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Commodity Intelligence Report
December 13, 2011

LAOS: Sustainability of Future Rice Production Growth and Food Security Uncertain


Rice is the staple foodgrain produced in Laos, with greater than 60 percent of all agricultural land devoted to its cultivation. However, Laos has serious limits to its ability to expand future production, given it has the smallest amount of arable land (4% of total national area) of any country in Southeast Asia. Despite the inherent shortage of arable land, Laotian farmers have made great progress during the past decade in improving average rice yields and modestly expanding crop area, leading to significantly higher national production. Official government statistics indicate that the country first achieved rice self-sufficiency in 1999 and that total rice production increased an additional 36 percent between 2000-2010. However, actual food security is highly tenuous given surplus rice production generally occurs in lowland districts along the Mekong River, while a large proportion of the population is dispersed throughout the country’s remote mountainous highlands. The highland regions are largely deficient in staple food grain production, and are the primary location of persistent annual rice shortages in the country. The United Nations World Food Program estimates that nearly 50 percent of Laos’s population experiences chronic malnutrition, while the Asian Development Bank estimates that on average poor households only have sufficient rice supplies for 7 months of the year. This implies that a majority of Laotians regularly cope with food grain shortages by rationing rice consumption throughout the year. It also indicates that even as recently as 2010 there is a serious disparity between rice production levels and overall consumptive demand. Given these well-documented conditions, the country cannot in real terms be classified as being self-sufficient in rice production, though it is striving to improve both crop output and regional rice availability. Analysts from the USDA Foreign Agricultural Service (FAS) and the U.S. Embassy in Vientiane investigated the rice production environment in Laos and the outlook for continued growth in the sector during recent travel in the country.

Rice Growing Environment

Laos is a predominantly mountainous, landlocked country, with a tropical monsoon climate. It has distinct wet and dry seasons with the wet season occurring between May and November. It has been estimated that at least 70 percent of the land area in the country has a slope of greater than 20 percent, which precludes its use for permanent agriculture. The arable land resources in Laos are estimated to be 4 percent of the country’s total geographic area or roughly 2.4 million hectares. Total cultivated agricultural area in 2010 was estimated by the government at approximately 1.5 million hectares, or 63 percent of total arable land. This includes all grains, oilseeds, pulses, root crops, fruits, vegetables, melons, coffee, tea, sugarcane, and cotton crops. Rice area alone totaled 0.89 million hectares or 60 percent of total cultivated agricultural land. Rice is grown by approximately 80 percent of all farmers in the country under predominantly subsistence conditions, with very little production ever being marketed off the farm. The average farm size is small, being between 1-2 hectares in size. Approximately 90 percent of total rice area is non-irrigated, being sown in the early summer and relying on monsoon rainfall for its growth and development. About 83 percent of total rice production also occurs during the summer wet season, with both drought and floods being common occurrences. Historically, national rice production has been quite volatile, with periodic drought being the most serious threat. In recent years, with the advent of irrigated dry season rice cultivation in the lowlands along the Mekong River, national rice production has become more predictable, with some regional farmers for the first time being able to offset crop losses suffered in the major wet season crop by double-cropping rice. This ability to overcome summer crop losses has been an important development in Laos, though it is restricted in scope to a few irrigated schemes in limited areas along the Mekong River. The vast majority of Laotian farmers do not have access to irrigation, and their crops are very vulnerable to annual losses caused by pests, diseases, and unfavorable weather conditions.

The agricultural environment in Laos is divided by elevation, with farming occurring in both relatively level lowland plains or valley bottoms and on steep mountain slopes. The highland, or upland, farming system utilized is called shifting cultivation or slash and burn, wherein land is cleared on an annual basis of forest or scrub and planted to seasonal crops. Tilling of the soil as a preparatory phase for planting rice is primarily carried out in the lowlands by buffalo or small machinery, but is rarely practiced in sloping upland farmlands. Upland rice is typically planted with the use of a dibble stick, wherein individual holes are gouged out of the ground to provide a suitable space for seeding. The practice of shifting cultivation in highland growing areas radically increases the amount of time and labor required to bring a rice crop to harvest (as illustrated in the crop calendar below). The slash and burn system on average extends the rice cultivation season to roughly 10 months of the year, compared to 6 months in a typical lowland growing environment.



