The Asian Development Bank (ADB) and the Lao government have signed an agreement for a US$40.5 million grant for the Climate-Friendly Agribusiness Value Chains Sector Project, which will help farmers and agribusiness develop sustainable and climate-smart agriculture value chains.
The agreement was signed in Vientiane by Deputy Minister of Finance Mrs Thipphakone Chanthavongsa and ADB Country Director to the Lao PDR Mr Yasushi Negishi.
Senior officials from the Ministry of Agriculture and Forestry and other line ministries were present at the signing ceremony.
“Agriculture makes up a significant portion of the Lao economy but the sector’s vulnerability to climate change threatened by floods and droughts puts the country’s development prospects and food security at risk,” said Mr Negishi.
“This project realizes a joint effort between the government of Laos and ADB to tackle the challenges in order to make the country’s agricultural production more commercialized, sustainable, and climate-resilient, while promoting regional integration, cooperation, and the competitiveness of agribusiness value chains to support the country’s economic development.”
Efforts to improve the climate resilience of infrastructure for agribusiness value chains include the rehabilitation of rural roads and small-scale irrigation infrastructure; the enhancement of crop research facilities and safety-and quality-testing infrastructure; and the improvement of climate-friendly post-harvest storage, and processing facilities of agribusiness enterprises in Laos.
The project will also help improve crop productivity, diversify agriculture products, and enhance climate resilience in Laos by promoting the use of biofertilizers and organic farming, while disseminating flood and drought-tolerant crop varieties.
It will also support the creation of an enabling policy environment to promote private sector investments through public-private partnerships, contract farming, and the formation of joint agricultural production group-agribusiness ventures, according to a press release from ADB. The initiative is in line with the government’s Agriculture Development Strategy to 2025 as it aims to boost the competitiveness of rice value chains in Khammuan, Saravan, and Savannakhet provinces, as well as vegetable value chains in the capital Vientiane and in Champassak and Xekong provinces.
This will help Laos reach its goal of producing agricultural crops and quality rice for domestic and export market, the press release said.
At least 100,000 people from 200,000 households in Laos are expected to benefit from the project, increasing their income by at least 30 percent and promoting regional cooperation and integration in the Greater Mekong Subregion through the harmonization of quality and safety standards and support for regional seed-trading agreements.