Published by the - Deutsche Gesellschaft für ... and Food... · findings and recommendations of the research will be used to determine which sectors the GIZ-VELA project will focus

Published by the:

Deutsche Gesellschaft für

Internationale Zusammenarbeit (GIZ) GmbH

Registered Offices:

Bonn and Eschborn, Germany

Project:

Vocational Education in Lao PDR Project (VELA)

Lao-German Development Cooperation

5th Floor, Premier Building (opposite Simeuang Temple)

Setthathirath Road, Unit 10, Piawat Village

Sisattanak District

Vientiane Capital, Lao PDR

P.O Box 10838

Phone: +856-21226000

Fax: +856-21226004

Email: [email protected]

Website: www.giz.de/laos (English)

www.giz.de/laos-la (Lao)

Responsible: Kumudhini Rosa

As at: November 2017

Printed by: Sisavath Printing Press

Design and layout: J&C Services

Cover photo credit: © GIZ Laos/ Phoonsab Thevongsa

Text/ Editors: IRL Laos

Statistical analysis conducted by: IRL Laos

GIZ is responsible for the content of this publication.

On behalf of the German Federal Ministry for Economic

Cooperation and Development (BMZ)

VALUE CHAIN ANALYSESSECTOR SKILLS STUDY

2

EXECUTIVE SUMMARY SECTOR SKILLS STUDY FOR THE AGRICULTURE AND FOOD-PROCESSING SECTORS..............................................................................................................................................................6EXECUTIVE SUMMARY VALUE CHAIN ANALYSES FOR SELECTED SUB-SECTORS OF THE AGRICULTURE AND FOOD-PROCESSING SECTORS......................................................................8ACKNOWLEDGEMENTS..............................................................................................................................................14LIST OF TABLES..............................................................................................................................................................14LIST OF FIGURES...........................................................................................................................................................15LIST OF ACRONYMS......................................................................................................................................................16ABBREVIATION OF PROVINCES IN LAO PDR......................................................................................................161. INTRODUCTION...........................................................................................................................................................182. RESEARCH DESIGN AND METHODOLOGY.......................................................................................................19 2.1 Study methodology...................................................................................................................................20 2.2 Limitations of this study..........................................................................................................................203. OVERVIEW OF THE AGRICULTURE AND FOOD PROCESSING SECTORS...............................................21 3.1 Sector backgrounds..................................................................................................................................22 3.1.1 Agriculture sector....................................................................................................................22 3.1.2 Food processing sector..........................................................................................................25 3.2 Schools and training.................................................................................................................................29 3.3 Economic performance and dynamics.................................................................................................304. CHARACTERISTICS OF THE AGRICULTURE AND FOOD-PROCESSING SECTORS IN SELECTED PROVINCES......................................................................................................................................................31 4.1 Geographical concentration....................................................................................................................32 4.2 Size..................................................................................................................................................................32 4.3 Characteristics of owners........................................................................................................................34 4.4 Characteristics of the workforce...........................................................................................................36 4.4.1 Fruits and Vegetable Farms..................................................................................................37 4.4.2 Food Processing Firms...........................................................................................................38 4.5 Required skills per position.....................................................................................................................38 4.6 Importance of soft and hard skills........................................................................................................44 4.7 Perceived existing skills per sector........................................................................................................47 4.8 Required skills of owners........................................................................................................................55 4.9 Training for admin staff............................................................................................................................55 4.10 Training for production workers..........................................................................................................58 4.11 Recruitment.................................................................................................................................................59 4.12 Perceptions about training...................................................................................................................62 4.13 Dual training program............................................................................................................................64 4.14 Past and expected growth....................................................................................................................645. RECOMMENDATIONS FOR SKILLS DEVELOPMENT PRIORITIES.............................................................69ANNEX 1. List of people interviewed.........................................................................................................................72ANNEX 2. Questionnaire.....................................................................................................................................................74

TABLE OF CONTENTS

VALUE CHAIN ANALYSES

3

ACKNOWLEDGEMENTS ..............................................................................................................................................84 LIST OF TABLES .............................................................................................................................................................84LIST OF FIGURES...........................................................................................................................................................84LIST OF ACRONYMS.....................................................................................................................................................851. INTRODUCTION...........................................................................................................................................................87 1.1 Background.....................................................................................................................................................88 1.2 Study objectives............................................................................................................................................88 1.3 Analytical framework..................................................................................................................................89 1.4 Study methodology......................................................................................................................................902. COFFEE VALUE CHAIN IN OUDOMXAY PROVINCE.......................................................................................91 2.1 Production......................................................................................................................................................93 2.2 Harvesting and processing.........................................................................................................................93 2.3 Advice/extension..........................................................................................................................................93 2.4 Value chain constraints and opportunities..........................................................................................94 2.5 Jobs and skills required............................................................................................................................943. TEA VALUE CHAIN IN OUDOMXAY PROVINCE...............................................................................................97 3.1 Production......................................................................................................................................................98 3.2 Advice and training....................................................................................................................................98 3.3 Value chain constraints and opportunities..........................................................................................98 3.4 Jobs and skills required............................................................................................................................994. CASSAVA VALUE CHAIN IN XAYABOURY PROVINCE....................................................................................101 4.1 Production.....................................................................................................................................................102 4.2 Processing......................................................................................................................................................102 4.3 Advice and training..................................................................................................................................103 4.4 Value chain constraints and opportunities..........................................................................................103 4.5 Jobs and skills required............................................................................................................................1045. MAIZE VALUE CHAIN IN XAYABOURY PROVINCE.........................................................................................107 5.1 Production....................................................................................................................................................108 5.2 Processing.....................................................................................................................................................109 5.3 Advice and training...................................................................................................................................109 5.4 Value chain opportunities and constraints........................................................................................110 5.5 Jobs and skills required..........................................................................................................................1116. DAIRY VALUE CHAIN IN VIENTIANE PROVINCE.........................................................................................113 6.1 Production....................................................................................................................................................114 6.2 Processing.....................................................................................................................................................114 6.3 Marketing......................................................................................................................................................115 6.4 Value chain opportunities and constraints........................................................................................115 6.5 Jobs and skills required..........................................................................................................................115

TABLE OF CONTENTS


4

7. MEAT VALUE CHAIN IN VIENTIANE CAPITAL AND PROVINCE..............................................................119 7.1 Production...................................................................................................................................................121 7.2 Marketing.....................................................................................................................................................122 7.3 Processing....................................................................................................................................................123 7.4 Retailing........................................................................................................................................................126 7.5 Research centres........................................................................................................................................126 7.6 Opportunities and constraints..............................................................................................................127 7.7 Jobs and skills required.........................................................................................................................1278. RICE VALUE CHAIN IN KHAMOUAN PROVINCE.........................................................................................133 8.1 Production...................................................................................................................................................134 8.2 Advice and training................................................................................................................................135 8.3 Processing....................................................................................................................................................136 8.4 Retail and marketing..............................................................................................................................136 8.5 Opportunities and constraints.............................................................................................................136 8.6 Jobs and skills required.........................................................................................................................1379. SUGAR VALUE CHAIN IN SAVANNAKHET PROVINCE...............................................................................141 9.1 Production...................................................................................................................................................142 9.2 Advice and training................................................................................................................................144 9.3 Processing....................................................................................................................................................144 9.4 Opportunities and constraints.............................................................................................................145 9.5 Jobs and skills required.........................................................................................................................14510. KEY FINDINGS AND CONCLUSION................................................................................................................149ANNEX 1: Interview checklists...............................................................................................................................152

ANNEX 2: Fieldwork schedule................................................................................................................................160

TABLE OF CONTENTS

SUMMARIESEXECUTIVE

Photo: © GIZ/ Satitphone Phommahack


6

This study aims to determine which sub-sectors in the agricultural and food-processing sectors are most likely to develop in the coming years. It ex-plores which skills are most frequently required by firms at present and the skills that are most likely to be required as each sub-sector develops. The findings and recommendations of the research will be used to determine which sectors the GIZ-VELA project will focus on in its next phase.

A survey of 50 agricultural farms and 150 food processing companies was carried out in six prov-inces in Lao PDR: Khammuane, Oudomxay, Sa-vannakhet, Xayabury, Vientiane Capital and Vien-tiane Province. Key informant interviews were conducted with relevant stakeholders from a va-riety of backgrounds, including the public sector, the private sector, industry associations, universi-ties and technical colleges.

Most food processing conducted in Lao PDR is still carried out at the household level with very limit-ed skills and equipment. The processing of agri-cultural commodities or livestock at this level is mainly oriented towards preservation (i.e. drying, pickling, conserving) and small-scale commer-cialisation (i.e. dried and fried fruit, dried meat). Farmers process commodities and meat using tra-ditional skills with very limited use of equipment and usually with little regard to health and sanita-tion. At present, there is no support from Govern-ment or development partners for households to improve the way in which they process food.The formal food processing sector is still in its in-fancy in Lao PDR. With a few exceptions, the large majority of formal processors are very small (less than 5 employees) and are highly concentrated in a few activities and locations. For example, meat processing companies are concentrated in Sa-vannakhet province and Vientiane province and capital, those preserving fruit and vegetables are gathered in Xayabury province, millers of non-rice or maize grains are mainly present in Vientiane,

Luang Prabang, Champasak and Oudomxay prov-inces, the production of noodles is highly concen-trated in Savannakhet province, and processors of coffee and tea are grouped in Phongsaly, Savan-nakhet and Oudomxay provinces.

However, this concentration of (mainly) small firms does not seem to have led to the emergence and development of clusters, where knowledge, resources, capital, etc. are shared or pulled to-gether for the benefit of all firms and other relat-ed actors.

Ministry of Education officials at the national, provincial and district level, as well as staff work-ing at different colleges, show little or no under-standing of food processing. Food processing is largely understood as cooking classes or prepara-tion of students to work in restaurants. No school or college was identified that provides skills for food-processing in medium or large firms, such as operation and repair of machinery, planning and management of production or marketing.

Around half the surveyed firms claimed they would like to provide more training to their em-ployees. However, there are no institutions cur-rently providing the type of training they require.

The limited training on food-processing that cur-rently exists is carried out within food processing firms themselves. Such training tends to be on-the-job and for the most basic tasks only, such as basic operation of machinery, sorting and drying. Larger firms sometimes hire foreign trainers (mainly Thai) to provide training on more specialised tasks, such as calibration of machinery, basic repair, and more sophisticated operation of processing machinery.

Overall, the food processing sector is likely to continue with the following trends:

EXECUTIVE SUMMARY OF SECTOR SKILLS STUDY FOR THE AGRICULTURE AND FOOD-PROCESSING SECTORS

SECTOR SKILLS STUDY

7

• Rice milling will continue to dominate the food-processing sector given the preponder-ance of rice in agricultural production, the lo-cal and international demand for rice and the pre-existing capacity to mill rice.

• Sugar cane production and sugar processing (milling), cassava production and process-ing, maize production and drying, and coffee production and processing will continue to develop and grow. These sectors are mainly driven by external demand, which is likely to experience continued growth.

• Livestock production and meat processing will benefit from growing internal demand. As incomes increase, the population is expected to increase their consumption of better qual-ity meat.

• There are a number of sectors that are rela-tively smaller, but that have a high potential for development such as vegetable and fruit production and processing, production of rice noodles and other rice products, and tea cul-tivation and processing. The main drive for the development of these sub-sectors will be local demand and, as incomes increase, cus-tomers will be able to purchase products of higher quality and price. Enterprises in these sub-sectors are likely to remain small and lo-calised, but will be equipped to compete with imported foods as they develop.

Skills are required in a number of areas. In agri-cultural farms, firms require staff with improved skills in agronomy and operation of agricultural machinery. In livestock farms, firms require vet-erinarians, feed specialists, and labourers able to conduct basic activities, such as feeding, monitor-ing of livestock and cleaning.

Food processing firms require qualified staff in a number of areas, including grading and sort-ing, operating and repairing of food-processing machinery (including calibration and adjusting), quality assurance, food safety and sanitation and hygiene.

EXECUTIVE SUMMARY OF SECTOR SKILLS STUDY FOR THE AGRICULTURE AND FOOD-PROCESSING SECTORS


8

This study provides a short description and anal-ysis of value chains for selected commodities that have been identified to have the highest poten-tial for employment and food processing at a semi-industrial or industrial level in six provinces of Lao PDR. The value chains selected are rice in Khamouan province, coffee and tea in Oudomx-ay province, sugar in Savannakhet province, meat and dairy in Vientiane Province and Vientiane Capital, and maize and cassava in Xayaboury prov-ince. The analyses aim to identify the potential for development of the supply chain, the constraints for growth, the main skills required, and the skill shortages in each value chain.

The key findings for each commodity are as fol-lows:

Coffee

• Farmers in Oudomxay province cultivate coffee with minimum skills and technolo-gy. Yields are low and the quality of coffee is poor. Technical support provided to farmers by (mainly Chinese) buyers through monthly monitoring visits and training of local farm-ers to become advisors is slowly improving their agricultural practices and the quality of their produce. Knowledge about how to pro-cess coffee is still limited and most coffee is exported with minimum processing (i.e. as parchment).

• DAFO has limited resources to provide coffee farmers with technical support. Furthermore, extension workers lack an in-depth knowl-edge of coffee cultivation to support farmers. Local agricultural schools provide no training to students on coffee cultivation as they do not have teachers with this knowledge.

• There is ample potential for improving the production of coffee in Oudomxay province given the poor cultivation and processing practices. There is also potential for farmers

and small-scale processors to engage in more sophisticated processing activities before cof-fee is exported to China, so long as the skills and technology are supplied. Coffee produced in Oudomxay has the potential to be sold within Lao PDR if the volumes and quality of production increase.

• There is an increasing need for agronomists with specialised technical knowledge in cof-fee cultivation working for District Agricul-ture and Forestry Offices, or the private sector (with a trader or buyer). There is also a need for processing specialists that can teach farmers the best coffee processing tasks. As the num-ber of coffee roasters and coffee shops rapid-ly increases in Lao PDR – mainly in Vientiane Capital and Luang Prabang – the demand for roasters and baristas is also increasing rapidly.

Tea

• In Oudomxay province, tea is collected by farmers as a way to earn an extra income; it is not their main source of income. Thus, farm-ers mainly collect tea during the lean (dry) season. Tea collectors in the province do not receive training or technical advice on the col-lection, cultivation or processing of tea. Lit-tle investment has been made by PAFO and DAFOs to conduct research on tea collection, cultivation and processing. District agricul-tural schools and colleges do not have cours-es on tea cultivation, collection or processing.

• The potential for development of the sub-sec-tor is large, given the low level of knowledge and technology currently used. This includes not only the “wild” tea currently collected and commercialised, but also cultivated tea. The likely impact on farmers’ income and the num-ber of farmers to benefit from investments in this sub-sector is low.

• Oudomxay’s tea sub-sector requires agrono-mists with knowledge of tea cultivation and

EXECUTIVE SUMMARY OF VALUE CHAIN ANALYSES FOR SELECTED SUB-SECTORS OF THE AGRICULTURE AND FOOD-PROCESSING SECTORS


9

processing, or NTFP specialists, working for DAFO or a private sector trader or buyer. A number of DAFO staff is nominally expected to conduct these tasks, but their skills and re-sources are limited. Increasing local skills to process tea could help to attract firms that process tea for local and external markets.

Cassava

• Cassava is grown extensively in Xayaboury province. However, due to lack of proper ex-tension and training, farmers use poor plant husbandry practices that tend to keep yields low. Farmers use limited inputs and ma-chinery which, if used properly, could help improve their yields. Farmers receive some technical support from factories on cassava cultivation, including soil management, input use and plant management and harvest. The TVET school in Xayaboury does not provide training to students on cassava cultivation or processing.

• Cassava is cut and delivered fresh to facto-ries by farmers. There are four cassava drying plants and one cassava processing factory in Xayaboury province. The factory processes cassava into flour and packs it for export to China. DAFO staff also provides some tech-nical support to farmers, although their re-sources and knowledge are limited.

• The cassava value chain in Xayaboury is oper-ating far below its full potential for a number of reasons, including poor agricultural knowl-edge of cassava cultivation and limited infor-mation provided to farmers on ways to im-prove their cultivation; limited infrastructure to increase productivity, such as better irriga-tion and machinery; lack of knowledge and equipment for harvesting and post-harvesting drying and processing, and lack of equipment for storage; limited quality control; and poor coordination between producers, traders and

processors leading to loss in quality. There are great opportunities for the development of the value chain due to the increasing demand of cassava in Xayaboury, mainly by Chinese processors.

• A number of DAFO staff in cassava producing districts in Xayaboury is expected to provide agronomic advice and training to farmers, but their skills and resources are limited. Cassa-va processing factories in Xayaboury provide some advice to farmers (and to DAFO staff) on cassava cultivation and harvesting. Skills to work in and manage a cassava plantation are also sorely needed in the province.

Maize

• Maize is predominantly grown in two districts of Xayaboury province – Paklai and Kenthao. Most maize production in Xayaboury is under some kind of informal agreement or contract with wholesale buyers/processors.

• Maize is usually cultivated in a labour-inten-sive way among other crops, although the number of farmers growing maize exclusive-ly is increasing. Maize is grown with limited technical knowledge or support from DAFOs or buyers. The use of inputs, such as fertiliz-er and pesticides, and machinery for cultiva-tion or harvest are minimal. While quality and standards of maize are established by whole-sale buyers, there is not a high expectation on quality.

• The level of processing of maize is very limit-ed. Maize is threshed and dried with limited machinery and processes. Increasing the lev-el of processing before selling to China could allow farmers/processors to obtain a propor-tion of the added value of processed corn.

• DAFO provides technical advice to farmers before planting (May) and before harvesting (November to December), but the training is limited and of low quality. In contrast to oth-



10

er supply chains, buyers do not provide advice or training to farmers. As a consequence, the maize produced is of low quality.

• The maize value chain in Xayaboury is oper-ating below its potential due to a number of factors, including poor agricultural knowledge and information provided to farmers.

• This sub-sector requires agronomists/techni-cal advisors will particular knowledge of maize cultivation and processing. Additionally, im-proving and increasing the skills of labourers to operate equipment to perform these and other post-harvest tasks would help in adding value before the maize is exported to China for further processing.

Dairy

• Local production of dairy products is concen-trated among a few companies mainly based in Vientiane Capital. Firms produce milk using imported cows and process it with imported second-hand machinery. The firms are inte-grated vertically and are responsible for all stages of production, from production of feed to bottling and distribution of milk and other dairy products.

• As with other sectors, there are no established standards for production of dairy products in Lao PDR. Companies have to develop and en-sure their own health standards and testing. This would naturally be an obstacle if produc-ers wanted to trade regionally.

• The growth of the dairy sector will be con-strained by a number of factors. Firstly, the consumption of milk and other dairy products in Lao PDR is very limited. Secondly, import-ed dairy products are still much cheaper than dairy products produced in Lao PDR due to economies of scale. Thirdly, infrastructure is still a challenge. At present there are no facto-ries able to pack dairy products in long-lasting containers, such as Tetra Pak. This means that

all dairy products need to be sold fresh. With limited cold chain transportation and relatively few outlets with refrigerators, the opportunity of marketing fresh dairy products is limited.

• The sector requires dairy farm labourers able to carry out basic tasks at a dairy farm, such as milking cows by hand or using milking ma-chines; cleaning and maintaining animal pens/quarters; and observing animals for signs of illness, injury or unusual behaviour. Firms also require skilled livestock feed specialists, vet-erinarians and animal care supervisors. The capacity of DAFO to provide training and/or advice in any of these areas is limited.

Meat

• Livestock are bred by smallholders using their own animals or breeding using group bulls, in the case of cattle. There is very limited artificial insemination, given the lack of resources and staff to do so by Government and the limited private sector actors involved in this activity.

• Disease of livestock is a significant problem for small-holders.

• Most households feed their livestock with products from their own farms or from near-by fields – from crop residues and grasses or forages on bunds and perimeters. Very few farmers buy processed feed for their livestock. Farmers’ knowledge of feed preparation is lim-ited.

• There are a number of commercial farms that raise small and large livestock for consumption in the local/national market.

• Vientiane Province and Capital have no estab-lished cattle or livestock markets.

• Most meat is processed in small slaughter-houses (capacity of 200kg meat per day), sometimes Government owned. Slaughter-houses operate with poor hygiene standards, poor practices and limited oversight. District officials from DAFO supervise the slaughtering



11

and conditions at slaughterhouses (and collect fees for each animal killed), but their skills and equipment to monitor health and hygiene is limited.

• Wet markets account for the vast bulk of meat sales in Lao PDR. Stallholders in wet markets are specialised in selling meat, and often dif-ferent types of meat products.

• The main constraints in this value chain are re-lated to the small scale of most operations and the high fragmentation of the chain.

• The sector requires a general upgrade in the existing skills from farm labourers to livestock feed specialists to veterinaries and butchers. Other key positions in demand include farm managers.

• There is an urgent need to develop the skills of people able to conduct proper inspections to ensure the implementation of proper food safety and hygiene and sanitation standards as well as improve animal welfare.

Rice

• Rice in Khamouan province is still mainly pro-duced in small plots by smallholders with mini-mum use of inputs and mechanical equipment. Government seed breeders provide rice seeds for farmers wanting to buy them, although in-dividual farmers rarely buy seeds.

• Technical advice is provided through the Dis-trict Departments of Agriculture and For-estry and in some cases by rice millers (who sub-contract DAFO extensionists or foreign advisors to provide training to farmers). Input suppliers provide some information to farmers on how to use chemical inputs, but the reliabil-ity and accuracy of this information is unclear. Developing skills in the right use of inputs would also have an important impact on rice cultivation as it could trigger a substantial in-crease in productivity and reduce losses due to droughts, floods and pests.

• Farmers producing rice for commercialisation are frequently engaged in a contract with a rice miller or rice mill association, sometimes through Farmer Groups.

• Rice millers are for the most part small- and medium-size firms with 2 to 15 employees and workers. A small proportion of middle-scale rice millers have modern technology and more organised and professional operations.

• Workers have to conduct a multitude of oper-ations within the company, such as transport-ing and unloading paddy rice, operating milling machines, packing and loading. Workers learn how to carry out these activities from firm owners and, when available, managers.

• The main constraint for the further develop-ment/growth of this sector is the capacity of farmers to increase productivity. Access to technology and irrigation is very limited and the progress in introducing and promoting mechanisation has been slow. Furthermore, developing the skills of workers to operate (and fix) agricultural machinery that is current-ly employed can improve the way the equip-ment is used and spread the knowledge on the best ways to use agricultural machinery.

• There is a need for skills development in mill-ing. Workers in rice mills should know how to operate (and in some situations, fix) equipment used in rice mill plants.

Sugar

• The sugar value chain in Savannakhet province is a short supply chain dominated by one large multi-national enterprise that buys sugar cane mainly for export.

• Farmers enter into agreements with the two sugar mills in the province to grow sugar cane. Depending on the type of contractual agree-ment, they may receive different degrees of support.



12

• The sugar mills provide training once per year in a number of areas, such as agricultural tech-niques and business planning. The Provincial and District Departments of Agriculture do not provide any support to farmers on sugar cane cultivation. The local agricultural college and university do not provide any training re-lated to the sugar sub-sector.

