Lao People's Democratic Republic: Smallholder Development

Sovereign Project | 31351-013 Status: Closed

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Project Name Smallholder Development
Project Number 31351-013
Country Lao People's Democratic Republic
Project Status Closed
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan 1949-LAO: Smallholder Development
Asian Development Fund US$ 12.00 million
TA 4005-LAO: Agribusiness Support and Training
Technical Assistance Special Fund US$ 250,000.00
Strategic Agendas Inclusive economic growth
Drivers of Change
Sector / Subsector

Agriculture, natural resources and rural development - Agricultural production - Agro-industry, marketing, and trade

Transport - Road transport (non-urban)

Gender Equity and Mainstreaming Some gender elements

The purpose of the Project is to promote sustainable commercial smallholder agriculture and associated associated agribusiness in the Lao PDR, with the goal of achieving sustained increases in rural incomes and long-term reductions in rural poverty. The purpose will be achieved by (i) increasing production and marketing of diversified, nonrice dry seosan cash crops, livestock, and fisheries; (ii) improving smallholder access to domestic and international markets and to market information; and (iii) increasing investment in value-adding agribusiness.

To achieve these objectives, the Project has four components: (i) farmer support services to improve farmers' technical knowledge of integrated farming systems, and access to market information and inputs; (ii) agribusiness and marketing to stimulate investment in agribusinesses; (iii) rural infrastructure to improve physical access to produce markets and reduce marketing costs; and (iv) project management.

Project Rationale and Linkage to Country/Regional Strategy The outcome of the project has direct relevance to ADB's country and regional strategies. The Project shows evidence of increased economic oppportunities for smallholders and small and medium enterpreneurs through increased productivity and linkage to markets.
Impact Economic growth, employment generation and income growth
Project Outcome
Description of Outcome Establishment of sustainable smallholder-commercial agriculture and associated agribusiness in the provinces of Vientiane, Savannakhet, Khammouan and Champassak
Progress Toward Outcome Agricultural demonstrations, study visits and training of farmers with technology has helped the farmers to increase the competitiveness of their products and market accessibility. The introduction of contract farming into the project area has helped the farmers in gaining easy access to supply chains and increasing their economic opportunities. Smallholders in about 180 villages have been assisted to gain access to credit whilw collaboration with other relevant agencies is being assessed to improve further access to financial services.
Implementation Progress
Description of Project Outputs

1. Effective agricultural extension and training mechanism

2. Improved physical infrastructure for input and produce marketing

3. Effective primary market network in project provinces

Status of Implementation Progress (Outputs, Activities, and Issues)

The project has made good progress, with the physical progress of 100% and financial progress of 100%. The project completion date was 31 December 2011 and the closing of loan account was 18 September 2012.

Component 1: Effective Agricultureal Extension and Training Mechanism. Main achievement include: (i) the 549 villages received training on rice and other cash crops plantation technique, (ii) the 162 Farmer Production and Marketing Groups (FPMGs) were established, (iii) 14 kinds of commodity involving 9,291 households from 329 villages of 16 project districts, (iv) the 185 training sessions were conducted for the 6,196 farmers, and (v) the 439 study tour were organized for the 1,580 farmers;

By strictly adhering to recommended organic farming principles, Bungphao Organic Vegetable Group has received Organic Certificate from Department of Agriculture of MAF

Component 2: Improved Physical Infrastructure for Input and Produce Marketing. An integrated agribusiness model between farmers and factories has been developed. (i) The FPMGs have concluded the contracts with the Cannery Factory for selling sweet corn and receiving fertilizer, while the Factory allots the cattle raising groups to obtain corn cob and fresh corn stems from it. This approach is being replicated in Khammouan and Champassak provinces at lower level with private traders instead the factory, and (ii) The Rice Miller Group has an agreement to supply 500 tons of white rice to Lao Beer Factory and contract to export 2,000 tons of white rice and 1,000 tons of glutinous rice to Vietnam. The Project has supported to formation of sub-group for beef and pork processing, these two sub-groups are important to note that members of the groups are women and run by women management.

All planned infrastructure under the component were fully constructed including (i) 78 km new feeder roads, (ii) 54.9 km all-weather improved roads, and (iii) 9 bridges totaling 329 meters. About 35,024 households living in the adjacent areas are benefitting from the roads; the number of transported commodities to the market has increased significantly as well as the number of new business registrations and investment along the road corridor.

Component 3: Effective Primary Market Network. 6 Primary Markets has been constructed in strategic locations of: Thourakom district-Vientiane province, Nongbok district-Khammouane province, Xaybouly and Xayphouthong districts-Savannakhet province, Pakxong and Phonthog districts-Champassak province.

Component 4: Project Management. The planned activities under this component are being satisfactorily implemented.

