Lao People's Democratic Republic: Sustainable Natural Resource Management and Productivity Enhancement Project

Sovereign Project | 37579-032 Status: Approved

Summary

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.

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Procurement Documents


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Project Name Sustainable Natural Resource Management and Productivity Enhancement Project
Project Number 37579-032
Country Lao People's Democratic Republic
Project Status Approved
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Grant 0144-LAO: Sustainable Natural Resource Management and Productivity Enhancement Project
Asian Development Fund US$ 20.00 million
Grant 0145-LAO: Sustainable Natural Resource Management and Productivity Enhancement Project
LRG - Intl. Fund for Agricultural Devt. US$ 15.00 million
Strategic Agendas Environmentally sustainable growth
Drivers of Change Governance and capacity development
Partnerships
Sector / Subsector

Agriculture, natural resources and rural development - Agricultural policy, institutional and capacity development

Gender Equity and Mainstreaming Effective gender mainstreaming
Description 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.

Impact More efficient and sustainable natural resource management and improved sector productivity.

Project Outcome

Description of Outcome Enhanced institutional capacity at provincial and national levels to manage natural resource utilization in a sustainable manner.
Progress Toward Outcome The Project has achieved progress under the subproject implementation. Activities until the end of the Project focused on completion of implementation of the subprojects, compliance with social safeguards covenants, enhancement of sustainability, and consolidation of project achievements for dissemination to other districts and provinces.
Implementation Progress
Description of Project Outputs

1. Capacity building for Agriculture and Natural Resource Sector management implemented

(i) National and provincial staff capable of financial and economic appraisal and safeguard analyses

(ii) Land use and suitability mapping completed in the five provinces

(iii) Producer groups trained and self-sustaining

(iv) Government and donors committed to a common agricultural development framework

2. Investment in Resource Management and Productivity Enhancement Completed

3. Efficient project management operational

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

259 land concessions have been reviewed by the Appraisal Unit of DoPC MAF covering an area of 288,000 hectares.

Land suitability and broad zoning maps have been produced for all 5 provinces (comprising 42 districts).

Seventy-one subprojects have 749 production groups, of which 71% are considered financially independent as the Project only has limited support to promote their existing productions.

Five policy papers have been produced: (a) Policy Gap Analysis of MAF Agricultural Modernization Thrust in Relation to its Devt Strategy for 2015; (b) Sugarcane Contract Growing Policy Gap Assessment Report; (c) Policy Gap Assessment of Farmers' Land Certificate Issuance; (d) Policy Gap Assessment on Lao PDR Agricultural Commericialization Thrust Towards Meeting WTO Food Safety Requirements, and (e) Concepts for the Private Public Community Partneryship.

The Policy facilitation subcomponent, anchored within the Policy Advisory Team of MAF, initiated a series of individual consultations at the national level on identifying critical success factors in achieving the core thrusts of MAF's 5 year development plan (2011-2015).

All subprojects have about 12% EIRR.

ANR investments are viable. EIRR has been calculated for all subprojects during formulation. Calculation of EIRR, after subproject completion, is ongoing. 749 production groups have been established. Out of which 635 groups are functional. 531 production groups are financially independent and started their own activities linking with private sectors.

Sixty-seven, out of 71 subprojects, are considered satisfactory in performance.

Land use planning have been completed in 254 villages (of 40 subprojects).

NPCO and 5 PPOs are operational.

All subprojects have been identified and prioritized across the 5 provinces. All 71 subprojects submitted to ADB for review have been approved by ADB.

The total subproject investments funds availed is about $20.4M.

Geographical Location 5 Southern provinces covering Attapeu, Champassak, Salavan, Savannakhet and Sekong

Summary of Environmental and Social Aspects

Environmental Aspects None.
Involuntary Resettlement None.
Indigenous Peoples Ethnic groups in upland areas are the primary beneficiaries. Women are also a target group. The Project developed guidelines for ensuring women''s involvement in the planning, implementation and sharing of benefits from the implementation of supported subprojects. To support mainstreaming of gender issues in subproject design and within MAF in general,specific methodologies were developed for engaging women at the community level in subproject planning in coordination with the Advance Women Unit of MAF.
Stakeholder Communication, Participation, and Consultation
During Project Design Undertaken.
During Project Implementation Multistakeholder consultations have been conducted with NGOs (WWF and national civil society groups), womens groups (Lao Womens Union), and multilateral/bilateral orgns (UNDP/UNEP on the Poverty Environment Initiative), The Lao-German Land Management and Registration Project (LMRP), the FINMAP project supported by Finland and the The Programme for Forest Resource Information Management (DoF/JICA).

Business Opportunities

Consulting Services Consulting services were engaged to ensure effective implementation at the national level and to assume responsibility for identification of potential subprojects and their implementation at the provincial level. Staff conducted training in safeguards, appraisal techniques and geographic information systems/information management. The consulting firm, which comprised international and national specialists, was recruited by the Project Management Office (PMO) in line with ADB's Guidelines on the Use of Consultants by Asian Development Bank and Its Borrowers and the Project's Procurement Plan.
Procurement Goods and works financed by ADB and IFAD were procured in accordance with ADB's Guidelines for Procurement and the Procurement Plan.

Responsible Staff

Responsible ADB Officer Charles Salter
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Environment, Natural Resources & Agriculture Division, SERD
Executing Agencies
Ministry of Agriculture and Forestry
Vinoth Vansy
vinus_lao02@yahoo.com
Vientiane, Lao PDR

Timetable

Concept Clearance 31 Mar 2011
Fact Finding 05 Aug 2008 to 31 Mar 2011
MRM 31 Mar 2011
Approval 23 Feb 2009
Last Review Mission -
PDS Creation Date 23 Oct 2009
Last PDS Update 30 Mar 2016

Grant 0144-LAO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
23 Feb 2009 23 Mar 2009 08 Sep 2009 31 Dec 2015 - -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 20.00 Cumulative Contract Awards
ADB 20.00 23 Feb 2009 20.00 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 23 Feb 2009 20.00 0.00 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - Satisfactory - Satisfactory

Grant 0145-LAO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
23 Feb 2009 08 Jul 2009 23 Jul 2009 30 Sep 2016 - -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 15.00 Cumulative Contract Awards
ADB 0.00 23 Feb 2009 0.00 15.42 99%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 15.00 23 Feb 2009 0.00 0.00 0%

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

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