• The sugar mills process sugar cane which is then exported to Thailand as red sugar to be processed into white/brown sugar and then exported to Europe.

• The main constraints for the further devel-opment of the sugar sector are the lack of expertise and training provided to producers (farmers) and processors (potential employ-ees of the firm) on sugar cane cultivation and processing.

• The sub-sector requires technical specialists with knowledge of sugar cane cultivation (agronomists) and processing (engineers). The sector also requires workers with skills to op-erate and repair agricultural machinery used in the production of sugar cane and machin-ery used in the processing of sugar cane.


SECTOR SKILLS STUDY FOR THE AGRICULTURE AND FOOD-PROCESSING SECTORS

Photo: © GIZ/ Laos


14

ACKNOWLEDGEMENTSThis report was prepared by IRL Laos. The research was led by Emmanuel Santoyo Rio (Senior Interna-tional Consultant), with a team comprising Vipapone Aphayvanh (Research Manager, IRL), Anolay Vong-southi (Value Chain Specialist), Chanthamone Singthong (Fieldwork Manager, IRL), Noulor Xayleng (Data Manager, IRL).

The team is grateful to GIZ and the Lao PDR’s Ministry of Education and Sports, other government ministries and institutions, development partners and civil society for excellent support and cooperation provided during the preparation of this study.

Table 1. Agricultural production in Lao PDR (2013-2014).....................................................................................23Table 2. Production (tons) of selected commodities by province in 2015.........................................................24Table 3. Number of firms per activity and size of firm (2013)..............................................................................26Table 4. Number of firms (over 4 employees) by activity and province (2017)*..............................................28Table 5. Number of firms surveyed by province and sub-sector.........................................................................32Table 6. Number of firms surveyed by size...............................................................................................................33Table 7. Average number workers per category by sub-sector.............................................................................33Table 8. Previous occupation of business owner by subsector (number)..........................................................34Table 9. Level of education of business owners by subsector (number)............................................................35Table 10. In which specific area was the business owner trained*.....................................................................35Table 11. Area of education for business owners with a university education by subsector (number)......36Table 12. Level of education of workers per type of firm (percentage)..............................................................37Table 13. Total and average number of workers currently employed and required in each position in the surveyed farms...............................................................................................................................................38Table 14. Total number of workers in the position, and average number of workers currently employed and required in each position in food processing firms (fruits and vegetables, grains and flour milling, and meat, poultry and fish)..........................................................................................................39Table 15. Average number of workers currently employed and required in each position in food processing firms (noodles, coffee and tea, oters)...................................................................................40Table 16. The required level of education for each position in farms (in percentage)....................................41Table 17. What is the level education required for each of the positions in fruit and vegetable and grain and flour milling firms (percentage of respondents)?..........................................................................42Table 18. What is the level education required for each of the positions in meat, poultry and fish and noodle firms (percentage of respondents)?.....................................................................................43Table 19. What is the level education required for each of the positions in coffee and tea and ‘other’ firms (percentage of respondents)?..........................................................................................................43Table 20. Perceived level of skills in fruit and vegetable farms (percentage)....................................................48Table 21. Perceived level of skills in livestock farms (percentage)......................................................................49Table 22. Perceived level of skills in food-processing firms..................................................................................50

LIST OF TABLES

SECTOR SKILLS STUDY

15

Table 23. Perceived level of soft skill in fruit and vegetables and livestock farms (percentage).................51Table 24. Perceived level of hard skills at fruit and vegetables and livestock farms (percentage).............52Table 25. Perceived level of soft skills at food-processing firms (percentage).................................................53Table 26. Perceived level of hard skills at food-processing firms (percentage)...............................................54Table 27. Number of participants in trainings..........................................................................................................56Table 28. Number of participants per training.........................................................................................................58Table 29. Percentage of firms that would participate in dual-training programme and provide support......................................................................................................................................64Table 30. How did your business change in 2016 from the previous year (2015)?..........................................64Table 31. How do you expect your business will perform this year (2017) in comparison to last year (2016)?........................................................................................................................................65Table 32. How do you expect your business will perform next year (2018) in comparison to this year (2017)?............................................................................................................65Table 33. Percentage of workers that firms are planning to recruit....................................................................66Table 34. What are your main problems to operate?..............................................................................................67

LIST OF FIGURESFigure 1. Number of food processing firms surveyed by main activity..............................................................32Figure 2. Perceived importance of soft skills for business (all firms)..................................................................44Figure 3. Perceived importance of hard skills for business (all firms).................................................................44Figure 4. Perceived importance of specific skills for vegetable and fruit farms...............................................45Figure 5. Perceived importance of specific skills for livestock farms.................................................................46Figure 6. Perceived importance of specific skills for food-processing firms....................................................47Figure 7. Do you think people in these areas need more skills?...........................................................................54Figure 8. What skills do you require as an owner of the business?.....................................................................55Figure 9. Did you provide training* to staff in any of following positions in the last 12 months**?..............................................................................................................................56Figure 10. What type of training did you provide? (for admin staff)...................................................................57Figure 11. Percentage of trainings that were paid for admin staff......................................................................57Figure 12. What type of training did you provide? (for production workers)....................................................58Figure 13. Percentage of trainings that were paid for production workers......................................................59Figure 14. How difficult it is to recruit workers for positions in production area?.........................................59Figure 15. How do you normally recruit production workers?............................................................................59Figure 16. Reasons for not finding people for open positions.............................................................................60Figure 17. Average time required to recruit a production worker.......................................................................60Figure 18. How long does it take to train a new person (in production) to get them to the right skill level?..................................................................................................................................61Figure 19. How much does it cost the company to train a new person to get them to the right skill level? (in LAK)*................................................................................................................62Figure 20. Percentage of respondents that agreed with the statement “Training is essential for the operation of my business”..............................................................................................................63Figure 21. Percentage of respondents that agreed or disagreed with the statement “Training is a waste of money”........................................................................................................................................................63


16

Figure 22. Percentage of respondents that agreed or disagreed with the statement “Educational institutions have already done the training, no need for my business to invest in more training”..............................................................................................................................................63Figure 23. “I want to provide training to my staff, but there are no institutions that provide the training required”............................................................................................................................................................63Figure 24. Did you make any investment in 2016?.................................................................................................64Figure 25. Investment made by firms in 2016 ........................................................................................................65Figure 26. Firms planning to recruit more staff in the next 12 months............................................................66Figure 27. Are workers being hired for existing or new positions?.....................................................................66

LIST OF ACRONYMS

BMZ Bundesministerium für Wirtschaftliche Zusammenarbeit und Entwicklung (German Federal Ministry for Economic Cooperation and Development)GDP Gross Domestic ProductGIZ Deutsche Gesellschaft für Internationale ZusammenarbeitIRL Indochina Research Ltd.MAF Ministry of Agriculture and ForestryMoES Ministry of Education and SportsMoLSW Ministry of Labour and Social WelfarePDR People’s Democratic RepublicSDC Swiss Agency for Development and CooperationTVET Technical and Vocational Education and TrainingVELA Vocational Education in Laos

ABBREVIATION OF PROVINCES IN LAO PDR

ATT AttapeuBOK BokeoBOL BolikhamxayCHA ChampasakHPN HuaphanKHM KhammuanLN LuangnamthaLP LuangprabangODX OudomxayPHO PhongsalySAR SaravanhSVK SavannakhetVTE Pro Vientiane ProvinceVTE Cap Vientiane CapitalXGN XaiyabouriXAYS Xaisomboun SEK SekongXKH Xiengkhouang

1. INTRODUCTION

Photo: © GIZ / Laurence Thouvenin


18

1. INTRODUCTION

This study was conducted in the context of the Vocational Education in Laos (VELA) project, im-plemented by GIZ in coordination with the Minis-try of Education and Sports (MoES) and the Minis-try of Labour and Social Welfare (MoLSW). This is a project co-funded by the German Federal Min-istry for Economic Cooperation and Development (BMZ) and the Swiss Agency for Development and Cooperation (SDC). Its aim is to strengthen Tech-nical Vocational Education and Training (TVET) in Lao PDR by improving the quality of instruction and training to better align with the needs of the country’s growing economy. In addition to tech-nical assistance, capacity building, and provision of scholarships to marginalized students, VELA intends to provide C1 training for 10,300 students and C2 training for 1,540 students over the dura-tion of the project (2013-2018).

In April 2017, GIZ-VELA commissioned a study to explore which agricultural and food process-ing sectors have the highest potential for growth in Lao PDR and to assess the specific skills that are required by each of the sectors. Indochina Research Ltd. (IRL) was contracted to conduct a survey of commercial farms and firms in the agro-processing sector, as well as a number of short value chain studies for selected commodi-ties. An international specialist worked with IRL to support the design, implementation and analysis of data for the survey. For the value chain stud-ies, the international specialist designed the study and tools, conducted field work with support of a research assistant, and analysed data and infor-mation to complete the short value chain assess-ments (see separate report).

The aim of this study is to determine which sub-sectors in the agricultural and food-process-ing sectors are most likely to develop in the near future. It explores which skills are most common-ly required by firms at present and the skills that are most likely to be required as each sub-sector

develops. The findings and recommendations of this research will be used to determine which sectors the GIZ-VELA project will focus on in its next phase.

2. RESEARCH DESIGN AND METHODOLOGY

Photo: © GIZ/ Phoonsab Thevongsa


20

2. RESEARCH DESIGN AND METHODOLOGY

2.1 Study methodology

To obtain sufficient information on which skills are most commonly required by agricultural farms and food-processing firms and the skills that are most likely to be required by these firms as each sub-sector develops, a survey of agricultural farms and food processing companies was carried out in six provinces in Lao PDR: Khammuane, Oudomx-ay, Savannakhet, Xayabury, Vientiane Capital and Vientiane Province.

A review of existing studies, reports, and govern-ment statistics was carried out early on during the research process to take stock of current knowledge and information, identify data gaps, and inform the choice of field work locations. This review informed the design of the survey questionnaires. At the same time, key informant interviews were conducted with relevant stake-holders from a variety of backgrounds, including the public sector, the private sector, industry asso-ciations, universities and technical colleges (see a list of people interviewed in Annex 1). Information gathered through these interviews also informed the design of the questionnaires and the selection of provinces to be surveyed.

A sample of 50 agricultural farms and 150 food processing firms was drawn from a list of firms provided by the Ministry of Industry and Com-merce. A questionnaire was designed with specific sections/questions for commercial farms and for food processing firms. The questionnaire was pi-lot-tested in Vientiane Capital before use in the field.

To implement the survey, a fieldwork team of 13 senior interviewers collected data over a 22 days period in August and September 2017. Data was collected using electronic tablets. The data was analysed using SPSS.

2.2 Limitations of this study

As any research of this nature, this study has a number of limitations. Firstly, the lists of firms provided by the Ministry of Industry and Com-merce were outdated, so a large number of farms and firms in the list no longer existed and were downsized. It could also be assumed that there were new farms and firms not present in the list that would have been available for selection in the sampling stage. This forced the survey team to re-place some of the firms from the original sample for other firms in order to reach the quota of firms allocated. Secondly, some firms based in remote locations were difficult or impossible to reach, which may bias the survey results to the needs of more accessible firms.

3. OVERVIEW OF THE AGRICULTURE AND FOOD PROCESSING SECTORS



22


Lao PDR has achieved impressive economic growth and poverty reduction over the past de-cade, with an average growth in gross domestic product (GDP) around 8 per cent per year. Poverty declined from 41.4 per cent in 2002/03 to 28.8 per cent in 2012/2013. Furthermore, with a GDP per capita of around US$1,600 in 2014, Lao PDR has become a lower-middle income country. Never-theless, the country still faces important challeng-es. Growth in the recent decade has been driv-en, to a large degree, by natural resources which are capital intensive and create few jobs, while low productivity in agriculture and weak per-formance in manufacturing limited the income generating opportunities for most Lao people. Lao PDR still lags behind regional peers on social outcomes.

3.1 Sector backgrounds

3.1.1 Agriculture sector

Agriculture remains central to the development of Lao PDR, contributing to the livelihoods of over 70 per cent of the population. Agriculture and forestry accounted for 27.4 per cent of GDP, or approximately US$2.8 billion in 2015 (World Bank, 2017). This is down from 61 per cent in 1990 and 45 per cent in 2000 and reflects the growing importance of other sectors such as mining, hy-dropower and services.

The agriculture sectors include crops, livestock, fisheries and forestry. Agriculture is broadly di-vided into lowlands and uplands systems. This reflects the geographic composition of the coun-try, of which around 80 per cent of the 240,000 square kilometres of land is mountainous. It is estimated that about 25 per cent of the land area of the country is used for crops, livestock or for-estry.

Only 10 per cent of Lao PDR’s land area is con-sidered agricultural land1. Of this, around 6.6 per cent is arable, used for temporary crops or fallow, while approximately 4 per cent would be used for perennial crops and livestock grazing2. A further 15 per cent of the land area is estimated to be po-tential production forest. The areas of arable and agricultural land are increasing due to land-use change.

Lowland agriculture is dominated by rain-fed and some irrigated cropping, while upland ag-riculture is mainly shifting cultivation. Irrigat-ed crop production for commercial purposes is increasingly important in lowland agriculture (although only 10 per cent of agricultural land is irrigated), while upland agriculture is mainly fo-cused on self-consumption.

Table 1 presents agricultural production in Lao PDR in 2013-2014. As the table illustrates, ag-ricultural production is concentrated on a few crops, such as rice, a small number vegetables and fruits (mainly produced for self-consump-tion) and maize, cassava and sugar cane (produced for commercialisation). Rice is also produced for commercialisation mainly in the lowland plains and vegetables are produced for commercialisa-tion in Vientiane province. This is partly because of geographical/physical conditions and other is-sues such as access to infrastructure (i.e. irrigation and roads) and markets.

1 World Bank DataBank databank.workbank.org [accessed on 30 Oct 2017] 2 World Bank (2012)

SECTOR SKILLS STUDY

23


ProductArea (ha) Production (tons) Yield (ton/ha)

2013 2014 2013 2014 2013 2014

Rice 891,190 957,836 3,414,560 4,002,425 3.83 4.18

Vegetables, fresh nes* 144,735 161,379 1,313,705 1,550,460 9.08 9.61

Cassava 45,185 60,475 1,254,188 1,629,805 27.76 26.95

Maize 212,030 243,385 1,214,085 1,412,440 5.73 5.80

Sugar cane 14,270 34,070 865,130 1,840,465 60.63 54.02

Bananas 19,120 22,920 420,425 508,580 21.99 22.19

Potatoes 1,035 1,035 255,169 300,435 2.64 3.11

Watermelons 8,150 8,765 189,202 181,341 15.42 15.89

Pineapples 2,820 5,160 128,918 119,564 3.64 6.17

Melons, other (incl. canta-loupes)

530 955 121,321 141,937 0.64 1.36

Sweet potatoes 5,710 6,595 112,557 121,895 6.43 8.04

Coffee 57,345 70,330 92,045 113,580 1.61 1.62

Tangerines, mandarins, clementines, satsumas

4,000 4,258 87,636 85,366 3.51 3.64

Lemons and limes 465 555 86,882 81,441 0.40 0.45

Mangoes, mangosteens, guavas

547 576 82,898 81,579 0.45 0.47

Oranges 5,794 6,197 82,714 82,963 4.79 5.14

Tobacco, unmanufactured 6,025 6,250 56,755 63,355 9.42 10.14

Grapefruit (incl. pomelos) 1,403 1,169 44,431 51,780 0.62 0.61

Fruit, fresh nes* 7,581 7,391 44,034 47,192 5.81 6.38

Chillies and peppers, dry 3,035 3,189 38,478 39,310 1.17 1.25

Ramie 650 655 36,923 37,538 0.24 0.25

Groundnuts, with shell 24,595 25,310 22,283 23,410 5.48 5.93

Chillies and peppers, green 10,157 10,328 16,586 16,503 1.68 1.70

Soybeans 8,900 11,880 13,905 17,035 1.56 1.43

Fruit, stone nes* 1,715 1,728 11,664 11,699 6.80 6.77

Sesame seed 10,710 12,080 10,952 12,748 1.17 1.54

Pulses, nes* 18,000 18,058 9,722 9,807 1.75 1.77

Tea 3,440 3,990 6,105 7,935 1.77 1.99

Nutmeg, mace and carda-moms

8,481 8,567 3,585 3,597 0.30 0.31

Beans, dry 2,940 2,930 3,365 4,000 1.14 1.37

Table 1. Agricultural production in Lao PDR (2013-2014)

* not elsewhere specified, Source: Data for 2013-2014 from FAOSTAT, 2017.


24


ATT CHA SEK SAR XAYS SVK KHM BOL XKH VTE Pro VTE Cap XGN HPN LP BOK ODX LN PHO

Rice 73,498 566,815 46,932 426,232 33,887 1,028.419 341,280 127,110 102,050 310,569 344,300 196,598 111,364 102,096 89,153 91,135 57,591 52,860

Vegeta-bles

3,790 443,485 356,250 92,955 1,345 104,085 55,315 32,300 29,515 101,085 88,060 83,355 30,624 101,471 4,740 93,445 27.665 33,920

Cassava 20,660 460,200 25,710 571,49 24,600 46,000 48,130 360,180 20,920 118,770 57,555 421,115 36,643 82,420 - - 47,420 10,665

Maize 58,255 42,120 39,150 29,010 4,655 48,770 16,990 30,165 154,025 54,725 16,640 335,465 173,690 80,185 22,160 323,235 33,735 52,825

Sugar cane

539,505 9,015 108,590 2,010 755 978,155 13,815 7,760 1,000 7,165 4,655 2,145 6,865 12,120 - 11,520 188,930 124,650

Coffee 635 68,680 36,930 24,585 - - - - 235 - - - - 2,655 - 945 - 1,260

Tea - 190 - - - - - - 245 - - - 100 1,180 - 480 - 4,100

Table 2. Production (tons) of selected commodities by province in 2015

Source: Agricultural Statistics Year Book 2015, Department of Planning and Cooperation, MAF, 2016

Table 2 presents the production of a number of commodities by province in 2015. The table shows how rice is widely grown all over the coun-try, while the production of other commodities is concentrated in a few provinces due to issues such as adequate climate, access to land, infrastructure and markets.

In general, the agricultural sector in Lao PDR suffers from a number of constraints. These in-clude:• A small/weak agriculture knowledge and in-

formation system. There is limited agricultur-al research being conducted in Lao PDR due to limited resources and skills. Furthermore, the results of the limited research being con-ducted are not properly disseminated due to poor communication between research and extension institutions. Additionally, the agri-cultural extension system is weak and inad-equate to the needs of farmers – a result of limited resources devoted to its functioning and a strong focus on monitoring and en-forcement of Government plans and quotas rather than the provision of advisory services.

• Limited access to good quality inputs. Al-though Government (research and seed breeding centres) and others (i.e. farmer or-

ganisations) produce rice seeds of decent quality the distribution of seeds is poor. Fur-thermore, there is limited distribution of seeds for other commodities leading to use of poor quality seeds. Additionally, the access to other inputs (i.e. fertiliser, pesticide, etc.) is limited as Government tries to have a tight control over imports, and their use is poor at best given that farmers have no way of accessing advice on best use of inputs (extension agents have poor knowledge and input sellers are not trained to provide advice).

• Poor infrastructure. The irrigation infrastruc-ture in Lao PDR is still very limited. In addition, the existing irrigation infrastructure receives very little maintenance leading to disrepair. Other infrastructure, such as feeder roads is also poor.

• Inadequate or limited mechanisation facil-ities and equipment. There is lack of equip-ment for harvesting and post-harvesting ac-tivities (i.e. drying and processing), as well as a lack of equipment and facilities for quality and safety testing and for storage.

• Limited access to finance and poor business skills. There is very limited access to credit and finance for buyers, traders and produc-ers. This hampers their capacity to invest in

SECTOR SKILLS STUDY

25


ATT CHA SEK SAR XAYS SVK KHM BOL XKH VTE Pro VTE Cap XGN HPN LP BOK ODX LN PHO

Rice 73,498 566,815 46,932 426,232 33,887 1,028.419 341,280 127,110 102,050 310,569 344,300 196,598 111,364 102,096 89,153 91,135 57,591 52,860

Vegeta-bles

3,790 443,485 356,250 92,955 1,345 104,085 55,315 32,300 29,515 101,085 88,060 83,355 30,624 101,471 4,740 93,445 27.665 33,920

Cassava 20,660 460,200 25,710 571,49 24,600 46,000 48,130 360,180 20,920 118,770 57,555 421,115 36,643 82,420 - - 47,420 10,665

Maize 58,255 42,120 39,150 29,010 4,655 48,770 16,990 30,165 154,025 54,725 16,640 335,465 173,690 80,185 22,160 323,235 33,735 52,825

Sugar cane

539,505 9,015 108,590 2,010 755 978,155 13,815 7,760 1,000 7,165 4,655 2,145 6,865 12,120 - 11,520 188,930 124,650

Coffee 635 68,680 36,930 24,585 - - - - 235 - - - - 2,655 - 945 - 1,260

Tea - 190 - - - - - - 245 - - - 100 1,180 - 480 - 4,100

inputs, machinery, storage, transportation, etc. Moreover, most stakeholders including produc-ers, traders, and processors have limited business skills, for instance to prepare a business plan or other documents to secure loans. There is limit-ed public or private support in this area.

• Poor business environment for agriculture. There is a lack of policies and regulations to help the agricultural enterprises grow and develop1. For instance, there are serious constraints to new business entry (i.e. licensing); there are no regula-tions for quality control and certification of agri-cultural products, or in the cases where they ex-ist, Government officials are not able to enforce them; and Government services to promote and support trade are limited.

3.1.2 Food processing sector

Most food processing conducted in Lao PDR is still done at the household level with very limited skills and equipment. The processing of agricultur-al commodities or livestock at this level is mainly oriented towards preservation (i.e. drying, pickling, conserving) and small-scale commercialisation

1 See for example World Bank (2017) Enabling the Business of

Agriculture 2017. Washington, DC: World Bank, where Lao PDR is

ranked low among the countries studied.

(i.e. dried and fried fruit, dried meat etc.). Farmers process commodities and meat using traditional skills with very limited use of equipment and usu-ally with little regard to health and sanitation. At present, there is no support from Government or development partners for households to improve the way in which they process food.

The formal food processing sector is still in its infancy in Lao PDR. With a few exceptions , the large majority of formal processors are very small (less than 5 employees) and are highly concentrat-ed on a few activities (see Table 3).

Most firms in the sector are Lao owned with very limited foreign investment and highly concen-trated in a few activities, such as sugar milling, cassava processing and maize drying. As Table 3 shows, most processing firms are concentrated on sectors that require very little skills and tech-nology, such as drinking water and ice factories, manufacture of noodles and rice wine. The only exception is rice milling, which, as can be expect-ed, is a widespread processing activity that is still carried out on a small scale and for local markets.


