081119 Lao PDR - National Irrigation Strategy - Initial Discussions - parts a and b

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In Lao PDR, irrigated agriculture has historically focused on paddy production for local and national food security. Nationally, the production level now exceeds the defined level needed for food …

In Lao PDR, irrigated agriculture has historically focused on paddy production for local and national food security. Nationally, the production level now exceeds the defined level needed for food security. How to proceed now? The presentation highlights factors and options for discussion by leaders of government agencies.

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  • 1. Review and Update of theNational Strategy forIrrigation (Part A)The Future of Irrigated Agriculture“Public Management for Better Returns”Presentation for the National Capitalisation Workshop, 19/11/08
  • 2. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 2Topics – Part A The MAF Initiative Achievements Opportunities Performance in the sub-sector Constraints
  • 3. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 3Map of LaoPDRSource: ADB - Operations Evaluation Department, April 2006:„Country Assistance Program Evaluation: Evaluation Study LaoPDR (Reference Number: Cap: Lao 2006-05)
  • 4. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 4The Minister’s Initiative for theIrrigated Agriculture Sub-sector Sub-sector should contribute its best to theachievement of the goals of the NSEDP 2001-2020and the resolutions of the 8th Party Congress MAF and Provinces to carry out a mid-term review of the performance inthe sub-sector to update the national strategy for the sub-sector‟spublic management to prepare an action plan with road map for 2010-2020,and to agree with the sub-sector development partners ona programme-based approach
  • 5. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 5The Minister’s Initiative - TimelineMar 08 - Mar 1006 - 10Plan 601 2002 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 2006 - 10Plan 601 - 05Plan 5Mar 017th Party Congress28/08/0816 - 20Plan 8Mar 11Next Party Congress11 - 15Plan 7Mar 068th Party Congress2001 20202001 - 2020Long-term NSEDPLao PDR ≠ leastdeveloped countryMar 08 Mar 10Apr 08 Jul 08 Oct 08 Jan 09 Apr 09 Jul 09 Oct 09 Jan 101/10 - 31/32. Strategy Options1/4 - 31/83. Strategy1/9 - 28/24. Action Plan1/6 - 30/91. Capitalisation3/3 - 31/5Inception28/08/08
  • 6. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 6The Minister’s Initiative - DiagramProgram Based Approach (PBA)For coordination of Development PartnerSupportNational Strategyfor Public Management of theIrrigation Sub-sector(Reviewed and Updated)Action Plan with Road Mapfor Implementation of the National Strategy25%38%16%Public Managementof the Irrigation Sub-Sector is moreEffective, Efficient,and SustainableDevelopmentGoalsAchievedAdvisoryTechnicalAssistance(AFD)March2008–February2010
  • 7. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 7The Minister’s Initiative - The Process0. Inception1. Capitalisation2. Strategy Options3. Strategy4. Action Plan and RoadMap01/04/2008 01/07/2008 01/10/2008 01/01/2009 01/04/2009 01/07/2009 01/10/2009 01/01/2010PolicyDirection4PolicyDirection3PolicyDirection2PolicyDirection1- Positon Paper- Principles- Vision- PreferredOptions- Endorsement30/03/2009Preferred strategyoptions are clear31/08/2009Strategy endorsed31/05/2008Final InceptionReport Approved30/09/2008Policy directionis clear03/03/2008TA Start02/03/2010TA End28/02/2010Strategy disseminated andimplementation arrangementsestablishedInception Report - Figure 3.9
  • 8. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 8Achievements:- Paddy production > 450 kg/capita2007Crop Ave yld Area Contrntype t/ha ha %WS 3.6 604 81DS 4.6 71 12Upland 1.8 106 72008 Dry seasonCrop Areatype 000haPaddy 91Other 48Total 139
  • 9. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 9Achievements:- Expansion of command areaInception Report - Figure 2.11ha %Reservoir 27,090 10%Permanent weir 55,430 21%Traditional weir 41,520 16%Pump-lift 143,020 54%Total 267,060 100%Nominal command areaScheme categoryIrrigation Inventory 2005: Nominal commandareasReservoirPermanent w eirTraditional w eirPump-lift
  • 10. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 10Achievements:- Legal frameworkInception Report - Figure 2.15
