Presentation at meeting of Sub-Sector Working Group for Farmers and Agribusiness (SSWG-FAB), Vientiane, 30 June 2020

1. Andrew Bartlett
Team Leader & Policy Adviser
Lao Upland Rural Advisory Service
Covid-19 Mitigation
For Lao Farmers and Agribusiness
Sub-Sector Working Group for
Farmers and Agribusiness
Vientiane, 30 June 2020

2. Introduction
 What can Lao farmers and agribusiness do to mitigate the
impact of Covid-19, and how can the Government and
development community help?
 In the past 4 months, the impact of Covid-19 on
agriculture has been the subject of numerous reports,
webinars, news articles, online discussion etc.
 This presentation is an attempt to summarise key points
from a wide range of sources.
 Twelve mitigation measures are proposed, with local
examples, covering short to long term interventions.

3. What happened in the past few months?
 For Lao farmers and agribusiness, this has been an
economic disaster not a health crisis.
 3 interrelated problems
 Reduction in demand for agricultural produce due to
closure of restaurants and collapse of tourist industry >>>
loss of income
 Inability to transport produce to market, which has led to
perishable items being destroyed >>> loss of income
 Reduction in alternative job opportunities, both in-
country and overseas >>> loss of income

4. Multiple disasters
 Many Lao farmers had a
poor harvest last year due
to drought.
 Others have suffered
losses due to pests and
diseases, including Fall
Armyworm and African
Swine Fever.
 As a consequence of these multiple disasters, many
farmers have less rice in store and less income to
purchase food.

5. Looking forward, what can we expect?
 Immediate future
 Localised rice shortages before the next harvest
 Higher levels of unemployment, both rural and urban
 Higher debt and reduced liquidity at HH and SME levels
 Longer term
 What does ‘new normal’
mean for rural people?
 What shapes of recovery?
NB: V-U-L-nerability
 Can we turn crisis into
opportunity, as proposed
by NERI?

6. Agriculture is a special case
 Laos is an agricultural country and this sector
offers the best opportunities for recovery.
 During a period of economic slowdown,
everybody still needs food!
 Tourism and manufacturing have been badly
hit but they employ far fewer people.
Energy, even less.
 Also, the impact on other sectors depends to
a higher degree on external factors beyond
control of Govt.
 The Lao Govt – like its neighbours – can
adopt measures to support farmers and
agribusiness during these difficult times, and
thereby stimulate recovery.

7. 1. Urgent action to protect the most vulnerable
 This is the first priority in a
number of existing reports
 Health crisis >>> economic crisis
>>> humanitarian crisis?
 In Laos, the traditional safety nets
have been weakened (forest
foods, off-farm employment,
remittances)
 Who needs help? There are big
gaps in available data
 How to respond? Direct cash
transfers? Food for work?
 Or should we focus on getting
people back to work, so they can
earn the money needed to buy
food?
Source: WFP, May 2020

8. 2. Avoid disruptions in food movement and trade
 Banning movement of goods
has been a major cause of
negative impacts on farming
and agribusiness.
 In other countries, road
transportation is a strategic
industry and truck drivers are
essential workers.
 Control measures in Laos have been inconsistent, often allowing
movement of imported food while local farmers cannot get their
produce to nearby markets.
 Movement of labour is also essential to the functioning of the sector.
Is large-scale testing feasible in Laos? This would allow greater
mobility of workers.

9. 3. Improve liquidity and reduce rural debt
 Earlier reports already noted how
agric commercialisation has led to
an increase in financial debt.
 The economic crisis brought on by
Covid-19 is making the situation
worse. Cash flows have been
disrupted, savings eroded.
 There are concerns that farmers will not be able to buy inputs
and SMEs in the sector will be unable to operate.
 More data is needed: SSWG-RD will conduct a study of rural
debt
 How to reduce the financial burden? Tax breaks? Reduced
fees? Subsidised inputs? Price control?