26


ActivityEmployees Total

0-4 5-9 10-19 20-99 100+

Alcoholic rice 160 10 1 2 1 174

Biscuits/dry bakery products 5 0 0 0 0 5

Bread and rolls 39 4 0 0 0 43

Cane sugar 1 0 0 0 0 1

Canned fruits 1 0 0 0 0 1

Collection, purification and distribution of water 59 5 0 1 0 65

Corn milling 14 1 0 0 0 15

Deep fried pig skin production 4 0 0 0 0 4

Fermented fish production 3 1 0 0 0 4

Fish pen operation 43 5 4 3 1 56

Fishpond operation 18 2 1 2 0 23

Lao dried noodles production 1 0 0 1 0 2

Lao rice noodles production 8 1 1 0 0 10

Manufacture of nuts food and pastes 2 0 0 0 0 2

Manufacture of Beer 2 0 0 0 0 2

Manufacture of Coffee 5 0 0 0 0 5

Manufacture of Drinking water 249 15 6 0 0 270

Manufacture of Fish sources 2 0 0 0 0 2

Manufacture of Grind chili 0 0 1 0 0 1

Manufacture of Gypsum 2 0 0 0 0 2

Manufacture of Herb infusion 6 0 0 0 0 6

Manufacture of Ice cream 3 1 0 0 0 4

Manufacture of Roots or tubers flour 1 2 0 0 0 3

Manufacture of Tea 3 0 0 0 0 3

Manufacture of Tomato/chili sauce 1 0 0 0 0 1

Manufacture of cocoa, chocolate and sugar confectionery 0 0 1 0 0 1

Manufacture of coconut oil, copra cake, meals and pellets 2 0 0 0 0 2

Manufacture of edible ice 253 15 6 5 0 279

Manufacture of other beverages, n.e.c. 1 0 0 0 0 1

Manufacture of other food products n.e.c. 5 0 0 0 0 5

Manufacture of other tobacco products n.e.c. 38 2 0 0 1 41

Manufacture of others grain mill products (except rice/corn) n.e.c.

4 0 0 0 0 4

Manufacture of other macaroni, noodles, couscous and similar farinaceous products n.e.c.

133 5 2 1 0 141

Table 3. Number of firms per activity and size of firm (2013)

SECTOR SKILLS STUDY

27


ActivityEmployees Total

0-4 5-9 10-19 20-99 100+

Manufacture of others prepared animal feeds 2 0 0 0 0 2

Manufacture of others sherbet, ice drop, ice candy and other flavored ices n.e.c.

8 0 0 1 0 9

Manufacture of others soft drinks n.e.c. 1 0 0 0 0 1

Manufacture of feed for farm animals 2 0 0 0 0 2

Manufacture of prepared meals and dishes 1 0 0 0 0 1

Manufacture of refined seed oils 1 0 0 0 0 1

Manufacture of starches and starch products 10 1 0 1 0 12

Manufacture of wines 1 0 0 0 0 1

Meat ball production 8 0 0 0 0 8

Mixed fruits alcoholic drinks production 0 0 1 0 0 1

Molasses 1 0 0 0 0 1

Processing and preserving of other fish and marine prod-ucts, n.e.c.

1 0 0 0 0 1

Processing and preserving of other fruit and vegetables n.e.c.

6 0 0 0 0 6

Processing and preserving of others fish and fish prod-ucts, fresh, chilled or frozen n.e.c.

2 0 0 0 0 2

Processing and preserving of other meat and poultry meat products n.e.c.

3 0 1 1 0 5

Processing of salt into food-grade salt 9 1 0 0 0 10

Production of eggs 54 6 0 1 0 61

Production of fruit or vegetable juices 2 0 0 0 0 2

Rice milling 2,276 124 41 26 2 2,469

Roasting nuts/fruit 3 0 0 0 0 3

Salted skin 6 0 0 0 0 6

Sausages/salami 2 0 0 0 0 2

Seed processing for propagation 34 1 2 0 0 37

Slaughtering Goat/sheep 1 1 0 0 0 2

Slaughtering and packing of Buffalo 32 2 1 0 0 35

Slaughtering and packing of cattle 20 0 0 0 0 20

Slaughtering and packing of others meat n.e.c. 57 0 0 0 0 57

Slaughtering and packing of pigs 62 3 0 1 0 66

Smoked meat/poultry 3 0 0 0 0 3

Tofu 3 0 0 0 0 3

Total 3,680 209 69 46 5 4,009

Source: LSB (2013) Economic Census, 2013.


28

Food processing firms are concentrated in partic-ular provinces (and even districts) in Lao PDR (see Table 4). For instance, meat processing companies are concentrated in Savannakhet province and Vientiane province and capital, preservation of fruit and vegetables are gathered in Xayabury province, millers of non-rice or maize grains are mainly pres-ent in Vientiane, Luang Prabang, Champasak and Oudomxay provinces, the production of noodles is highly concentrated in Savannakhet province, and processing of coffee and tea is grouped in Phong-saly, Savannakhet and Oudomxay provinces. As ex-pected, rice milling is widespread in a number of provinces.

However, this concentration of (mainly) small firms does not seem to have led to the emer-gence and development of clusters, where knowledge, resources, capital, etc. are shared or pulled together for the benefit of all firms and other related actors. In contrast, firms tend to work in isolation from each other and from other actors, such as suppliers, training institutions and Government offices.

Table 4. Number of firms (over 4 employees) by activity and province (2017)*

Activity ATT BOK BOL CHA HPN KHM LN LP ODX PHO SAR SVK SEKVTE Cap

VTE Prov

XGN XKH Total

Slaughtering and meat packaging (except for poultry) 2 1 1 1 6 5 3 22

Production and preservation of meat and poultry 1 1

Processing and preservation of fruit and vegetables 1 8 9

Manufacturing of canned fruit and vegetables 1 1 2

Manufacturing of fruit and vegetable juices 2 1 3

Manufacturing of other fruit and vegetables products 2 1 3

Production of other fruit and vegetables products 1 1

Production of vegetable oil, animal oil and fats 1 1


Processing of ice cream, sorbet, ice and other flavoured liquid 3 1 1 5 4 14

Processing of milled grain products (excludes rice and corn) 5 1 7 5 2 1 11 32

Production of flour and food processing 1 1 1 1 1 1 2 1 9

Rice/corn milling and production of rice-glutinous rice/corn flour 1 2 6 3 3 4 1 4 2 12 6 8 6 1 59

Production of bread and biscuits 1 1

Production of sugar 1 1

Production of noodles, pho noodles and similar farinaceous products 1 1 2 11 3 2 1 21

Processing of coffee, tea and herbal tea 1 1 3 9 4 1 1 20

Production of spices, sauces, seasoning and other cooking products 1 2 2 2 1 8

Manufacture of other food products 4 1 1 3 9

Manufacture of prepared animal feeds 1 1 1 3

Total 5 3 4 10 1 13 9 13 27 11 7 25 12 29 34 14 3 220

* excludes water and ice manufacturing Source: Ministry of Industry and Commerce (2017)


SECTOR SKILLS STUDY

29

Activity ATT BOK BOL CHA HPN KHM LN LP ODX PHO SAR SVK SEKVTE Cap

VTE Prov

XGN XKH Total

Slaughtering and meat packaging (except for poultry) 2 1 1 1 6 5 3 22

Production and preservation of meat and poultry 1 1

Processing and preservation of fruit and vegetables 1 8 9

Manufacturing of canned fruit and vegetables 1 1 2

Manufacturing of fruit and vegetable juices 2 1 3

Manufacturing of other fruit and vegetables products 2 1 3


Production of vegetable oil, animal oil and fats 1 1


Processing of ice cream, sorbet, ice and other flavoured liquid 3 1 1 5 4 14

Processing of milled grain products (excludes rice and corn) 5 1 7 5 2 1 11 32

Production of flour and food processing 1 1 1 1 1 1 2 1 9

Rice/corn milling and production of rice-glutinous rice/corn flour 1 2 6 3 3 4 1 4 2 12 6 8 6 1 59

Production of bread and biscuits 1 1

Production of sugar 1 1

Production of noodles, pho noodles and similar farinaceous products 1 1 2 11 3 2 1 21

Processing of coffee, tea and herbal tea 1 1 3 9 4 1 1 20

Production of spices, sauces, seasoning and other cooking products 1 2 2 2 1 8

Manufacture of other food products 4 1 1 3 9

Manufacture of prepared animal feeds 1 1 1 3

Total 5 3 4 10 1 13 9 13 27 11 7 25 12 29 34 14 3 220


3.2 Schools and training

Limited training is carried out within food pro-cessing firms, according to key informants (see also results of the survey below). Formal training on food processing is also quite limited. A number of educational facilities provide some form of train-ing on food processing, but this mainly consists of courses on food processing at the home level (pres-ervation, conservation, storing) and cooking. No school or college was identified that provides skills for food-processing in medium or large firms, such as operation of machinery, planning and manage-ment of production or marketing.Worryingly, interviews with several key informants

in the education sector at the national and sub-na-tional level revealed that even in provinces where some food processing is being carried out, educa-tion authorities and staff working at different col-leges show limited to no understanding on food processing. Food processing in colleges and schools is understood as cooking classes or preparing stu-dents to work for restaurants. On the few occasions when school authorities understand the type of skills required in food processing companies, they admit that they do not have the knowledge or skills to teach students. As a consequence, students grad-uate with very limited skills and capacity to work in food processing firms. Firms are therefore forced to train staff in-house, mainly on the job.


30


Interestingly, some informants claimed that a num-ber of mainly male migrants to Thailand work in food processing firms. They learn and develop their skills while working in Thailand, but their knowl-edge is not utilized when they return to Lao PDR, as there are no firms in a position to hire them.

3.3 Economic performance and dynamics

The Government of Lao PDR does not produce specific reports on the food-processing sector nor share the full statistics or economic data on the sector to analyse the existing data. However, based on the interviews conducted for this study and the short value chain studies that complement this survey, a few trends can be inferred:

• Rice milling will continue to dominate the food-processing sector for years to come, given the preponderance of rice in agricultur-al production, the local and international de-mand for rice and the already existing capacity to mill rice. Furthermore, there is ample space for improvement, specifically in rice milling operations, through investments in machinery and skills. Other drivers for the growth of the sector will be any support coming from Gov-ernment in terms of improving the business environment, access to finance, and knowl-edge/skills.

• There are a number of sectors that have been growing and will likely continue to grow, which include sugar cane production and sugar processing (milling), cassava pro-duction and processing, maize production and drying, and coffee production and pro-cessing. These sectors are mainly driven by external demand which according to most informants will continue growing. However, businesses operating in these sectors also face a limited supply of human resources with skills (in particular for processing). Moreover,

they face the uncertainty of an unreliable reg-ulatory environment where rules and regula-tions can change at any time and affect their business prospects.

• The sector that seems most likely to benefit from growing internal demand is livestock production and meat processing. As income in the country increases, the population will be keen to consume more and better quality meat. However, the sub-sector faces import-ant challenges in terms of skills shortages and the lack of institutions providing training to potential workers, the lack of clear regulatory framework for food safety and the lack of en-forcement when it exists, the extremely limit-ed infrastructure, and the lack of Government support to develop the sub-sector.

• There are a number of sectors that are rel-atively smaller, but that have a high poten-tial for development: vegetable and fruit production and processing, production of rice noodles and other rice products, and tea cultivation and processing. The main drive for the development of these sub-sectors will be local demand which, as incomes increase, will mean that customers be able to buy high-er quality and higher priced products. Enter-prises in these sub-sectors are likely to remain small and localised, but as they develop they will be able to compete with imported foods.

4. CHARACTERISTICS OF THE AGRICULTURE AND FOOD-PROCESSING SECTORSIN SELECTED PROVINCES



32

4. CHARACTERISTICS OF THE AGRICULTURE AND FOOD-PROCESSING SECTORS IN SELECTED PROVINCES

This section summarises the main and most sig-nificant findings of the survey of commercial farms and food-processing firms in the six prov-inces in Lao PDR.

4.1 Geographical concentration

Table 5 shows the distribution of firms surveyed by province and by sub-sector (vegetable and fruit farms, animal farms and food processing firms).

The majority of surveyed firms, in particular food processing firms, were located in Vientiane Capital (94 in total), followed by Vientiane prov-ince (44 farms/firms).

A smaller number were surveyed in the four re-maining provinces of Khammuane (31), Xayabury (28), Savannakhet (27) and Oudomxay (26).

Figure 1 shows the number of firms surveyed by main activity. As expected, most firms surveyed were in the grain, flour and sugar products sub-sector (66 firms), largely consisting of rice milling firms, and firms in the “other food pro-cessing” sub-sector, which included firms pro-ducing ice, water, other food products, animal

feeds and cooking products. This was followed by the meat, poultry and fish sub-sector (34), the noodles sub-sector (10) and, to a much lesser ex-tent, the fruit and vegetable and coffee and tea sub-sectors, each representing five firms.

4.2 Size

Table 6 shows the number of firms surveyed by size. The majority of firms surveyed were mi-cro-enterprises of between 1-4 workers.

Sub-sector

Province

Vientiane Capital

Vientiane Province

KhammuaneSavanna-

khetOudomxay Xayabury

Vegetable and fruit farm 5 1 0 0 1 0

Animal farm 11 8 8 3 5 8

Food processing 78 35 23 24 20 20

Total 94 44 31 27 26 28

Table 5. Number of firms surveyed by province and sub-sector

Figure 1: Number of food processing firms surveyed by main activity

SECTOR SKILLS STUDY

33


A further 62 firms were classified as small and 33 were classified as medium-size enterprises. The smallest number of firms were large en-terprises – only 16 of the total firms surveyed. Among food processing firms, the large majority were micro-enterprises (107 firms) or small en-terprises (54 firms). Similarly, most animal farms surveyed were micro-enterprises. Among vegetable and fruit farms, however, the size of farms was either small or large, with a slightly larger number of farms classified as large (4 farms) than small (3 farms).

Among the surveyed firms, the average number of full-time paid production workers is six, while the number of unpaid/family production workers and

Sub-sectorSize

Micro Small Medium Large

Vegetable and fruit farm 3 0 0 4

Animal farm 29 8 4 2

Food processing 107 54 29 10

Total 139 62 33 16

Table 6. Number of firms surveyed by size

Type of employment

Sub sector

FarmsFruits and Vegetables processing

Grain, Flour and

Sugar products

Meat, Poultry,

Fish Noodles

Other food pro-

cessing

Coffee and Tea

Number of full-time paid production workers

7 15 2 7 4 8 11

Number of unpaid/family production workers

2 3 2 3 2 2 2

Number of part-time production workers

3 9 3 1 1 1 1

Table 7. Average number workers per category by sub-sector

part-time production workers is two, although this can vary substantially between firms. For example, large processing firms in cassava and sugar can have tens or even hundreds of part-time workers. Table 7 shows the average number of workers per category in each sub-sector. The fruit and vegetable sub-sector employs the highest number of workers across all three categories, with an average of 15 full-time paid production workers, three unpaid/family production workers, and nine part-time production workers. Overall, the lowest number of full-time production workers are em-ployed in the grain, flour and sugar sub-sectors – an average of only two workers.


34

4.3 Characteristics of owners

Table 8 reveals the main occupation of business owners before they started their current business. Many of the owners of farms and food processing firms – as many as 50 per cent of commercial farm owners – had another business prior to this one, indicating their interest in business and their en-trepreneurial attitude. The majority of grain, flour and sugar firm owners (44 per cent) were farmers in their previous occupation, followed closely by owners of other businesses. More than a quarter (26 per cent) of current owners of food processing firms were former government staff.

Table 9 shows the level of education of business owners of surveyed firms. Most business owners have a level of education between lower-sec-ondary and TVET, which suggests a low level of skills and formal education to manage and op-erate a business. Interestingly, 9 out of 50 com-mercial farm owners (almost 20 per cent) have a post-graduate education. This is much higher than any other sector. On the other hand, three farm


Occupation

Sub-sector


Grain, Flour and Sugar products

Meat, Poultry,

Fish Noodles

Other food processing

Coffee and Tea

Farmer 10 1 29 6 1 6 0

Trainer 0 0 1 1 0 4 0

Owner of other business

25 3 21 18 4 33 5

Worked for Government

11 1 7 2 0 20 0

Worked for family

0 0 2 1 1 2 0

Employed by other business

3 0 4 3 2 8 0

Unemployed 1 0 0 1 0 1 0

Studying 0 0 2 2 2 4 0

Total 50 5 66 34 10 78 5

Table 8. Previous occupation of business owner by subsector (number)

owners reported having no education at all, again higher than in any other sector.

For those business owners with a TVET educa-tion, Table 10 shows in which specific area they were trained. Only owners of farms with TVET education seem to have an education relevant to their current business, with the majority trained in agriculture (agronomy or veterinary). For other sub-sectors, many business owners with a TVET education seem to have had training unrelated to their business activity. For example, over a third of business owners of food processing firms and half of owners of grain, flour and sugar firms were

trained in social science, business and/or law.For most business owners with a university ed-ucation, their education is unrelated to the busi-ness they are currently managing. The exception is business owners of farms, where several reported to have studied an agriculture-related degree (see Table 11).

SECTOR SKILLS STUDY

35


Education

Sub-sector

Farms

Fruits and Vegeta-

bles pro-cessing

Grain, Flour and Sugar products

Meat, Poultry,

Fish Noodles


Coffee and Tea

No schooling 3 0 1 0 0 1 0

Some primary 1 0 5 6 0 0 0

Completed primary 2 0 15 4 0 8 1

Lower secondary 9 0 22 6 3 13 1

Upper secondary 11 1 11 6 3 15 1

TVET 9 1 9 7 2 27 0

Higher Education 6 1 3 5 1 11 2

Post-Graduate 9 1 0 0 0 2 0

Don't know 0 1 0 0 1 1 0

Total 50 5 66 34 10 78 5

Table 9. Level of education of business owners by subsector (number)

Area

Sub-sector

Farms

Fruits and Vegeta-

bles pro-cessing

Grain, Flour and

Sugar products

Meat, Poultry,

Fish

Noo-dles

Other food pro-

cessing

Coffee and Tea

Agriculture (Agronomy, Veterinary) 8 0 1 0 0 4 0

Health 0 0 0 0 0 2 0

Services (hospitality and tourism) 0 0 0 0 1 1 0

Education 1 1 1 0 1 5 0

Humanities and Arts (language, fine arts)

0 1 0 1 0 2 0

Science 1 0 0 1 0 1 0

Engineering (civil engineering, architec-ture, IT)

1 1 3 2 0 4 0

Social Science, Business and Law 2 0 5 3 1 11 0

Banking 1 0 0 0 0 0 0

Tailoring 0 0 0 1 0 0 0

Chef 0 0 0 1 0 0 0

Don’t know 1 0 0 0 0 1 0

Total 18 3 10 9 3 31 0

Table 10. In which specific area was the business owner trained*

* for those with TVET education.


36

4.4 Characteristics of the workforce

Table 12 shows the number of staff with different levels of education per type of firm. The data in-dicates that noodle factories, understandably, are the firms with the least educated staff with al-most a third of their workers (28.9 per cent) having no schooling or only some primary level schooling. The fruit and vegetable processing sector is the sector with the highest level of basic to mid-level education with 72 per cent of workers having low-er secondary education or higher. This is followed by the other sub-sector and the meat, poultry and fish processing sub-sector with almost 70 per cent of workers having at least a lower secondary ed-ucation. The sub-sector with the largest number of staff educated to a higher level are farms, with over 40 per cent of their workers having a TVET

education or higher and over 30 per cent of their workers having higher or post-graduate education.

Tables 13 to 15 show the total number of workers that firms have in a particular position, the average number of workers employed in each of those po-sitions and the average number of additional work-ers required in such positions for farms and food processing firms respectively. As the table shows, fruit and vegetable farms have 15 workers in the position of agricultural worker/labourer, 36 work-ers have the position of scientist (i.e. agronomist, engineers, food science technician), six people are employed as agricultural supervisors, only one person has the position of grader, sorter and pack-er and three workers in the seven surveyed farms have the position of equipment operator among the seven fruit and vegetable farms surveyed.

Area

Sub-sector


Grain, Flour and

Sugar products

Meat, Poultry,

Fish Noodles


Coffee and Tea

Agriculture (Agron-omy, Veterinary)

4 0 1 1 0 1 0

Health 0 0 0 0 0 1 0

Services (hospitality and tourism)

0 0 0 0 0 1 1

Education 0 0 0 0 0 1 0

Humanities and Arts

0 1 0 0 0 0 0

Science 0 0 0 1 0 1 0

Engineering and architecture

2 1 0 1 0 1 0

Social Science, Business and Law

1 0 2 1 1 6 1

Don’t know 3 0 5 2 0 9 0

Total 10 2 8 6 1 21 2

Table 11. Area of education for business owners with a university education by subsector (number)


SECTOR SKILLS STUDY

37

Education

Sub-sector

FarmsFruits and vegetables processing

Grains and flour

Meat, Poul-try and Fish

NoodlesCoffee and

teaOthers

No schooling 3.7% 0% 3.6% 3.5% 7.7% 2.7% 5.6%

Some primary 4.7% 9.1% 2.6% 5.8% 21.2% 4.5% 6.4%

Completed primary 22.7% 18.9% 28.3% 21.3% 21.2% 32.4% 18.5%

Lower secondary 13.8% 15.9% 31.9% 19.0% 19.2% 24.3% 30.0%

Upper secondary 10.5% 38.6% 16.1% 31.8% 28.8% 19.8% 28.1%

TVET 13.1% 13.6% 14.1% 12.8% 1.9% 8.1% 7.9%

Higher Education 25.2% 3.8% 3.3% 5.8% 0% 8.1% 3.2%

Post-graduate edu-cation

6.3% 0.0% 0% 0% 0% 0% 0.2%

Total 100% 100% 100% 100% 100% 100% 100%

Table 12. Level of education of workers per type of firm (percentage)


4.4.1 Fruits and Vegetable Farms

On average, fruit and vegetable farms have 2.5 agricultural worker/labourers, seven scientists, six supervisors, one grader, sorter and packer and three farm equipment operators. Furthermore, farms expressed that they require, on average, three more agricultural workers, four scientists (e.g. agronomist, engineer or food science tech-nician) and six agriculture supervisors and three fruit and vegetable graders, sorters and packers (although for the last two positions only one farm expressed the need for extra workers). Fruit and vegetable farms with farm equipment operators claimed that they do not need more operators of machinery, which suggests very little use of ma-chinery on existing farms.

Overall, surveyed livestock farms have 161 peo-ple working in the position of farm worker and labourer, although on average they have six peo-ple in this position (the number of workers in this position between farms varies a lot as their sizes vary considerably). Sixty-two (62) animal breeders work in surveyed livestock farms, with an average

of only three animal breeders per farm. Twen-ty-two (22) veterinarians work in the 36 surveyed farms, with an average of three people occupying that position, per farm. Among the surveyed live-stock farms there is only one equipment opera-tor, suggesting that any equipment is operated by farm works or labourers with limited skills.

Interviewed owners of livestock farms claimed that, on average, they need one more farm workers or labourers, one more animal breeder, one vet-erinarian and one equipment operator, although larger farms will require more workers in each po-sition. Overall, this suggests that farms require a limited number of workers in each position and most of them will be lower skilled workers.


