35 years in Laos: ifad partnership booklet 1978-2016

35 years in Laos
Investing in rural people

Prepared by:
Benoît Thierry, Country Programme Manager for the Lao People’s Democratic Republic and Anna Manikowska.
Front cover photograph: © IFAD, G. M. B. Akash
Photographs on pages 38, 51, 66: © IFAD, Benoît Thierry
Photographs on pages 2, 6-19, 23-36, 41-49, 54-60, 64, 68: © IFAD, G. M. B. Akash
Photograph on pages 21, 63: © IFAD, Harald Franzen
Photograph on page 53: © IFAD, Robert Grossman
© International Fund for Agricultural Development (IFAD), 2016
February 2016
Table of contents
Message from the Vice-Minister of Agriculture and Forestry 3
Message from IFAD’s Country Programme Manager 4
IFAD | Investing in rural people 7
Rural poverty in the Lao People’s Democratic Republic 8
IFAD in the Lao People’s Democratic Republic | A history of cooperation 12
IFAD’s strategy in the Lao People’s Democratic Republic 15
COSOP I: 1996-2005 18
COSOP II: 2005-2011 20
COSOP III: 2011-2015 22
COSOP IV: 2016-2020 25
Policy for the poor 29
Partnerships for the poor 30
Ongoing IFAD-funded operations 37
Southern Laos Food and Nutrition Security and Market Linkages Programme 39
Soum Son Seun Jai – Community-based Food Security and Economic Opportunities Programme 40
Completed IFAD-funded operations 43
Sustainable Natural Resource Management and Productivity Enhancement Project 45
Northern Region Sustainable Livelihoods through Livestock Development Project 47
Rural Livelihoods Improvement Programme in Attapeu and Sayabouri 48
Oudomxai Community Initiatives Support Project 50
Xieng Khouang Agricultural Development Project - Phase II 52
Northern Sayabouri Rural Development Project 55
Bokeo Food Security Project 56
Xieng Khouang Agricultural Development Project 59
Rural Credit Project 61
Agricultural Production Project 62
Casier-Sud Pioneer Agricultural Project 64
IFAD’s financing 66
Beneficiaries 69
Contact information 70

2 IFAD | Laos IFAD | Laos 3
Phouang Parisak Pravongviengkham
Vice-Minister
Ministry of Agriculture and Forestry
Message from the Vice-Minister of Agriculture and Forestry
As we leave the year 2015 behind us, I am honoured to celebrate 35 years of partnership and
cooperation between the International Fund for Agricultural Development (IFAD) and the Lao
People’s Democratic Republic.
Since 1980, IFAD has been an unfaltering partner in our struggle to improve the livelihoods of
the country’s poorest women and men. IFAD has stood by our side as we worked our way
through post-war reconstruction, a process of decentralization, the economic transition to a
market economy and, more recently, our efforts to adapt to climate change.
In the past 35 years, IFAD has provided a total of US$122.4 million in loans and grants for
investments in 13 rural development programmes and projects. Approximately 238,875 poor
rural families have benefitted from these interventions. Governmental institutions have also
grown stronger, as we gained knowledge, skills and expertise through IFAD’s support.
Still, more needs to be done. Our national development goals are bold and ambitious, and the
eighth National Socio-Economic Development Plan has reinforced our commitment to leaving
the group of the least developed countries and to reduce by half the number of people living in
poverty by 2020. We count on all our development partners’ support to address the challenges
that await us through in-country support and continuous exchange and collaboration.
We sincerely thank IFAD for its long-standing support and we look forward to many more years
of cooperation for the benefit of our country’s poor rural communities.

Benoit Thierry
Country Programme Manager
International Fund for Agricultural Developement
Government’s decentralization policy, IFAD helped put into place locally-managed rural
extension, pro-poor financial institutions and community-based veterinary services.
IFAD’s strategy and focus has evolved over time, as it followed the communities’ and the
Government’s changing needs and priorities. As discussed among all parties during the
country programme review in December 2015, IFAD’s strategy for 2016-2020 will continue to
support the country’s agricultural development strategy and the eighth National Socio-Economic
Development Plan to increase poor rural people’s economic opportunities, food security and
climate resilience.
We look forward to continuing to work together with the Lao People’s Democratic Republic,
investing to improve the lives of the country’s poor rural people.
Message from IFAD’s Country Programme Manager
In 2015, we have completed 35 years of cooperation between IFAD and the Lao People’s
Democratic Republic. To commemorate this important anniversary, we take the opportunity to
reflect upon and review our joint achievements.
IFAD is the only international development institution established exclusively to help reduce
poverty and food insecurity in rural areas of developing countries. Our goal is to empower
poor rural men and women, help them increase their incomes and improve their food security.
Overcoming rural poverty is possible, but it requires long-term solutions, such as putting in
place appropriate policies at a national and international level, increasing investment in small-
scale family farms, and strengthening the capacity of poor rural people and their organizations.
IFAD works together with governments, small farmers’ organizations and other development
partners to transform rural economies by creating opportunities to improve the living conditions
of poor rural people.
The Lao People’s Democratic Republic is home to a unique landscape and a vast cultural
diversity. Each community is very different from the other in terms of context, needs and
potential. This is why, very early on, IFAD has focused on participatory and community-
based development, as well as flexibility and creativity in developing unique approaches and
community-defined solutions. IFAD has also helped rehabilitate and build roads, schools, health
centres, and boost food production by introducing irrigation systems in the most vulnerable
communities.
We have worked alongside governmental institutions, supporting national rural development
plans and strengthening the country’s technical and organizational skills. In support of the

IFAD | Investing in rural people
The International Fund for Agricultural Development (IFAD), a specialized agency of the United
Nations based in Rome, was established as an international financial institution in 1977
following the 1974 World Food Conference. It is a unique partnership of 168 members from the
Organization of the Petroleum Exporting Countries (OPEC), other developing countries and the
Organisation for Economic Co-operation and Development (OECD).
IFAD’s goal is to enable poor rural people in developing countries to improve their food security
and nutrition, raise their incomes and strengthen their resilience. Working with poor rural people,
organizations, governments, donors, non-governmental institutions and many other partners,
IFAD focuses on country-specific solutions, which can involve increasing poor rural people’s
access to financial services, markets, technology, land and other natural resources. Through
low-interest loans and grants, IFAD works to develop and finance programmes and projects that
enable poor rural people to overcome poverty by themselves.
IFAD tackles poverty not only as a lender but also as an advocate for poor rural people. Its
multilateral base provides a natural global platform on agriculture to discuss important policy
issues that influence the lives of poor rural people, as well as to draw attention to the centrality
of rural development in meeting the Sustainable Development Goals.
Since starting operations in 1978, IFAD has invested about US$17.0 billion in grants and low-
interest loans, empowering some 453 million people to break out of poverty, thereby helping to
strengthen vibrant rural communities.