It has been estimated that up to a third of the total rural population of Laos depends on food production gleaned from steeply sloping mountain farmland where rotational slash and burn techniques have been traditionally practiced. Historically, rice was grown for a single season on a plot of land cleared from the forest, and then left fallow for a period of 20 years or more. The intervening fallow period ensured robust regrowth of secondary forest, and replenishment of soil nutrients and organic matter before the land was cleared again and utilized for rice cropping. Soil erosion was also limited owing to the brief period when the soils were exposed during the single rice growing season. In 1990 upland rice acreage reportedly accounted for 40 percent of total sown area in Laos (245,877 Hectares), with up to 1.0 million farmers practicing the slash and burn farming system. Scientists estimated that approximately 2.1 million hectares of land were being utilized on a national basis by shifting cultivators, including an annual cropped area of roughly 300,000 hectares (rice, corn, beans and pulses) and 1.8 million hectares of land in varying lengths of fallow and regeneration. During the last two decades, however, government policy sought to strongly reduce upland rice acreage for environmental reasons – though it did not resolve how mountain communities would feed themselves in the event that substantially less rice was cultivated. The government initiated a national land allocation program in the mid-1990’s to distribute 2-3 hectares to each adult in the rural farming communities, and forced them to restrict their farming activities to these fixed locations rather than practicing traditional regional-scale migratory shifting cultivation throughout the highlands utilizing the slash and burn technique. The problem with this new approach, however, is that the land allocated to farmers is

being utilized much more intensively for annual cropping than before, and the fallow period on most fields has been reduced to 3 years or less. Agronomic scientists have documented serious problems associated with both soil erosion and declining soil fertility on highland farmlands owing to the inappropriately short fallow period. Upland rice yields and production are also reportedly declining as a result of these problems. The conclusion is that this enforced short-fallow farming system is not sustainable, and is contributing to escalating food production shortages in highland communities dependent on sloping lands. In reality, highland farmers would require significantly larger land holdings (40-60 hectares on average) to enable them to practice a more viable food-crop farming system involving 20-year rotations.

It has been well-documented that only 6-8 percent of the total rice produced in the country ever leaves the farm to market, and that poor roads and high transport costs prevent surplus production in major lowland producing areas (South and Central Laos) from being shipped to highland locations. In effect, rural communities in the highlands have been faced with a quandary – how to increase local rice availability despite declining production on sloping lands. The solution seems to have been that villages who had access to lands in the valley bottoms gradually expanded rice area, and over a period of 20 years through the introduction of new varieties released by government researchers, farmers roughly doubled crop yields. Rising production from lowland paddy fields interspersed in the highlands to some degree helped reduce the acute regional rice supply deficit. In 2010, according to official government statistics, upland rice area had declined to 116,000 hectares or 14 percent of total national area - a 53 percent decline from 1990 levels. Upland rice production in 2010 is also reported to have declined 47 percent to 196,000 tons of paddy, compared to 369,376 tons in 1990. During the same 20 year period, however, the country’s population increased by 2.3 million or 55 percent (averaging over 2% annual growth rate), causing net per capita demand for rice to increase at a proportionate rate over time. The combination of rapidly rising population and declining rice production in the highlands has caused persistent food security problems in these regions, despite the progress made in lowland rice development.

Over the past 20 years, despite the governments policy to curb slash and burn shifting cultivation in an effort to preserve forested lands, aggregate agricultural land area in the highlands has actually increased owing to a surge of cash crop cultivation (corn, cassava, jobs tears, banana, sugarcane, teak, rubber). Virtually all of these cash crops are grown under contract for export to markets in China, Thailand and Vietnam. Cash crop cultivation in the highlands is a relatively new phenomenon, having first begun in 2005 when the government opened the domestic agricultural market and allowed foreign traders to independently contract with farmers for specific agricultural commodities. Government statistics indicate that crop area devoted to corn, cassava, jobs tears, banana, and sugarcane increased 88 percent in the past 5 years alone, rising from approximately 140,000 hectares in 2005 to 264,000 hectares in 2010. If you include upland rice, teak and rubber plantation acreage to the overall scenario, net agricultural land use grew from 274,000 hectares in 2005 to 570,000 in 2010 or an increase of 108 percent. The combination of rapid growth of export crop cultivation and commercial plantation expansion has significantly increased the competition for land throughout the highlands. As a result of the increasing demand for land to produce both staple food grains (rice) and export products (crops, rubber, timber), it is likely that total forest area has significantly declined compared to levels documented in the late 1980’s. International environmental scientists have alluded to this phenomenon in recent regional remote sensing studies of forest cover loss in Laos, indicating that total forest cover has declined approximately 10 percent in the last 20 years.