38


4.4.2 Food Processing Firms

In food processing firms, fruit and vegetable-pro-cessing firms have a total of 54 line workers, three food preparers, 15 food scientists and six opera-tors of other equipment. Grain and flour millers have a total of 160 line workers, 35 heavy machin-ery operators, 7 graders, sorters and packagers, two food scientists and four equipment operators. Surveyed meat, poultry and fish processing firms have a total of 171 line workers, nine cutter and driers, three food preparers, four heavy machine operators, seven graders, sorters and packers, 12

food scientists and four operators of other ma-chinery (see Table 14).

Rice noodle factories have a total of 41 line workers, four cutters and driers, five food preparers, one heavy machine operator, two graders, sorters and packagers and one operator of other equipment. Coffee and tea processing firms have 30 line workers, four cutters and driers, one food preparer and three heavy machine op-erators. Other food processing firms have 493 line work-ers, six food preparers, 38 heavy machine operators, nine graders, sorters and packers, 22 food scientists and 20 operators of other machinery (see Table 15).

Position

Current Position Required Position

Total number of workers in the

position

Average number of workers in this posi-

tion in each firm

Total number of workers required

in the position

Average number extra workers

required in this position

Fruit and vegetable farms

Agriculture worker/labourer 15 2.5 15 3

Scientist (agronomist, engi-neer, food science techni-cian)

36 7* 22 4

Agriculture supervisor 6 6 6 6

Fruit and vegetable grader, sorter, packer

1 1 3 3

Other farm equipment operator (freezer, lab equip-ment)

3 3 0 0

Livestock farms

Farm worker and labourer 161 6 26 1

Animal breeder (breeding, feeding, etc.)

62 3 19 1

Veterinary 22 3 3 0

Equipment operator and mechanic (production and transportation equipment)

1 1 1 1

Table 13. Total and average number of workers currently employed and required in each position in the surveyed farms

*average among 5 firms with an outlier

SECTOR SKILLS STUDY

39


Fruits and vegetables processing firms claim to re-quire, on average, only four line workers, pointing to their limited expectations of growth and de-velopment. Grains and flour millers require three more line workers, two heavy machine operators, one grader, sorter and/or packer, four food sci-entists and two operators of other machinery, on average. Meat, poultry and fish processing firms need on average, two more line workers, four food scientists and one operator of other machinery (see Table 14).

Rice noodle manufacturing firms need one ex-tra line worker, two more cutters and driers, one heavy machine operator, and one operator of oth-

Position

Fruits and Vegetables process-ing

Grains and flour milling Meat, poultry and fish

Total number of work-ers in the position

Average number of work-ers in this position in each

firm

Average number

extra workers required

in this position


Average number of

workers in this

position in each firm

Average number


in this position

Total num-ber of

workers in the

position

Average num-ber of

workers in this

position in each

firm

Average number


in this position

Line worker 54 18* 4 160 3 3 171 7 2

Cutter and drier 0 - - 0 - - 9 2 0

Food preparer 3 3 0 0 - - 3 2 0

Heavy machin-ery operator

0 - - 35 2 1 4 2 0

Grader, sorter and packager

0 - - 7 2 1 7 2 0

Scientist (food science techni-cian)

15 5 0 2 2 4 12 3 4

Other equip-ment (freezer, lab equipment)

6 6 0 4 1 2 4 2 1

Table 14. Total number of workers in the position, and average number of workers currently employed and required in each position in food processing firms (fruits and vegetables, grains and flour milling, and meat, poultry and fish)

er equipment, on average. Coffee and tea process-ing firms, need three more line workers, seven cut-ters and driers, one food preparer and two heavy machine operators, on average. Finally, other food processing firms need three line workers, two food prepares, three heavy machine operators, one grader, sorter and packer, one food scientist, and one operator of other equipment (see Table 15). Overall, this indicates that the average needs of extra workforce for food processing firms is limited, and suggests that their expectations of growth are low.


40


Position

Noodles Coffee and Tea Others


Average number of work-ers in this position in each firm

Average number extra workers required in this position


Average num-ber of workers in this position in each firm

Average number extra workers required in this position


Average num-ber of workers in this position in each firm

Average number ex-tra workers required in this position

Line worker 41 5 1 30 10* 3 493 7 3

Cutter and drier

4 4 2 4 4 7 0 - -

Food preparer 5 1 0 1 1 1 6 1 2

Heavy machin-ery operator

1 1 1 3 2 2 38 3 3


2 2 0 0 - - 9 3 1


0 - - 0 - - 22 3 1

Other equip-ment (freezer, lab equipment)

1 1 0 0 - - 20 3 1

Table 15. Average number of workers currently employed and required in each position in food processing firms (noodles, coffee and tea, others)


SECTOR SKILLS STUDY

41


4.5 Required skills per position

Table 16 shows the required level of education for each of the positions in a farm, according to firm owners and managers. As can be expected, firm owners and managers expect agronomists to have a higher-level education, while their ed-ucational expectations for agricultural workers are lower. In livestock farms, owners and man-agers have a more widespread expectation of the required level of education of farm workers and of animal breeders, while most agree that veterinar-ians and operators of equipment require higher levels of education.

PositionNo

SchoolPrimary

Lower Second-

arySecondary TVET

Bachelor Degree

Post Grad-uate

Fruit and vegetable farms

Agriculture worker/labourer

33.3% 50.0% 16.7%

Scientist (agronomist, engineer, food science technician)

20.0% 40.0% 40.0%

Agriculture supervisor 100%

Fruit and vegetable grader, sorter, packer

100%

Other farm equipment (freezer, lab equip-ment)

100%

Livestock farms

Farm worker and labourer

25.9% 14.8% 14.8% 25.9% 14.8% 3.7%

Animal breeder (breeding, feeding, etc.)

13.6% 13.6% 4.5% 22.7% 36.4% 9.1%

Veterinary 28.6% 57.1% 14.3%

Equipment operator and mechanic (pro-duction and transpor-tation equipment)

100%

Table 16. The required level of education for each position in farms (in percentage)



42

In food processing firms, owners/managers have widely different opinions about the required level of education for different positions within firms, as illustrated in Tables 17, 18 and 19. For in-stance, in grain and flour milling firms, 18 per cent of respondents believe that line workers require either no formal education or primary school edu-cation, while 24.5 per cent of respondents believe that the position requires at least secondary edu-cation and a further 35 per cent think it requires secondary education. Only 4 per cent believe the position requires a TVET degree. Beliefs about the required level of education for a heavy machine operator are equally spread.

In meat, poultry and fish processing firms, opin-ions about required skills for each position are more synchronised between owners/managers. In ‘other’ firms, however, the opinions are more widely dispersed, which is understandable given that this category includes firms with a number of different activities.


Position

Fruits and Vegetables processing Grains and flour milling

Line work-

er

Lower Sec-

ondaryTVET

Bach-elor

Degree

No School

Primary

Lower Sec-ond-ary

Sec-ond-ary

TVETBach-elor

Degree

Line worker 33.3% 66.7% 18.4% 18.4% 24.5% 34.7% 4.1%

Cutter and drier

Food preparer

Heavy machinery operator

40.9% 9.1% 4.5% 22.7% 18.2% 4.5%


50.0% 25.0% 25.0%

Other equipment 100.0% 66.7% 33.3%

Scientist (food sci-ence technician)

66.7% 33.3%

Table 17. What is the level education required for each of the positions in fruit and vegetable and grain and flour milling firms (percentage of respondents)?

SECTOR SKILLS STUDY

43

Position

Meat, poultry and fish Noodles

No School

Prima-ry

Lower Sec-

ondary

Sec-ondary

TVET

Bach-elor De-gree

No School

Prima-ry

Lower Sec-

ondary

Second-ary

Line worker 32.0% 32.0% 4.0% 32.0% 22.2% 33.3% 33.3% 11.1%

Cutter and drier 60.0% 40.0%

Food preparer 50.0% 50.0% 60.0% 40.0%


50.0% 50.0%


66.7% 33.3%

Other equipment 50.0% 50.0%


50.0% 50.0%

Table 18. What is the level education required for each of the positions in meat, poultry and fish, and noodle firms (percentage of respondents)?

Position

Coffee and Tea Others

No School

Prima-ry

Lower Sec-

ondary

Sec-ondary

No School

PrimaryLower

Second-ary

Second-ary

TVET

Line worker 33.3% 33.3% 33.3% 25.4% 26.8% 23.9% 21.1% 2.8%

Cutter and drier 50.0% 50.0%

Food preparer 20.0% 20.0% 40.0% 20.0%


7.1% 14.3% 14.3% 64.3%


33.3% 33.3% 33.3%

Other equipment 50.0% 50.0%

Scientist (food sci-ence technician)

12.5% 12.5% 37.5% 37.5%

Table 19. What is the level education required for each of the positions in coffee and tea and ‘other’ firms (per-centage of



44

4.6 Importance of soft and hard skills

Most firms find soft skills to be important for the operation of the business. In all cases, over 90 per cent of respondents claimed that soft skills are necessary for the good functioning of the firm.

Equally, most firms find hard skills to be a neces-sary for the proper functioning of the business, as shown in Figure 3.

Most owners of vegetable and fruit farms find most skills listed in Figure 4 as important, with a few exceptions, namely irrigation and operating of other equipment. Similarly, only half of respon-dents found that operating and repairing agri-cultural machinery was necessary for the good functioning of the farms, suggesting the low level of mechanisation and technological use in farms.

Most owners/manager of livestock farms find the skills listed below on Figure 5 as necessary for the business. Only for culling and deboning of ani-mals, which is a very specific skill less than half of respondents found it was a necessary skill.


Figure 3. Perceived importance of hard skills for busi-ness (all firms)

SECTOR SKILLS STUDY

45


Figure 4. Perceived importance of specific skills for vegetable and fruit farms


46

For skills in the food processing sub-sectors, re-spondents have different priorities and views, which is understandable given the variety of firms aggregated in this category (see Figure 6). While most respondents thought that more generic skills such as hygiene and sanitation awareness and understanding and adhering to quality standards were necessary for the business, fewer respondents thought that more specific skills such as animal slaughter and culling was a necessary skill.


Figure 5. Perceived importance of specific skills for livestock farms

SECTOR SKILLS STUDY

47


Figure 6. Perceived importance of specific skills for food-processing firms


48

Table 20. Perceived level of skills in fruit and vegetable farms (percentage)

Skills

Skills Rating

We have poor skills in that area, our staff achieve only 25% of

what we need

We have medium skills in that area, our staff achieve

only 50% of what we need

We have good skills in that area, our staff achieve 75% of what

we need

We have very good skills in that area, our staff achieve

more than 75% of what we need

Crop-growing and cultivation

18.2% 27.3% 9.1% 45.5%

Pesticide handling 25.0% 0.0% 12.5% 62.5%

Irrigation 20.0% 80.0% 0.0% 0.0%

Harvesting 11.1% 11.1% 55.6% 22.2%

Grading, sorting and packing

11.1% 22.2% 44.4% 22.2%

Operating machin-ery for agriculture

33.3% 16.7% 50.0% 0.0%

Repairing agricultur-al machinery

33.3% 16.7% 16.7% 33.3%

Operating other equipment (freezer, cutter, dryers)

100.0% 0.0% 0.0 % 0.0%


4.7 Perceived existing skills per sector

Table 20 shows the percentage of respondents that claimed to have poor, medium, good or very good skills in each of the most important required skills for their firms. For most of the skills, owners and managers of fruit and vegetable farms believe they have good or very good skills. For example, 54. 5 per cent believe they have good or very good skills in crop-growing and cultivation; 75 per cent think that they have good skills in pesticide handling; 78 per cent believe their staff have good or very good skills in harvesting and almost 70 per cent of interview-ees believe that they have good or very good skills in grading, sorting and packing. Half of respondents claim that their workers have poor or medium skills in operating and repairing agricultural machinery. This confirms how firms struggle to find and develop human resources with higher level skills.

In livestock farms, more than half of respon-dents claim to have none, poor or medium skills in operation of machinery (59 per cent) and in operation of other machinery (64 per cent), as shown in Table 21. Sixty (60) per cent of livestock farms owners/managers also believe that they have none, poor or medium skills in veterinary skills, and just over half believe the same about grading, sorting and packing skills. A high 70 per cent of businesses find that they have none, poor or medium skills in animal slaughtering and just over half opine the same about culling and deboning, pointing to a clear area of opportunity. In all other areas, interviewees believe that their firms have good or very good skills. This suggests that owners and managers of livestock farms per-ceive that their staff are under skilled in particular skills and points to the need for better qualified workers in the livestock sector.

SECTOR SKILLS STUDY

49


Skills

Skills Rating

We need the skill, but we don’t have

the skill

We have poor skills in that

area, our staff achieve only 25% of what

we need

We have medi-um skills in that area, our staff achieve only 50% of what

we need

We have good skills

in that area, our staff

achieve 75% of what we

need

We have very good

skills in that area, our staff achieve

more than 75% of

what we need

Operating machinery 8.8% 14.7% 35.3% 29.4% 11.8%

Repairing machinery 9.4% 18.8% 21.9% 37.5% 12.5%

Animal husbandry 1.8% 10.9% 25.5% 45.5% 16.4%

Animal feeding 0.0% 5.3% 14.0% 57.9% 22.8%

Veterinary 8.0% 12.0% 40.0% 26.0% 14.0%

Grading, sorting and packing 9.4% 9.4% 37.5% 37.5% 6.3%

Animal transportation 2.3% 4.7% 20.9% 65.1% 7.0%

Animal slaughter 0.0% 41.2% 29.4% 17.6% 11.8%

Culling and deboning of animals 0.0% 19.2% 34.6% 30.8% 15.4%

Hygiene and sanitation aware-ness

0.0% 7.3% 25.5% 49.1% 18.2%

Other machinery (freezer, tractor)

4.5% 18.2% 40.9% 31.8% 4.5%

Table 21. Perceived level of skills in livestock farms (percentage)


50

Skills

Skills Rating

We need the skill, but we

don’t have the skill

We have poor skills in that area, our staff achieve

only 25% of what we

need

We have medium

skills in that area, our

staff achieve only 50%

of what we need

We have good skills in that area, our staff achieve 75% of what

we need


more than 75% of what we

need

Handling of perishable commod-ities

1.1% 2.1% 40.4% 46.8% 9.6%

Operating food processing ma-chinery

1.3% 7.2% 30.9% 49.3% 11.2%

Food preparation 3.5% 3.5% 30.2% 51.2% 11.6%

Maintenance and repairing of food processing machinery

8.9% 15.8% 38.4% 27.4% 9.6%

Grading, sorting and packing - 3.4% 32.9% 49.7% 14.1%

Storage management 0.8% 1.7% 28.0% 60.2% 9.3%

De-husking, drying, de-browning, polishing and sorting rice

2.2% 2.2% 23.3% 56.7% 15.6%

Maintaining and using chillers and freezers

1.4% 11.4% 40.0% 38.6% 8.6%

Understanding and adhering to quality standards

0.5% 4.8% 28.5% 53.6% 12.6%

Supervision of production 1.8% 7.3% 37.6% 44.0% 9.2%

Resource allocation 0.7% 7.7% 38.0% 44.4% 9.2%

Microbiology 20.4% 9.3% 20.4% 31.5% 18.5%

Hygiene and sanitation awareness 0.4% 3.8% 22.9% 59.2% 13.8%

Animal slaughter 10.0% 15.0% 10.0% 20.0% 45.0%

Culling and deboning of animals 9.5% - 28.6% 42.9% 19.0%

Table 22. Perceived level of skills in food-processing firms


In food-processing firms, owners and managers tend to be more confident that their firms have the required skills (see Table 22). For instance, 56 per cent of respondents think that their firms have good or very good skills in handling of perishable commodities and 60 per cent of respondents be-lieve their firms have good or very good skills in operating food processing machinery. This is sim-ilar for most of the skills listed. The only two skills

where less than half of respondents thought their firms do not have good or very good skills are in maintenance and repairing of food processing machinery and in use and maintenance of chillers and freezers. This suggests that the main area of required improvement in this sub-sector is in the maintenance and repair of machinery and equip-ment.

SECTOR SKILLS STUDY

51

Most owners/managers of farms seem to have a positive view of their workers’ soft skills. For most of the soft skills listed in Table 23, more than half of respondents claimed that they believe that their workers had good or very skills. The only exceptions are problem solving skills where only 44.3 per cent of respondents believe they have good or very good skills. This points to the need to strengthen theory and critical thinking, as well as the use of technology.

Skills

Skills Rating

We need the skill, but we

don’t have the skill

We have poor skills in that

area, our staff achieve only

25% of what we need

We have medi-um skills in that area, our staff achieve only

50% of what we need

We have good skill in that area, our staff achieve 75% of what we

need


more than 75% of what we need

Ability to lead and manage team(s)

0.0% 18.3% 29.6% 46.5% 5.6%

Ability to work in teams

0.0% 7.2% 24.6% 50.7% 17.4%

Service oriented 2.9% 2.9% 29.4% 45.6% 19.1%

Problem solving skills

2.9% 10.0% 42.9% 32.9% 11.4%

Communication skills

1.5% 8.8% 38.2% 38.2% 13.2%

Decision making skills and ability to work autono-mously

0.0% 10.3% 30.9% 47.1% 11.8%

Table 23. Perceived level of soft skill in fruit and vegetables and livestock farms (percentage)



52

Skills

Skills Rating

We need the skill, but we don’t have the skill

We have poor skills in that area, our staff achieve only 25% of what we need

We have medium skills in that area, our staff achieve only 50% of what we need

We have good skill in that area, our staff achieve 75% of what we need

We have very good skills in that area, our staff achieve more than 75% of what we need

Knowledge of work procedure

1.4% 1.4% 25.7% 52.9% 18.6%

Knowledge of using tools

1.5% 2.9% 32.4% 45.6% 17.6%

Technology profi-ciency

5.8% 25.0% 25.0% 34.6% 9.6%

Factual knowledge 2.9% 17.6% 35.3% 35.3% 8.8%

Theoretical knowledge

4.7% 31.3% 23.4% 32.8% 7.8%

Work health and safety knowledge

0.0% 6.1% 30.3% 51.5% 12.1%

Table 24. Perceived level of hard skills at fruit and vegetables and livestock farms (percentage)

Similarly, most owners/managers perceive the hard skills of workers at fruit and vegetable farms as good or very good. The only exception is technology proficiency where only 44.2 per cent of respondents believe their staff have good or very good skills, and factual and theoretical knowledge where less than half of respondents find that their staff have good or very good skills, suggesting that staff do not arrive to their jobs with sufficient knowledge.


SECTOR SKILLS STUDY

53

Skills

Skills Rating






Ability to lead and manage team(s)

2.4% 11.6% 38.2% 40.6% 7.2%

Ability to work in teams

1.2% 3.9% 33.1% 51.6% 10.2%

Service oriented 0.8% 2.8% 32.9% 50.6% 12.9%

Problem solving skills

2.7% 9.1% 45.1% 36.4% 6.8%

Communication skills

1.9% 3.8% 43.5% 42.3% 8.5%

Decision making skills and ability to work autono-mously

3.1% 9.3% 34.7% 44.8% 8.1%

Table 25. Perceived level of soft skills at food-processing firms (percentage)

At food processing firms, owners/manager also tend to have an optimistic view of the soft skills of their workers, with the only exception being that only 43.2 per cent see the problem-solving skills of their workers as good or very good (see Table 25).

Regarding hard skills, only 32.3 per cent of inter-viewed owners/managers think that their work-ers have good or very good skills in work health and safety standards, only 44 per cent find their theoretical knowledge as good or very good and just under half of respondents (46.7 per cent) see the factual knowledge of their workers as good or very good. For other skills, most owners/managers find that their staff have good or very good skills.



54

Skills

Skills Rating






Knowledge of work procedure

0.4% 4.6% 25.8% 55.8% 13.5%

Knowledge of using tools

1.6% 4.8% 32.5% 52.8% 8.3%

Technology profi-ciency

7.1% 16.9% 29.3% 40.0% 6.7%

Factual knowledge 2.9% 12.4% 40.7% 39.0% 5.0%

Theoretical knowledge

4.0% 23.5% 40.3% 26.5% 5.8%

Work health and safety knowledge

0.6% 4.5% 32.4% 50.6% 11.9%

Table 26. Perceived level of hard skills at food-processing firms (percentage)

Figure 7. Do you think people in these areas need more skills?

Regarding office staff, both farms and food pro-cessing firms tend to think that their staff do not need more skills than they already have, as shown in Figure 7. For example, the vast majority of own-ers and managers in farms and food processing firms do not believe their finance and accounting staff need more skills – 74 per cent and 87.5 per cent, respectively. The area most frequently iden-tified as requiring more skills among both farms and food processing firms was for marketing, sales and customer service staff (40 per cent).


SECTOR SKILLS STUDY

55

4.8 Required skills of owners

Business owners claim to require a number of skills as shown in Figure 8. The skills that most business owners reported to need are marketing and sales skills (83 per cent), followed by produc-tion management skills (64 per cent) and skills in developing business plans (55 per cent). Other skills required by owners include financial man-agement and technical management skills. Only a small number of business owners (5.2 per cent) reported that they did not require any skills.

Figure 8. What skills do you require as an owner of the business?

Note: answers will add up to more than 100 per cent as respondents were able to choose multiple options.

4.9 Training for admin staff

Most firms do not provide any training for their office staff, including on-the-job training, gain-ing information from other people or the Inter-net and short-term training, as shown in Figure 9. For example, only 16 per cent and 8 per cent of staff in finance and accounting have received training by the firms in the last 12 months. How-

ever, among marketing, sales and customer ser-vice staff, the percentage who received training in the past year was higher – 66 per cent working in farms and almost 50 per cent working in food processing firms.



56

Figure 9. Did you provide training* to staff in any of following positions in the last 12 months**?

* Including on-the-job training, gaining information from other people or the Internet and short-term training.

**Topics include managing food inventory and preservation, planting organic vegetables, hygiene in production, disease pre-

vention, sales techniques, interpersonal skills, customer service, understanding job responsibility, marketing, using accounting

program, payment and budget planning, using T Accounts, managing budget, bookkeeping, marketing plan, company policy,

time management, HR management and management skills.

Number of participants Percentage (cumulative)

1-5 77.6

1-10 87.8

1-20 93.9

1-40 100.0

Table 27. Number of participants in trainings

Furthermore, when training was provided to staff, it was only for a few employees, as shown in Table 27. Over three quarters (77.5 per cent) of trainings provided by firms had a maximum of five people. Almost 90 per cent had a maximum of 10 people, and 94 per cent had a maximum of 20 people.

Over half of all trainings provided were done internally within the firm (on-the-job training, learning from friends and family, from the Inter-net or from a supervisor), as shown in Figure 10. About one quarter of trainings were conducted by a national trainer and almost 20 per cent of train-ings were provided by a Government department/official. Less than 10 per cent of trainings were


provided by an international trainer. This shows how firms try to minimise the cost of trainings. In effect, only 11.6 per cent of firms paid for train-ings (Figure 11).