  • 11. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 11Achievements:- The Agriculture Law 1998Article 18. Building and Management of Irrigation (Simplification:) Small-scale : <100 ha Families, groups of people, or associations of water users invest in,build, manage, and use State may provide support and contribute to the construction Medium-scale : 100 - 500 ha cooperative or association of water users invest in, construct, manage,and use State and the people will jointly invest in construction, if it requiressophisticated technology and large investment Ownership will be transferred to the people for their own managementand use Large-scale : > 500 ha State and the people jointly invest in construction Management shall be assigned to the people State will participate in the management if it involves sophisticatedtechnology
  • 12. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 12Opportunities:- Available potential 1. Existing schemes: irrigation infrastructure not yet fully utilised: helpcommunities to intensify irrigated agriculture 2. New development: national potential for new development 913,000 ha,with 850,000 ha of dry season area Implementation: 68,000 ha, Designed: 107,000 ha,Feasibility studied: 124,000 ha, Reconnaissance study614,000 ha 3. Rise in food prices on the world market: “2+3” arrangement” applicable in 200,000 ha of newirrigation area 4. Advanced technologies: Sprinkler and drip irrigation for high value products
  • 13. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 13Performance - past and current- Conclusion Under-utilisation: many irrigation infrastructure systems haveremained under-utilised Low returns: Public investments in irrigation infrastructuredid not generate the returns that wereexpected Economic Social Can we do better?
  • 14. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 14Performance - past and current- IDS: Cropping intensity and yieldsCropping intensityType ofschemeNr ofschemesCombineddesigncommandareaWetSeasonDry season(nr) (ha) 2006 2004/2005 2005/2006 2006/2007Pump-lift 11 3,483 20% 36% 25% 34%Reservoir 3 2,840 68% 94% 102% 64%Gravity 2 650 85% 25% 25% 62%Overall 16 6,973 69% 58% 57% 49%Average yield (tons/ha)Type ofschemeNr ofschemesWetSeasonDry season(nr) 2006 Min Max AveragePump-lift 11 3.11 1.40 6.3 4.0Reservoir 3 2.76 1.13 4.58 2.88Gravity 3 3.02 1.50 3.75 2.69Traditional 3 3.33 2.54 3.45 3.00Overall 16 3.59Inception Report - Figure 2.18
  • 15. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 15Performance - past and current- Prov. studies ‘08: cropping intensitiestotal wet S. dry S.Savannakhet 52% 40% 65%Attapeu 66% 85% 47%Champasak 73% 88% 59%Saravane 77% 93% 61%Vientiane Cap. 78% 90% 66%Bolikhamxay 15% 20% 11%Khammouane 39% 52% 27%Vientiane Prov. 75% 99% 51%Bokeo 70% 97% 42%Luangprabang 62% 87% 37%Sayabury 59% 89% 29%Oudomxay 50% 85% 16%Total 56% 65% 46%Provinces% irrigation area efficiencyachieved 2007-2008
  • 16. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 16Constraints:- 7 problem areas Market mechanismsand economicincentives Technology for cropproduction Performance of theirrigation services Labour availability Credit for agricultureand trade Participation Implementation andAdministrativeCoodinationMany irrigation schemes areunder-utilised1.MarketMechanisms Farmers haveinsufficient economicincentives to maximiseproduction of irrigatedcrops2.Technology forcrop production3.Performance ofthe irrigationservices4.Labouravailability5.Farming andtrade credit6.ParticipationProvincial Studies July-October 2008 and Planning Workshop 09/05/08 –Seven Principal Problem Areas7.Implementationand AdministrativeCoordinationCoordination:- Laws and regulations- Organisations, staff,and work processes- Public financing andbudgets- Others? GovernmentPolicy
  • 17. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 17Constraints:- Key problem areas - 1Farmers do not dare to invest in production:constraints, uncertainty and risk Three key problem areas: M the functioning of trade and markets forinputs and outputs T the availability of production technology I the development and management ofirrigation infrastructure
  • 18. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 18Constraints:- Key problem areas - 2Effectiveness of public managementprogrammes is low: wider constraints not identified/addressed: development was government-initiated, with minimal inter-sectoral coordination focus was on area size and infrastructure development planning, design, supervision, procurement were centralised management responsibilities „shed‟ to irrigator communities follow-up programmes were not carried out roles and responsibilities of central and local government not clear, gaps &overlap budget not made available Fourth key-problem area: C Coordination and cooperation
  • 19. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 19Thank you!
