Department of Agricultural, Food, and Resource Economics Innovation Lab for Food Security Policy, Research, Capacity and Influence

ABSTRACT

Over seventy-two percent of the Laos population is engaged in agriculture. Since the introduction of the New Economic Mechanism (NEM) strategic framework in 1986, agriculture has been acknowledged as the foundation of economic development in Laos. The Ministry of Agriculture and Forestry has designated rice, bananas, maize, coffee, cassava, and sugarcane as cash crops with high export potential. Cassava plantations cover more than 100,000 hectares and are steadily expanding. They generate more than US$225 million in 2020 for smallholder farmers. This study aims to investigate the factors that influence Lao farmers' participation in the cassava value chain. It also explores economic advantages of participating in the cassava value chain for Laos farmers. Based on the study's findings, this research provides recommendations to improve the cassava supply chains and their impact on increasing farmer welfare, reducing production costs, and enhancing the economic benefit of Lao cassava producers.

This study purposively selected cassava production sites in 5 provinces namely: Champasak, Borikhamxay, Saravan, Vientiane, and Xayaboury. In the data collection process, the data collection team was able to retrieve information from 138 households. Information retrieved from the field survey has been analyzed using descriptive and inferential statistics. The study outcome shows that several socio-demographic characteristics play an important role in Lao cassava value chain engagement, predominantly age, income level, level of education, and geographical location. Additionally, most households that participated in the cassava value chain stated that they received both direct and indirect economic benefits after entering the value chain, which can be seen through the improvement of household income, overall living conditions, educational opportunities, and other factors. In order to improve the overall social welfare and economic benefits for Lao cassava farmers, several policy recommendations have been developed for multiple timeframes. The policy recommendations cover training farmers to enhance productivity, favorable price policies, infrastructure improvements, and government intervention in the cassava supply chain to enhance the participation of farmers in the cassava supply chains.