SECTOR SKILLS STUDY

57

Figure 10. What type of training did you provide? (for admin staff)

Figure 11. Percentage of trainings that were paid for admin staff



58

4.10 Training for production workers

Production workers were also trained in a wide range of topics, including veterinary and animal husbandry, machine maintenance and control, animal disease control, slaughtering and cutting, hygiene in production, packaging and roasting coffee, grading meat and rice varieties, breeding animals, understanding production processes (e.g. rice milling, noodle making, baking), understand-ing job responsibility, customer service, company policy, sales technique, customer service, securi-ty at work, time management, and management skills.

Similar to training for office staff, the number of participants in trainings for workers was also small, as almost all trainings (87.5 per cent of total trainings) had less than ten participants.

Number of participants Percentage (cumulative)

1-5 68.9

1-10 87.5

1-20 97.8

1-52 100.0

Table 28. Number of participants per training.

Most trainings (78 per cent) were provided in-house – on-the-job training, learning from friends and family, learning from the Internet or from a supervisor. Just over 10 per cent (12.1 per cent) of trainings were provided by a nation-al trainer, while 7.6 per cent were provided by Government. Only 6.1 per cent of trainings were provided by an international trainer and only 0.8 per cent of trainings were provided by industry associations such as the Lao National Chamber of Commerce and Industry (LNCCI) and other asso-ciations.

This again confirms that firms try to minimise costs, but also that the supply of relevant train-ings from local suppliers (national trainers, Gov-ernment or industry associations) is minimal. Key informant interviews suggested that the trainings offered in the country are insufficient and not adequately tailored to the industry’s needs. It is noteworthy that none of the respondents provid-ed trainings through a technical college or school, again suggesting that trainings supplied through this source are not addressing the industry’s needs. Only 1.5 per cent of firms reported paying for their trainings, as shown in Figure 13.


Figure 12. What type of training did you provide? (for production workers)

SECTOR SKILLS STUDY

59


Figure 13. Percentage of trainings that were paid forproduction workers

4.11 Recruitment

Most firms (77 per cent) reported that they can recruit workers easily (see Figure 14). Only 7.6 per cent of firms claimed that there are not enough

Figure 14. How difficult it is to recruit workers for positions in production area?

Figure 15. How do you normally recruit production workers?

Note: answers will add up to more than 100 per cent as re-spondents were able to choose multiple options.

applicants for the job, while 9.2 per cent report that there are many applicants but they are not qualified.


60

Almost 90 per cent of new workers are found through family or friends and through employee referrals. Only 9.8 per cent of production workers are recruited through advertising in various media channels and only 1 per cent of production work-ers are recruited through recruitment agencies.

Of the firms that reported facing challenges in recruitment in terms of quantity and quality of applicants, a large proportion find that those who apply do not have the skills and experience to carry out the job (26 per cent), or that appli-cants who applied cannot perform (17 per cent) (see Figure 16). A smaller proportion find that ap-plicants cannot work full time because they are students (14 per cent).

Firms report that they are able to recruit new production workers quickly (see Figure 17). Over two thirds of firms (66.7 per cent) can find a new production worker in less than a week and over 90

per cent of firms can find a new worker in a max-imum of three weeks. Only 1.7 per cent of firms reported that it takes more than two months to recruit a new production worker.

Figure 17. Average time required to recruit a produc-tion worker


Those who applied cannot perform

17% Low wage and no one wants to do it

10%

Applicants don't have experience

26%

Applicants are dishonest

12%

Business is unstable and people don't

want to apply 2%

Applicants are students (but we

need full time staff) 14%

Applicants are in other province

2%

Applicants cannot work at night time

10%

No one applied for the job

7%

Reasons for not able to find suitable applicants

Less than a week,

66.70%

Between 2 to 3 weeks, 25.60%

Between 1 to 2 months,

6%

More than 2 months, 1.70%

Average time required to recruit a production worker

Figure 16. Reasons for not finding people for open positions

SECTOR SKILLS STUDY

61


Most owners and/or managers interviewed (al-most 60 per cent) maintain that in takes less than a week to train a new person in a production job in order to get them to the right skill level. Over 80 per cent believe that it takes a maximum of three weeks to get someone to the right skill lev-el (see Figure 18). Around 19.2 per cent claim it takes more than one month to adequately train a new person in production. This indicates that the required skills for most positions are low, as it is fairly easy to get a person to the right skill level.

Of the few firms that were able to estimate the cost of training a new person in order to get them to the right skill level, more than half estimated that it costs a maximum of LAK 750,000, which is a relatively low sum (see Figure 19). Ths confirms that firms aim to minimise costs of training new results.

Figure 18. How long does it take to train a new person (in production) to get them to the right skill level?

Average time required to train a production worker


62


4.12 Perceptions about training

Figure 19. How much does it cost the company to train a new person to get them to the right skill level? (in LAK)*

*(only 39 of 250 firms were able to estimate cost)

How much does it cost the company to train a new person to get them to the right skill level? (In LAK)*

Most firm owners/managers think that training is essential for the operation of the business, as seen in Figure 20. Only a small percentage of respondents disagreed with this idea and none strongly disagreed.

Furthermore, over three quarters of respondents dis-agreed or strongly disagreed with the statement “Train-ing is a waste of money” (see Figure 21). This shows that despite not spending much money on providing train-ing to their workers, owners/managers still believe that training can be worth an investment.

SECTOR SKILLS STUDY

63


Figure 20. Percentage of respondents that agreed with the statement “Training is essential for the operation of my business”

Figure 21. Percentage of respondents that agreed or disagreed with the statement “Training is a waste of money”

Figure 22. Percentage of respondents that agreed or dis-agreed with the statement “Educational institutions have already done the training, no need for my business to invest in more training”

Figure 23. “I want to provide training to my staff, but there are no institutions that provide the training required”

Almost half of respondents think that educational institutions have not educated/trained students suf-ficiently/adequately for the jobs in the industry (See Figure 22). This is a confirmation of what key informant interviews and other studies have found, regarding the clear disconnect between the curricula, business needs and quality of education. Owners of firms in diverse sec-tors continuously express their frustration at the quality of education provided by educational institutions1.

1 See for instance, World Bank (2016), “Doing Business 2017: Equal for All” and world Bank (2012) STEP Employer Survey

According Figure 23, about 40 per cent of respondents claimed that they would like to provide training to their staff, but that there are no institutions that current-ly provide the type of training that they require. This confirms what was expressed by different stakeholders during key informant interviews and when visiting tech-nical colleges and schools, as was mentioned above re-garding the mismatch between what is being taught and what the industry needs.


64

4.13 Dual training program

Most firms expressed an interest in participat-ing in a dual training programme with a TVET school. Of those who would be willing to partic-ipate most said that they would also be willing to provide some support to students. A 73.3 per cent of respondents said that they would provide a sti-pend, a 59.2 per cent said that they would be able to provide food and a 57.5 per cent would offer accommodation. Only 1.7 per cent would provide money for transportation (i.e. bus fares).

Yes No

Would you be interested in participating in a dual-training programme provided by a TVET school? 54.8% 45.2%

Would you be able to provide some support to the students on the training? 87.6% 12.4%

Table 29. Percentage of firms that would participate in dual-training programme and provide support

Output Turnover Profit

Increased 47.7% 14.9% 45.5%

Remained the same

26.8% 76.6% 21.7%

Decreased 24.3% 6.4% 30.2%

Do not know 1.3% 2.1% 2.6%

Total 100.0% 100.0% 100.0%

Table 30. How did your business change in 2016 from the previous year (2015)?


4.14 Past and expected growth

Almost half of firms claimed that their output and profit increased in 2016 in comparison to 2015, as is shown in Table 30. However, over three quar-ters of firms said that their turnover remained the

Figure 24. Did you make any investment in 2016?

same. Furthermore, only 32.8 per cent of firms claimed to have done an investment in 2016.

Of the food processing firms that made an in-vestment in 2016, most of them made an invest-ment in machinery (81.4 per cent) and just over 30 per cent made an investment in building(s). Among farms, most (81 per cent) made an invest-ment in buildings, and under a quarter (23.8 per cent) made an investment in machinery and office equipment (23.8 per cent). Figure 25 shows the full list of investments made by firms.

SECTOR SKILLS STUDY

65


Figure 25. Investment made by firms in 2016


Around 40 per cent of firms expect to increase their output and profit this year (2017) in com-parison to last year (2016). However, most firms expect that their output and profit will remain the same or decrease this year in comparison to last. Almost 80 per cent of firms believe their turnover will remain the same this year.

Table 31. How do you expect your business will perform this year (2017) in comparison to last year (2016)?


Increase 45.6 31.6 42.0

Remain the same 23.2 55.2 18.4

Decrease 10.0 3.6 12.0

Do not know 21.2 9.6 27.6

Total 100.0 100.0 100.0


Increase 40.4 11.2 37.2

Remain the same 30.8 78.8 27.6

Decrease 26.4 7.2 32.4

Do not know 2.4 2.8 2.8

Total 100.0 100.0 100.0

Table 32. How do you expect your business will per-form next year (2018) in comparison to this year (2017)?

Over 40 per cent of firms expect to increase their output and profit in 2018, while more than half of firms think their turnover will remain the same, as Table 32 shows.


66

Despite the optimistic view on output and prof-its, almost 70 per cent of firms are not planning to recruit more staff in the next 12 months, which suggests that they expect productivity to increase or their unused capacity to reduce.

Of those firms that plan to recruit workers in the next 23 months, 72 per cent plan to recruit be-tween 1 and 3 workers. Over 83 per cent of firms plan to recruit a maximum of 5 workers and 95 per cent will recruit a maximum of 10 workers. This shows that while some firms are planning to grow, their growth in terms of workers will be modest.

Figure 27. Are workers being hired for existing or new positions?

Figure 26. Firms planning to recruit more staff in the next 12 months


No. of workers Percentage (cumulative)

1-3 71.8

1-5 83.3

1-10 94.9

1-20 100.0

Table 33. Number of workers that firms are planning to recruit

The main problems for their firms to operate are the lack of credit, high competition from other businesses, the poor quality of supplies and the lack of market information. The lack of skills of human resources seems to be a bigger problem for farms than for food processing firms, but that could be because most food processing firms car-ry out very basic operations. These responses are similar to those provided by firms for the World Bank Enterprise Survey 2016.

As Figure 27 indicates, most workers hired by firms will be hired for new positions.

SECTOR SKILLS STUDY

67


Total Farms Food processing

Capital/credit 18.0% 25.6% 16.0%

Competition with other businesses

18.9% 17.3% 19.3%

Quality of supplies 11.0% 8.3% 11.7%

Lack of skills of human resources

6.5% 12.8% 4.9%

Lack of human resources 2.2% 3.0% 1.9%

High labour costs 3.9% 1.5% 4.5%

Lack of market informa-tion

10.4% 11.3% 10.1%

High taxes and/or duties 6.7% 2.3% 7.8%

Other fees or unofficial payments

6.8% 6.8% 6.8%

Poor infrastructure 0.6% 0.0% 0.8%

Customs/trade regula-tions

3.4% 2.3% 3.7%

Expensive raw materials and high cost utility bills

1.1% 0.0% 1.4%

Customer damaged equipment

0.5% 0.0% 0.6%

Don't have market for the product

0.3% 0.0% 0.4%

Lack of advanced machin-ery

0.5% 0.0% 0.6%

Customers do not pay for a long time

0.3% 0.0% 0.4%

Lack of suppliers 0.2% 0.0% 0.2%

Illegal imports 0.9% 0.8% 1.0%

Selling seasons fluctuate 1.9% 3.8% 1.4%

Crowded production space

0.6% 0.0% 0.8%

Table 34. What are your main problems to operate?


5. RECOMMENDATIONS FOR SKILLS DEVELOPMENTPRIORITIES



70

5. RECOMMENDATIONS FOR SKILLS DEVELOPMENT PRIORITIES

This study looked at the agriculture and food-pro-cessing sectors to identify the sub-sectors that have the highest potential for growing in the short- and middle-term. The study also explored what are and will be the skills needs of these sub-sectors. To do so, the research team conduct-ed a review of literature, conducted key informant interviews and a survey of 50 agricultural farms and 200 food-processing firms.

The study identified a small number of sub-sec-tors that are likely to grow in the short- and middle-term. This include fruit and vegetable production and processing, livestock production and meat processing firms, mills (of rice, maize and cassava), production and processing of cof-fee and tea. Overall:• Rice milling will continue to dominate the

food-processing sector for years to come, given the preponderance of rice in agricultur-al production, the local and international de-mand for rice and the already existing capacity to mill rice. Furthermore, there is ample space for improvement, specifically in rice milling operations, through investments in machinery and skills. Other drivers for the growth of the sector will be support coming from Govern-ment in terms of improving the business en-vironment, access to finance, and knowledge/skills.

• There are a number of sectors that have grown in the last decade and will likely con-tinue to grow, which include sugar cane production and sugar processing (milling), cassava production and processing, maize production and drying, and coffee produc-tion and processing. These sectors are mainly driven by external demand which according to most informants will continue growing. How-ever, businesses operating in these sectors also face a limited supply of human resources with skills (in particular for processing). More-over, they face the uncertainty of an unreli-

able regulatory environment where rules and regulations can change at any time and affect their business prospects.

• The sector that seems most likely to benefit from growing internal demand is livestock production and meat processing. As income in the country increases, the population will be keen to consume more and better quality meat. However, the sub-sector faces import-ant challenges in terms of skills shortages and the lack of institutions providing training to potential workers, the lack of clear regulatory framework for food safety and the lack of en-forcement when it exists, the extremely limit-ed infrastructure, and the lack of Government support to develop the sub-sector.

• There are a number of sectors that are rela-tively smaller, but that have a high potential for development. These sectors include veg-etable and fruit production and processing, production of rice noodles and other rice products, and tea cultivation and processing. The main drive for the development of these sub-sectors will be local demand which, as in-comes increase, will mean that customers be able to buy higher quality and higher priced products. Enterprises in these sub-sectors are likely to remain small and localised, but as they develop they will be able to compete with im-ported foods.

The survey of farms and food-processing re-vealed that most firms are small, with overall low levels of education of both owners and workers. In most sub-sectors, most workers have a second-ary education or lower, which for the most part matches what owners think is the required skill for most positions. Only for more specialised po-sitions such as agronomists or machine operators do owners think that it is necessary to have a high-er education level of formal education.

SECTOR SKILLS STUDY

71

5. RECOMMENDATIONS FOR SKILLS DEVELOPMENT PRIORITIES

Fruit and vegetable farms think that they have poor or medium skills in most of their required skills. In livestock farms, more than half of re-spondents claim to have none or poor skills in all of their required skills areas. In food-processing firms, owners and managers tend to be more confident that their firms have the required skills to operate.

Most firms do not provide any training for their office staff, including on-the-job training, gain-ing information from other people or the In-ternet and short-term training. When training is provided this is done internally within the firm (on-the-job training, learning from friends and family, from the Internet or from a supervisor). Equally, most trainings to production workers were provided in-house – on-the-job training, learning from friends and family, learning from the Internet or from a supervisor.

While almost half of firms claimed that they would like to provide more training to their staff, they find that there are no institutions that cur-rently provide the type of training that they re-quire. This confirms what was expressed by differ-ent stakeholders during key informant interviews and when visiting technical colleges and schools, regarding the mismatch between what is being taught and what the industry needs.

Most firms expressed an interest in participating in a dual training programme with a TVET school and they claimed to be willing to provide some support to students. Firms recruit workers through social networks such as family or friends and referrals from em-ployees. Firms claim that it is easy to find work-ers and they can be quickly trained (i.e. less than a week) to conduct their jobs.

Firms are cautiously optimistic about the next couple of years, with many firms expecting an in-

crease in output and profit. However, most firms are not planning to recruit more staff in the next 12 months, which suggests that they expect pro-ductivity to increase or their unused capacity to reduce. Furthermore, of the less than 30 per cent of firms that plan to hire workers, almost two third will hire between 1 and 3 new workers.Based on the findings from this study, the follow-ing recommendations can be made:

• Develop and implement specialised courses for the agricultural sector. Currently commer-cial fruit and vegetable farms depend on exter-nal specialists to conduct a number of technical activities, such as agronomists and operators of agricultural machinery. Developing skills in the country to allow farms to hire national special-ists will aid in their development and growth.

• Develop specialist courses for the livestock farms. Equally, commercial livestock farms depend on foreign specialists to carry out the technical activities, such as veterinarians and feed specialists. The supply of national special-ists can support firms in their growth.

• Develop and implement new courses for the food-processing sector. As the food-process-ing sector grows and develops the supply of a skilled workforce will be critical. The areas in which food-processing factories require and will increasingly require skilled staff include graders and sorters, operators of food-pro-cessing machinery and specialists in quality assurance, food safety and sanitation and hy-giene.

• Develop and implement trainings for Govern-ment areas responsible for monitoring and in-spection. The current capacity of Government officials to monitor and inspect food-process-ing factories on food safety and hygiene and enforce safety and hygiene standards is mini-mal. Support in increasing their knowledge and skills will be critical for the development of the food-processing sector.


72

ANNEX 1. List of people interviewed

Date Person interviewed

15 / 05 / 2017

Mr. Somxay SisanonhDeputy DirectorDepartment of Technique Extension and Agricultural Processing (previously Department of Agricultural Extension and Cooperatives (DAEC)Ministry of Agriculture and ForestryTel. 020 55133914

16 / 05 / 2017

Dr. Vongpaphanh ManivongDirector RPRCMinistry of Tel. 020 5417 8945;021 770047

16 / 05 / 2017

Mr. Somlith VirivongDeputy Director TVEDMinistry of Education and SportTels. 020 2220 9945; 021 216473

19 / 05 / 2017

Ms Brieke SteenhofCTA SURAFCOHelvetas

24 / 05 / 2017

Mr Pethsamone ThanasackDeputy Director of Agriculture and ForestryMinistry of Agriculture and ForestryTel. 020 9826 6129

26 / 05/ 2017

Dr. Silinthone SacklokhamVice DeanFaculty of AgricultureNational University of LaosTel. 021 870 048

26/05/2017

Ms. LounnyDirector Department of IndustryMinistry of Industry and CommerceTels. 020 2221 3014, 021 453491

26 / 05 / 2017

Mr Andrew BarlettCTA LURASHelvetas

26 / 05 / 2017

Dr. Vongpaphane Manivong.Policy Research CentreNational Agriculture and Forestry Research Institute Tel: 0 21 770078

SECTOR SKILLS STUDY

73

29/05/2017

Alounni Sisavath (Ms)Deputy Director of Productivity DivisionDepartment of Small and Medium Enterprise Promotion

Alounni Sisavath (Ms)Deputy Director of Productivity DivisionDepartment of Small and Medium Enterprise PromotionMinistry of Industry and CommerceTel: 0 20 2814 2428

Mr. Vilakone SisavathDirector of Productivity DivisionDepartment of Small and Medium Enterprise PromotionMinistry of Industry and Commerce

02/06/2017

Mr Somphuang PhianphinitDirectorDepartment Enterprise Registration and ManagementMinistry of Industry and CommerceTels. 020 2220 9945; 021 216473

07/06/2017 9:30

Mr Phouxay ThepphavongPresidentLNNCITel. 02055813681

12 / 06/ 2017

Koichi MotomuraProject Formulation AdvisorJICAYutaka MachidaProject ManagerJICA

05 / 07 / 2017

Mr Nhetdara InsixiengmaySecretaryLao Agro-Processing AssociationMr Salaksone KovasakMemberLao Agro-Processing Association

26/05/2017

Dr Silinthone SacklokhamVice DeanFaculty of Agriculture, NOULPersonal no 020 22250 2563 Office no: 021 870 048.

Email exchangesMs Nanna Skau Programme Director WFP


74

Company ID

Interview’s Code

Indochina Research (Laos) Ltd 282/17 Phontong-savath, Chanthaboury, PO Box: 1887 Tel: (855-21) 562 881-4, Fax: (855-21) 562 880 Vientiane Capital, Laos

Is the form on the inteviewer list? Yes, on the list No, not on the list(If not), where did business register? Prov. Dept of agriculture and forestry Prov. Dept of industry and commerce From central Did not register

(terminate the interview)

Name of the business: ______________________________ Business activity ____________________________________Respondent's Name: _______________________________Respondent's Position: ___________Owner Director HRName of village: ____________________________________District: ____________________________________________ Province: __________________________________________ Telephone Number: ________________________________Vietiane Capital Vientiane Province Khammuan Savannakhet Oudomxai Xaiyabouri

Household information on the list:

Good morning, my name is ................ . I come from In-

dochina Research Company Ltd. We are conducting a

survey to collect information about the company for

a study on the agricultural and food processing sec-

tors in Lao PDR, commissioned by GiZ. Please be as-

sured that all information you provide to us will be

kept strictly confidential. Your help in providing infor-

mation to us is very important to the success of this

project. Our interview will take around 90 minutes. We

are highly appreciate you sparing time for us to con-

duct the interview and thank you for your cooperation.

