Government agencies' responsibilities for the management of natural resources have been clarified in recent years, including recent reorganization of the Ministry of Agriculture and Forestry (MAF) and establishment of the Water Resources and Environment dministration (WREA). However, the capacity to apply sound management principles and practices are still deficient, particularly in view of increasing devolution of management responsibilities to the provinces.
The Project will address institutional and capacity building requirements (including governance improvements) to enable improved management of the sector on a sustainable basis while contributing to the Government's overall objectives of enhancing agricultural productivity, promoting commercialization of agriculture, and protecting the country's natural resources. Project outputs comprise (i) capacity built in sector management, (ii) investment in resource management and productivity enhancement, and (iii) an effective project management structure.
|Project Rationale and Linkage to Country/Regional Strategy
The Lao PDR has abundant natural resources and a small population, of which over 80% is dependent on agriculture for their livelihood. Significant numbers of indigenous peoples from a wide range of linguistic groups live in upland areas to the north and in the southern part of the Lao PDR along the border with Viet Nam. They forge their predominantly subsistence livelihoods from rotational cropping, which incorporates a heavy dependence on the natural forest and water resources. The incidence of poverty in these areas is over 60%, and is highest among ethnic groups.
The institutional and legal framework for sustainable and equitable management of agriculture and natural resources (ANR) is weak. This is evident in the ambiguity of policies and legislation, as well as inadequate professional and technically trained staff and facilities. At the provincial and district levels where most ANR management decisions are taken, there is a deficit of expertise and facilities. The situation is exacerbated by budgetary constraints (generally sufficient to meet staff salaries, but insufficient for operational and development activities).
The capacity of the ANR sector to support traditional livelihoods is coming under unprecedented pressure from the recent influx of foreign direct investment (FDI) and consequent granting of land concessions. Allowing large-scale commercial development where there is a weak regulatory and enforcement framework without adequate analysis of land capability and economic impact, and encouraged by land speculation is increasingly resulting in adverse social and environmental impacts on local people's livelihoods. It also compromises the Government's ability to preserve the country's rich and diverse forest environs (deforestation is actually increasing). Adverse impacts on ecological function and integrity include reduced recharge of aquifers and storage capacity of reservoirs and reduction in dry season irrigation areas (directly contributing to reduced agricultural production). Furthermore, the loss of forest, coupled with the expansion of economic activities, is likely to result in a positive net emission of greenhouse gases with global impact.
While trying to protect the natural resource base, the Government is conscious of the need to maximize productivity on existing arable land an area limited by topography, undeveloped water resources, and limited market access. Agricultural productivity is low by the standards of the Association of Southeast Asian Nations (ASEAN), and the recent achievement of broad national self-sufficiency in rice can only be maintained if the Government continues to improve agricultural productivity. Food insecurity remains common, especially in areas where the road network is underdeveloped.
Support for proven interventions within an existing implementation framework, which will contribute to the Government's overall sector development objectives and provide practical examples for the enhanced capacity of agency staff to manage the development process, is therefore justified.