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.

1. Review and Update of the
National Strategy for
Irrigation (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 2
Topics – Part A
 The MAF Initiative
 Achievements
 Opportunities
 Performance in the sub-sector
 Constraints

3. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 3
Map of Lao
PDR
Source: ADB - Operations Evaluation Department, April 2006:
„Country Assistance Program Evaluation: Evaluation Study Lao
PDR (Reference Number: Cap: Lao 2006-05)

4. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 4
The Minister’s Initiative for the
Irrigated Agriculture Sub-sector
 Sub-sector should contribute its best to the
achievement of the goals of the NSEDP 2001-2020
and the resolutions of the 8th Party Congress
 MAF and Provinces
 to carry out a mid-term review of the performance in
the sub-sector
 to update the national strategy for the sub-sector‟s
public management
 to prepare an action plan with road map for 2010-2020,
and
 to agree with the sub-sector development partners on
a programme-based approach

5. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 5
The Minister’s Initiative - Timeline
Mar 08 - Mar 1006 - 10
Plan 6
01 20
02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20
06 - 10
Plan 6
01 - 05
Plan 5
Mar 01
7th Party Congress
28/08/08
16 - 20
Plan 8
Mar 11
Next Party Congress
11 - 15
Plan 7
Mar 06
8th Party Congress
2001 2020
2001 - 2020
Long-term NSEDP
Lao PDR ≠ least
developed country
Mar 08 Mar 10
Apr 08 Jul 08 Oct 08 Jan 09 Apr 09 Jul 09 Oct 09 Jan 10
1/10 - 31/3
2. Strategy Options
1/4 - 31/8
3. Strategy
1/9 - 28/2
4. Action Plan
1/6 - 30/9
1. Capitalisation
3/3 - 31/5
Inception
28/08/08

6. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 6
The Minister’s Initiative - Diagram
Program Based Approach (PBA)
For coordination of Development Partner
Support
National Strategy
for Public Management of the
Irrigation Sub-sector
(Reviewed and Updated)
Action Plan with Road Map
for Implementation of the National Strategy
25%
38%
16%
Public Management
of the Irrigation Sub-
Sector is more
Effective, Efficient,
and Sustainable
Development
Goals
Achieved
AdvisoryTechnicalAssistance(AFD)
March2008–February2010

7. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 7
The Minister’s Initiative - The Process
0. Inception
1. Capitalisation
2. Strategy Options
3. Strategy
4. Action Plan and Road
Map
01/04/2008 01/07/2008 01/10/2008 01/01/2009 01/04/2009 01/07/2009 01/10/2009 01/01/2010
Policy
Direction
4
Policy
Direction
3
Policy
Direction
2
Policy
Direction
1
- Positon Paper
- Principles
- Vision
- Preferred
Options
- Endorsement
30/03/2009
Preferred strategy
options are clear
31/08/2009
Strategy endorsed
31/05/2008
Final Inception
Report Approved
30/09/2008
Policy direction
is clear
03/03/2008
TA Start
02/03/2010
TA End
28/02/2010
Strategy disseminated and
implementation arrangements
established
Inception Report - Figure 3.9

8. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 8
Achievements:
- Paddy production > 450 kg/capita
2007
Crop Ave yld Area Contr'n
type t/ha ha %
WS 3.6 604 81
DS 4.6 71 12
Upland 1.8 106 7
2008 Dry season
Crop Area
type '000ha
Paddy 91
Other 48
Total 139

9. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 9
Achievements:
- Expansion of command area
Inception Report - Figure 2.11
ha %
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 command
areas
Reservoir
Permanent w eir
Traditional w eir
Pump-lift

10. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 10
Achievements:
- Legal framework
Inception Report - Figure 2.15

11. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 11
Achievements:
- The Agriculture Law 1998
Article 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 requires
sophisticated technology and large investment
 Ownership will be transferred to the people for their own management
and 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 sophisticated
technology

12. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 12
Opportunities:
- Available potential
 1. Existing schemes:
 irrigation infrastructure not yet fully utilised: help
communities 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 study
614,000 ha
 3. Rise in food prices on the world market:
 “2+3” arrangement” applicable in 200,000 ha of new
irrigation area
 4. Advanced technologies:
 Sprinkler and drip irrigation for high value products

13. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 13
Performance - past and current
- Conclusion
 Under-utilisation:
 many irrigation infrastructure systems have
remained under-utilised
 Low returns:
 Public investments in irrigation infrastructure
did not generate the returns that were
expected
 Economic
 Social
 Can we do better?

14. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 14
Performance - past and current
- IDS: Cropping intensity and yields
Cropping intensityType of
scheme
Nr of
schemes
Combined
design
command
area
Wet
Season
Dry season
(nr) (ha) 2006 2004/2005 2005/2006 2006/2007
Pump-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 of
scheme
Nr of
schemes
Wet
Season
Dry season
(nr) 2006 Min Max Average
Pump-lift 11 3.11 1.40 6.3 4.0
Reservoir 3 2.76 1.13 4.58 2.88
Gravity 3 3.02 1.50 3.75 2.69
Traditional 3 3.33 2.54 3.45 3.00
Overall 16 3.59
Inception Report - Figure 2.18

15. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 15
Performance - past and current
- Prov. studies ‘08: cropping intensities
total 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 efficiency
achieved 2007-2008

16. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 16
Constraints:
- 7 problem areas
 Market mechanisms
and economic
incentives
 Technology for crop
production
 Performance of the
irrigation services
 Labour availability
 Credit for agriculture
and trade
 Participation
 Implementation and
Administrative
Coodination
Many irrigation schemes are
under-utilised
1.
Market
Mechanisms Farmers have
insufficient economic
incentives to maximise
production of irrigated
crops
2.
Technology for
crop production
3.
Performance of
the irrigation
services
4.
Labour
availability
5.
Farming and
trade credit
6.
Participation
Provincial Studies July-October 2008 and Planning Workshop 09/05/08 –
Seven Principal Problem Areas
7.
Implementation
and Administrative
Coordination
Coordination:
- Laws and regulations
- Organisations, staff,
and work processes
- Public financing and
budgets
- Others? Government
Policy

17. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 17
Constraints:
- Key problem areas - 1
Farmers do not dare to invest in production:
constraints, uncertainty and risk
 Three key problem areas:
 M the functioning of trade and markets for
inputs and outputs
 T the availability of production technology
 I the development and management of
irrigation infrastructure

18. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 18
Constraints:
- Key problem areas - 2
Effectiveness of public management
programmes 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 19
Thank you!

20. Review and Update of the
National Strategy for
Irrigation (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 21
Topics – 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 22
Map of Lao
PDR
Source: ADB - Operations Evaluation Department, April 2006:
„Country Assistance Program Evaluation: Evaluation Study Lao
PDR (Reference Number: Cap: Lao 2006-05)

23. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 23
Existing 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 24
Change:
- National and regional change
 Lao PDR‟s principal change processes:
 moving from a centrally planned economy towards a
market-oriented economy
 integration of the national economy into the regional
and 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; 3rd
largest 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 25
Change:
- 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 in
global 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, and
management systems

26. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 26
Change:
- 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 and
management, so that national producers can
successfully compete

27. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 27
Irrigated Agriculture Sub-sector:
- Why irrigation?
- More crop/yr
- Higher yields
- Better quality
Irrigation
Higher incomes
of farming
households
Higher NPV/ha
NPV = Net Production Value
More trade in
inputs and
outputs
More job
opportunities
Increased ability to
afford essential
services
Increased
revenue
Higher value of
land
Improved Local
Socio-economy
Increased ability to
provide essential
services
Achievement of the goals of the NSEDP 2001-2020

28. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 28
Constraints:
- 7 problem areas
 Market mechanisms
and economic
incentives
 Technology for crop
production
 Performance of the
irrigation services
 Labour availability
 Credit for agriculture
and trade
 Participation
 Implementation and
Administrative
Coodination
Many irrigation schemes are
under-utilised
1.
Market
Mechanisms Farmers have
insufficient economic
incentives to maximise
production of irrigated
crops
2.
Technology for
crop production
3.
Performance of
the irrigation
services
4.
Labour
availability
5.
Farming and
trade credit
6.
Participation
Provincial Studies July-October 2008 and Planning Workshop 09/05/08 –
Seven Principal Problem Areas
7.
Implementation
and Administrative
Coordination
Coordination:
- Laws and regulations
- Organisations, staff,
and work processes
- Public financing and
budgets
- Others? Government
Policy

29. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 29
Understanding the constraints:
- 4 key-problem areas: M, T, I, C
1. Markets and Trade
 Public management of trade, market, and transport
sectors 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 phytosanitary
facilities, certification of origin, etc.

30. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 30
Understanding the constraints:
- 4 key-problem areas: M, T, I, C
2. Technology for production
 Production technology affects the margin:
 If risk of crop failure is high, margin is low
 Need research to discover suitable production
technology
 Need transfer of the suitable technology to farmers
 However: the performance of the extension
apparatus is weak
 low staff capacity
 insufficient resources available

31. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 31
Understanding the constraints:
- 4 key-problem areas: M, T, I, C
3. Irrigation Infrastructure
 Low return on investment - planning, design, and construction
 Actual availability of water and land for irrigation is less
than reported
 Major irrigation infrastructure is incomplete - project owner
ran out of funds
 Minor irrigation infrastructure is incomplete - local
communities are reluctant to invest own resources
 Low return on investment - management
 Communities minimise inputs to production and are
reluctant to invest own resources in the upkeep of the
irrigation 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 32
Understanding the constraints:
- 4 key-problem areas: M, T, I, C
4. Coordination and cooperation
 Government projects focused on infrastructure
 Introduction of production technology a minor
component over limited period
 Logic: extension is a local government responsibility
 Access roads rarely included, because costly and
other sector‟s responsibility
 Trade management and its impact on market rarely
considered

33. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 33
Strategy considerations:
- Do something or do nothing?
How serious is the issue?
 Should public management just
continue in the same manner?
 Should public management be
improved so that the issues get
addressed?
 Can public management address the
issues?

34. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 34
Strategy considerations:
- An important choice - Scope
What should be the scope of the strategy
for improvement of public management of
the sub-sector?
 improve some aspects of the existing
model?
 overhaul certain components of the
existing model?
 develop a new model?

35. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 35
Strategy considerations:
- Key elements of an improved model
Support for
Production
Technology
Effective
functioning of
Markets
Support for
Infrastructure
Development
Profitable Irrigated
Agriculture
Coordination

36. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 36
Strategy
considerations:
- Scope,
- Effectiveness,
- Stakeholders
Scope
M+T+I
M = Market Supply & demand management, taxes, tariffs, permits, price ceilings,
financing
T = Technology for agricultural production
I = Infrastructure (i) = irrigation
(r) = roads
(m) = market places
(o) = others (stores, jetties, seed production centres)
……..
MAF
MPI
MoF
MoIC
P Gov
PAFO
PPIO
PFO
PICO
D Gov
DAFO
DPO
DFO
DICO?
Village Chief
….
….
….
….
Committee?
Comprehensive
Stakeholder Agencies
Central Province District Village
1
T+I
MAF
DoP, DoC,
DoH, DoI
NAFES,
NAFRI
(+ education
& training)
PAFO
DoP, DoC,
PIS, ?
(+ education
& training)
DAFO
….
….
….
….
Village Chief
….
….
….
….
Integrated
technicalfocus
2
I (i)
DoI
PD, O&MD,
ID
(+ education
& training)
PIS
….
….
….
….
(+ education
& training)
DIT
….
….
….
….
Village Chief
….
….
….
….
Engineeringfocus
3
I (i) –
Coord
DoI
PD, O&MD,
ID
(+ education
& training)
Coordinationfocus
4
PUBLIC MANAGEMENT of IRRIGATION
Strategy for Improved relevance, effectiveness, efficiency, economy, and
sustainability
What should be the scope of the strategy?
Principal
problem areas
1 to 7
Principal
problem areas
2, 3, 6a, 7
Principal
problem areas
3, 6a, 7
Principal
problem areas
3, 6a

37. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 37
Strategy considerations:
- Criteria for an improved model
 Principles are consistent with Lao PDR
market-oriented economy model
 markets offer incentives to farmers for
increasing irrigated crop production
 farmers are able to respond to these
incentives

38. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 38
Strategy considerations:
- Criteria for an improved model
Government initiatives:
 Planning & design approach should be
 bottom-up, participative, flexible: government responds
to opportunities/needs that communities identify
 holistic: addressing of all requirements for success
 economic: minimising government roles and
maximising private sector roles (while ensuring the
quality of public services)
 realistic: taking into account essential limitations
 Inter-authority and inter-sectoral coordination and
cooperation should be supported by effective
mechanisms

39. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 39
Government roles
- In a market economy
General
The Sector
Local ConsumerLocal ProducerPrimary Producer
The Primary Product
National Public
Services Regulator
Irrigated Agriculture
Category 2
Typical technical
models for the
Public Service
Enabling Public Services for Profitable Irrigated Agriculture
Suppliers
Category 1
National regulatory
framework for the
Public Service
National
Government
Local
Government
The Final Product
Category 2
Specific technical
models for the
Public Service
Category 1
Local regulatory
framework for the
Public Service
Suppliers
Local Public
Services Provider
Irrigated Agriculture
Nat‟l regulatory
framework
Local regulatory
framework
Suppliers
Rural Communities
Irrigated Agriculture

40. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 40
Planned change:
- The planned-change model
Current State
A
Desired Future State
B
Interventions
Unfreeze RefreezeMove/change

41. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 41
Planned change:
- New approaches and activities
What should we change?
 Adaptation of the three main frameworks for
public 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 42
Planned change:
- New approaches and activities
Who will be affected?
 Not only MAF/DoI and PAFO/PIS, but also
other 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 43
Policy 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 of
toxic 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 the
northern provinces as well as in the mountainous areas
 Construct irrigation systems with the participation of the local
people and address the problems that cause a high cost of
water use

44. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 44
Policy Framework check:
- The 8th Party Congress, 2006
 Accelerate the enhancement of efficiency of State-management
to ensure development
 Urgently improve the legal system and State-management
regulations relevant to the economy
 Improve administrative regulations and State-management
transparency
 Create an environment in legal, policy, and services sectors
that is attractive and conducive to entrepreneurs
 Remove procedural bottlenecks delaying decision-making
 Promoting the expansion of trade and services to rural and
remote areas as a complimentary factor in addressing poverty
 Gradually make the domestic market vividly stimulate business
production
 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 45
The next stage:
- Development of strategy options …
… for a new model of public management of the
irrigated agriculture sub-sector
 Is the legal/regulatory framework the first and most
important 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 of
the wide sub-sector and its public management
 What working groups would we need?
 What studies do these groups need in order to have
sufficient insight?

46. 19/11/08 Advisory TA for the Irrigated Agriculture Subsector 46
Thank you!