Module # Description

Cover

Section 1 Characteristics of firms

Section 1A Business

Section 1B Owner

Section 1C Utilities

Section 1D Supply Chain

Section 2 Workforce Characteristics

Section 3 Skill Assessment

Section 4 HR Solution

Section 4A Training

Section 4B Recruitment

Section 5 Sector Growth

ANNEX 2. Questionnaire

SECTOR SKILLS STUDY

75

SECTION 1 - CHARACTERISTICS OF FIRMS SECTION 1A - BUSINESS

1 How many paid permanent employees do you have in total ? Include only paid permanent staff Check If it is consistent with Section 2, Q7, Code 1

2 What is the size of your firm? (micro, small, etc.)? (interviewer choose based on Q1) [SA]

3 What is your type of business? This selection determines the appearance of answers in Section 3A [SA]

Type of business Micro SME Farm

3B What is your main activity in food processing?[SA]

Fruits and Vegetables (Processing, Preserving, Canning, Manufacturing of products) ……… 1 Grain, Flour, mussel and Sugar products (Processing, Milling) ……… 2

Meat, Poultry, Fish (Producing, Packaging, Preservation) ……… 3 Noodle Products Production ……… 4

Other food processing (ice, water, other food products, animal feeds, cooking products) ……… 5 Processing of Coffee and Tea ……… 6

Processing of Dairy Products (milk, cheese, yogourt) ……… 7

4 What is the location of the production site? [MA]

6 What year did you start operating the business? (may not register in the same year) Determine the appearance of answers in Section 5 [Year]

Micro enterprise ……… 1 Small enterprise ……… 2

Medium enterprise ……… 3Large enterprise ……… 4

Extra large enterprise ……… 5

Home ……… 1 Traditional market ……… 2

Commercial area ……… 3 Industrial area ……… 4

Roadside/mobile ……… 5 Farms in rural area ……… 6

Other (specify) .………7

5 What is the lcoation of the shopfront? [MA]

Home ……… 1 Traditional market ……… 2

Commercial area ……… 3 Industrial area ……… 4

Roadside/mobile ……… 5 Farms in rural area ……… 6

Direct sell to end customer ……… 7 Other (specify) ……… 8

Vegetable and fruit farm ……… 1 Q>>>4Animal farm............2 Q>>>4

Food processing ………Q>>3B onlyOther ……… 4 Q>>>4

(IF: range 0-4 employees)(IF: range 5-9 employees)(IF: range 10-19 employees(IF: range 20-100 employees)(IF: range more than 100 employees)

if chosen, it’s Farmif chosen, it’s FarmIf chose and if Q2, code 1 is selected, it’s Mico. IfQ2 is code 2,3,4, it’s SME


76

SECTION 1 - CHARACTERISTICS OF FIRMS SECTION 1B - OWNER

1 What is the gender of the owner (or main sharehold-er)? [SA] Female………...1

Male ………......2

2 What is the nationality of the owner (or main share-holder)? [SA] Lao ……… 1

Vietnamese ……… 2 Chinese ……… 3

Thai ……… 4 Japanese ……… 5

Other ……… 63 Who owns this firm? [SA] State owned ……… 1

Private ……… 2 State-Private ……… 3 Joint-venture ……… 4

Foreign owned ……… 5 Group ……… 6

Cooperative ……… 7

4 What did the owner (or main shareholder) do be-fore you started this business? if business is part time, can include the current profession [SA]

Farmer ……… 1 Trainer ……… 2

Owner of other business ……… 3 Worked for Government ……… 4

Worked for family ……… 5 Employed by other business ……… 6

Unemployed ……… 7 Studying ……… 8

Other……… 9 Don’t know ……… 10

5 What is the owner’s (or director’s) highest level of formal qualification? [SA]

No schooling ……… 1 Q>>> Section 1C Some primary ……… 2 Q>>>7

Completed primary ……… 3 Q>>>7 Lower secondary ……… 4 Q>>>7 Upper secondary ……… 5 Q>>>7

TVET ……… 6 Q>>>6 Higher Education ……… 7 Q>>>6

Post-Graduate ……… 8 Q>>>6 Don’t know ……… 9 Q>>> Section 1C

6 What discipline did the owner (or director) study ? (Look at Code Box 6 and put codes in 6A, 6B and 6C)6A Technical Training and Vocational Training6B University6C Post Graduate

6 ………Science7 ………Engineering (civil engineering, architechtrue, IT) 8 ………Social Science , Business and Law9 ………others 10 ……..Don’t know

7 In which institution did the onwer (or director) get your highest qualification? [Open End] ___________________________________________

SECTION 1- CHARACTERISTICS OF FIRMS SECTION 1C- UTILITIES

1 Are there utilities on site? [SA] Yes ……….. 1 Q>>>1A

No, not at all ……… 2 Q>>>2

1A If yes, what are the utilities? [MA] Electricity (from grid) ……… 1

Tap Water ……… 2 Gas ……… 3

Water from nature (wells, rivers) ……… 4 Electricity from other sources (sun and motor) …. 5

2 What is the highest level of technology of this firm? [SA]

3 What type of communication tools do you use? [MA]

Fixed telephone ……… 1 Mobile telephone ……… 2

Fax ……… 3 Internet ……… 4

None ……… 5 Other (specify)……… 6

4 Do you use computer in your business? [SA]

Yes ……… 1 Q>>>5 No ……… 2 >>>section 1D

5 What for? [MA]

Documents ……… 1 Accounting ……… 2

Market research / marketing ……… 3 Internet – communicate with suppliers and clients.…4

e-commerce ……… 5 Other (specify)...…6

Hand tools/utensils ……… 1 Portable power tools and

electrical appliances ……… 2 Specify Small fixed motorised

equipment (specify) ……… 3 Large machinery (specify) ……… 4 Motorised vehicles (specify) ……5

Other (specify)……… …6

Code Box 6

0 ………Not Applicable1 ………Agriculture (Agronomy, Veterinary) 2 ………Health3 ………Services (hospitality and tourism)4 ………Education5 ………Humanities and Arts (language, fine arts)

SECTOR SKILLS STUDY

77

SECTION 1 - CHARACTERISTICS OF FIRMS SECTION 1D - SUPPLY CHAIN

1 Who are the main suppliers of raw materials? [MA] Local farmers ……… 1 Q>>>2 Local traders ……… 2 Q>>>2

Foreign traders ……… 3 Q>>>1A Government project ……… 4 Q>>>2

From nature (from river, soil, forest) ……… 5 Q>>>2 Breed inhouse ……… 6 Q>>>2

Others ……… 7 Q>>>2

1A For foreign traders, which country are they mainly from? [SA] Thailand ……… 1

Vietnam ……… 2 China ……… 3 Japan ……… 4 Other ……… 5

2 Who are your main clients? [SA] Local firms ……… 1 Q>>> 2A then to Section 2

Local traders 2 >>> Section 2 Foreign traders ……… 3 Q>>>2B then to Section 2

Client abroad ……… 4 Q>>>2C then to Section 2 Direct retail ……… 5 >>> Section 2

Other……… 6 >>> Section 2

2A What type of local firm? [MA]

Market vendor ……… 1 SME ……… 2

Large enterprise ……… 3 Others ……… 4

2B For foreign traders, what nationality are they mainly? [MA]

Thai ……… 1 Vietnamese ……… 2

Chinese ……… 3 Japanese ……… 4

Other……… 5

2C For client abroad, which country are they mainly from? [MA]

Thailand ……… 1 Vietnam ……… 2

China ……… 3 Japan ……… 4 Other ……… 5

SECTION 2 - WORKFORCE CHARACTERISTICS

When started and number of paid permanent staff 1 How many permanent office staff did the firm have when it started? Office staff: admin, HR, fiance, mar-keting and spending time in general administration and paperwork2 How many production staff did the firm have when it started?

Production staff: employees working in the production line and factory, including supervi-sor, manual worker, food scientist, lab staff

In 2016 (in the last 12 months) and number of paid permanent staff 3 How many office staff did you have 12 months ago?

4 How many workers did you have 12 months ago?

In 2017 (present) and number of paid permanent staff5 What is the total number of office staff today?

6 What is the total number of production employees today?

The answer Q5+Q6 = Section 1, Q1.

Type of workers (now) Write down the numbers of each type of employee in the table Code 1-3, Q8+Q9=Q7

7 8 9

code Total Male Female

1 Current number of full-time paid production employees

2 Number of unpaid/family production employees

3 Number of part-time produc-tion employees


78

SECTION 3 - SKILL ASSESSMENT

Job Mapping (Q1-Q5, Code 1-4)Ask respondents to list 5 important production positions in their business. The name of the production position is from Code Box 3.1 and level of qualification is from Code Box 3.2.

Code1 2 3 4 5

production1 production1 production1 production1 production1

1 What is the name of the position? (Use Code Box 3.1)

2 What is the level of qualification for this position? (Use Box 3.2)

3 How many employees do you currently have in this [Production] position?

4 How many more employees do you need in this [Production] position ? (write down numbers)

Code Box 3.1

Shows this selection if Section 1A, Q3 is code 1Shows this selection if 1 ………Agriculture worker/labourer2 ………Scientist (agronomist, engineer, food science technician)3 ………Agriculture supervisor4 ………Fruit and vegetable grader, sorter, packer5 ………Farm eqipment operator and machanic (tractor driver, harvestor)6 ………Other farm equipment (freezer, lab equipment)7 ………Other job position

Shows this selection if Section 1A, Q3 is code 2Animal farm 8 ………Farm worker and labourer 9 ………Animal breeder (breeding, feeding, ect.) 10 ………Butcher/slaughterer11 ………Veterinary 12 ………Meat, poulty and fish cutter and trimmer13 ………Grader, sorter and packager 14 ………Eqipment operator and machanic (production and transportation equipment)15 ………Other equipment (freezer, lab equipment)16 ………Other job position

Shows this selection if Section 1A, Q3 is code 3 Food processing 17 ………Line worker 18 ………Cutter and drier 19 ………Food preparer (include operation of machinery to prepare food) 20 ………Heavy machinery operator (driver, rice, corn and sugar mill) 21 ………Grader, sorter and packager22 ………Other equipment (freezer, lab equipment)23 ………Scientist (food science technician) 24 ………Other job position

Code Box 3.2

primary school ……… 1lower secondary school ..........2

secondary school .................3TVET ..................4

bachelor degree ................5post graduate ................6

no need school ..................0

Showcard: Code Box 3.4: Definition of ratings (from Code 2 to Code 48)

1 We need the skill, but we don’t have the skill 2 We have poor skills in that area, our staff achieve only 25% of what we need3 We have medium skills in that area, our staff achieve only 50% of what we need 4 We have good skill in that area, our staff achieve 75% of what we need 5 We have very good skills in that area, our staff achieve more than 75% of what we need 0 N.A (we don’t need those skills in the position)

Soft Skills and Hard Skills (Q1-Q5, Code 5-16)

Ask respondents rate the current skill level for dif-ferent skill dimension in their company based on the production positions from 0 to 5. Use Showcard 3.4 to let respondent choose the most appropriate number for each skill and each position

SECTOR SKILLS STUDY

79

Skills1 2 3 4 5


5 Ability to lead and manage team(s)

6 Ability to work in teams

7 Service oriented

8 Problem solving skills

9 Communication skills

10Decision making skills and ability to workautonomously

11 Knowledge of work procedure

12 Knowledge of using tools

13 Technology proficiency

14 Factual knowledge

15 Theoretical knowledge

16 Work health and safety knowledge

code Skills1 2 3 4 5


17 Crop-growing and cultivation

18 Pesticide handling

19 Irrigation

20 Harvesting

21 Grading, sorting and packing

22 Operating machinery for agriculture

23 Repairing agricultural machinery

24Operating other equipment (freezer, cutter, driers)



25 Operating machinery for agriculture

26 Repairing agricultural machinery

27 Animal husbandry

28 Animal feeding

29 Veterinary


31 Animal transportation

32 Animal slaughter

33 Culling and deboning of animals

34 Hygiene and sanitation awareness

35 Other machinery (freezer, tractor)

Soft

Ski

lls H

ard

skill

s F

ruit

and

Veg

etab

le F

arm

sPr

oduc

tion

of M

eat P

rodu

cts

Skills for fruit and vegetables farms (if Section 1A, Q3 is code 1 , shows 17 - 24) Use Showcard 3.4 to let respondent choose the most appropriate number for each skill and each production position.

Skills for animal production and meat product (if Section 1A, Q3 is code 2, shows 25 - 35) Use Showcard 3.4 to let respondent choose the most appropriate number for each skill and each production position.


80

Skills for animal production and meat product (if Section 1A, Q3 is code 2, shows 25 - 35) Use Showcard 3.4 to let respondent choose the most appropriate number for each skill and each production position.



36 Handling of perishable commodities

37 Operating food processing machinery

38 Food preparation

39Maintainance and repairing of food pro-cessing machinery


41 Storage management

42De-husking, drying, de-browning, polishing and sorting rice

43 Maintaining and using chillers and freezers

44Understanding and adhering to quality standards

45 Supervision of production

46 Resource allocation

47 Microbiology

48 Hygiene and sanitation awareness

49 Animal slaughter

50 Culling and deboning of animals

Food

Pro

cess

ing

6A are there any production skilles that have not been mentioned? yes ……… 1 Q>>>6 no ……… 2 Q>>>8What other production skills do you need that haven’t been mentioned? Write down the name of the skill in Q6 and use rating scores 0-5 from Showcard 3.4 in Q7.

How many of your production employees have the follow-ing qualification? (write down the number of employees in Q8)

code

67

Skills in Production Position

Skills Assessment (Use Showcard 3.4)

1 Skill 1 (specify)

2 Skill 2 (specify)

3 Skill 3 (specify)

4 Skill 4 (specify)

5 Skill 5 (specify)

code

67

Skills in Production Position

Skills Assessment (Use Showcard 3.4)

1 No schooling

2 Some primary

3 Completed primary

4 Lower secondary

5 Upper secondary

6 TVET

7 Higher Education

8 Post-Graduate

code Do you think those in these positions need more skills 1 = Yes 2= No

9 Finance and accounting

10 HR and admin

11 Marketing, sales and customer service

Oth

er S

kills

SECTOR SKILLS STUDY

81

Statement Rating

12ATraining is essential for the operation of my business

12B Training is a waste of money

12CEducational institutions already done the train-ing, no need for my business to invest

12DI want to provide training to my staff, but there are no institutions that provide the training they require

1 2

code Positions

1 = Yes 2= No

How many times in the last 12 months?

1 Finance and accounting

2 HR and admin

3Marketing, sales and customer service

4 Production employees

3 4 5 6

codeTopic of Training

Number of partici-pants

Type of Training (Use Code Box 4A.5)

Paid Training(1=Yes, 2=No)

1 Training 1

2 Training 2

3 Training 3

4 Training 4

5 Training 5

6 Training 6

7 8 9 10

codeTopic of Training

Number of partici-pants

Type of Training (Use Code Box 4A.5)

Paid Training(1=Yes, 2=No)

1 Training 1

2 Training 2

3 Training 3

4 Training 4

5 Training 5

6 Training 6

SECTION 4 - HR SOLUTION SECTION 4A - TRAINING

Did you provide training to staff in any of following posi-tions in the last 12 months? (including on job training, gain-ing information from other people or the Internet and short term training).If Q1 has answer “no” from all codes from 1-3, skip to Q7. If Q1 has answer “no” in code 4, skip questions Q7 - Q10.

What trainings were provided to production employee in the last 12 months? Present showcard For Q8, use code from Code Box 4A.5.

11 What skills do you require as an owner of the business? Present Showcard Section 4, Q11. [MA]

Marketing and sales……… 1 Production management……… 2

Business plans……… 3 Financial management……… 4 Technical management……… 5

Other (specify)……… 6

13 Would you be interested in participating in a dual-training program provided by TVET school? [SA] Yes……… 1 Q>>>13A

No……… 2 Q>>>15

13A Would you be able to provide some support to the students on the training? [SA]

Yes……… 1 Q>>>14 No……… 2 Q>>>15

14 How could you support students?(can choose more than 1 answers) [MA]

Provide accommodation ……… 1 Provide food……… 2

Provide stipend……… 3Others……… 4

Office and production employee Training What trainings were provided to office staff in the last 12 months? Pres-ent Showcard. For Q5, use code from Code Box 4A.5. Show questions Q3-Q6 if Q1, code 1-3 are “1=yes”.

Showcard: Code Box 4A.5

On job training ……… 1 Learning from friends and family ……… 2

Learning from the Internet 3 Training from a domestic trainer ……… 4

Training from an international trainer ……… 5 Training from a supervisor ……… 6

Training from the government (from ministry) ……… 7 Training from an INGO ……… 8

Training from an industry association (e.g. LNCCA, ASSOC) ……9 others ………10

Showcard: Code Box 4A.3

1 Strongly disagree2 Disagree 3 Neutral 4 Agree 5 Strongly agree


82

15 How long does it take to train a new person (in pro-duction) to get them to the right skill level? [SA] Less than a week ………............1 Between 2 to 3 weeks ……........… 2 Between 1 to 2 months ………3 More than 2 months ………............416 Can you estimate how much does it cost the company to train a new person to get them to the right skill level? (in kip)Yes, I can estimate ……….........1 Q>>>17 No, I cannot estimate ………...2 Q>>> Section 4B17 How does it cost? kip____________________________________________________

SECTION 4 - HR SOLUTION SECTION 4B - RECRUITMENT

What months of the year do production employees apply for job in your business (code 1 = peak season)?

How many workers (full time, family member and part time) do you have at a maximum and minimum for production employees? (in number)

17 How difficult is it to normally recruit workers for positions in production area? [SA]

Can recruit easily ……… 1 Q>>>18Not enough applicants apply for the job ……… 2 Q>>>17A

Many applicants but they are not qualified ……… 3 Q>>>17A I don’t know ……… 4 >>>Section 5

17A Why?18 How do you normally recruit production workers? [MA]

Through family or friends ……… 1 Advertise through various media channels ……… 2

Recruitment agencies ……… 3 Employee referrals ……… 4

Other……… 519 On average, how long does it takes for you to recruit a produc-tion worker? [SA] Less than a week ……… 1

Between 2 to 3 weeks ……… 2 Between 1 to 2 months ……… 3

More than 2 months ………417 How difficult is it to normally recruit workers for positions in production area? [SA]

Can recruit easily ……… 1 Q>>>18Not enough applicants apply for the job ……… 2 Q>>>17A

Many applicants but they are not qualified ……… 3 Q>>>17A I don’t know ……… 4 >>>Section 5

17A Why? 18 How do you normally recruit production workers? [MA]

Through family or friends ……… 1 Advertise through various media channels ……… 2

Recruitment agencies ……… 3 Employee referrals ……… 4

Other……… 519 On average, how long does it takes for you to recruit a produc-tion worker? [SA]

Less than a week ……… 1 Between 2 to 3 weeks ……… 2

Between 1 to 2 months ……… 3 More than 2 months ………4

1 2 3 4 5 6 7 8 9 10 11 12Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Code Definitions

1 Peak season 2 Low season

15 16

PositionsHow many people were replaced in the last 12

months?

How many people were new hires in the last 12 months?

1 Office Staff

2 Production Employee

SECTION 5 - SECTOR GROWTH

1 Are you planning to recruit more staff in in the next 12 months? [SA] Yes ……… 1 Q>>>1A, 2A No ……… 2 Q>>>3

1A How many?

2A Are they for existing position or new positions? [MA] Existing positions ……… 1 New positions ……… 2

3 How did your business change in 2016 from the previous year (2015)? Show this question if answer from Section 1A, Q6, < or = 2015 (older than 2015). [SA]

3A Output (in volume, kilos)Increased ……… 1 Remained the same ……… 2 Decreased ……… 3 Do not know ……… 4 3B Turnover (of employees) Increased ……… 1 Remained the same ……… 2 Decreased ……… 3 Do not know ……… 4 3C Profit (after expense) Increased ……… 1 Remained the same ……… 2 Decreased ……… 3 Do not know ……… 4

4 Did you make any investment in 2016 (e.g. in machinery, train-ings, building)? Show this question if answer from Section 1A, Q6, < or = 2016 (older than 2016). [SA] Yes ……… 1 Q>>>5 No ……… 2 Q>>>6

5 What kind of investment? [MA] Machinery ……… 1 Building(s) ……… 2 Office equipment ……… 3 Training ……… 4 Marketing ……… 5 Other (specify)_________ ……… 6

6 How do you expect your business will perform this year (2017) in comparison to last year (2016)?

6A Output (in quantity, volume, kilos) Increased ……… 1 Remained the same ……… 2 Decreased ……… 3 Do not know ……… 4

6B Turnover (number of employees) Increased ……… 1 Remained the same ……… 2 Decreased ……… 3 Do not know ……… 4

6C Profit (after expense) Increased ……… 1 How do you expect your business will perform this year (2017) in comparison to last year (2016)?Remained the same ……… 2 Decreased ……… 3 Do not know ……… 4

7 How do you expect your business will perform next year (2018) in comparison to thist year (2017)?[SA]

7A Output (in quantity, volume, kilos) Increased ……… 1 Remained the same ……… 2 Decreased ……… 3 Do not know ……… 4

7B Turnover (number of employees) Increased ……… 1 Remained the same ……… 2 Decreased ……… 3 Do not know ……… 4

7C Profit (after expense) Increased ……… 1 Remained the same ……… 2 Decreased ……… 3 Do not know ……… 4

8 What are your main problems to operate?Present Showcard Section 5, Q8.[Rank 3 most important] Capital/credit ……… 1 Quality of supplies ……… 2 Lack of skills of human resources ……… 3 Lack of human resources ……… 4 High labour costs ……… 5 Lack of market information ……… 6 High taxes and/or duties ……… 7 Other fees or unofficial payments ……… 8 Poor infrastructure (specify)_____________ ……… 9 Customs/trade regulations ……… 10 Competition with other businesses ……… 11 Other (specify)______________ ……… 12

End of Interview

13 14

Minimum number Maximum number


FOR THE SELECTED SUB-SECTORS



84

This report was prepared by IRL Laos. The research was led by Emmanuel Santoyo Rio (Senior Interna-tional Consultant), with a team comprising Vipapone Aphayvanh (Research Manager, IRL), Anolay Vong-southi (Value Chain Specialist), Chanthamone Singthong (Fieldwork Manager, IRL), Noulor Xayleng (Data Manager, IRL).

The team is grateful to GIZ and the Lao PDR’s Ministry of Education and Sports, other government ministries and institutions, development partners and civil society for excellent support and cooperation provided during the preparation of this study.

Figure 1. Coffee value chain in Oudomxay province................................................................................................92Figure 2. Cassava value chain in Xayaboury province...............................................................................................103Figure 3. Maize value chain in Xayaboury province...............................................................................................108Figure 4. Pig value chain in Vientiane Province and Capital................................................................................122Figure 5. Value chain for meat processing in Vientiane Capital and province..................................................124Figure 6. Meat value chain with contract farming in Vientiane Capital and province....................................125Figure 7. Rice value chain in Khamouan province.................................................................................................135Figure 8. Sugar value chain in Savannakhet province...........................................................................................143

LIST OF FIGURES

ACKNOWLEDGEMENTS

LIST OF TABLES

Table 1. Main jobs and skills required in the coffee sub-sector in Oudomxay......................................................96Table 2. Main jobs and skills required in the tea sub-sector in Oudomxay.....................................................100Table 3. Main jobs and skills required in the cassava sub-sector in Xayaboury...............................................105Table 4. Main jobs and skills required in the maize sub-sector in Xayaboury...............................................111Table 5. Main jobs and skills required in the dairy sub-sector in Vientiane province..................................117Table 6. Main jobs and skills required in the meat sub-sector in Vientiane Capital and province...........130Table 7. Main jobs and skills required in the rice sub-sector in Khamouan...................................................139Table 8. Main jobs and skills required in the rice sub-sector in Savannakhet...............................................147


85

LIST OF ACRONYMS

BMZ Bundesministerium für Wirtschaftliche Zusammenarbeit und Entwicklung (German Federal Ministry for Economic Cooperation and Development)DAFO District Agriculture and Forestry OfficeDoES District Office of Education and SportsDoIC District Office of Industry and CommerceGDP Gross Domestic ProductGIZ Deutsche Gesellschaft für Internationale ZusammenarbeitIRL Indochina Research Ltd.PAFO Provincial Agriculture and Forestry OfficeMAF Ministry of Agriculture and ForestryMoES Ministry of Education and SportsMoIC Ministry of Industry and CommerceMoLSW Ministry of Labour and Social WelfarePDR People’s Democratic RepublicPoES Provincial Office of Education and SportsPoIC Provincial Office of Industry and CommerceSDC Swiss Agency for Development and CooperationTVET Technical and Vocational Education and TrainingVELA Vocational Education in LaosMoES Ministry of Education and SportsMoIC Ministry of Industry and CommerceMoLSW Ministry of Labour and Social WelfarePDR People’s Democratic RepublicPoES Provincial Office of Education and SportsPoIC Provincial Office of Industry and CommerceSDC Swiss Agency for Development and CooperationTVET Technical and Vocational Education and TrainingVELA Vocational Education in Laos

1. INTRODUCTION

Photo: © GIZ/ Satitphone Phommahack


88

1.1 Background

This study was conducted in the context of the Vocational Education in Laos (VELA) project, im-plemented by GIZ in coordination with the Minis-try of Education and Sports (MoES) and the Minis-try of Labour and Social Welfare (MoLSW). This is a project co-funded by the German Federal Min-istry for Economic Cooperation and Development (BMZ) and the Swiss Agency for Development and Cooperation (SDC). Its aim is to strengthen Tech-nical Vocational Education and Training (TVET) in Lao PDR by improving the quality of instruction and training to better align with the needs of the country’s growing economy. In addition to tech-nical assistance, capacity building, and provision of scholarships to marginalized students, VELA intends to provide C1 training for 10,300 students and C2 training for 1,540 students over the dura-tion of the project (2013-2018).