The lowland growing environment, by comparison, is the current and future breadbasket of Laos. According to recent government statistics 86 percent of total rice area and 93 percent of total rice production originate from these areas. The lowland rice ecosystem is also where the government has expended most of its agricultural research and development resources in the past few decades, in an effort to significantly boost overall national rice production, increase food security and self-sufficiency. Their efforts have largely been successful, as national rice production growth has been very strong - averaging 1.7 percent annually for the past 10 years. Lowland rice production on its own has increased roughly 50 percent in the past decade, reaching 2.295 million tons (paddy basis) in 2010 compared to 1.550 million in 2000.

Though the lowlands are essentially gently sloping alluvial “bottom lands” and floodplains in an otherwise mountainous country, the soils are not naturally fertile – being highly weathered and low in available plant nutrients (nitrogen, potassium, phosphorus). Historically rice yields have been very low, though rice biodiversity was extremely high. Scientists at the International Rice Research Institute (IRRI) have surveyed the country and collected over 3000 distinctly different traditional varieties of rice that Lao farmers have created through centuries of plant selection. Farmers have a wealth of well-adapted region-specific varieties to choose from, and generally plant 3-4 different varieties in their fields in a given growing season. These usually comprise early, medium, and late-maturing varieties to spread out the production risk and labor requirements. The development of high-yielding rice varieties came very late to Laos compared to other countries in the region, though with considerable collaboration with IRRI crop breeders at least 20 improved varieties have been introduced since the mid-1990’s. These new varieties were specifically selected for higher grain quality and yield, as well as suitability for saline and low fertility soils. They are widely adapted to the diverse lowland cropping environment of Laos and have experienced wide appeal amongst farmers. Adoption rates have exceeded 50 percent of total sown area in a number of key primary producing zones, as resultant crop yields typically increase over 40 percent compared to traditional varieties.

Despite farmers apparent interest in new plant technology, they are notoriously risk averse in regards to financial matters, and generally refuse to engage in any form of agricultural credit. As a result, the average rate of fertilizer and pesticide use is one of the lowest in Southeast Asia. This is one of the greatest limiting factors influencing future growth rates of rice production in the country, as improved plant genetics alone are not currently capable of lifting average yields much higher in the country.

Though lowland soils are generally infertile, and average inorganic fertilizer use by farmers is extremely low in Laos, rice yields are surprisingly high. According to government statistics, lowland rainfed rice yields typically average a little over 3.5 tons per hectare, which is nearly double the level achieved in the highlands. This substantial difference in average rice productivity is largely the result of the seed technology being used in the different growing environments. The yield gap widened dramatically in the years following the introduction of improved rice varieties in the lowland growing regions. Instead of simply planting low-yielding traditional late-maturing rice varieties, the majority of lowland farmers are now sowing a combination of high-yielding short, medium and late-maturing crops. Increased acreage devoted to higher yielding improved short and medium duration varieties in particular has enabled farmers to more than double their average productivity compared to the early 1980’s. As a result of these major lowland rice research breakthroughs, and the rapid adoption by growers of improved cultivars, the country has substantially increased overall rice production.

The vast majority of rice grown in the lowlands is rainfed, and produced during the summer wet season. However, the distribution of rainfall during the growing season is often erratic, leading to periods of drought intense enough to cause significant crop stress and yield losses. Drought conditions, more so than floods, are of chief concern to farmers everywhere in the ecosystem. Of the approximately 754,000 hectares of rice sown in the lowlands in 2010, only 110,000 or 15 percent was irrigated. These irrigated crop lands are typically located in the immediate vicinity of the Mekong River, with water being drawn from the river by floating pumps and distributed inland via canals. On a national basis, approximately 13 percent of total rice area is irrigated, the lowest level of any country in Southeast Asia.