  • 20. Review and Update of theNational Strategy forIrrigation (Part B)The Future of Irrigated Agriculture“Public Management for Better Returns”Presentation for the National Capitalisation Workshop, 19/11/08
  • 21. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 21Topics – Part B Policy framework Why irrigation? Understanding constraints Change processes Strategy considerations Planned change The Eight Party Congress The next stage
  • 22. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 22Map of LaoPDRSource: ADB - Operations Evaluation Department, April 2006:„Country Assistance Program Evaluation: Evaluation Study LaoPDR (Reference Number: Cap: Lao 2006-05)
  • 23. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 23Existing Policy Framework NSEDP 2001-2020: Lao PDR ≠ Least Developed Country NSEDP 2006-2010: Sector GDP: 3 to 3.4% Improve utilisation of the irrigation systems Expand where drought (reservoirs) Improve accountability of project management NSEDP Agriculture & Forestry Sector 2006-2010: 1. Food security 2. Commodity production 3. Stop Slash-and-Burn Cultivation 4. Sustainable Forest Management Eight Party Congress, 2006 (see end of presentation)
  • 24. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 24Change:- National and regional change Lao PDR‟s principal change processes: moving from a centrally planned economy towards amarket-oriented economy integration of the national economy into the regionaland global economies Lao PDR‟s developing trade agreement framework: 1997: member of ASEAN and part of AFTA 2003: ACMECS (a.o. supports contract-farming) Thailand, Cambodia, Laos, Myanmar, and Vietnam 2015: integration into the China – ASEAN FTA(CAFTA) 1.8 billion people; combined GDP > US$2 trillion; 3rdlargest free trade area after the EU and NAFTA Asian Highway Network - Lao PDR‟s central position
  • 25. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 25Change:- Major global change Global change processes: Impressive economic growth in China, India, and Brazil Global climate change Rise in the cost of energy Rise in the cost of food Global financial crisis and the subsequent downturn inglobal economic activity Consequences as well as drivers for development Positive as well as negative sides No other choice than reviewing and modernizing,time and again, policies, strategies, priorities, andmanagement systems
  • 26. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 26Change:- Some consequences Integration in the world market offers opportunities: increased demand for Lao products local entrepreneurs can raise production employment increases Also brings more competition: production efficiency and product quality Government role frequently review and update public policy andmanagement, so that national producers cansuccessfully compete
  • 27. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 27Irrigated Agriculture Sub-sector:- Why irrigation?- More crop/yr- Higher yields- Better qualityIrrigationHigher incomesof farminghouseholdsHigher NPV/haNPV = Net Production ValueMore trade ininputs andoutputsMore jobopportunitiesIncreased ability toafford essentialservicesIncreasedrevenueHigher value oflandImproved LocalSocio-economyIncreased ability toprovide essentialservicesAchievement of the goals of the NSEDP 2001-2020
  • 28. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 28Constraints:- 7 problem areas Market mechanismsand economicincentives Technology for cropproduction Performance of theirrigation services Labour availability Credit for agricultureand trade Participation Implementation andAdministrativeCoodinationMany irrigation schemes areunder-utilised1.MarketMechanisms Farmers haveinsufficient economicincentives to maximiseproduction of irrigatedcrops2.Technology forcrop production3.Performance ofthe irrigationservices4.Labouravailability5.Farming andtrade credit6.ParticipationProvincial Studies July-October 2008 and Planning Workshop 09/05/08 –Seven Principal Problem Areas7.Implementationand AdministrativeCoordinationCoordination:- Laws and regulations- Organisations, staff,and work processes- Public financing andbudgets- Others? GovernmentPolicy
  • 29. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 29Understanding the constraints:- 4 key-problem areas: M, T, I, C1. Markets and Trade Public management of trade, market, and transportsectors influences margins transport system between production site and markets quota on imports of inputs permit systems that limit competition price ceilings on outputs inefficient export mechanisms such as phytosanitaryfacilities, certification of origin, etc.
