Education

1. 2nd Regional Land Forum
Bangkok 28-30 May 2018
Mr. Phouvong Phaophongsavath Deputy Director of
Investment Promotion Division,
Investment Promotion Department,
Ministry of Planning and Investment

2. Banana Plantation in the north of Laos

3. Historical background of Chinese investment in the region
• In recent years, the government of Lao PDR is accelerating
the economic growth by continuously supporting the impleme
ntation of policy which promotes both domestic and forei
gn investment in various sectors.
• More Chinses investors are coming to invest in agriculture
plantation because of low land and labor cost, good soil q
uality, suitable weather, perceived flexibility in the use/c
ontrol of chemical substances, good political and econo
mic relations, matching harvesting period with peak mar
ket demand.

4. The Land Lease Practice
• Investors establish networks of local middle man
to facilitate over land directly at village level.
• Circumvent any formal involvement of
government authorities.
• 1+4 contract (land rental scheme).
• The farmer rents his/her land for an agreed
period of time to an investor who uses the land to
grow bananas.
• No arrangement for post-banana land
recovery/reconversion.

5. Economic impacts
• Contribute to Socio-Economic
development and poverty
eradication
• Income generation to local
people
• Income return to banana
grower
• Income return to lessor
• Income for field workers
• Loss of opportunities to
diversify production and grow
other crops
• Loss of land for self-
subsistence agriculture
• All for direct export: no local
processing to add value
• High investment costs,
especially for infrastructure
(roads, water systems), fertiliz
ers and drinking water
Positive Negative

6. Economic impacts: livelihood

7. Social impacts
• Created job opportunities for local
people
• Infrastructure development ( road,
electricity, health center)
• Contribution to social
activities( traditional festival and
meeting)
• Reduced labor migration
• Income generation
• Lifestyle change: less non-forest
timber products, more dependent
on purchased food
• Traditional paddy irrigation
systems destroyed
• Conflict on land use between
investor and framers
• Banana contamination (health)
• Workers health and their children
health (education)
• Some foreign worker do not fully
comply to labor law
Positive Negative

8. Social impacts: worker in farm

9. Environmental impacts
• Extension of agricultural land
• More productive landscape
• Soil degradation and
destruction of plot structure
• No proper waste management
(chemical container, etc.)
• Erosion and heavy chemical
run-off into stream and rivers
• Land can use to grow other
crops with rehabilitation of land
• Strong smells of some
chemical fertilizers.
• Decreased fish numbers in
surrounding areas.
Positive Negative

10. Environmental impacts

11. Health impacts

12. Why are better regulations needed?
• Need to prevent and mitigate negative impacts
• Weak of laws enforcement on Lease Arrangement
for Crop Plantation, no measurement or guidelines
• Unclear roles and responsibilities of government
agencies to lease arrangement for crops plantatio
n
• Investment in crops plantation should be more
socially and environmental friendly, and shall follo
w the GAP.

13. Development of the Instruction/Guideline for Land Lease
Arrangement for Crop Plantations/LAP
Goal of the Instruction/Guidelines to safeguard farmers’
benefit from private land lease arrangement for commercial c
rops cultivation.

14. How the guideline is developed
• A task force was set up. The members are from
the IPD, NAFRI, DALaM, NERI, NUoL, MRLG
and GIZ.
• The Task Force is an interim body to coordinate
among key stakeholders and to provide advices
for the development of the guideline.
• Development of Lease Arrangement for crops
plantation Guidelines
• Use of Guidelines through monitoring
• Awareness Raising/feedback from community

15. Who develops the guideline
Ministry of Planning and Investment,
Investment Promotion Department
MRLG Innovation Fund Award
Project Timeline
Phrase 1:
6 months
Phrase 2: 18 months

16. What is regulated ?
The guideline includes 29 articles
•Objective and definition
•Scope of the guideline
•Approval of the investment
•Investment promotion
•Supervision and Inspection
•Environment Management
•Right and duties of local authorities, local people
and investors
•Prohibition and Sanction

17. Who to ensure the guidelines are respected
Department of Planning and Investment, Department of
Agriculture and Forestry, Natural Resources and Environm
ental, and Land Department at all level will be responsible f
or the use of the guideline.

18. Thank You