Rural poverty in the Lao People’s Democratic Republic
Located in the heart of the Southeast Asian peninsula, the Lao People’s Democratic Republic
is a landlocked country surrounded by Myanmar, Cambodia, China, Thailand and Viet Nam.
The country’s 236,800 square kilometres feature predominantly mountainous northern, eastern
and southern provinces, characterized by steep terrain that average 1,500 meters above sea
level and high plateaus. The western part of the country features small and large plains around
the Mekong River, which flows through 1,835 kilometres from north to south along the western
border with Thailand. Together, the plains surrounding the Mekong and its tributaries cover
about 20 per cent of the land.
Despite still featuring on the list of least-developed countries, the Lao People’s Democratic
Republic has grown significantly in the past decade. Its infrastructure has expanded and the
incidence of poverty has declined from 46 per cent in 1993 to 23 per cent in 2012. As a
result of the introduction of a series of reforms designed to encourage foreign investment, an
open trade regime and a return to private enterprise, direct foreign investment has more than
doubled. Consequently, the country’s economy has been growing steadily, despite fluctuations
during the Asian financial crisis and a recent recession. Annual growth reached a peak at
8.5 per cent in 2013 and declined to 7.5 per cent in 2014.
The Lao People’s Democratic Republic has a wealth of natural resources, including forestry,
minerals and hydroelectric power. The main exports are garments, electricity, wood and non-
wood products, and coffee. Three of the country’s neighbours, Thailand, Viet Nam and China
are growing rapidly, offering opportunities for trade and market linkages. Agriculture production,
on the other hand, is limited by the country’s topography and forest cover, and only about
10 per cent of the country’s land area is suitable for agriculture.
The agricultural sector remains the primary source of employment in rural areas. Overall
productivity is low – per capita income in the farming sector is less than half the national
average. Most of the country’s 4.3 million rural people are engaged in subsistence agriculture
and suffer from limited access to inputs, finance and other support services, weak organization
among farmers and a lack of appropriate technologies and crop selection. Farmers are also
notably risk-averse and prefer to rely on traditional methods.
Nevertheless, even the poorest farmers have some interaction with markets and market
demand has been increasing for a range of commonly cultivated products such as maize,
cassava, coffee and vegetables, as well as niche products such as pepper, garlic, cardamom,
ginger and moringa.
With almost 80 per cent of rural households relying mostly on rain-fed agriculture, climate
change threatens the livelihoods of a large part of the population. Among the lower Mekong
basin countries, the Lao People’s Democratic Republic is one of the most vulnerable to the
effects of climate change. Current climate models predict a trend of increasing precipitation
(from 10 to 30 per cent) for the Greater Mekong region, in the form of more intense rainfall
events, with longer dry seasons. Such changing rainfall patterns will increase the risks of
erosion, flooding, landslides and forest fires, with concomitant increases in food insecurity.
The key constraint on agricultural production is the availability of water during the dry season.
Climatic variability – in particular what appears to be an increase in the frequency and severity of
drought in some parts of the country – is already limiting the availability of this critical resource.

IFAD in the Lao People’s Democratic Republic | A history of cooperation
IFAD’s first loan to the Lao People’s Democratic Republic was approved in 1979 to increase
agricultural and fisheries’ production of the poorest segments of the country’s rural population,
through investments in irrigation schemes and rural infrastructure. The project started in 1980, the
year that effectively marks IFAD’s first intervention in the country.
Since then, IFAD has invested a total of US$122.4 million in 13 rural development programmes
in the Lao People’s Democratic Republic, for a total of US$234.0 million. Approximately 238,875
households directly benefitted from IFAD-funded operations.
Throughout the years, IFAD has funded numerous activities aimed to improve rural livelihoods
and incomes, such as irrigation, rural infrastructure, agricultural practices and inputs, livestock
production, access to financial and technical services and strengthening of grassroots
organizations. Side-by-side with the Government, IFAD has worked to increase overall investment
in agriculture and provide resources to farmers and their organizations to improve production
and marketing strategies. Enhancing the quality of smallholders’ investment is key to reaching
environmental goals such as reducing water scarcity, restoring soils and preserving biodiversity. In
the past ten years, natural resource management and access to markets have thus also become
a priority.
IFAD continues to support the country’s poverty eradication efforts, particularly in the context of
the country’s new rural development strategy, which spans through 2020. The strategy includes
a strong focus on developing the agricultural and natural resources sector by modernizing
agricultural production and creating value-added food and agricultural products. It aims to reduce
rural poverty, maintain food security and apply science-based management to natural resources.
Despite impressive economic growth during the last decade, the country has been grappling
with malnutrition and the associated alarming rates of stunting among children – 44 per cent
nationally and up to 61 per cent in some provinces. The strategy therefore also strives to reduce
malnutrition, undernutrition and food insecurity, particularly in the uplands and among pregnant
women and children under five years old. IFAD and the Lao People’s Democratic Republic have
jointly taken up the challenge by placing nutrition at the core of all IFAD-financed programmes in
the country.