  • 30. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 30Understanding the constraints:- 4 key-problem areas: M, T, I, C2. Technology for production Production technology affects the margin: If risk of crop failure is high, margin is low Need research to discover suitable productiontechnology Need transfer of the suitable technology to farmers However: the performance of the extensionapparatus is weak low staff capacity insufficient resources available
  • 31. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 31Understanding the constraints:- 4 key-problem areas: M, T, I, C3. Irrigation Infrastructure Low return on investment - planning, design, and construction Actual availability of water and land for irrigation is lessthan reported Major irrigation infrastructure is incomplete - project ownerran out of funds Minor irrigation infrastructure is incomplete - localcommunities are reluctant to invest own resources Low return on investment - management Communities minimise inputs to production and arereluctant to invest own resources in the upkeep of theirrigation infrastructure Low return on investment - financing arrangements Government approves budgets, but financing is bit by bit
  • 32. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 32Understanding the constraints:- 4 key-problem areas: M, T, I, C4. Coordination and cooperation Government projects focused on infrastructure Introduction of production technology a minorcomponent over limited period Logic: extension is a local government responsibility Access roads rarely included, because costly andother sector‟s responsibility Trade management and its impact on market rarelyconsidered
  • 33. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 33Strategy considerations:- Do something or do nothing?How serious is the issue? Should public management justcontinue in the same manner? Should public management beimproved so that the issues getaddressed? Can public management address theissues?
  • 34. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 34Strategy considerations:- An important choice - ScopeWhat should be the scope of the strategyfor improvement of public management ofthe sub-sector? improve some aspects of the existingmodel? overhaul certain components of theexisting model? develop a new model?
  • 35. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 35Strategy considerations:- Key elements of an improved modelSupport forProductionTechnologyEffectivefunctioning ofMarketsSupport forInfrastructureDevelopmentProfitable IrrigatedAgricultureCoordination
  • 36. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 36Strategyconsiderations:- Scope,- Effectiveness,- StakeholdersScopeM+T+IM = Market Supply & demand management, taxes, tariffs, permits, price ceilings,financingT = Technology for agricultural productionI = Infrastructure (i) = irrigation(r) = roads(m) = market places(o) = others (stores, jetties, seed production centres)……..MAFMPIMoFMoICP GovPAFOPPIOPFOPICOD GovDAFODPODFODICO?Village Chief….….….….Committee?ComprehensiveStakeholder AgenciesCentral Province District Village1T+IMAFDoP, DoC,DoH, DoINAFES,NAFRI(+ education& training)PAFODoP, DoC,PIS, ?(+ education& training)DAFO….….….….Village Chief….….….….Integratedtechnicalfocus2I (i)DoIPD, O&MD,ID(+ education& training)PIS….….….….(+ education& training)DIT….….….….Village Chief….….….….Engineeringfocus3I (i) –CoordDoIPD, O&MD,ID(+ education& training)Coordinationfocus4PUBLIC MANAGEMENT of IRRIGATIONStrategy for Improved relevance, effectiveness, efficiency, economy, andsustainabilityWhat should be the scope of the strategy?Principalproblem areas1 to 7Principalproblem areas2, 3, 6a, 7Principalproblem areas3, 6a, 7Principalproblem areas3, 6a
  • 37. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 37Strategy considerations:- Criteria for an improved model Principles are consistent with Lao PDRmarket-oriented economy model markets offer incentives to farmers forincreasing irrigated crop production farmers are able to respond to theseincentives
