-2015 Forestry Strategy to 2020 National Nutrition Policy National Adaptation Programme of Action to Climate Change Land Policy Statement (pending legislative approval)

Legal framework Law on Agriculture Law on Food Forest Law Law on Environmental Protection Law on Land Law on Industrial Processing Law on Water and Water Resources Fisheries and Aquatic Resources Law

Proposed Second Draft: Upland Development Strategy 2015-2020 11 July 2013

VISION FOR THE UDS Long-term holistic sustainable development of agriculture, natural resources, and rural areas by an economically empowered and better skilled upland population mostly deriving livelihoods from secure access to productive assets that support food security and resilient farming systems with links to pro-poor and climate-smart agricultural value chains and off-farm economic opportunities.

Objectives 4 objectives by 2020: Integrated rural development is a process for eradicating poverty in upland areas Upland food security through increased food production and improved incomes linked to market activities Strengthened capacity of local government facilitates decentralization leading to improved effectiveness of service delivery in upland areas to maximize development of local potential Sustainable natural resources management including conservation and sustainable use of agro-biodiversity

Principles Principle 1: Principle 2: Principle 3: Principle 4: Human resources are given a high priority Principle 2: Promote local ownership Principle 3: Contribute to GOL policy objectives Principle 4: Role of Government is to improve the delivery of public services Principle 5: Mobilize capital from all sectors

TARGET GROUPS Upland communities Smallholder upland farmers Poor communities in remote upland areas Food insecure areas in upland areas Border districts with upstream linkages to upland smallholder farmers

5 Pillars of the UDS Food security and self-sufficiency Commercial agriculture, markets, and marketing Conservation and sustainable use of natural resources Rural upland infrastructure Human resources development and delivery of public services

Cross-cutting aspects Pillar 1: poverty, gender, culture, empowerment Pillar 2: poverty, gender, empowerment, technology innovation Pillar 3: poverty, environment, climate change, hazard risk reduction, innovation Pillar 4: risk reduction Pillar 5: gender equality, rule of law, poverty, culture, values

Pillar 1: Food security and self-sufficiency Priority areas for action: Farming systems approach for food security, farm diversification, improved nutrition, and self-sufficiency Value-chain analysis for food security Gender-linked extension for food security Soil conservation Stabilizing land use rights Agroforestry farming systems Climate smart upland agricultural development Irrigation system effectiveness Improvement of livestock productivity Reduction of opium production

Pillar 2: Commercial agriculture, markets, and marketing Priority areas for action: PLUP Use TSCs to improve monitoring of land concessions Farming systems approach Strengthen farmer organizations Reduction of opium production Facilitate competition in agricultural trade Application of GAP Promotion of niche market products Technology transfer to farmer organizations Gender and extension Promote soil conservation and fertility improvement for better fodder production Priority areas for action: PPP with upland mega-projects Market-oriented crop production and extension Improved competitiveness of commodities IPM / FFS Use of model farmers Rural financing Irrigation system effectiveness Improvement of livestock productivity Implementation of the national coffee strategy Rural economic diversification based on value chain analysis Economic empowerment of communities

Pillar 3: Conservation and sustainable use of natural resources Priority areas for action: Community-based watershed management Resource-based planning for stabilization of cultivated land Decentralized management of natural resources linked to value chain gap analysis Investments in green zones: agroforestry, grazing areas, clean agriculture production Promotion of soil fertility improvements as ecological landscape management based on land zoning and land use planning Carry-out PLUP and land zoning Promote soil erosion control through conservation agriculture Priority areas for action: Integrated watershed management for ecological landscape management and conservation and sustainable use of agro-biodiversity Participatory forest rehabilitation with benefit sharing (PES) Promotion of village forestry associations Management of NTFP extraction Climate change mitigation and adaptation Conservation agriculture as part of ecological landscape management

Pillar 4: Rural upland infrastructure Priority areas for action: Upgrade irrigation systems on 14 upland plains Develop small-scale irrigation for upland communities Upgrade rural market access roads Upgrade market infrastructure at strategic border crossings Improve rural water supply to enhance rural quality of life and nutrition

Pillar 5: Human resources development and public services delivery Priority areas for action: Individual and group capacity development Improving women’s nutrition Producing safe, appropriate and high-quality complementary food Micronutrient interventions Gender mainstreaming Gender balanced training Gender-linked extension groups Agricultural modernization aimed at youth On-farm and off-farm occupational skills development Priority areas for action: Institutional structures and processes Training needs assessment Government decentralization (sam sang) Delivery of public sector development services Government monitoring of contract farming Government monitoring of land-based mega-projects Professional standards for service delivery Monitoring and evaluation knowledge management Land tenure

INSTITUTIONAL ROLES

Public services provided by MAF Consultations with upland agricultural land concessionaires; use investment/ business plans as platform for consultations and basis for monitoring More effective monitoring of contract farming arrangements with agro-processors Promoting awareness of CSR to agro-enterprises Verification of clean agriculture products and certification of organic products Technology transfer through TSCs Up-grade knowledge and skills of GoL staff (technical, financial, social) Ensure access to finance for upland smallholder farmers and micro-enterprise Ensure participation through facilitation of project planning and monitoring by communities, safeguarding the rights of women, poor people, and ethnic groups Set-up institutional inter-departmental coordination mechanisms for coordinated planning, implementation, and evaluation of projects. Facilitate land-use planning and ensure permanent and reliable land use-rights for individuals and communities.