IFAD’s strategy in the Lao People’s Democratic Republic
IFAD’s in-country operating model consists of two main components: the participatory
development of Country Strategic Opportunities Programmes (COSOPs) and high-quality
inclusive rural development investment programmes that are country-driven and respond to
contextual realities and the needs and aspirations of the project’s partners, stakeholders and
beneficiaries.
The Country Strategic Opportunities Programme is the cornerstone of IFAD’s operations. It
analyzes the country context and priorities, identifies opportunities for IFAD financing and
facilitates management for results. COSOPs are also intended to support strategic country
planning in agriculture and rural development, while bringing together complementary
processes such as research, policy dialogue, community empowerment and partnerships.
The COSOP features a highly consultative process. It is characterized by wide national multi-
stakeholder consultations and it calls on the knowledge and expertise of national, regional and
international experts, farmers and their organizations, private sector operators, and multilateral
and bilateral donors. The COSOP is aligned with the country’s sectorial policies, including the
poverty reduction strategy and planning framework, and takes into account the needs and
views of the rural communities it is designed to serve.
Finally, COSOPs incorporate findings and lessons learned from IFAD’s previous operations,
particularly from evaluation studies and impact assessments, to integrate these into future
operational directions.
In the Lao People’s Democratic Republic, IFAD’s strategic objectives are to ensure that poor
rural people have increased opportunities for sustainable food and nutrition security and

economic livelihoods. IFAD’s interventions are designed to complement other development
partners’ work, seeking synergies and collaboration while focusing on areas where it has a clear
comparative advantage.
Three COSOPs have guided IFAD’s interventions in the Lao People’s Democratic Republic since
1980. Prior to the first COSOP, developed in 1996, IFAD has relied on project design missions
and general identification missions to define its country strategy. IFAD’s strategy in the Lao
People’s Democratic Republic from 1980 to 1995 was guided by a focus on improving food
security and nutrition in poor remote areas, with a particular attention toward ethnic minorities,
women and young people. IFAD’s strategy featured three types of interventions designed to
address the issue of food security:
▘ investment in underexploited resources
▘ strengthening of institutions capable of supporting farmers in their transition from subsistence
to a monetized economy
▘ supporting marketing and access to credit
Five projects were designed between 1980 and 1995 based on these strategic priorities.
1980-1995 projects and programmes
Programme / project Duration Strategic objectives
Casier-Sud Pioneer Agricultural Project 1980-1983 Increase farm incomes, food production and nutrition by
developing irrigation and flood protection systems.
Agricultural Production Project 1983-1989 Build the Government’s implementation capacity.
Increase food grain and livestock production by providing
irrigation equipment, construction materials, agricultural inputs,
road maintenance and other support services.
Rural Credit Project 1987-1993 Strengthen the capacity of the State Bank of Lao to deliver rural
credit for smallholder production.
Xieng Khouang Agricultural Development Project 1990-1997 Improve food security and incomes of poor families, by
providing greater access to resources and services, particularly
livestock.
Progressive elimination of opium production.
Bokeo Food Security Project 1994-2002 Improve declining productivity for farmers and develop income-
generating opportunities for the rural population.

COSOP I: 1996-2005
IFAD’s first COSOP for the Lao People’s Democratic Republic, developed in 1996, stemmed
from an analysis of the evolving macro-economic context, the nature of the economic and
social changes, government programmes and priorities for rural development, other donor
involvement and IFAD’s own experience in the country. Poverty in rural Laos was found to
be primarily a reflection of low agricultural productivity and limited opportunities for non-farm
activities.
The Government’s commitment to alleviating poverty by promoting full employment, secure and
sustainable livelihoods and social integration allowed IFAD to both support and align with the
Government’s national poverty eradication plan and rural development programme.
More specifically, the COSOP aimed to:
▘ continue to give priority to poor ethnic groups in mountainous areas in the central and
northern regions
▘ focus on poverty alleviation, increased food and income security, stabilization of shifting
cultivation, and more efficient use of productive resources
▘ build upon changes and development of the transitional economy
▘ build institutional capacity for implementation of rural development projects
▘ improve institutional capacity-building and sustainability of operations
▘ involve the private sector to the extent possible to enhance sustainability
▘ develop rural credit
The first IFAD COSOP guided the design of three IFAD-funded projects.
Northern Sayabouri Rural Development Project 1997-2003 Improve incomes and livelihoods of poor rural communities in
the province.
Xieng Khouang Agricultural Development Project
– Phase II
1998-2004 Increase household incomes and food security, and create
alternatives to opium poppy cultivation.
Oudomxai Community Initiatives Support Project 2002-2010 Reduce poverty and help increase incomes and food security
for poor rural household.

COSOP II: 2005-2011
The second COSOP was developed jointly with the Government of the Lao People’s
Democratic Republic between 2003 and 2004, in support of the National Growth and Poverty
Eradication Strategy (NGPES), the Government’s comprehensive framework for growth and
development, and its rural development strategy. The latter featured a “focal site programme”,
which concentrated development resources and people from the most vulnerable areas of the
country in zones with access to a full range of support and services, including technical inputs,
markets, social services and road access. The objective was to reduce poverty, overcome
environmental and social problems related to shifting agriculture and opium production, and
improve human development.
In this context, IFAD’s country strategy aimed to enhance the impact of IFAD’s operations on
reducing poverty, improve its portfolio management, exercise greater influence on pro-poor
policies and institutions, strengthen existing partnerships and improve knowledge management.
More specifically, IFAD’s investments focused on the livelihood improvement aspects of rural
poverty reduction, including:
▘ capacity-building among the poor and their organizations
▘ the introduction of sustainable alternatives to shifting cultivation in the uplands
▘ the resolution of land allocation issues
▘ the promotion of market access and agricultural development led by the private sector
▘ gender mainstreaming
The second COSOP guided the design of three IFAD-funded projects.
Rural Livelihoods Improvement Programme in
Attapeu and Sayabouri
2005-2013 Promote economic growth and the sustained improvement of
livelihoods of poor rural people.
Northern Region Sustainable Livelihoods
through Livestock Development Project
2006-2012 Enhance village livestock systems through improved livestock
productivity and profitability.
Sustainable Natural Resource Management and
Productivity Enhancement Project
2008-2015 Achieve more efficient and sustainable natural resources
management while improving agricultural productivity in the
southern part of the country.