In April 2017, GIZ-VELA commissioned a study to explore which agricultural and food processing sectors have the highest potential for growth in Lao PDR and to assess the specific skills that are required by each of the sectors. The findings of this study will be used to determine which sec-tors the GIZ-VELA project will focus on in its next phase.

Indochina Research Ltd. (IRL) was contracted to conduct a survey of commercial farms and firms in the agro-processing sector, as well as a num-ber of short value chain studies for selected com-modities. An international specialist worked with IRL to support the design, implementation and analysis of data for the survey (see separate sur-vey report). For the value chain studies, the inter-national specialist designed the study and tools, conducted field work with support of a research assistant, and analysed data and information to complete the short value chain assessments.

1.2 Study objectives

The aim of this study is to provide a short descrip-tion and analysis of value chains for selected com-modities that have been identified, through the literature and key informant interviews, to have the highest potential for employment and food processing at a semi-industrial or industrial level in six provinces in Lao PDR. The value chains se-lected are rice in Khamouan province, coffee and tea in Oudomxay province, sugar in Savannakhet province, meat and dairy in Vientiane Province and Vientiane Capital, and maize and cassava in Xayaboury province.

These short value chain studies do not represent the situation of each particular supply chain at the national level, nor do they provide an in-depth understanding of their problems and the complex issues they face. However, it does aim to highlight the situation and specific constraints that each supply chain faces in that particular province and shed light on some important issues and questions. More specifically, the analyses aim to identify the potential for development of the supply chain, the constraints for growth, the main skills required, and the skill shortages in each value chain.

1. INTRODUCTION


89

1.3 Analytical framework

The M4P tool book for practitioners of value chain analysis, also known as “Making value chains work better for the poor1” was used as the main ref-erence for the development of the analytical framework that guided these value chain studies. A selective approach to data collection and the choice of tools and methods for data analysis was followed, taking into consideration the resources and time allocated to the studies.

It is important to note that during field work for this study not enough time and resources were available for collection of detailed price and cost data along whole agricultural chains (only two days were spent in each province). Yet, this was not the only reason why the research team was unable to collect sufficient data to estimate marketing costs, and gross and net marketing margins, along the different supply chains studied. The timing of the field work was a key constraint. In several of the studied commod-ities none of the farmers interviewed had started harvesting their crop at the time of the field visits.

Furthermore, the collection of reliable price data was a rather complex exercise due to wide vari-ations in product quality and prices at any given point in time, even within the same market chan-nel. In order to produce a meaningful snapshot of margins practiced along the chain, the data col-lection team would have had to follow products from farms to key destination markets, sometimes in other provinces and on several occasions in other countries. Clearly, this was not possible in the context of this study. Nevertheless, the limited data collected on prices and costs is sufficient for the purposes of this study and helps to create a picture of where and how value is being created

1 M4P (2008), Making value chains work better for the poor: A toolbook for practitioners of value chain analysis, Version 3, UK Department of International Development, Agricul-tural Development International, Phnom Penh: Cambodia.

1. INTRODUCTION

and distributed along the chain.

The recommendations of this study take these is-sues into consideration and provide insights into the sub-sectors where there is most potential for growth. A parallel survey of 50 commercial farms and 200 food processing enterprises will shed further light on existing and future required skills and jobs.


90

1.4 Study methodology

A review of existing studies, reports, and govern-ment statistics was carried out early on during the research process to take stock of current knowl-edge and information, identify data gaps, and in-form the choice of field work locations and value chains. Secondary data and information were fur-ther reviewed during the report writing stages to support the analysis and findings.

Qualitative methods (i.e. semi-structured inter-views and focus group discussions) were employed for collection of primary data. The semi-structure interviews were conducted with representatives of all types of market actors (and supporting ac-tors) along the value chain for each commodity, such as input suppliers, farmers, collectors, pro-cessors, exporters, market retailers and Govern-ment staff related to each commodity, such as extension agents and local agricultural officials from PAFOs and DAFOs, Government staff from education departments such as PoES and DoES, and Government staff from industry and com-merce departments such as PoIC and DoIC. The names and location of key informants interviewed are presented in Appendix 2. Through these inter-views, data and information was requested on the size of the sectors, including the number of peo-ple working in the sector, existing and required skills in the sector, end markets and demand, rela-tionships between value chain actors, constraints for the development of the value chain, and strat-egies that value chain actors are taking to mitigate constraints.

Interviews with key informants from each val-ue chain were conducted based on pre-prepared value chain analysis question guides tailored to each identifiable market actor (see Annex 2). The data collected through these interviews and focus group discussions was complemented with sec-ondary data collected before and after fieldwork.

Triangulation and direct observation methods were employed to cross-check the quality of the data collected and evaluate the views expressed by key informants. Secondary sources were also used to assess the validity of primary data collect-ed during the field work.

Fieldwork was carried out in August and Septem-ber 2017. In total, 14 days were spent in Savanna-khet, Khammuane, Vientiane, Oudomxay and Xay-abury provinces and Vientiane Capital, including travelling from one location to another (see field-work schedule in Annex 3). During this time, 30 semi-structured interviews were conducted with market actors and Government staff and 2 focus group discussions were conducted with farmers.

1. INTRODUCTION

2. COFFEE VALUE CHAININ OUDOMXAY PROVINCE

Photo: © GIZ/ Lucas Wahl


92

Arabica coffee is produced by a number of small-holder farmers (an estimated 319 families) in 11 villages in two districts (Xay and Namor) in Oudomxay province. A third district – La district – will begin plantation next year. Coffee production covers approximately 250 ha, though this is likely to increase significantly in the coming years due to higher demand and climatic factors1. A total of 945 tons of coffee was produced in Oudomxay in 20152.

Farmers in Oudomxay cultivate coffee with min-imum skills and technology. As a consequence, yields are low and the quality of coffee is poor. Technical support provided to farmers by buyers is slowly improving their agricultural practic-es and the quality of their produce. Knowledge about how to process coffee is limited.

1 A recent study conducted by WFP found that due to ex-pected increases in temperature, Oudomxay may be one of the few provinces where coffee will be able to be cultivated in Lao PDR. See MONRE and WFP (n.d.) Consolidated Live-lihood Exercise for Analyzing Resilience. Lao PDR. Agricul-tural Statistics Year Book 2015, Department of Planning and Cooperation, MAF, 2016.2 Agricultural Statistics Year Book 2015, Department of Planning and Cooperation, MAF, 2016.

Farmers in the province have contracts with Chi-nese buyers for all of their coffee production. Buyers provide technical advice, inputs and credit to farmers. Processing of coffee in this province is minimal. Coffee is then exported to China for processing and marketing.

2. COFFEE VALUE CHAIN IN OUDOMXAY PROVINCE

Figure 1. Coffee value chain in Oudomxay Province

Source: Author’s own based on interviews with key informants.


93


2.1 Production

Coffee is cultivated using traditional practices linked to shifting cultivation with limited invest-ment in machinery and technology. Coffee culti-vation is labour intensive where most activities are carried out by farmers and their families to mini-mise costs.

A typical farmer grows coffee in around 0.5 to 1 ha of their land, with an average of 1,400 trees per ha (between 1,000 and 1,500 trees per ha)3. The trees are frequently provided by the buyer (company) and the farmer looks after them for at least three years before seeing a return. The use of other inputs, such as fertilizer, herbicides and pesticides, is minimal, although they are available on credit from buyers. Farmers do not have to pay back money for any inputs until their fifth or sixth year of cultivation. While some farmers only grow coffee and fruits for commercialisation, most farmers are still engaged in upland rice cultivation for self-consumption. Other commodities grown by coffee farmers include jackfruit, mango and banana.

Coffee yields tend to be low as farmers still have limited knowledge of coffee growing. Topics like soil and plant management, irrigation and har-vesting, for example, are still very new for farm-ers. According to interviews with farmers, in 2016 their coffee trees were producing around 2 kg of red cherry per tree and a total of around 100 kg of red cherry per year per farm.

3 This is significantly lower than what is planted by farmers in the South where farmers plant up to 4,500 trees per ha (Nicole Motteux (2017) “The contribution of coffee pro-duction to household expenditure and consumption in Duk Chueng in Sekong Province” a report prepared for CARE

International in Lao P.D.R).

2.2 Harvesting and processing

Coffee is harvested by hand three times per year, mainly between September and January. Some farmers sell a proportion or all of their red cherries to traders which provides quick cash. The current price for red cherries is LAK 2,200 per kilo. Red cherries can be sun-dried, which allows for dried black cherries to be stored. It also increases the price of the coffee. The dry cherry is then hulled to produce a dry green bean.

Another way to process red beans is called pulp-ing, which consists of removing the skin of the fresh red cherry using a pulper machine with ad-dition of water. The mucilage (sugar coating) is then removed immediately after pulping using a demucilager. Immediately after demucilaging, the clean parchment is ready for drying to produce a parchment. This process not only increases the price of the coffee, it also ensures that the coffee lasts longer. The price of parchment is significant-ly higher than that of red and dried beans and it can reach LAK 15,000 per kilo.

In the communities visited in Xay district, the buyer provided the machinery and training for farmers to produce parchment. One farmer was responsible for processing the coffee beans for a wide number of growers (up to 200 households), at a fee. Farmers try to pulp as much coffee as possible to ensure they get a higher price. The semi-processed coffee beans are then collected by the buyer for further processing in China.

2.3 Advice/extension

Buyers provide training to farmers with regu-lar (monthly visits) to villages to monitor the development of trees and crops and provide advice to farmers. Some buyers have an estab-lished farmer-to-farmer training system, where one outstanding and interested famer is recruited


94

as a trainer to provide technical support to other farmers in their village and neighbouring villages (up to 150 households).

DAFO has limited resources to provide farmers with technical support. Furthermore, extension workers lack an in-depth knowledge of coffee cultivation to support farmers. Extension work-ers usually join training provided by buyers in order to increase their knowledge. Local agricul-tural schools provide no training to students on coffee cultivation as they do not have teachers with this knowledge. Another source of knowl-edge for farmers is working as labourers in coffee plantations, where better cultivation techniques are used. However, this knowledge is unstruc-tured and farmers are only able to capture some of the advice.

At the processing level, roasters and retailers provide training to staff and new employees by themselves (or sometimes through the Lao Cof-fee Association). However, there are no identified roasters or retailers in Oudomxay, as most operate from Vientiane Capital, Luang Prabang or the cof-fee producing region in the South (Bolaven Pla-teau) of Lao PDR.

2.4 Value chain constraints and oppor-tunities

There is ample potential for improving the pro-duction of coffee in Oudomxay province. At present, coffee is produced with poor practices and with very limited knowledge. Better practic-es, better use of inputs and better management of farms can lead to important increases in yields and quality. Advice and knowledge can be provided by farmers, extensionists and companies producing coffee in the Bolaven Plateau, through exchange visits and trainings.


There is also potential for farmers and small-scale processors to engage in more sophisticated processing activities before coffee is exported to China, so long as the skills and technology are supplied. The introduction of small-scale tech-nology to process and store coffee could help farmers and processors to obtain higher returns.

Chinese buyers in the province are interested in expanding their contracts to cover more farmers and larger areas, with the aim of having 1,200 ha under contract farming in Xay district and 800 ha in Namor district. This indicates the potential for growth of the sub-sector in the province.

Finally, there is some potential for selling coffee produced in Oudomxay within Lao PDR if the vol-umes and quality of production increase. At pres-ent, the majority of Lao coffee consumed in the country is produced in the Bolaven Plateau. The coffee cultivation practices in those areas are pro-ducing better quality coffee and achieving much higher yields. Furthermore, coffee is being pro-cessed in Lao (before consumption) by a number of companies that have developed their employ-ee’s skills to select, roast, pack and serve coffee.

2.5 Jobs and skills required

One of the most important jobs in Oudomxay’s coffee sub-sector is an agronomist, or a coffee cultivation specialist, working for the District Agriculture and Forestry Office, or in the private sector (with a trader or buyer). This job requires the provision of advice and support to farmers on crop production activities, such as planning, tilling, planting, fertilising, cultivating, spraying, and har-vesting. This involves demonstrating or explaining working techniques, practices, or safety regulations to farmers. Furthermore, this coffee specialist is required to inspect farm equipment to ensure its proper functioning and advice on best use.


95


At present, DAFOs have a number of staff that are nominally expected to conduct these tasks, but their skills and resources to do so are limit-ed. As mentioned earlier, buyers in Oudomxay province provide some advice to farmers (and to DAFO staff). If staff in DAFOs or in other public and private organisations acquire the necessary skills to support farmers efficiently, the impact on coffee cultivation could be high, as this could lead to higher productivity and quality if carried out alongside other support, such as better infra-structure and/or access to inputs and credit.

At the farm/production level, there is also a need for processing specialists that can teach farmers the best coffee processing tasks, including grad-ing and sorting products according to quality, processing red cherries (pulping) and storing red and black cherries to ensure its maximum quality. During field work, the research team found that buyers provide some basic advice to farmers on how to grade, store and process coffee red beans. However, it would be important for DAFOs or other public or private organisations (i.e. Farmers organisation) to have some staff (at least two staff per coffee-producing district) that are able to pro-vide this advice. Furthermore, other organisations or institutions, such as agricultural research cen-tres or coffee associations, could also benefit from having a specialist able to provide advice to pro-ducers on processing. The increased availability of coffee processing specialists in Oudomxay would help to ensure that the coffee is stored and pro-cessed to maintain the highest quality and would contribute to farmers obtaining higher prices.

Finally, as the number of coffee roasters and cof-fee shops rapidly increases in Lao PDR – mainly in Vientiane Capital and Luang Prabang – the de-mand for roasters and baristas is rapidly increas-ing. At present, coffee roasters and shops train their own staff on how to operate machinery and prepare coffee (or hire roasting and coffee ma-

chine suppliers to carry out these tasks). Provid-ing training and increasing existing skills in roast-ing and coffee preparation could have a medium impact among people working in this part of the chain by allowing them to access better jobs and/or obtain better salaries. This is unlikely to provide many benefits upstream to farmers and proces-sors, unless the roasting skills of machine oper-ators of exporting companies (DAO coffees) are substantially increased contributing to an increase in demand for high-volume coffee. The tasks of roasters and baristas include selecting and grad-ing beans; operating roasting equipment; filling or removing product from trays, carts or equipment; packing; operating coffee machines; preparing or serving hot or cold beverages, such as coffee, espresso drinks, blended coffees, or teas; weigh-ing, grinding, or packing coffee beans for custom-ers; and cleaning or sanitising work areas, utensils, or equipment.


96

Priority jobs LevelNumber of workers

availableNumber of workers

requiredPotential impact

Agronomist 4

At least two per district in DAFO, but level of knowledge is low.

At least two per district in DAFO or other private or public sector organisations in districts where cassava is grown.Plantations have up to 15-20 agronomists to supervise their cultiva-tion and provide advice to contract farmers.

High – there is high demand for cas-sava and the area cultivated is likely to grow.

Processing officer/ tech-nician

4

None – at present farmers learn from buyers how to carry out simple processing.

At least two processing officers/technicians per district who would work with DAFO or for buyers.

High – the demand, quality and value of coffee sold in Lao PDR would increase.

Roaster and barista 2

None identified in Oudomxay province, but there are between 20 and 30 small-scale roasters in Lao PDR each employing be-tween 1 and 2 staff.There is larger num-ber of baristas (an estimated 100) in the country, especially in Vientiane Capital and Luang Prabang where the vast majority of coffee shops are located.

The number of roasters will grow, but slowly given that there is plen-ty of unused capacity.

The number of baristas will grow more quickly as coffee shops are constantly opening in Vientiane Capital and Luang Prabang.

Medium – while the demand for roasters and baristas will grow it will not have a significant economic impact upstream in the chain.

Table 1. Main jobs and skills required in the coffee sub-sector in Oudomxay


3. TEA VALUE CHAININ OUDOMXAY PROVINCE



98

Tea is an important product in Laotian culture. Tea is consumed regularly (on a daily basis) by people all over the country. Most tea consumed in Lao PDR is wild tea collected from the forest. How-ever, there are a number of farmers in different provinces that grow tea for commercialisation.

In Oudomxay province, tea is collected by farm-ers as a way to earn an extra income; it is not their main source of income. Collectors buy the tea from farmers and dry it before exporting it to China. The volumes of tea collected and pro-cessed are small. In 2015, 480 tons of tea were collected from 445 ha in four districts (Xay, Namor, Beng and Pakbeng). However, there is a potential for growth if the sub-sector receives support from Government, donors and/or the private sector.

3.1 Production

According to Provincial authorities in Oudomxay province, tea is collected from the forest by ap-proximately 100 families in five villages in Xay and Pakbeng districts. Tea is collected manually with minimal use of technology or tools. The current

price for tea is LAK 15,000 per kilo in the rainy sea-son and LAK 35,000 in the dry season.

Tea is cleaned and dried in home driers before be-ing sold to collectors/buyers. Buyers collect tea at the village level. Dry tea leaves are then exported to China for processing, where it is further dried and compressed, before being packed for retail. The retail price of tea in China is between LAK 80,000 and LAK 300,000 per kilo depending on quality.

3.2 Advice and training

Tea collectors in Oudomxay do not receive train-ing or technical advice on the collection, culti-vation or processing of tea. The sub-sector has received limited support from Government or donors. There is potential for development of the value chain if the right investments in training and access to technology are made.

Little investment has been made by PAFO and DAFOs to conduct research on tea collection, cul-tivation and processing. Extension officers have little to no knowledge of tea collection and cultiva-tion and are thus incapable of supporting farmers.

Agricultural schools and colleges in the district do not have courses on tea cultivation, collection or processing. These schools and colleges have no staff with knowledge of tea, so they cannot train students on tea cultivation and processing.


The potential for the development of the sub-sector is large, given the low level of knowl-edge and technology currently used. Further-more, most tea is currently collected from the for-est and sold as “wild” or “natural” for a premium,

3. TEA VALUE CHAIN IN OUDOMXAY PROVINCE


99

but the potential for cultivation exists. China is the main market for Laotian tea and according to in-formants the demand for tea in China is high.

However, the likely impact on farmers’ income and the number of farmers to benefit from in-vestments in this sub-sector is low. Tea is usually not the main source of income for farmers and they only engage in tea collection at times when they are not busy with other agricultural activities. It is unlikely that investments in this sub-sector will encourage farmers to devote more time to tea collection and drying.


One of the most important jobs in the tea sub-sector in Oudomxay province is an agrono-mist, or NTFP specialist, working for the District Agriculture and Forestry Office or in the private sector with a trader or buyer (see Table 2). This job requires the provision of advice and support to farmers on “wild” tea collection, storing and drying. In tea plantations, agronomists or tea cul-tivation specialists provide advice to managers and farmers on crop production activities, such as planning, tilling, planting, fertilising, cultivating, spraying, and harvesting. This involves demon-strating or explaining working techniques, practic-es, or safety regulations to farmers. Furthermore, the tea production specialist is able to inspect farm equipment to ensure proper functioning and advice on best use.

At present, DAFOs have a number of staff that are nominally expected to conduct these tasks, but their skills and resources to do so are limited. As mentioned previously, tea buyers in Oudomxay provide some advice to farmers on how to collect and dry tea leaves. If staff in DAFOs acquired the necessary skills to support farmers efficiently, the impact on tea collection and post-harvest pro-cessing could be high, as this could lead to farm-

ers obtaining better prices for their tea. Trained DAFO staff, among other things, such as a better investment environment and better infrastruc-ture, could also encourage investments in tea plantations by local or foreign investors.

The level of processing of tea in Oudomxay prov-ince is minimal, and most “wild” tea is exported to China unprocessed. During this research no pro-cessing specialists were identified in the province (although there might be some in other parts of the country). Developing human resources with skills to process tea could help to attract firms that process tea for local and external markets. Their tasks would include inspecting or testing raw tea, cleaning and sorting tea leaves by grade or quality, operating processing machinery, and packing tea.



100


Priority jobs LevelNumber of

workers avail-able

Number of workers re-quired

Potential impact

Agronomist / NTFP specialist

4 None identified

At least two per district in DAFO or another public or private organisations where tea and other NT-FPs are collected.

Medium – while many farmers would benefit, their increase in income would not be significant as “wild” tea has a limited market.

Processing specialist 4 None identifiedOne processing specialist per firm.

Medium – the demand, quality and value of tea from Lao PDR would increase.

Table 2. Main jobs and skills required in the tea sub-sector in Oudomxay

4. CASSAVA VALUE CHAIN IN XAYABOURY PROVINCE



102

Cassava is grown in most provinces of Lao PDR, the most important being Saravan, Champasak, Xayaboury and Borikhamxay. In Xayaboury prov-ince, 24,170 ha of cassava were planted in 2016, with a total production of 949,849 tons. Also, the province exported 30,000 tonnes of cassava pow-der to China1. Cassava is a labour-intensive crop that is grown mainly under contract between farmers and processing factories. There are five processing factories in Xayaboury province, all producing cassava flour that is then exported to China.

4.1 Production

Farmers grow cassava in Xayaboury province during the wet season. Farmers obtain cuttings from the processing firms or from other farmers for planting. Farmers use little to no other inputs, although some buyers provide them with credit. Little to no machinery is used in the cultivation and harvesting of cassava. Where machinery is used, this largely consists of ploughing machines and sprayers.

Due to lack of proper extension and training, farmers use poor plant husbandry practices that tend to keep yields low. Furthermore, farm-ers make limited use of inputs and machinery which could help improve their yields. Addition-ally, farmers are unsure about the risk of growing only cassava and sometimes prefer to grow other commodities like maize so they can practice in-tercropping. Farmers seem to lack knowledge and understanding of the benefits of crop rotation and may be causing deterioration in their soil quality. The farm gate price for fresh cassava is LAK 500,000 per ton. Farmers are in charge of transporting and delivering the cassava to the factory. The price of cassava has increased from LAK 300,000 per ton in 2011, as factories have tried to encourage farmers

1 Vientiane Times, “In Laos, Xayaboury pushing crop growth and livestock breeding for export”, 10 October 2017.

to switch from maize and other crops to cassava. Penalties are imposed to farmers if cassava is not delivered to the factory within 24 hours of harvest-ing as the quality deteriorates quickly. According to a processing factory employee, the penalty for late delivery is LAK 100 per kilo.

4.2 Processing

Cassava is cut and delivered fresh to factories by farmers. It has to be delivered within 24 hours of be-ing cut to avoid deterioration. There are four cassava drying plants and one cassava processing factory in Xayaboury province. The factory processes cassa-va into flour and packs it for export to China. The process includes washing, drying, compressing and milling the cassava into flour. The processing factory has a capacity of 1,400 tons per day, but it is currently processing between 1,200 and 1,400 tons per day for only three months a year, due to lack of supply. All the production is sent to China for further processing.

