Quality investments from Lao PDR: Organic contract farming in Patxong province

Lao is one of the fastest growing economies in the world. The country offers an attractive investment climate. Tax incentives, policies and law reforms have resulted in a rapid expansion in hydropower, mining, construction and agriculture investments. While economic growth has lifted thousands of people out of poverty, some investments have also come with big environmental and social costs. 

The government of Lao is now working to ensure investments comply with national laws and policies to protect the environment and communities; and to ensure contract negotiations result in equal benefits for all parties concerned. The Poverty-Environment initiative is supporting the government’s7th National Social Economic Development Plan that aims to improve the quality of investments. 

“A quality investment contributes to reducing poverty, enhance development of human capital, have least impact on the environment, support a diversified economy and provide a fair distribution of benefits to the population”. (Mrs. Phonevanh Outhavong, Deputy Director General. Ministry of Planning and Investment)

Six years ago Mrs. Inpeng Samuntee converted her timber company into an organic contract farming business cultivating coffee and vegetables. Surrounding communities are already benefiting from this win-win initiative. Farmers witness that “within 5-6 years, our lives got better. Now, we got better productions. The vegetables are not going bad anymore. Before, we lived in small cottages. Now we improved our houses.” 

This example demonstrates the impact that quality investments can have on human development, environmental conservation and the economy as a whole. Globally, organic sales have reached $59.1 billion in 2010 with experts forecasting a steady annual growth of 9 per cent or higher.

Laos has excellent potential to expand organic production, considering that farmers are traditionally accustom to zero chemical production systems, 75% of the labour force are engaged in agriculture related activities, not to mention the large contribution agriculture makes to the GDP. 

Domestic and foreign investments should be the driving force behind farmers’ adoption of advanced technologies, knowledge building of Good Agricultural Practices and provide the appropriate linkages to rapidly growing GREEN based markets.


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