MAF cross-sector coordination Public services to be delivered Lead agency Coordinating agency Nutrition-based livelihood development MAF/Department of Planning & Cooperation Ministry of Public Health Integrated local planning NLCRDPE MAF/ Department of Planning & Coop. Facilitate cross-border trade of upland agricultural products at border districts MOIC Guarantee markets for upland commodities (i.e., rubber, livestock, cassava, bananas, vegetables) MFA MOIC, MAF/ Department of Planning & Coop. PLUP: To stabilize upland agricultural production and provide land tenure security for upland farmers MAF/DALM&D MONRE Trees are accepted by Government banks as assets in agroforestry systems and family forests MAF/DOF APB Nayoby Bank Policy measures to promote agribusiness investment in border districts MAF/DAEC MPI MOF Increased access to institutional credit for upland smallholder farmer organizations Bank of Lao PDR Promotion of FDI in upland border districts using fiscal policy measures MAF/ Department of Planning & Cooperation

Eexpected actions of farmers in implementing the UDS Apply experience, indigenous knowledge, and local wisdom to increase productivity of upland subsistence farmers Blend local knowledge with modern upland agricultural production technologies Understand production and marketing benefits of farmer organizations Respect upland ecosystems on which productive and profitable agriculture is dependent Adopt agricultural entrepreneurship and minimize debt

Expected actions of farmer organizations in implementing the UDS Contribute to upland community food security and quality of life Respond to incentives offered to modernize and commercialize upland agriculture Clean agriculture, GAP, harmonized SPS procedures, farming systems, inter-cropping, agroforestry, trees as assets, value-added processing, mechanization, post-harvest technologies Risk mitigation and adaptation to climate change, conservation agriculture, soil fertility improvements, water, and land conservation Participate in dialogue with GOL and agribusiness Retain maximum value-added at the community level Learn about markets, marketing, and traders; liaise with other stakeholders in value chains Expected actions of farmer organizations in implementing the UDS Participate in farmer field schools (FFS) for integrated pest management (IPM)

Expected actions of the private sector in implementing the UDS Seek profitable investments Provide services for which upland farmers are prepared to pay Operate contract farming Comply with GOL laws and regulations Mitr Lao Sugar

Expected actions of CSOs in supporting implementation of the UDS Provide subsidies, grants, low-interest loans, and income-generating schemes to fund alternative rural development approaches Respond to local needs related to community development Ensure that women have a voice in decision making at all levels Coordinate with the GOL to implement upland agricultural and rural development policies and strategies Coordinate with the GOL to train and advise upland communities about natural resources management, PLUP, conservation agriculture, and ecological landscape management Promote FFS for IPM Coordinate with GOL to train and provide international professional certification to GOL technicians and managers

Expected actions of development partners in supporting implementation of the UDS Support GOL to undertake upland development using PBA Monitor jointly with government progress of upland development based on agreed key indicators using Lao PDR’s statistical, monitoring, and evaluation regulations and procedures

Indicators (from Annex 1: Results Framework) General indicators Provincial GDP growth rate Provincial wealth distribution (Gini coefficient) 20% crown cover by natural forests in designated upland conservation, protection, and production forests Agro-processing facilities established at strategic upland border trading districts supplying outlets for diversity of crops Application of post-harvest technology by upland producers Outcome indicators: Number of farmer organizations organized around farming systems Agriculture lands, forests, and forestlands are designated (zoned), delineated, and registered in 25% of all upland districts Climate change risk mitigation and adaptation measures are being applied by one farmer organization in each upland district At least one upland irrigation system for supplementary wet season irrigation of rice (and other upland crops) is operating in each upland district % increase in yield of wet season upland rice 25% increase in police fines and court cases against illegal logging Trade flows to neighboring countries are normalized Sanitary and phyto-sanitary procedures are harmonized with principal trading partners

OPERATIONAL FRAMEWORK Process is gradual, phased, and maturing Criteria for programme-based approach Government ownership and leadership Strategy based on shared vision and priorities Comprehensive resource framework Coordination of institutional arrangements and assignment of responsibilities Harmonized approaches to implementation and management

NEXT STEPS Endorsement of the UDS by MAF Prepare an action plan Prepare an investment plan Implement the UDS

The end Thank you