Press release No.: IFAD/10/09

Rome, 18 February 2009 – Agricultural productivity is low in the Lao People’s Democratic Republic by the standards of the Association of Southeast Asian Nations (ASEAN). The recent achievement of national self-sufficiency in rice production can only be maintained if the government continues to improve agricultural productivity. A US$15 million grant from IFAD to the Lao People’s Democratic Republic will help finance a project to manage natural resources sustainability while improving productivity.

The loan agreement was signed today at IFAD headquarters by Viengthong Siphandone, Vice-Minister for Finance of the Lao People’s Democratic Republic and Kevin Cleaver, IFAD Assistant President.

In the Lao People’s Democratic Republic, there is a need to maximize the productivity of existing arable land, in an area limited by topography, undeveloped water resources and limited market access. The institutional and legal framework for sustainable and equitable management of agriculture and natural resources is weak, policies and legislation are unclear, professional and technical staff lack training, facilities are inadequate and the livelihoods of local people have been adversely affected by land speculation.
Against this backdrop, the project will strive to help poor farmers and farming households in the upland areas manage natural resources sustainably and improve their incomes. Many of these farmers have insecure land tenure, lack of access to markets and little awareness of their rights.
The total cost of the project is US$ 36.8 million over six years, with financing from IFAD, the Asian Development Bank and the Lao Government.

To date, IFAD has funded 11 rural development projects in the Lao People’s Democratic Republic for a total of about US$91 million.

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IFAD was created 30 years ago to tackle rural poverty, a key consequence of the droughts and famines of the early 1970s. Since 1978, IFAD has invested more than US$10.6 billion in low-interest loans and grants that have helped over approximately 350 million very poor rural women and men increase their incomes and provide for their families. IFAD is an international financial institution and a specialized United Nations agency. It is a global partnership of OECD, OPEC and other developing countries. Today, IFAD supports close to 250 programmes and projects in 87 developing countries and one territory.