COSOP III: 2011-2015
The third COSOP, covering the period from 2011 to 2015, builds on the National Growth and
Poverty Eradication Strategy (NGPES), the seventh National Socio-Economic Development Plan
(NSEDP), the new Agriculture and Rural Development Strategy, and supports the Government in
achieving the Millennium Development Goals. It integrates with the Greater Mekong Subregion
strategy, which envisions the Lao People’s Democratic Republic as a land bridge for direct
overland transport routes between its seaboard neighbors. The Greater Mekong Subregion
strategy creates a great opportunity for market development which IFAD strives to leverage to
enhance the living conditions of poor rural people.
The 2011-2015 IFAD Country Strategic Opportunities Programme has three main objectives:
▘ community-based access to and management of land and natural resources
▘ access to advisory services and inputs for sustainable, adaptive and integrated farming
systems
▘ access to markets for selected products
The cross-cutting issues underlying its strategic objectives include:
▘ capacity-building of government line agency staff, beneficiaries and service providers
▘ engagement with ethnic groups
▘ engagement with women as key partners in all production and marketing systems
▘ investment in strategic infrastructure related to farming systems and markets
▘ formation of farmer and producer common-interest groups
▘ resilience to climate-related risks and enhanced capacity to adapt to climate change
The third COSOP informed the design of two IFAD-funded projects.
Soum Son Seun Jai - Community-based
Food Security and Economic Opportunities
Programme
2011-2017 Ensure sustainable food security and income generation for
the rural poor.
Southern Laos Food and Nutrition Security and
Market Linkages Programme
2013-2019 Contribute to reducing extreme poverty and hunger.
Build the adaptive capacity of communities and institutions to
better contend with climate change risks.

COSOP IV: 2016-2020
IFAD’s fourth 2016-2020 COSOP will support the country’s Agricultural Development Strategy
2020 and the National Socio-Economic Development Plan in ensuring food security, producing
competitive potential agricultural commodities, developing clean, safe and sustainable agriculture,
and gradually shift to a modern, resilient and productive agriculture economy.
In the next five years, IFAD will work to ensure that poor rural people have more opportunities to
sustainably improve food security and economic livelihoods with increased climate resilience.
Its three strategic objectives are to:
▘ develop sustainable, adaptive and integrated farming systems
▘ improve access to local, national and regional markets through structured value chains and
producers’ organizations
▘ enable communities to reclaim and manage land and natural resources in a sustainable and
climate resilient way
The cross-cutting issues underlying its strategic objectives include:
▘ local innovation and utilization of science, technology and telecommunications
▘ promote gender equality and services to young people
▘ enhance the effectiveness of public governance and administration

Two IFAD-funded interventions are being planned in 2016 to meet the Fund’s strategic objectives
under COSOP IV.
▘ The Strategic Support for Food Security and Nutrition Project. Funded through a loan
of US$30.0 million, the project will contribute to reduce extreme poverty and malnutrition in
the country’s poorest communities by improving and diversifying agricultural production and
household nutrition. More specifically, project activities will aim to strengthen public services,
establish community-driven nutrition interventions based on agriculture and foster sustainable
and inclusive market-driven partnerships. The project is expected to reach 34,000 poor
households in 400 villages. It is designed to support the National Nutrition Strategy and Plan
of Action 2016-2020 (NNSPA), empower women to sustainably improve family nutrition and
focus on pregnant women and small children, whose nutrition needs are highest. All project
activities will promote green technologies and approaches that have a neutral or positive effect
on the ability of communities to adapt to climate change.
▘ The Northern Smallholder Livestock Commercialization Project. This IFAD-funded
project was designed in partnership with the Asian Development Bank to scale up the
achievements of the recently completed Northern Region Sustainable Livelihoods through
Livestock Development Project. Its goal will be to increase incomes and improve the
livelihoods of about 9,000 households of smallholder livestock producers in 12 districts across
the provinces of Luang Namtha, Luang Prabang, Houapanh and Xiengkhouang. The project
will focus on strengthening capacities of smallholders and stakeholders of the livestock value
chain, strengthening the livestock value chain’s infrastructure and improving access to credit
for its members. Leveraging each partner’s comparative advantage, IFAD will provide a loan
of US$10.0 million to support activities related to improving smallholder livelihoods through
access to rural finance and strengthening farmers’ groups while the Asian Development Bank
will invest in infrastructure and technical support.

Policy for the poor
IFAD has been involved in policy dialogue in the Lao People’s Democratic Republic since the very
beginning. By focusing its interventions on improving the livelihoods of poor and marginalized rural
people, IFAD has complemented the Government’s poverty reduction strategies in a variety of
ways.
Rural extension services
With the Agricultural Production Project (1983) and the Xieng Khouang Agricultural Development
Project (1990), IFAD focused on setting up extension services for the poor in remote areas.
Financial services for the poor
Through the Rural Credit Project (1987), IFAD worked with the State bank of Lao and the
Government of the Lao People’s Democratic Republic to undertake institutional and policy
reforms with respect to prices and loan interest rates. Work in this sector continued through the
Xieng Khouang Agricultural Development Project.
Decentralization
Since the Bokeo Food Security Project (1994), IFAD has consistently supported the
Government’s decentralization policies through each of its projects and programmes.
Climate change adaptation
With the Southern Laos Food and Nutrition Security and Market Linkages programme, IFAD has
also included climate change adaptation to natural resource management, working at the policy
level to create an enabling environment for climate change adaptation.

