The Context

Over the past decade, the Lao People’s Democratic Republic has experienced rapid economic growth and poverty reduction. Although the national poverty rate declined steadily, by 40 per cent over the last 15 years, 26 per cent of the population still lives below the poverty line. 

More than three quarters of the Lao people live in rural areas and depend on agriculture and natural resources for survival. Poverty is largely rural,  concentrated especially in remote and mountainous areas adjacent to the north-eastern and eastern borders with Viet Nam.

Agriculture and natural resources accounted for 24.8 per cent of GDP and over 70 per cent of employment as of 2014. More than 80 per cent of the population depends on agriculture for their livelihoods, while more than half of households are subsistence farmers with annual incomes below US$300.

While agriculture is the mainstay of the economy, farming is largely practised at the subsistence level, and access to improved technologies and markets is generally poor. Farmers, especially from large families, struggle to meet their household’s food requirements. Most use traditional farming methods and lack knowledge of new technologies and skills to improve yields. Also affecting productivity are declining soil fertility and lack of access to irrigation.

The country’s geography provides an opportunity to develop products and raw material that can tap into high-value markets in neighbouring countries. Lao People’s Democratic Republic sees itself as a ‘land bridge’, providing the most direct overland transport routes between its seaboard neighbours. This requires improving and developing infrastructure to facilitate connections between rural areas and urban markets.

The Strategy

IFAD began operations in the Lao People’s Democratic Republic in 1980. 

Our strategy is to ensure that poor rural people have increased opportunities for sustainable food and nutrition security and livelihoods. Together with government agencies and development partners, IFAD has identified areas where it has a comparative advantage and complements other donors’ activities.

The IFAD country strategic opportunities programme has three main objectives, focused on improving:

• community-based access to and management of land and natural resources;
• access to advisory services and inputs for sustainable, adaptive and integrated farming systems;
• access to markets for selected products.

The following cross-cutting issues are common to all three objectives:

• building capacities of government, beneficiaries and service providers;
• engaging with women as key partners in all production and marketing systems;
• constructing infrastructure needed by farmers, such as small-scale village irrigation, or for market access, such as farm-to-market roads;
• forming farmer and producer common-interest groups;
• building resilience to climate-related risks and improving capacity to adapt to climate change.