ADB, Lao PDR sign agreement to boost sustainable, climate-smart agribusiness

The Asian Development Bank (ADB) and the Government of the Lao People’s Democratic Republic (Lao PDR) signed an agreement yesterday for a $40.5 million grant for the Climate-Friendly Agribusiness Value Chains Sector Project.

The Asian Development Bank (ADB) and the Government of the Lao People’s Democratic Republic (Lao PDR) signed an agreement yesterday for a $40.5 million grant for the Climate-Friendly Agribusiness Value Chains Sector Project that will help farmers and agribusinesses develop sustainable and climate-smart agriculture value chains in the country.

The agreement was signed by Deputy Minister of Finance Ms. 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 also witnessed the signing ceremony in Vientiane.

“Agriculture makes up a significant portion of the Lao PDR economy but the sector’s vulnerability to climate change threatened by floods and droughts puts the country’s development prospect and food security at risk,” said Mr. Negishi. “This project realizes a joint effort between the Government of the Lao PDR and ADB to tackle the challenge 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 the 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 the country.

The project will also help improve crop productivity, diversify agriculture products, and enhance climate resilience in the Lao PDR 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.

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 Khammouan, Saravan, and Savannakhet provinces, as well as vegetable value chains in Vientiane Capital, Champasak, and Sekong provinces. This will help the Lao PDR reach its goal of producing agricultural crops and quality rice for domestic and export markets.

At least 100,000 people from 20,000 households in the Lao PDR are expected to benefit from the project, increasing their income by at least 30% and promoting regional cooperation and integration in the Greater Mekong Subregion through harmonization of quality and safety standards and support to regional seed-trading agreements.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and Pacific while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 67 members—48 from the region. In 2017, ADB operations totaled 32.2 billion, including $11.9 billion in co-financing.