Thai Ministry of Commerce’s Organic SymposiumThai Ministry of Commerce s Organic Symposium2 – 4 February 2010Bangkok ThailandBangkok, Thailand

“Organic Opportunities in Lao PDR ”

Presented byPhaydy Phiaxaysarakham

Deputy Director GeneralDepartment of Agriculture

Lane Xang Avenue, Patuxay SquareP.O.Box 811, Vientiane, Lao PDRTel +856 21 412350 ; Fax +856 21 412349

Ministry of Agriculture and Forestry

Tel. +856 21 412350 ; Fax. +856 21 412349e-mail: doag@laotel.com; phaydy8@yahoo.com

The Government of Lao PDR has The Government of Lao PDR has initiated the policy on agricultureinitiated the policy on agricultureinitiated the policy on agriculture initiated the policy on agriculture production be secure, sustainable, production be secure, sustainable,

l f f t i b t dl f f t i b t dclean, free of toxic substance and clean, free of toxic substance and low cost productionlow cost production. pp

(8th Party Congress Resolution,18 - 21 March 2006)

What is free of toxic substance ?What is free of toxic substance ?

Agriculture production of Laos needs to utilize i lt l i t h d d l ti t i lagricultural inputs, such as : seed and planting material,

fertilizer and pesticide. Meanwhile, chemical or biological input is also a factor that increases high productivity andinput is also a factor that increases high productivity and if correctly use its will certainly produce the agricultural commodity clean and free of toxic.y

What does mean secure, sustainable ?What does mean secure, sustainable ?

Utilization of natural resources for agriculture production, f l il t f t h ld t b d d dfor example, soil, water, forest should not be degraded and should protect those resources securely and sustainablysustainably.

Soil: Soil which naturally has fertility should be utilizedSoil: Soil which naturally has fertility should be utilized effectively and should be maintained for ever.

Water: Water resource still be pure and clean in its nature with less chemical contamination and should be utilized effectively, not negative exploitation . If exploit for agriculture development needs to protect the environment for its sustainabilityenvironment for its sustainability.

Forest:Forest: Forest in Laos is tropical natural resource, as soil fertility for agriculture biodiversity and water keeping If nofor agriculture, biodiversity and water keeping. If no rational use the forest will lack of water and fertility of soil. Therefore, it is needed to preserve forest for long p gterm sustainability .

What does mean low cost production ?What does mean low cost production ?

It is the production with low cost by preferably using agricultural inputs that can be found and produced locally, for example, local variety, farm yard manure, compost, green manure, rice straw, herbal pesticide ... That needs to increase quantity and high quality of product with the context of low cost production and its unit price can be competitive in local and international market.

How we are able to understand different ti ithi th f lpractice within the scope of clean

agriculture?Comprehensive context of different practice within the scope of clean agriculture, require understand p g , qthat clean agriculture has much of techniques.

Cl A i lt li 4 i i f tiClean Agriculture policy covers 4 areas, i.e. information, development technique, inspection-certification, and food processing and 4 agricultural systemsp g g y

- safe conventional agriculture (CA), - good agricultural practice (GAP, IPM), good ag cu u a p ac ce (G , ),- pesticide-free agriculture (PFA) and - organic agriculture (OA)

How we can implement clean agriculture, free How we can implement clean agriculture, free o e ca p e e t c ea ag cu tu e, eeo e ca p e e t c ea ag cu tu e, eeof toxicity, low cost production ?of toxicity, low cost production ?

Nowaday agricultural production should respect the potential of ecological production. To introduce production practice which will be suitable to such potential ecology it ispractice which will be suitable to such potential ecology, it is needed:

O i i lt t d dOrganic agriculture standard of Lao PDR

Upstream OAUpstreamOA

Technology using accordingly to agro ecology

Middle down

OAto agro-ecology

Middle down stream

OA PFAOA, PFA

Down stream and river bed

CA, PFA, GAP/IPM, OA,

Background of OA in LaosBackground of OA in LaosTh t “ t i bl i lt d i f i ”The concept “sustainable agriculture and organic farming” were introduced since late 1990s

Sustainable farming technologies and practices were incorporatedSustainable farming technologies and practices were incorporated into various training programme, like NAFES, NGOs etc.

