FINANCING AGROCHEMICALS REDUCTION AND MANAGEMENT (FARM) IN LAOS
Lao PDR is a landlocked country in the centre of Southeast Asia. Only about 10% of the land area is used for agriculture, but it is a sector that provides livelihoods for 70% of the population yet only contributes to 30% of the GDP. Farming in Lao PDR is still largely subsistent, with rice accounting for half of its agricultural output. Maize, cassava, coffee, citrus and horticulture crops (e.g. watermelons) are also important outputs.
While agricultural products offer good potential for improving livelihoods and creating opportunities, they have also brought about significant social and environmental costs, which often limit the competitiveness of the sector while endangering human health and the ecosystem.
Meanwhile, access to financial services for the rural poor remains to be a challenge for multiple reasons. Access to financial institutions including banks by the rural population in Lao PDR is in general low. In addition to the lack of income to open a savings account, there is also a lack of awareness of the use of financial products including bank loans. Lao smallholder farmers experience difficulties obtaining capital at affordable rates because of the lack of collaterals and perceived higher risks.
Although the Government of Lao PDR has been working with multilateral and bilateral partners on the adoption of sustainable agricultural practices, as well as supporting microfinancing in rural areas, the investment flows into the agriculture sector in Lao PDR, in general, have not been focused on shifting to low/non-chemical pest control alternatives. There is a need to improve the policy and regulatory environment for sustainable agricultural practices by introducing and scaling up agroecological approaches such as integrated farming and integrated pest management (IPM), which will dampen the demand for harmful pesticides and at the same time reduce the risk and uncertainties for public and private investment in the sector.
The project aims to reduce the use of harmful agrochemicals by supporting farmers to access finance, innovative and sustainable production practices, and competitively access consumer markets.
Regulatory frameworks enhanced for sound agricultural chemicals management, agrochemical waste identified, and the use of harmful agrochemicals reduced.
Investment /Financial frameworks incentivized.
Innovative and safer alternatives and sustainable agricultural practices piloted aiming to improve income and unlock access to finance for the ultimate reduction of demand for agrochemicals.
Information & knowledge management platforms developed to catalyse evidence-based decision-making scale-up.
- Status: Ongoing
- Duration: 2023 – 2027
- Geographic coverage: Oudomxay, Luang Namtha, Xiengkhuang, Bolikhamxay Province and Vientiane Capital
- Project Office: UNDP in Lao PDR
- Focus Area: Agriculture chemicals and Sustainable Agriculture
- Collaborating Partners: Department of Agriculture (DoA), Ministry of Agriculture and Forestry (MAF)
Total project budget: 4,200,000 USD
Donors: GEF: 4,000,000 USD; UNDP: 200,000 USD