Partnerships for the poor
IFAD works most effectively to support the rural poor by partnering with institutions whose
strengths complement its own comparative advantages. As it designs its interventions, IFAD
consults with government agencies, development partners, non-governmental and grassroots
organizations, to better harmonize in-country development interventions and create long-lasting
partnerships.
In the Lao People’s Democratic Republic, the donors’ round-table meeting – a process that is
part of the COSOP design – is a key instrument to ensure harmonization. IFAD also engages
with development partners’ coordination groups, such as the Agriculture and Natural Resources
working group, the United Nations Country Team and the REACH partnership.
Partnerships take many forms, including policy dialogue, harmonized implementation,
cofinancing, technical assistance, research and innovation, and implementation support. Many
development partners have also been actively engaged in the development of the COSOP.
To date, IFAD has successfully collaborated with development partners such as the Asian
Development Bank, the OPEC Fund for International Development, the World Bank, Deutsche
Gesellschaft für Internationale Zusammenarbeit, the Government of Japan, the Government
of Luxembourg, the Swiss Agency for Development and Cooperation, the United Nations
Development Programme, the United Nations Drug Control Programme, the United Nations Office
for Project Services and the World Food Programme.
IFAD operations in the Lao People’s Democratic Republic have also relied on the expertise and
implementation capacity of skilled and committed national staff, while at the same time investing
in strengthening the institutions they represented. Long-term partnerships with government
institutions have facilitated mutual learning and sharing of experience between projects and
programmes, thus also informing IFAD’s evolving strategic priorities in the country. Key agencies
involved in the implementation of IFAD projects and programmes include:
The Ministry of Agriculture and Forestry has been an implementing partner for IFAD since the very
start. Its role and capacity grew over the years, as it gradually gained the technical competency
and experience as implementing partner. Overall, five IFAD-funded projects were placed under its
responsibility: the Casier-Sud Pioneer Agricultural Project, the Bokeo Food Security Project, the
Northern Region Sustainable Livelihoods through Livestock Development Project, the Sustainable
Natural Resource Management and Productivity Enhancement Project, and the Soum Son Seun
Jai - Community-based Food Security and Economic Opportunities Programme.
The National Planning Committee
The National Planning Committee was charged with implementing the Agricultural Production
Project (1983-1989). It subsequently delegated execution authority to provincial governments
while retaining a supervisory role.

State Bank of Lao
The State Bank of Lao was IFAD’s implementing partner for the Rural Credit Project (1987-1993).
The project increased the Bank’s capacity to deliver credit to poor individuals in rural areas, thus
increasing smallholder investment capacity, access to inputs and production.
Provincial authorities
Several provincial governments were also selected as to implement IFAD projects:
▘ The Government of the Province of Xieng Khouang was IFAD’s implementing partner in
both phases of the Xieng Khouang Agricultural Development (1990-2004)
▘ The Government of the Province of Sayabouri implemented the Northern Sayabouri Rural
Development Project (1997-2003)
▘ The Government of the Province of Oudomxai worked together with IFAD in the Oudomxai
Community Initiatives Support Project (2002-2010)
▘ The Provincial authorities of Attapeu and Sayabouri implemented the Rural Livelihoods
Improvement Programme in Attapeu and Sayabouri (2005-2013)

Ongoing IFAD-funded operations
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Total cost: US$17.3 million
Approved IFAD grant under the Debt Sustainability Framework: US$9.7 million
Approved IFAD grant under the Adaptation for Smallholder Agriculture Programme (ASAP): US$5.0 million
Duration: 2013-2019
Directly benefiting: 12,000 households
Southern Laos Food and Nutrition Security and Market Linkages Programme
Entirely funded through grants, the Southern Laos Food and Nutrition Security and Market
Linkages programme operates in three southern provinces where the poorest districts in the
country are located. Poor people’s main constraints result from their remote location and isolation.
The programme’s development goal is to contribute to reducing extreme poverty and hunger.
Specifically, it focuses on:
▘ Food and nutrition security and pro-poor market access
▘ Rural finance inclusion
▘ Institutional support
A component specifically aimed to increase smallholder adaptation to climate change was
developed in 2015 and funded through an additional US$5.0 million grant. The Lao People’s
Democratic Republic is one of the countries in the Southeast Asia region most vulnerable to
climate change, due to its high dependence on climate-sensitive natural resources and its
low adaptive capacity. The objective of the component is to build the adaptive capacity of
communities and institutions to better contend with climate change risks.

Cofinancing:
Deutsche Gesellschaft fur Technische Zusammenarbeit (US$0.4 million)
World Food Programme (US$3.7 million)
Duration: 2011-2017
Soum Son Seun Jai – Community-based Food Security
and Economic Opportunities Programme
The goal of the grant-financed Soum Son Seun Jai – Community-based Food Security and
Economic Opportunities Programme is to reduce extreme poverty and hunger by ensuring
sustainable food security and income generation for the rural poor. The programme works with
approximately 17,000 households in 225 villages where the incidence of poverty is greater than
30 per cent.
The programme mainly works with two groups of ethnically diverse poor rural households: one
group is highly vulnerable and food-insecure with limited capacity to enter the market, whereas
the other group is moderately food-secure and has a greater potential to enter the market. All
rely on rain-fed crops, raising livestock, collecting forest products and wage labour for their
livelihoods.
The programme has developed innovative approaches to creating integrated farming systems
and links to markets. These two components are closely interconnected, since the programme
participants lack access to services promoting enhanced subsistence farming or marketing of
cash crops, and are at a disadvantage when contracting with traders. In this context, it has been
necessary to develop an integrated and flexible approach to address location-specific challenges
among the rural poor.
Capacity building, knowledge management, community-based natural resource management,
farmers’ organizations and gender mainstreaming are integral to all programme activities. Young
people are also given special attention: they are involved in mentoring activities through linkages
with agricultural universities and ethnic schools.

Completed IFAD-funded operations
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Cofinancing: Asian Development Bank (US$20.0 million)
Duration: 2008-2015
Sustainable Natural Resource Management and Productivity Enhancement Project
The objective of this IFAD grant was to achieve more efficient and sustainable natural resources
management while improving agricultural productivity in the southern part of the country. It
supported the Government’s efforts to maximize the productivity of existing arable land in an area
constrained by topography, undeveloped water resources and inadequate market access, and
built national capacity for informed management in the agriculture and natural resources sector.
Through the project, agency staff at the national, provincial, district and village levels received
capacity-building support.
Increasing agricultural productivity is crucial to maintaining national self-sufficiency in rice.
Pockets of food insecurity were common in the country in 2008, particularly in areas where the
road network was underdeveloped. Project activities were in line with the Government’s overall
objectives to increase productivity and commercialization of agriculture, and to protect the
country’s natural resources. The project encouraged poor farmers to join farmers’ organizations
and producers’ associations, making them more attractive partners for the private sector and
increasing their capacity to negotiate with potential investors.
At the provincial and national levels, the project enhanced capacity to manage natural resource-
based development and promote agricultural productivity. A significant innovation was the
devolvement of responsibility for natural resource management to the provincial and district levels,
with policy guidance provided at the national level. The project also included a policy link at the
national level that anchored it to a similar initiative in the northern uplands.

