11.1 Appendix 1:

Comparing Developments in Agricultural Extension Services in Lao PDR with Global Trends: A Literature Review

Michael J. JonesPeter CaseJohn G. Connell

May 2013Vientiane 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 in-country 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.

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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 full-time, 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.

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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

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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.

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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 Years Percent

Rural Population as a Percent of Total Population 1975 88.92010 66.8

Farming Households as a Percent of Total Households 1998/99 842010/11 77

Farm Holdings Smaller than 2 Hectares as a percent of total number of holdings, 1998/99

1998/99 73

2010/11 53(<3ha=73)

Agriculture contribution to GDP as a percent 1990 60.552010 31

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 ControlCovered 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

1 All Lao P.D.R policy documents are listed separately in a table at the end of the reference list.

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agrarian reforms aimed at slowly shifting the population toward collectivization, beginning 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 InvestmentWhile 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)

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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 well-off 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.

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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

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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 resource-based 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 FarmingAs 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.

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3.2.1 Loss of Land, Loss of LivelihoodsIndustrial 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.

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

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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.

3.2.3 Magnitude of the Land-Concession ProblemAttention 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:

… 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 political-economic 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).

3.2.4 Questionable Increase in Value Commercialization vs. Upland Rice FarmingThe 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

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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).

3.2.5 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

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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 ManipulationContemporary 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:

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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’)

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3.4 Persistent PovertyWith 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).

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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.

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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

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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

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acknowledge the conceptual and practical challenges in translating this policy into equitable 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 MeansThe 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

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continued relevancy of various approaches, and making a series of recommendations. While 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 7 th Five-year Socio-Economic 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. 4-14). 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.

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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) Food production2) Commodity production and farmer organizations3) Sustainable production patterns, land allocation and rural development4) Forestry development5) Irrigated agriculture6) Other agriculture and forestry infrastructure7) Agriculture and forestry research and extension8) 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 area-specific 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/DAECFormed 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:

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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

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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 AssociationsLaos 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 interest-groupings. 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

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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.

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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 SystemsA 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

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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

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other hand, implies a wider range of organizations and stakeholders involved in agricultural innovations along agricultural value chains. (2007: 2)

5.2 Pluralistic Extension ServicesThe 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 non-government 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

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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.

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5.3 Market DevelopmentTwo 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

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et 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 OrganizationsIn 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 co-operatives 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

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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

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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.

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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 ExtensionAside 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. Public-sector 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.

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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 non-service 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

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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.

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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

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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.

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