10. 4. Include resilience in value chain analysis
 The future is uncertain.
Consequently, planning in the
sector must give more
attention to resilience
 In the past, VCA by farmer
groups, SMEs and development
projects has typically used a
static model of market systems
(eg. the ‘donut’) that gives little
or no attention to possible
disturbances or ‘shocks’.
 Alternative models and tools
are available, often developed
in context of climate change
mitigation projects
Source: Vroegindewey and Hodbod, 2018

11. 5. Reorient towards shorter value chains
 Lots of evidence that the longer
and more complex the value
chain, the more vulnerable it is
disruption.
 There has been a short-term hit
on agric exports due to border
closers.
 In longer term, the global
economic slowdown may
reduce demand for some Lao
products.
 With the lifting of restrictions on domestic transportation, local food
markets are now thriving
 More effort needed to match local supply and demand
 What measures need to be taken to make local markets safe?

12. 6. Diversification of products and markets
 Agricultural diversification has been recommended for some years
as a response to climate change.
 This idea is receiving renewed attention across the world as a
response to the economic impacts associated with Covid-19.

13. 7. Investing in storage and processing
 Processing and storage capacity is under-developed in Laos
 Producers of perishable products such as fresh vegetables were
hard hit during the lockdown
 Investment is needed at multiple levels: producer groups, local
traders, national wholesale businesses.

14. 8. Strengthening farmer organisations and networks
 The cases of Thongmung and Houayoun vegetable farmers show the
benefit of organisation and networking.
 After publicising the difficulties they face, they received urgent
support from government at local and national level.
 Across Asia, other FOs are
helping to raise the voice
of small producers affected
by Covid-19
 Equally important, they are
a mechanism for collective
action and self-help,
sharing knowledge and
resources
 It helps to have the right
connections!

15. 9. Creating genuine partnerships
 PPP has been part of the agricultural
development agenda for many years. It
continues to be promoted as part of the
response to Covid-19.
 Obviously the private sector has a key role
to play in recovery and stimulus, but we
need learn from past experience.
 A concession or a contract is not a
partnership.
 Results of IFAD/Procasur study on PPP in Laos emphasised “The
identification of a private sector who is willing to undertake a
long-term investment” :
The return of the investment will arrive, but on longer time basis. The private
sector will have to engage concretely with the community development,
supporting the village in its process of learning and practicing new “business
skills”. A trustful relation between communities and village must be established
and with that a long term plan with shared objectives.

16. 10. Digitalisation of agribusiness
 Everybody seems to agree that
the ‘new normal’ will include
greater use of e-commerce, e-
finance, e-learning, e-meetings….
e-verything!
 In Laos, this may provide an
enhanced role for rural youth,
who have greater experience in
using digital technology, and now
have less opportunities for jobs in
other sectors
 There is a severe lack of capacity in this area among traditional
development actors… ie. agricultural research institutes, extension
services, NGOs. Can the private sector handle this in Laos?

17. 11. Applying the principles and practices of One Health
 Covid-19 has increased awareness of the links between
human, animal and environmental health.
 We can expect this awareness will impact on policy,
regulation, inspection and training
 Livestock value chains and fresh markets will be a focus of
attention

18. 12. Rethinking the development of food systems
 A wide range of voices are calling for Governments, the private
sector and international agencies to think about the lessons from
this crisis and reconsider the direction they have been taking.
 The growing dependence on large-scale industrial agriculture and
complex supply chains have made millions of people more
vulnerable. Change is needed.
“COVID-19 is a wake-
up call for food
systems that must be
heeded”

19. Summary: 12 mitigation measures
1. Urgent action to protect the
most vulnerable
2. Avoid disruption in food
movement and trade
3. Improve liquidity and reduce
rural debt
4. Include resilience in value
chain analysis
5. Reorient towards shorter
value chains
6. Diversification of products
and markets
7. Investing in storage and
processing
8. Strengthening farmer
organisations and networks
9. Creating genuine partnerships
10. Digitalisation of agribusiness
11. Applying the principles and
practices of One Health
12. Rethinking the development
of food systems

20. Thankyou