Total project cost: US$18.3 million
Approved IFAD loan: US$3.0 million
Cofinancing:
Asian Development Bank (US$10.0 million)
Swiss Development Corporation (US$3.5 million)
Duration: 2006-2012
Northern Region Sustainable Livelihoods through Livestock Development Project
The Northern Region Sustainable Livelihoods through Livestock Development Project aimed to
improve living conditions and sustainable livelihoods for poor upland communities of the Lao
Theung and Lao Sung ethnic groups in the northern provinces of Bokeo, Houaphanh, Luang
Namtha, Luang Prabang and Xieng Khouang. The objective was to improve livestock productivity
and profitability and help develop linkages to export and domestic markets.
The programme’s main components included:
▘ developing livestock enterprises and market linkages for small-scale farmers
▘ supporting the creation of village-based producers’ associations and revolving fund groups
▘ developing materials in various languages for radio broadcasts in project areas
▘ building the capacity of extension workers to enable them to work effectively with diverse
cultural communities
Overall, the programme helped improve nutrition and food security and increase the self-reliance
of upland communities, particularly of women.

Approved IFAD grant: US$0.7 million
Cofinancing:
Germany (US$0.3 million)
Duration: 2005-2013
Rural Livelihoods Improvement Programme in Attapeu and Sayabouri
The goal of the Rural Livelihoods Improvement Programme was to promote economic growth and
the sustained improvement of livelihoods among poor rural people in three districts in Attapeu
and five districts in Sayabouri. Its objectives were to improve food security, basic education,
health services and road access, ensuring that communities fully took charge of managing their
own development, including the operation of social infrastructure, in ways that reduced poverty
and were sustainable, participatory and gender sensitive.
The project had a significant impact on physical and financial assets of village communities, on
food security and on incomes. An impact study in 2012 concluded that rice deficit in the target
villages decreased from 85 per cent to 45 per cent – a 21 per cent lower rice deficit than for the
non-target villages. These improvements have been credited mainly to the expansion of paddy
rice areas, crop diversification (including vegetable gardens) and access road improvement.
Small livestock improvement also contributed to the results.
The 2012 impact survey also highlighted positive changes in household income between 2006
and 2012 (see table below). Survey data suggest an increase for each income source, except
for livestock, which may be explained by lower sales in 2012 and immunization issues.
2012 impact survey income changes
Source of income Change percentage (in percentage of
income)
Crop production 48 – 56 per cent
Livestock 71 – 62 per cent
Hunting 21 – 33 per cent
Non-timber forest products 33 – 84 per cent
Wood processing 24 – 37 per cent
Charcoal and firewood 0 – 32 per cent
Sale of labour 26 – 62 per cent
Other 50 – 55 per cent
According to a programme performance assessment conducted in 2015 by the Independent
Office of Evaluation of IFAD, the programme’s contribution to overall rural poverty reduction
is most pronounced in terms of household income, assets, food security and agricultural
productivity. The number of poor households decreased markedly in both provinces while the
quality of housing increased. There was also a significant increase in households which did
not experience a first hunger season. Other key achievements include increases in cash crop
production, enhanced rice production due to the expansion of rice fields in the lowland areas and
the reduction of chronic malnutrition.

Cofinancing:
Luxembourg (US$1.8 million)
Duration: 2002-2010
Oudomxai Community Initiatives Support Project
The Oudomxai Community Initiatives Support Project aimed to improve the livelihoods of poor
households living in remote villages in the northern province of Oudomxai. The project’s goals
were to reduce poverty and help increase incomes and food security for the target population,
especially for women, who play a major role in on-farm and off-farm activities. Key objectives
included promotion of natural resource management and sustainable farming practices.
Specifically, the project worked to:
▘ increase awareness of alternatives to shifting cultivation and opium production, and provide
training in improved upland farming systems for more sustainable production
▘ strengthen grassroots organizations
▘ improve access to rural financial services
▘ improve access to irrigation, safe drinking water and education, and rural infrastructure
▘ build local development mechanisms that are decentralized and participatory
Overall, the project made a significant impact on reducing poverty in the region. Household
incomes rose and poverty diminished in the participating villages. Agricultural output increased
through an extension of irrigated land and substitution of maize for rice, albeit mostly for
households with access to valley bottom land, roads and markets. Access to urban centres,
schooling and safe water improved as a result of investments in rural infrastructure.
Villagers’ empowerment increased through the project’s support to village institutions and
participatory development planning. Women were empowered to participate in public meetings,
their workload was reduced because of easier access to water and markets, and their personal
well-being improved because of better health, hygiene and literacy. The capacity of government
staff to provide pro-poor services also significantly increased.

Cofinancing:
Japan (US$0.5 million)
United Nations International Drug Control Programme (US$0.9 million)
Duration: 1998-2004
Xieng Khouang Agricultural Development Project - Phase II
The second phase of the Xieng Khouang Agricultural Development Project built on the successful
experience and institutional capacity developed in the first phase. Its goal was to increase
household incomes and food security, and to create alternatives to opium poppy cultivation.
Xieng Khouang is one of the poorest provinces in the country and productivity is generally low. In
addition, many of the poorer households are located in remote areas without access to markets,
roads, irrigation facilities and financial services.
Specific project activities included:
▘ developing irrigation, crop and livestock production
▘ providing savings and credit services
▘ providing clean drinking water supplies
▘ constructing rural access roads
▘ promoting local self-help savings groups and water users’ groups
To achieve its goals, the project took advantage of several opportunities in the province, such as:
▘ a proven capacity of key service providers to provide the services required by the beneficiaries
in a demand-driven and participatory manner
▘ improvements to the main roads to Vientiane and Viet Nam, providing communities with
access to markets and opportunities for social and economic development
▘ the potential to increase agricultural and off-farm investments for improving household food
security and incomes, and improve poor people’s nutrition
▘ increased farm productivity thanks to irrigation development, crop diversification, livestock
vaccination, improved livestock production as well as on and off-farm income-generating
activities
Opportunities also existed to provide further benefits to the rural poor from the Xieng Khouang
province by investing in village water supply to improve the health, nutrition and productivity.