Irrigation infrastructure development has been a major policy area that the government has been interested in fostering over the past 20 years, given the dramatic potential impact it has in raising crop yields and production. However, since the year 2000 budget constraints have severely restricted expansion of the irrigation network, while the breakdown of poorly designed and constructed initial schemes as well as the widespread distribution of inappropriate equipment (diesel pumps) led to a general decline in functional irrigated area from 2002-2007. The government has subsequently received foreign direct investment (FDI) funds in the range of US$1 billion from the Asian Development Bank (ADB), World Bank, and India to rehabilitate damaged irrigation infrastructure and retrofit its pumping equipment. Seriously eroded or damaged earthen canals are being lined with concrete and expensive-to-operate diesel pumps are being converted to use more affordable electricity. In addition, whereas the government was primarily interested in the development of big irrigation schemes in the past, it is thinking small-scale today. Where before it would only underwrite the cost of major irrigation headworks and main canal construction, it is now ensuring that irrigation water actually reaches farmers fields via secondary and tertiary canals constructed with the assistance of the communities it serves. Local participation by grower groups and community organizations in the design, construction, and utilization of irrigation has ensured that the systems recently deployed are more sustainable and that farmers actually reap benefits from these major government investments. The Lao government has set a target for 200,000 hectares of rice under irrigation by 2016, implying an expansion rate of roughly 15,000 hectares per year in the national network. Whether or not this scale of growth is feasible is yet to be determined.

Recent Rice Production Growth

USDA estimates marketing year 2011/12 milled rice production in Laos at a near-record 1.86 million tons, up 3.1 percent from 2010/11. This is despite flooding in southern lowland producing areas during September which led to crop losses on at least 70,000 hectares of rice paddies. Over the past 20 years national rough rice production has more than doubled, rising 147 percent over the period from a level of 1.25 million tons (0.75 million milled basis) in 1991/92 to 3.09 million tons (1.86 million milled basis) in 2011/12. This unusual and sustained growth pattern marked a significant departure from historic trends and has been attributed by both private and public sector officials to the substantial gains in crop yield achieved following the introduction of improved varieties in the 1990’s and the modest increase in irrigated rice acreage compared to two decades ago. The net increase in crop yields over this period was 69 percent. Though it has not been singled out as a major contributor, area under rice cultivation has also increased, with a net gain in 20 years of roughly 46 percent. Part of this gain was accomplished through a nearly 100,000 hectare increase in irrigated rice acreage in the winter dry season, allowing farmers to double-crop rice on lands previously left fallow. Current government statistics indicate wet season crop area and production expanded 2.0 percent and 3.4 percent per annum over the past 10 years, while dry season area and production increased by 3.0 percent and 4.0 percent respectively.

One of the most important means through which Laos has achieved its strong recent rice production growth has been through modifying the traditional summer wet season cropping cycle, and bringing much more land under an intensive double-cropping regime. Historically, the great majority of rice farmers sowed and harvested a single annual rice crop. However, following extensive field research and varietal trials involving collaboration with scientists at the International Rice Research Institute (IRRI) Laotian rice breeders at the National Agriculture and Forestry Research Institute (NAFRI) introduced high-yielding short season varieties (maturing in 120 days or less) capable of intensifying the rice cropping cycle. These basic improvements in crop genetics helped put the country back in a position to attain a semblance of self-sufficiency in rice production. The net result of improving the varietal stock cultivated in Laos, creating the capacity to double-crop in the wet season, and expand irrigated rice area was to gradually boost national crop yields. According to official government statistics, wet season rice yields have increased 12 percent since 1990 while dry season crop yields have risen approximately 37 percent.