Thousands of farmers have been trained

No market linkage planned, the products were sold as conventional with only few were sold as natural products or pesticide-free products with non significant premium pricesproducts with non-significant premium prices

mid 2000s, market linkage was introduced as opportunities of organic agriculture as poverty eradication became apparentorganic agriculture as poverty eradication became apparent

The collaborative project between HELVETAS and DOA launched PROFIL in 2004, major milestone of Lao organic history

Production & marketProduction & marketA very early stage of developmentA very early stage of developmentLargely under subsistent production => “organic by default”Several wild products collected from forest or fallow land which can be pcertified as organicOnly few commercial agriculture projects in Laos received organic certification Domestic organic market growing rapidly, since started weekend market by PROFIL in December 2006Average sale 24 758 million kip and 2 49 tons of vegetables and rice areAverage sale 24.758 million kip and 2.49 tons of vegetables and rice are sold weekly (111 organic farmers non-certified) Producers started be satisfied with the organic production as well as the sale at weekend market (interview, November 2008)sale at weekend market (interview, November 2008)Consumers are less aware about organic agriculture but was confident about the integrity of organic products sold at the weekend market

Tea84 (98 ha)Laos Farmer Product (LFP)

ProductsNo. of farmersWho

Coffee, Tea2 (70.6 ha) Sinouk Coffee

Tea84 (98 ha)Laos Farmer Product (LFP) 

Rice390 (433.37 ha) Green Field Miller Group

Coffee589 (1,543.93 ha) Jhai Cooperative

Mulberry tea4Vang Vieng Organic Farm

Vegetables111Vientiane Vegetables

Rice2,500(800 ha)

Arrowny corporation ltd

Coffee processor‐Lao Mountain Coffee

Vegetables500 haPaxong Development  Export‐

coffee200 ???Coffee‐OXFAM

(800 ha)

Soybean???Wilaikul International Group

Import State enterprise

herbs and fresh vegetables

???STE Lao‐International Import‐Export

Training and researchTraining and research Very few on organic farming (PROFILVery few on organic farming (PROFIL, PRORICE, Jhai Foundation (Laos), Oxfam S lid i B l i O f A li CIDSE SAFSolidarity Belgium, Oxfam Australia, CIDSE, SAF, CUSO

Some organic training is introced with external consultant inputC tl F lt f A i lt (NUOL) i iCurrently, Faculty of Agriculture (NUOL) organizing academic curriculum related to organic and sustainable agricultureNo research specifically on organic agriculture by local researchers

Standards and CertificationStandards and Certification DOA developed national organic standards based on IFOAM BasicDOA developed national organic standards based on IFOAM Basic Standards, adopted by the MAF on December 2005DOA established Clean Agriculture Development Centre (CADC)DOA developed a national organic labelDOA set up Standard and Accreditation Division, 2009DOA b d l i l l tifi ti b d L C tifi tiDOA began developing local certification body, Laos Certification Body (LCB) Started offering its certification services and label, 2009Foreign CBs offer services in Laos, all have their base in Thailand, e.g. ACT (Thailand), BCS (Germany), ICEA (Italy) and Bioagricert(Italy) LCB joined the Certification Alliance

Govt Policy & ProgrammesGovt Policy & Programmes A ti l t t t l f O iA national export strategy plan focus on Organic

Products (under developing by MOIC) The strategic plan concerned will be approved by

the Cabinet of MOIC in the near future. DOA develop a regulatory framework for organic

and safe agriculture production, under the term “clean agriculture”clean agricultureDOA set up Laos certification body. Standard and Accreditation Division was

established under DOA, 2009.

SWOT Analysis (extract from TA report finding)SWOT Analysis (extract from TA report finding)

•StrengthensLarge and productive arable land with low population densityLarge and productive arable land with low population density (24hab/km2) Sufficient labourLow intensive labor costLess polluted environmentContinuous supports from foreign organization (technical)Continuous supports from foreign organization (technical) Emerging domestic market (weekend market) Traditional farming practices are close to organic farming (less ad t o a a g p act ces a e c ose to o ga c a g ( essuse of agro-chemicals) Having local certification body with collaborative relationship with foreign certification bodies (Certification Alliance) Clear government policy supporting organic agriculture Cost competitive compared to other countriesCost competitive compared to other countries

SWOT Analysis (extract from TA report finding)ticontinue…

• Weaknesses

Small farmers have limited access to relevant information to improve their knowledge and skills, thus slow to adapt to new innovationPublic extension system to organic farmers still weak y gLack of entrepreneurship among the business sector to work on devoted quality business like organic productsLack of basic organization among small-scale farmersg gLack of clarity regarding leadership and coordination (within the public / private / donors) within the organic sectorLimited human resource and coherent human development pprogrammeLack of R&D system to generate technical production knowledge appropriate to local Laos conditions Too few producers and operators as well as products offered

SWOT Analysis (extract from TA report finding)continue…

• Opportunities

Abundance of national Resources (large cultivable land, clean water, many farms are less and non-chemical use). Increasing demand of organic agricultural products in EU countries, USA, Japan ASEAN and China marketsJapan, ASEAN and China marketsOrganic products carry price premium, helping to improve farmers’ income and reduce poverty Synergy among international development partner to assist rural y gy g p pdevelopmentDeveloping the agro- and eco-tourism