Cofinancing: United Nations Development Programme (US$1.5 million)
Duration: 1997-2003
Northern Sayabouri Rural Development Project
The overall goal of the Northen Sayabouri Rural Development Project was to improve incomes
and livelihoods of poor rural communities in the province, taking advantage of recent changes in
government policy that encouraged cross-border trade with Viet Nam and created a potential for
economic development in the area.
In the mountainous parts of Sayabouri province, rural infrastructure was inadequate and farmers
had received little institutional support. The poorest groups in the area – ethnic communities living
in upland villages – lacked access to schools, health services and drinking water supplies.
Building on the Bokeo Food Security Project’s successful use of participatory approaches to
project design, the Northen Sayabouri Rural Development Project featured extensive participation
of beneficiaries and government staff at all levels. A high level of participation was also part of
project implementation, with activities being developed to respond specifically to the expressed
needs and priorities of the beneficiaries through continued participatory planning, particularly in
irrigation development, agricultural extension services and training, rural financial services and
social infrastructure.
Community participation and planning also translated into a high level of commitment to the
building and maintenance of the infrastructure.

Project activities included:
▘ improving food security by increasing rice production through the introduction of rice cultivars
and improved animal health
▘ rehabilitating and developing irrigation systems on approximately 650 ha of land
▘ introducing sustainable management strategies for highland areas
▘ promoting better health among rural communities, especially through child immunization and
increased access to safe drinking water
▘ improving education, especially for women and ethnic minorities
▘ strengthening the capacity of grassroots organizations
▘ supporting the delivery of government services to the area
The project was largely successful thanks to a combination of factors. The participatory approach
used for project design helped to precisely define and address poor people’s main constraints,
namely rural infrastructure, the availability of paddy land and livestock development. The project
also successfully supported the Government’s decentralization policies.
Cofinancing:
OPEC Fund for International Development (US$4.7 million)
Duration: 1994-2002
Bokeo Food Security Project
The goal of the Bokeo Food Security Project was to improve declining productivity for farmers and
develop income-generating opportunities for the rural population, with a specific focus on women
and ethnic minorities.
Bokeo, home to three main ethnic groups, is one of the more remote and isolated provinces of
the Lao People’s Democratic Republic. Most of the province is mountainous, heavily forested and
difficult to access. For many communities living in Bokeo, the Mekong River is the only means of
access and communication.

Cofinancing:
United Nations International Drug Control Programme (US$2.6 million)
United Nations Development Programme (US$0.5 million)
Duration: 1990-1997
Xieng Khouang Agricultural Development Project
The Xieng Khouang Agricultural Development Project was designed to improve food security
and increase incomes for poor rural households. It also aimed to help eliminate opium poppy
cultivation by supporting the creation of alternative livelihoods.
The project had a notable impact on the province, allowing it to move from a predominantly
subsistence economy towards a monetized economy. Improved roads have led to increased
trade with neighbouring provinces and Viet Nam. The project also became a backbone
of agricultural extension services and access to credit, helping to build strong institutional
and technical skills, and ensuring a better distribution of these services among the poorest
households.
The project’s most successful activities were related to livestock production, which included
distributing cattle to poor families and creating a network of skilled village veterinarians and the
development of irrigation systems. These resulted in an increase of paddy areas, higher yields
for existing rain-fed rice paddies, a decrease in slash and burn agriculture, and an increase in dry
season crops.
Motivated farmers, encouraging results and the need for further intervention later led to the design
of a second phase.

Cofinancing: United Nations Development Programme (US$0.9 million)
Duration: 1987-1993
Rural Credit Project
The third IFAD-funded intervention in the Lao People’s Democratic Republic focused on
strengthening the capacity of the State Bank of Lao to deliver rural credit, by guiding the
Government of the Lao People’s Democratic Republic in undertaking the institutional and policy
reforms needed to support rural development, particularly with respect to prices and interest
rates.
The project focused specifically on opening loan opportunities to individual borrowers in poor rural
areas, addressing a financing gap that had long impeded growth. The project helped provide
credit for the purchase of the farm inputs needed for crop and livestock production, aquaculture
and the processing of agricultural products, as well as for cottage and light industries, a
predominantly feminine sector.
The project was initially implemented in the southern provinces of Champasak and Saravane
and the province and prefecture of Vientiane, because those areas were poor and undeveloped
and they also offered opportunities to support women’s enterprises. Women’s cottage craft
enterprises were particularly concentrated in rural and urban areas around Vientiane City.

In parallel, community-support components were also developed. Their design was based
on the first IFAD-funded initiative which, despite having been prematurely cancelled due to
implementation issues, had a well-founded rationale. The project, therefore, focused primarily on
the Vientiane province, where extreme poverty was widespread among smallholder farmers. It
supported food and livestock production activities and infrastructure such as:
▘ building small-scale irrigation works
▘ developing agricultural extension services
▘ rehabilitating roads
▘ developing sugarcane production and processing
▘ developing a livestock feed industry
▘ providing agricultural inputs
Finally, the project also helped develop agricultural extension services in five other main rice
producing provinces: Savannakhet, Champassak, Khammouane, Saravane and Luang Prabang.
Cofinancing:
World Bank IDA (US$6.2 million)
OPEC Fund for International Development (US$3.1 million)
United Nations Development Programme (US$0.9 million)
Duration: 1983-1989
Agricultural Production Project
The Agricultural Production Project was designed to address difficulties experienced by the
Government of the Lao People’s Democratic Republic in organizing its agricultural production
structure, procuring and distributing essential inputs, and creating institutions capable of
effectively implementing rural development projects. Early on, the Government decided to transfer
responsibility for project execution from central agencies to provincial authorities, leading to better
results and more effective implementation.
The project, therefore, had as main objectives to:
▘ increase food, grain and livestock production by providing irrigation equipment, construction
materials, agricultural inputs, road maintenance and other support services
▘ establish an inventory system for spare parts and agricultural inputs
▘ provide training to government staff in budgeting, accounting, procurement and project
management
▘ strengthen the implementation capacity of the Government