One of the real mysteries which pops out of available official crop statistics, however, is the actual comparative crop yield achievement that Laos has engineered at the national level when compared to its much more developed neighbor Thailand, a regional rice powerhouse. If the data is to be believed, Laotian farmers rice fields out yield Thai producers by a margin of 36 percent. And they produce these superior crop yields while using far less fertilizer or irrigation resources. International agencies such as FAO which track fertilizer use rates report that on average only 30 percent of total rice area in Laos receives any fertilizer treatments, whereas 90 percent of Thai rice fields are fertilized. A much more developed rural agricultural credit system in Thailand, and adequate crop input financing also ensures that Thai farmers on average apply much higher rates of fertilizer than in Laos. And as far as irrigation coverage is concerned, Thailand has over 20 percent of its total rice area under assured irrigation while Laos only has 12.6 percent. In addition, as early as 2002 IRRI estimated that Thailand had roughly 70 percent of its total rice area sown to improved varieties, whereas Laos had less than half of that coverage. All of these comparative factors actually favor higher average rice yields in Thailand than in Laos. So at this point, there is uncertainty whether the officially reported national crop yields in Laos are completely accurate or not.

Future Constraints and Sustainability

It is apparent that Laos has sufficient land and water resources to theoretically enable sustained expansion of its rice production capacity. However, as with all national-scale development initiatives, the devil is in the details, and it is uncertain whether the government can succeed in maintaining recent growth rates. U.S. government employees touring the country uncovered or observed significant constraints that are presently plaguing the rice production sector. These problems are fundamental obstacles or limitations to future growth, and there is a need for government policy, programs, and budgets sufficient to address them. The government claims that the country is self-sufficient in rice production and that it plans to double irrigated rice area in the next 8 years. However, nearly half of its population is chronically malnourished, and it has not allocated sufficient budgets to underwrite the expansion of its national irrigation infrastructure or fund urgently needed agricultural research or extension activities to increase crop productivity. Furthermore, the government appears to be engineering a large-scale expansion of cash crop cultivation in the highlands (primarily corn and rubber) while at the same time limiting land available for food-crop (rice) production. The net effect of the government’s land allocation program has been to force highland farmers into an unsustainable short-fallow farming system, which poses the likelihood of increased erosion, soil deterioration, and declining crop yields. Highland food security, therefore, is more tenuous. As a result, the areas/issues outlined below will likely remain long-term impediments to future rice production potential in Laos.

Core Constraints to Rice Production Growth:

Limited arable land suitable for rice cultivation
• Between 0.5-0.9 million hectares available for agriculture on suitable slopes
• Available lands are increasingly difficult to bring into production
• Easy gains have already been made

Vastly under-developed irrigation capacity
• Enormous public sector investment needed, but finances severely limited
• Extremely slow growth of irrigated area coverage
• Poor construction or engineering plagues many existing systems
• Almost total lack of system maintenance
• Systems developed in regions with unsuitable soils or other physical problems
• Many existing systems may not be sustainable over a 10-20 year time frame

Extreme under-funding for agricultural crop extension programs
• Severe lack of educated and experienced extension officers
• Severe insufficiency in on-farm technology transfer and farming systems training
• Lack of programs focusing on reducing post-harvest grain losses

Inadequate funding for scientific agricultural research and seed production
• Government relies almost totally on international donors for crop research
• Extremely low production and availability of improved rice seed
• 5,000 tons of certified seed produced annually
• Sufficient for less than 1 percent of national rice area
• Inability to increase improved seed production and rural distribution
• Improved seed adoption and usage rates threatened

Rice yield growth rates stagnating
• Easy yield improvements already accomplished
• Irrigated acreage not growing fast enough
• Farmers lack capital to regularly (annually) refresh planting seed stocks
• New cultivars require more fertilizer, irrigation, and improved agronomic management – farmers lack needed capital/credit/training

Increasing pressure on highland agricultural lands
• Government’s recent land allocation program making highland farming system unsustainable
• Limited land holdings in fixed locations forcing growers to resort to short-fallow
• Worsening erosion, soil structure, nutrient content and crop productivity expected
• Rising lowland rice production will not offset a collapse of highland production
• Introduction of contract farming is increasing total agriculture area, depleting forests
• Lack of government focus or investment in developing improved highland rice varieties
• Farmers require 40-60 hectares of productive land (instead of 2-3 hectares provided through Land Allocation Program) to make highland food-crop farming system sustainable with 20 year rotations


Current USDA area and production estimates for grains and other agricultural commodities are available on IPAD's Agricultural Production page or at PSD Online.

For more information contact Michael Shean | | (202) 720-7366
USDA-FAS, Office of Global Analysis

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