Geographical Location The Project covers the provinces of Savannakhet (6 districst), Champasack (6 districts), Khammouane (2 districts), and Vientianne (2 districts).
Safeguard Categories
Environment B
Involuntary Resettlement
Indigenous Peoples
Summary of Environmental and Social Aspects
Environmental Aspects Since the Project is dealing with smallholders at family and village level, the negative environmental and social impact of interventions are minimal. Necessary mitigation measures have been incorporated into each of the activities through procedural improvements. These have been further reinforced through technology transfer and extension activities
Involuntary Resettlement The Project deemed satisfactory regarding Involuntary Resettlement safeguards compliance requirements in both design and implementation
Indigenous Peoples No IP impact, no action are required
Stakeholder Communication, Participation, and Consultation
During Project Design Key stakeholders were consulted during project preparation. Detailed consultations are being carried out
During Project Implementation
Business Opportunities
Consulting Services The Project will provide about 44 person-months of international and 146 person-months of domestic consulting services for project management and a number of technical inputs. The amount of consulting services identified under the Project is considered necessary in view of the limited human resources capacity and technical expertise available in the Government at central, provincial, and district levels. The consultants will be selected and engaged in accordance with ADB's Guidelines on the Use of Consultants and other arrangements satisfactory to ADB for engaging domestic consultants. For consulting services related to labor-based machine-assisted construction technology, a contract will be negotiated directly with ILO, which has extensive experience in this technical area and has been providing assistanve to similar projects throughout the Mekong region for several years.
Procurement Goods and services to be financed from the proceeds of the ADB loan will be procured in accordance with ADB's Guidelines for Procurement. Vehicles, equipment, and materials will be procured by international competitive bidding (ICB) where the cost is valued more than $500,000 equivalent, or by international shopping (IS) where the cost is valued from $100,000 to $500,000 equivalent. Equipment or materials valued at less than $100,000 equivalent may be procured under direct purchase. The civil works for road rehabilitation will be procured in accordance with local competitive bidding procedures among prequalified private local contractors acceptable to ADB. Because labor-based machine-assisted construction technology will be employed, prequalification will be contingent to the contractor's attending training workshops to be conducted at project commencement by International Labor Organization (ILO) specialists concerning the construction methodology.
Responsible ADB Officer Phantouleth Louangraj
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Lao Resident Mission
Executing Agencies
Ministry of Agriculture & Forestry-Irrigation Dep
Mr. Kham Ouane Khamphoukeo or
Houay Nhang Tha Ngon Rd. Km 14, Xaythany, Vientiane
Concept Clearance 08 Mar 2001
Fact Finding 06 Jul 2002 to 19 Jul 2002
MRM 10 Sep 2002
Approval 28 Nov 2002
Last Review Mission -
PDS Creation Date 12 Dec 2006
Last PDS Update 21 Sep 2012

Loan 1949-LAO

Approval Signing Date Effectivity Date Closing
Original Revised Actual
28 Nov 2002 07 Feb 2003 18 Jun 2003 31 Oct 2009 31 Dec 2011 18 Sep 2012
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 12.00 Cumulative Contract Awards
ADB 12.00 28 Nov 2002 13.22 0.00 97%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 28 Nov 2002 13.68 0.00 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - Satisfactory - Satisfactory

TA 4005-LAO

Approval Signing Date Effectivity Date Closing
Original Revised Actual
28 Nov 2002 26 May 2003 26 May 2003 31 Dec 2005 30 Apr 2009 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
250,000.00 0.00 0.00 0.00 0.00 0.00 250,000.00 28 Nov 2002 238,589.61
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - Satisfactory - Satisfactory
Title Document Type Document Date
Smallholder Development Project Procurement Plans Nov 2011
Agribusiness Support and Training TA Completion Reports Jul 2009
Agribusiness Support and Training Consultants' Reports Jun 2009
Smallholder Development: Summary Initial Poverty and Social Analysis Initial Poverty and Social Analysis Aug 2004
Smallholder Development Project Reports and Recommendations of the President Nov 2002

Safeguard Documents

See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Evaluation Documents

See also: Independent Evaluation

None currently available.

Related Publications

None currently available.

The Public Communications Policy (PCP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

  • 17 Nov 2010 | Article

    Farming Smarter in Lao PDR

    Aided by investments in skill transfers, irrigation, and road upgrades, villagers in the Lao highlands now have the knowledge to improve their farming and marketing techniques, connecting them to markets as far away as Japan. Pak Xong - Signs of modernity have come to these hardscrabble hills in southern Lao People's Democratic Republic (Lao PDR). Satellite dishes peek out from behind stilted homes. The chirp of mobile phones breaks the quiet as farmers take calls from traders provinces away.