Th tThreatsPromotion of industrial crops (e.g. rubber tree, tree for pulp, palm oil, agar wood, sugar cane, cassava, jatropha…) reduce land for organic farmingUnscrupulous farmers and traders taking advantage of the growing organicUnscrupulous farmers and traders taking advantage of the growing organic marketsMedia power on advertisementMaintaining the awareness on organic productsg g p

Strategic & action planStrategic & action planJoint public-private sector collaboration Establish two permanent bodies i e an inter ministry bodyEstablish two permanent bodies , i.e. an inter-ministry body and a private stakeholder forumPlan should include: Cl i i f th i tClear vision for the organic sector Clear strategic objectives and perpetual realistic targetsInnovative activities and responsible agencies and bodiesFinancing mechanismMonitoring and Evaluation

Based on the existing Organic Product Strategy (2007-2009) developed by the MOIC • Some researches are needed to prepare background informationp p g• Organize some kind of information sharing workshop to all level of various stakeholders

Market Development: ExportMarket Development: Export

Export opportunities existExport opportunities exist

• high potential products: tea vegetableshigh potential products: tea, vegetables, processed fruits and vegetables, wild products, and cardamomp ,

• medium potentials are coffee, medicinal herbs, rattan, and handicrafts (textile)

But high transport costs (land-locked country) logistic infrastructure and othercountry), logistic infrastructure, and other comparative disadvantage

Market Development: DomesticWeekend markets

• Initiating vigorously monitor according to DOA organic standards (PROFIL is already planning to do this)

• Improving communication with consumers, e.g. on-spot display, short newsletter

• Improving the market hygienic and environment friendly, e.g. restrict plastic bags, organic wastes handling

Initiative for organic “box scheme” in Vientiane city, high-end hotels and restaurants Promoting the awareness on organic foods among consumer Serves as a good linkage to eco-tourismSpecial programme, led by the government, to introduce Lao organic

coffee to high-end restaurants and hotels nation-wide Support the use of “Laos Organic” label as a common seal in LaosSupport the use of Laos Organic label as a common seal in Laos

Standards & Conformity Assessment

N k b l kNo key bottleneck at present

Competency development for LCB for inspection and tifi ti b t thi i b i dd d b PROFIL dcertification, but this is being addressed by PROFIL and

Certification Alliance

DOA Standard and Accreditation mandate on organicDOA-Standard and Accreditation mandate on organic agriculture has been established (2009)

Possibility DOA to delegate the LCB work to private sectorPossibility DOA to delegate the LCB work to private sector when there is the readiness

Some private sector interests to run business as CBSome private sector interests to run business as CB

Production and ExtensionProduction and Extension Combination of production technology and comprehensive farmerCombination of production technology and comprehensive farmer support should be addressed

Need appropriate knowledge and production technology for farmersprovision of organic inputs (e.g. seeds, bio-pesticides and organic fertilizers) and creditsEstablish and/or strengthen producers organization

Generic knowledge is available in various publications and internetLack specific knowledge on production system appropriate for smallLack specific knowledge on production system appropriate for small-scale farmers in LaosTake long time (and resource) to generate own knowledge Tap on the existing knowledge and experiences from compatible local conditions, e.g. ASEAN countries, as starting points

Production and Extension Continue..

N l l b d i L ff i t i i i i ltNo local body in Laos offering training courses on organic agriculture, especially for extension staffs Need to develop such training capacity in LaosTrainers should have good experiences, training programmes are practical and grounded on the local conditionsR d t t bli h i t t i t i i tit tRecommend to establish a private-sector organic extension institute

Collaborate with foreign institutes in the Asian region who have good experiences in organic extensionInitiate free or subsidized extension supports to projects in LaosOrganize its own organic projects to gain sufficient experiences and

ti l k l dpractical knowledgeLater, offer the training by it own without the need for foreign institutes and charges fees

Research and EducationResearch and EducationAd i h i f i lid iAdaptive research on organic farming to validate appropriate production knowledge

St t ith t f itt d h 4 5Start with one team of committed researchers, 4 - 5 persons to form the core group

Research team works closely with the extension instituteResearch team works closely with the extension institute above

For education introduce organic agriculture as a compulsoryFor education, introduce organic agriculture as a compulsory subject in the bachelor curriculum (already introduced by NOUL)

Organic Curriculum Development Project (Helvetas-supported project in Luangpabang Agricultural College).

Ways forwardsWays forwards D l i N ti l O i PDeveloping National Organic ProgramEnhancing public and private coordination Encouraging private organic extension instituteinstitute Joint-venture organic entrepreneurship Improving organic (value-quality) supply managementmanagementExpansion of domestic markets

Thank you very much for your attention !