Cofinancing:
Asian Development Bank (US$7.0 million)
United Nations Development Programme (US$ 0.9 million)
Duration: 1980-1983
Casier-Sud Pioneer Agricultural Project
The Casier-Sud Pioneer Agricultural Project was designed jointly with the Asian Development
Bank to increase farm incomes, food production and nutrition in Hat Sayfong district,
15 kilometres southwest of Vientiane. The densely populated area consisted entirely of
smallholder farmers living in extreme poverty. The region’s fertile soils were subject to recurrent
droughts and floods but abundant water resources for irrigation and the proximity to the country’s
capital created an opportunity for increasing food production, fisheries and access to markets.
Commercial crops such as rice, corn, tobacco, vegetables and fruit were among the crops that
were promoted by the project.
The project, however, quickly faced such financial, technical and institutional constraints that,
in a joint decision with the Government, IFAD decided to cancel the loan in 1983 and design
a simpler agricultural production project with better defined roles and responsibilities. The
project, described above, was designed primarily to address the Government’s implementation
challenges and set the stage for years of collaboration to come.

IFAD’s financing
Since 1980, IFAD has approved a total of US$74.8 million in loans and US$47.6 million in grants
for investments in 13 rural development programmes and projects. The total investment, including
government and beneficiary contributions, amounts to US$234.0 million. These projects have
directly contributed to improving the lives of 238,875 poor rural households.
Starting in 2005, the Lao People’s Democratic Republic benefited from special conditions within
the Debt Sustainability Framework with matching grants added to the IFAD loan. Since 2008,
three IFAD-financed programmes were funded entirely through grants.
IFAD provides loans to the Lao People’s Democratic Republic on highly concessional terms. The
loans have a term of 40 years, including a grace period of 10 years, and a service charge of
three-fourths of one per cent (0.75 per cent) per annum.
Programme/project Date of
approval
Total IFAD
approved financing
Status
Casier-Sud Pioneer Agricultural Project 1979 US$6.4 million Completed
Agricultural Production Project 1983 US$7.4 million Completed
Rural Credit Project 1987 US$4.4 million Completed
Xieng Khouang Agricultural Development Project 1990 US$5.3 million Completed
Bokeo Food Security Project 1994 US$4.1 million Completed
Northern Sayabouri Rural Development Project 1997 US$7.3 million Completed
Xieng Khouang Agricultural Development Project – Phase II 1998 US$6.9 million Completed
Oudomxai Community Initiatives Support Project 2002 US$13.4 million Completed
Rural Livelihoods Improvement Programme in Attapeu and
Sayabouri
2005 US$20.5 million Completed
Northern Region Sustainable Livelihoods through Livestock
Development Project
Sustainable Natural Resource Management and Productivity
Enhancement Project
Soum Son Seun Jai - Community-based Food Security and
Economic Opportunities Programme
2011 US$14.0 million Ongoing
Southern Laos Food and Nutrition Security and Market
Linkages Programme
2013 US$14.7 million Ongoing

Beneficiaries
The total number of households directly benefiting from all ongoing and completed IFAD projects
in the Lao People’s Democratic Republic is approximately 238,875. Of the country’s total
650,000 rural households (as per the 2013 national census), more than a third have benefited
from IFAD interventions over the years.
Programme/project Directly benefitting
Casier-Sud Pioneer Agricultural Project 3,295
Agricultural Production Project 60,000
Rural Credit Project 21,500
Xieng Khouang Agricultural Development Project 12,900
Bokeo Food Security Project 13,330
Northern Sayabouri Rural Development Project 10,000
Xieng Khouang Agricultural Development Project – Phase II 24,400
Oudomxai Community Initiatives Support Project 10,000
Rural Livelihoods Improvement Programme in Attapeu and Sayabouri 26,200
Northern Region Sustainable Livelihoods through Livestock Development Project 17,000
Sustainable Natural Resource Management and Productivity Enhancement Project 11,250
Soum Son Seun Jai - Community-based Food Security and Economic Opportunities Programme 17,000
Southern Laos Food and Nutrition Security and Market Linkages Programme 12,000
Total 238,875

Contact information
IFAD
Benoit Thierry
IFAD Country Programme Manager
Room 203, B3 Van Phuc Diplomatic Compound 298 Kim Ma
Hanoi, Viet Nam
Work: +84 96 20 27 847
Mobile: +39 33 57 76 97 05
Fax: +39 06 54 59 32 34
b.thierry@ifad.org
Soulivanh Pattivong
IFAD Country Programme Officer
UNDP, P.O. Box 345
Vientiane, Lao People’s Democratic Republic
Work: +856 20 22 22 20 60
p.soulivanh@ifad.org
Government of the Lao People’s Democratic Republic
Phouang Parisak Pravongviengkham
Vice-Minister
Lane Xang Avenue, P.O Box 811
Work: + 856 21 41 23 59
pppravongviengkham@yahoo.com
Southern Laos Food and Nutrition Security and Market Linkages
Programme
Soulichanh Phonekeo
Programme Director
18-B Road, Km.6
Ban Xaysy Saysettha District
Attapue Province, Lao People’s Democratic Republic
Work: + 856 21 55 52 14 16
soulichanhp@yahoo.com
Soum Son Seun Jai - Community-based Food Security and
Economic Opportunities Programme
Khonesavanh Vongxay
Programme Director
2nd floor, IT Building
Ban Phonxay, Saysettha District, P.O Box 811
Work: + 856 20 22 21 19 33
ksvvongxay@yahoo.com

Via Paolo di Dono, 44 - 00142 Rome, Italy
Tel: +39 06 54591 - Fax: +39 06 5043463
E-mail: ifad@ifad.org
www.ifad.org
www.ruralpovertyportal.org
Investing in rural people

35 years in Laos: ifad partnership booklet 1978-2016

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35 years in Laos: ifad partnership booklet 1978-2016