  • 38. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 38Strategy considerations:- Criteria for an improved modelGovernment initiatives: Planning & design approach should be bottom-up, participative, flexible: government respondsto opportunities/needs that communities identify holistic: addressing of all requirements for success economic: minimising government roles andmaximising private sector roles (while ensuring thequality of public services) realistic: taking into account essential limitations Inter-authority and inter-sectoral coordination andcooperation should be supported by effectivemechanisms
  • 39. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 39Government roles- In a market economyGeneralThe SectorLocal ConsumerLocal ProducerPrimary ProducerThe Primary ProductNational PublicServices RegulatorIrrigated AgricultureCategory 2Typical technicalmodels for thePublic ServiceEnabling Public Services for Profitable Irrigated AgricultureSuppliersCategory 1National regulatoryframework for thePublic ServiceNationalGovernmentLocalGovernmentThe Final ProductCategory 2Specific technicalmodels for thePublic ServiceCategory 1Local regulatoryframework for thePublic ServiceSuppliersLocal PublicServices ProviderIrrigated AgricultureNat‟l regulatoryframeworkLocal regulatoryframeworkSuppliersRural CommunitiesIrrigated Agriculture
  • 40. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 40Planned change:- The planned-change modelCurrent StateADesired Future StateBInterventionsUnfreeze RefreezeMove/change
  • 41. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 41Planned change:- New approaches and activitiesWhat should we change? Adaptation of the three main frameworks forpublic management Legal/regulatory Organisational Work procedures Staff and staff capacity Information systems Facilities and equipment Financing
  • 42. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 42Planned change:- New approaches and activitiesWho will be affected? Not only MAF/DoI and PAFO/PIS, but alsoother agencies with relating roles: Planning and investment Finance Industry and commerce Transport, and The executive: inter-sectoral coordination
  • 43. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 43Policy Framework check:- The 8th Party Congress, 2006 Modernise the farming system, create a new rural environment,and a new generation of farmers Make agricultural production more sustainable, clean, free oftoxic chemicals, and with low production costs Promote higher yields Promote services and stable markets Promote investment and the utilisation of advanced technology Enlarge resources: agricultural land, forestry, water resources,technology, livestock, and processing Enhance the utilisation of existing irrigation systems Plan development in 7 prioritised plains and small plains in thenorthern provinces as well as in the mountainous areas Construct irrigation systems with the participation of the localpeople and address the problems that cause a high cost ofwater use
  • 44. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 44Policy Framework check:- The 8th Party Congress, 2006 Accelerate the enhancement of efficiency of State-managementto ensure development Urgently improve the legal system and State-managementregulations relevant to the economy Improve administrative regulations and State-managementtransparency Create an environment in legal, policy, and services sectorsthat is attractive and conducive to entrepreneurs Remove procedural bottlenecks delaying decision-making Promoting the expansion of trade and services to rural andremote areas as a complimentary factor in addressing poverty Gradually make the domestic market vividly stimulate businessproduction Prepare to fully participate in the ASEAN Free Trade Area Preparing to enter the WTO
  • 45. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 45The next stage:- Development of strategy options …… for a new model of public management of theirrigated agriculture sub-sector Is the legal/regulatory framework the first and mostimportant aspect to address in model development? Are the model components M, T, I, and C? Who are the stakeholder agencies in each component? Option developers should have good understanding ofthe wide sub-sector and its public management What working groups would we need? What studies do these groups need in order to havesufficient insight?
  • 46. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 46Thank you!