The cassava-processing factory employs 90 work-ers for a variety of different tasks including carrying, packaging, monitoring machines, stoking and storing cassava and bags. There is limited specialisation.



103

The 90 factory workers are unskilled. Additional-ly, the factory employs 25 Lao technicians that provide extension support to farmers. Howev-er, as the factory only operates for three months per year, the technicians are only hired for a few months every year. Finally, the factory employs 15 Chinese technicians that supervise and manage operations.


Farmers receive some technical support from factories on cassava cultivation, including soil management, input use and plant management and harvest. DAFO staff also provide some tech-nical support to farmers, although their resources and knowledge to do so are limited. To solve this problem, DAFO staff are being trained by the fac-tory so that they can deliver the training to farm-ers in the future. At present, DAFO staff mainly focus on monitoring the growth of cassava and on making sure that farmers sell their cassava to factories.

The 90 factory workers receive training at the fac-tory for one day when they are hired. The techni-cians (agronomists) hired by the factory to provide technical advice to farmers come from colleges in Vientiane and Luang Prabang and they receive in-tense training upon joining the factory.

The TVET school in Xayaboury does not provide any training to students on cassava cultivation or processing. This is because they do not have any teachers with knowledge of cassava cultivation or processing. However, they do acknowledge that their teachers and students require more knowl-edge in this field. The school has no contact or agreement with producers or processors to allow teachers and/or students to gain experience from plantations or factories.


The cassava value chain in Xayaboury is operating far below its full potential for a number of reasons. These include: poor agricultural knowledge of cassava culti-vation and limited information provided to farmers on ways to improve their cultivation, i.e. limited research and extension and training provided to farmers; limited infra-structure to increase productivity such as better irrigation and machinery; lack of knowledge and equipment for harvesting and post-harvesting drying and processing, and lack of equipment for storage; and limited quality control; poor coordination between producers, traders and processors leading to loss in quality.

However, there are great opportunities for the development of the value chain due to the in-creasing demand of cassava in Xayaboury, mainly by Chinese processors. According to informants, the area cultivated is only likely to increase if the provincial Government provides the facilitation and support to do so. If any or several of the issues mentioned previously are addressed, the benefits for farmers are likely to be high.

Figure 2. Cassava value chain in Xayaboury province




104


One of the most important jobs in the cassava sub-sector in Xayaboury is that of agronomist or technical advisor. This position is responsible for providing advice and support to farmers on crop production activities, such as planning, tilling, planting, fertilising, cultivating, spraying, and har-vesting cassava. This includes demonstrating or explaining working techniques, practices, or safe-ty regulations to farmers. Furthermore, the cassa-va specialist is able to inspect farm equipment to ensure proper functioning and advice on its best use.

DAFOs in cassava producing districts in Xayaboury have a number of staff that are nominally expect-ed to conduct these tasks, but their skills and re-sources are limited. Currently, cassava processing factories in Xayaboury provide some advice to farmers (and to DAFO staff) on cassava cultivation and harvesting. However, DAFO staff or indepen-dent trainers/traders should also be able to pro-vide this advice to farmers so that they are able to receive advice on cassava cultivation without the commitment to sell all their production to one particular processor. If there were other public or private sector actors with the necessary skills to support farmers efficiently, the impact on cas-sava production could be high, as this could lead to higher productivity and quality, if carried out alongside other support, such as better infrastruc-ture and/or access to inputs and credit.

Cassava processing companies are interested in leasing land to grow cassava. If they manage to negotiate and agree with the Provincial govern-ment to do so, they will need farmworkers that can work in cassava cultivation, operate and repair agricultural machinery and carry out post-harvest activities. Traditionally, farmworkers in plantations in Lao PDR are farmers that have little or no land or that need an extra source of income during the

lean season. These farmers tend to have no for-mal education and limited skills in farming at the commercial level, as they are commonly self-sub-sistence or small-scale commercial farmers.

Providing training to prospective farm workers can help them obtain higher salaries and attract investment in cassava plantations. The tasks re-quired for farm workers include setting up and operating irrigation equipment; operating tractors and other machinery to plough, harrow and fer-tilise soil, or to plant, cultivate, spray and harvest crops; repairing and maintaining farm vehicles, im-plements, and mechanical equipment; identifying plants, pests, and weeds to determine the selec-tion and application of pesticides and fertilisers; participation in the inspection, grading, sorting, storage, and post-harvest treatment of crops. Al-though the number of farm workers required will largely depend on the size of plantations, their numbers can reach the hundreds, as in the case of sugar plantations in Savannakhet province.

Plantation managers would also be required to manage and supervise the operations of the plantations. Their tasks would include directing and managing crop operations; planning crop ac-tivities based on factors such as crop maturity or weather conditions; monitoring activities such as irrigation, chemical application, harvesting, or grading to ensure adherence to safety regulations or standards; inspecting farm equipment to ensure proper functioning; selecting or purchasing ma-chinery, equipment, livestock, or supplies, such as seed, fertilisers, or chemicals; hiring, training, or su-pervising farm workers; demonstrating or explain-ing working techniques, practices, or safety regu-lations to farm workers; and maintaining financial, operational, production, or employment records. The number of plantation managers required will depend on the size of the plantations, but could easily be between 2 and 5 per plantation.



105





Agronomist or technical advisor

4

At least two per district in DAFO but their level of knowl-edge about cassava is low.

At least two per district in DAFO or other private or public sector organi-sations in districts where cassava is grown.Plantations have up to 15-20 agrono-mists to supervise their cultivation and provide advice to contract farmers.

High – there is high demand for cas-sava and the area cultivated is likely to grow.

Farmworker and labourer 1

None identified as processing compa-nies claim they do not yet rent land.

Processing compa-nies are interested in renting land from the Government to grow cassava, as they do in other parts of the coun-try. If this happens, these companies will need labourers (farmers) to work in the plantations. Up to 100 labourers during planting and harvesting season.

Medium – This would be temporary employment with low pay.

Agricultural equipment oper-ator and mechanic

3 None identified

Plantations will require 1 or 2 agri-cultural equipment operators.

Medium – small number of operators required per planta-tion as plantations tend to be small.

Post-harvest storage and processing specialist

2-3

None – at present farmers learn from traders/buyers how to do simple pro-cessing e.g. cutting, cleaning.

At least two spe-cialists per district where cassava is grown, who can provide services privately or through DAFOs

High – the demand, quality and value of cassava processed in Lao PDR would increase.

Farm manager 4 None identifiedPlantations will require 2 or 3 farm managers.

High – well man-aged farms should help increase the volume and qual-ity of production, therefore increasing prices and helping the sub-sector to grow.

Table 3. Main jobs and skills required in the cassava sub-sector in Xayaboury

5. MAIZE VALUE CHAIN IN XAYABOURY PROVINCE



108

Maize constitutes about 12 per cent of the total harvested area in Lao PDR, and is the next most important crop after rice1. However, maize is not an important component of the Laotian diet. Most maize cultivated in Lao PDR is produced under a farming contract or agreement between farmers and traders and exported to Thailand, China or Vietnam. A small proportion is kept by households and is mainly used as animal feed.

Maize is predominantly grown in two districts of Xay-aboury province – Paklai and Kenthao. PAFO officials in Xayaboury reported that in 2016, the planted area for maize in the province was 39,330 ha, with a to-tal production of 225,000 tons. They claim that the area allocated to maize cultivation is reducing as the area devoted to cassava increases, mainly given to the higher prices and profits received from growing cas-sava. However, this changes year on year as the price of both commodities fluctuate.

Most maize production in Xayaboury (and in Lao PDR) is under some kind of informal agreement or contract with wholesale buyers/processors. Contract

1 Agricultural Statistics Year Book 2015, Department of Planning and Cooperation, MAF, 2016.

farming is not widespread (as it used to be) as farmers prefer to have different marketing options. Recent-ly, new Chinese buyers are coming into the market with aggressive strategies that include higher prices, more credit to farmers, and technical advice, which are attractive to some farmers. Nonetheless, the con-tractual relationship between farmers and buyers still largely benefits the buyers, as there is little group selling and lack of involvement and oversight from District or Provincial authorities.


5.1 Production

Farmers in two districts (Paklay and Kenthao) in Xayaboury province are engaged in maize cultiva-tion. Farmers grow maize for commercialization usually under a formal or informal contract with traders. Frequently, traders provide seeds (MX10 and LVN 10) and other inputs on credit in ex-

Figure 3. Maize value chain in Xayaboury province



109


change for supplying the harvest. However, some farmers prefer to buy the seedlings themselves and grow maize independently to have more mar-keting options.

Maize is usually cultivated in a labour-intensive way among other crops, although the number of farmers growing maize exclusively is increasing. Households with limited members have to rent labour, which has an impact on their profits. Most farmers grow maize only once a year during the rainy season. However, some farmers in Paksei District with access to irrigation are able to grow two crops per year. Some farmers also rotate their production between a number of crops in high demand, such as tear’s job and cassava. The use of inputs, such as fertilizer and pesticides, is min-imal. Equally, the use of machinery for cultivation or harvest is minimal. Some farmers are able to rent tractors for land preparation, but the model in which individual farmers rent tractor services results in high costs for farmers.

Prices largely depend on the demand from Chi-na, where most of the maize produced in the province is destined for. Informants claimed that five years ago the price of maize (hob) at the farm gate was around LAK 500 to LAK 600 per kilo. At present the price of maize (hob) at the farm gate is reported to be around LAK 800 per kilo.

The quality and standards of maize are estab-lished by wholesale buyers, although there is not a high expectation on quality. According to informants, farmers in these two districts market their product individually to collectors or traders (wholesale buyers), as the recent arrival of new Chinese traders allows them to negotiate for bet-ter prices.

5.2 Processing

Maize is transported by collectors or wholesale buyers to their warehouse. According to key in-formants, there are 14 maize processing business-es/wholesalers in Xayaboury province. The level of processing is very limited. Maize is threshed and dried with limited machinery and processes. Most of the work is carried out by hand by labour-ers. Wholesale buyers have a limited number of workers, usually between 5 and 10, but the tem-porary workforce can increase during peak times. These workers have no formal education and are trained internally by business owners and other more experienced workers.

Dried maize has a price of between LAK 1,500 and LAK 2,100 per kilo. It is transported to China and delivered to food processing factories. Most of the maize is processed into animal feed.


DAFO provides technical advice to farmers be-fore planting (May) and before harvesting (No-vember to December), but the training is limited and of low quality. By their own admission, ex-tension service agents have limited knowledge of maize production, so they are not able to provide extensive support to farmers. Local agricultural schools do not provide specific training on maize production or processing, so students are unable to learn about one of the most important com-modities currently produced in the province.

In contrast to other supply chains, buyers do not provide advice or training to farmers. Farmers obtain knowledge from other farmers and from development projects, but this is minimal and scattered. As a conse-quence, farmers remain exposed to inequitable terms of trade, continue to face difficulty accessing needed inputs, and received virtually no advice on sustainable and productive practices.


110


5.4 Value chain opportunities and con-straints

The maize value chain in Xayaboury is operating below its potential due to a number of factors, including poor agricultural knowledge and in-formation provided to farmers i.e. limited research and extension and training provided to farmers; use of poor quality inputs and inadequate/poor diversifi-cation; limited infrastructure i.e. irrigation canals, lack of maintenance of infrastructure, lack of machinery and mechanisation; lack of machinery for harvesting and post-harvest drying and processing, and lack of equipment for storage and testing; limited finance to traders/buyers so they can provide more credit and support to farmers and buy more sophisticated pro-cessing machinery; and limited quality control.

The key driver for the growth (and stagnation) of this sector from the perspective of farmers and traders is the demand and price of maize in neighbouring countries and the risk associated with focusing only on maize. Despite the fact that the demand and price for maize is growing, both farmers and wholesale buyers diversify to other commodities, such as job’s tear, cassava and amaranth, as a risk management strategy.

There is very limited processing carried out in Lao PDR so supporting farmers and buyers to increase the level of processing before selling to China would allow them to obtain proportion of the added value of processed corn. This support could include access to better credit conditions to buy processing machinery, technical advice on what machinery to buy and how to process maize mechanically, exchange visits for traders and pro-cessors to understand the quality requirements of processors in China.


One of the most important existing and required jobs in the maize sub-sector in Xayaboury is that of an agronomist/technical advisor. DAFOs have a number of staff that are nominally expected to provide advice and support to maize farmers, but their skills and resources to do this are limited. Maize traders in Xayaboury provide some advice and support (i.e. inputs and credit) to farmers on maize cultivation and harvesting, but this is very limited and of low quality. If other public or pri-vate sector actors were able to provide quality advice and support to farmers, they would able to access advice on maize cultivation without the commitment to sell all their production to one particular trader or processor, improving their terms of trade with buyers. The impact of this on maize production could be high, as this could lead to higher productivity and quality, if carried out alongside other support such as better infrastruc-ture and/or access to inputs and credit.

An agronomist or technical advisor would be respon-sible for providing advice and support to farmers on crop production activities, such as planning, tilling, planting, fertilising, cultivating, spraying, and har-vesting maize, including demonstrating or explaining working techniques, practices, or safety regulations to farmers. Furthermore, the maize specialist would be able to inspect farm equipment to en-sure proper functioning and advice on its best use.

The number of agronomists or technical advisors required will depend on the number of farmers growing maize per district. However, having at least two technical advisors in each district would be useful to develop a system of learning in their districts (i.e. farmer-to-farmer learning).


111





Agronomist 4


At least two per district in districts where maize is grown.

High – there is high de-mand for maize and the area cultivated is likely to grow.

Labourer 1

Traders/processors currently employ between 5 and 10 la-bourers (there are 14 traders/ processors in Xayaboury).

As the trade of maize grows, more labourers will be required to carry out basic processing (i.e. shredding, sorting, packing).Increase of around 5 workers per year.

Low – skills required and salaries for these posi-tions are low.

Processing machine operator

3

None – at present labourers learn from buyers how to carry out simple processing, such as drying, shredding and packing.

At least one per pro-cessing facility (14 in Xayaboury) which could eventually attract higher investment in processing.

High – the demand, quality and value of maize processed in Lao PDR would increase.

Table 4. Main jobs and skills required in the maize sub-sector in Xayaboury

Traders and processors hire workers to conduct basic processing of maize, such as shredding, dry-ing, sorting and packing, mostly done by hand or with very basic machinery. However, improving and increasing the skills of labourers to operate equipment to perform these and other post-har-vest tasks would help in adding value before the maize is exported to China for further pro-cessing. Labourers should know how to operate equipment to perform post-harvest tasks, such as husking, shelling and threshing. The number of workers required for processing activities would be around 5-10 per processing facility, at pres-ent 14 trading/processing firms in Xayaboury, but likely to increase as the demand for maize contin-ues to rise.

6. DAIRY VALUE CHAIN IN VIENTIANE PROVINCE



114

Dairy production is an emerging sector in Lao PDR. Given that dairy products have a limited role in the Laotian diet, most dairy products are consumed in large cities by expats or households with higher incomes. Most dairy products, in particular milk, are imported from Thailand and sold in minimarts and supermarkets in Vientiane and Luang Prabang cities. In 2016, Lao PDR imported 927 tons of milk and cream (not concentrated or containing add-ed sugar or other sweetening matter) mainly from Thailand for a value of US $720,000. Furthermore, in 2015 Lao PDR imported 309 tons of concen-trated or sweetened milk and cream for a value of US $878,000. Lao PDR imports concentrated or sweetened milk from Vietnam, Malaysia and Sin-gapore1.

The main dairy products produced in Lao PDR are fresh milk and yoghurt, sold in minimarts and su-permarkets that have refrigerators to keep them fresh. There was no production of cheese in Lao PDR identified by this study.

1 Trade map 2017.

6.1 Production

Local production of dairy products is concen-trated among a few companies mainly based in Vientiane Capital. The main company producing milk in Lao PDR is Crysta Farm located in Nax-aythong district, Vientiane Capital. The company is fully integrated from farm to processed milk. The farm has around 100 cows that were bought and imported from Thailand, but has a capacity to hold up to 300 hundred cows. Feed for cows is prepared with inputs produced in their own farms and also bought from local farmers, such as grass, maize and cassava, and supplements that are imported from Thailand. A Thai special-ist has advised the company on how to prepare feeds.

The farm has one Thai veterinary and six workers, none of whom have any formal education. They have all been trained in-house on a number of tasks, including feeding and watering cows and monitoring food and water supplies, preparation of feeds, cleaning stalls, pens and equipment, and milking animals using milking machines.

6.2 Processing

The dairy plant processes the raw milk into fresh milk and yoghurt. Milk is pasteurised in a sec-ond-hand machine bought from China. It is then bottled in small and large containers all brought from Thailand. The plant has the capacity to pack the milk into small plastic bags (ideal for school meals), but it is not currently doing so because they have not found a way to market them. With existing capacity, the plant can produce

up to 400 litres of milk and up to 200 litres of yo-ghurt per day. However, the plant is operating at 30 per cent capacity due to a lack of markets and the lack of capacity to compete with Thai milk.



115

Furthermore, as with other sectors, there are no established standards for production of dairy products in Lao PDR. Companies have to develop and ensure their own health standards and test-ing. This would naturally be an obstacle if produc-ers wanted to trade regionally.

The Crysta milk and yoghurt factory has one Thai dairy specialist and four workers, none of whom have any mid-level or higher education. Staff were trained in-house by the dairy specialist. There is no division of labour and all workers are expected to carry out any of the required activities. Their tasks include cleaning and sterilising containers and factory processing ar-eas, operating basic machinery, such as the pasteur-iser and the packing machine, testing food product samples, inspecting production and packing/bottling the final product (i.e. milk or yoghurt).

6.3 Marketing

The company distributes their products in coolers on the back of small trucks, which is a risk for the prod-ucts given the constant change in temperatures. The factory owner is in charge of managing production and conducting marketing for their products.

6.4 Value chain opportunities and con-straints

The growth of the dairy factory and of the sec-tor in general will be constrained by a number of factors. Firstly, the consumption of milk and oth-er dairy products in Lao PDR is very limited. Dairy products are not a significant part of the Laotian diet and outside of cities people rarely consume milk or any other dairy products. Secondly, im-ported dairy products are still much cheaper than dairy products produced in Lao PDR, because of economies of scale. Without Government sup-port, it seems difficult that a dairy industry will be able to develop in Lao PDR in the short term. Thirdly, infrastructure is still a problem. At pres-

ent there are no factories able to pack dairy prod-ucts in long-lasting containers, such as Tetra Pak. This means that all dairy products need to be sold fresh. With limited cold chain transportation and relatively few outlets with refrigerators, the op-portunity of marketing fresh dairy products is lim-ited.


A common job in the dairy sub-sector is that of dairy farm labourer. These labourers usually have no pre-vious training and are trained by the companies. They carry out a number of tasks such as feeding animals; milking cows by hand or using milking machines; cleaning and maintaining animal pens/quarters; and observing animals for signs of illness, injury or unusu-al behaviour. At present, given the small size of the sub-sector, the number of workers required to con-duct these activities is limited, but as the sub-sector develops in the mid-term this will increase.

Two of the most important existing and required jobs in this sub-sector are the livestock feed spe-cialist and the animal care supervisor. DAFOs have a department and a number of staff focused on providing advice and guidance on livestock raising and veterinary services to farmers and companies. However, their resources are limited and their capacity to reach a high number of farm-ers or companies is low. As in other sub-sectors, private sector actors hire specialists to provide this support. As the dairy sub-sector develops and grows it will require a number of qualified feed specialists and veterinarians to support the industry.

The responsibilities of the livestock feed specialist are to assign tasks such as feeding and treatment of animals, and cleaning and maintenance of an-imal quarters; study feed, weight, health, genetic, or milk production records to determine feed for-mulas and rations and breeding schedules. For the animal care supervisor, the responsibilities include



116

observing animals for signs of illness, injury, or unusual behaviour, and notifying veterinarians ac-cordingly; monitoring animal care, maintenance, breeding, and transfer activities; training workers in animal care procedures, maintenance duties, and safety precautions.

Equally, the work of a veterinarian is key for the operation of a dairy farm. As with the previous positions, as the sub-sector develops this position will be in higher demand. The tasks of a veterinar-ian in a dairy farm involve examining animals to detect and determine the nature of diseases or in-juries; treating sick or injured animals by prescrib-ing medication, setting bones, dressing wounds, or performing surgery; advising on sanitary mea-sures, feeding, general care, medical conditions, or treatment options; training or supervising work-ers who handle or care for animals; and inspect-ing animal housing facilities to determine their cleanliness and adequacy. The impact of having Lao skilled staffed in these areas can be high as at present most of these specialists are brought from Thailand.

A dairy plant manager is in charge of directing and coordinating the activities of workers en-gaged in production; enforcing safety and sanita-tion regulations; planning and establishing work schedules, assignments, and production sequenc-es to meet production goals; inspecting materi-als, products, or equipment to detect defects or malfunctions; conducting training in equipment operations or work and safety procedures; read-ing and analysing charts, work orders, production schedules, and other records and reports to de-termine production requirements and to evaluate current production estimates and outputs; main-taining operations data, such as time, production, and cost records, and preparing management reports of production results; recommending or implementing measures to motivate employees and to improve production methods, equipment

performance, product quality, or efficiency; and calculating labour and equipment requirements and production specifications, using standard for-mulas.

Dairy plants also require milk and yoghurt ma-chine operators. At present, they are being trained by firms by external trainers or managers. As the sub-sector develops, more machine operators specialised in milk and yoghurt machines will be required. Their tasks consist of loading specified amounts of materials into equipment or contain-ers for further processing or storage; operating machines to process materials in compliance with applicable safety, energy, or environmental regu-lations; monitoring material flow or instruments such as temperature or pressure gauges, indica-tors, or meters to ensure optimal processing con-ditions; cleaning or sterilising tanks, screens, in-flow pipes, production areas, or equipment, using hoses, brushes, scrapers, or chemical solutions; measuring or weighing materials to be refined, mixed, transferred, stored, or otherwise processed.



117





Farm labourers 16 for a farm with 100 cows.

Between 6 and 10 per dairy farm.

Low - the number of jobs in this area is not likely to grow substantially in the short term.

Specialist in animal feed

4

At least two per district in DAFOs, but level of knowledge is low.One per dairy farm.

One or two per dairy farm.

Low – dairy sub-sector will not grow quickly in the short term.

Animal Care Super-visor

4One per livestock or dairy farm.

One per livestock or dairy farm.

High – well looked after dairy cows will opti-mise the quality of dairy products.

Veterinarians 5Two per each DAFO.One in the dairy farm. One per dairy farm.

Low – dairy sub-sector will not grow quickly in the short term.

Dairy plant manager 5 One in dairy plant. One per dairy plant.Low - dairy sub-sector will not grow quickly in the short term.

Milk and yoghurt machines operator

3

None – at present workers learn from factory how to operate machinery

Low – 4 or 5 per dairy factory

Low – sub-sector will not grow quickly in the short-term

Table 5. Main jobs and skills required in the dairy sub-sector in Vientiane province

7. MEAT VALUE CHAIN IN VIENTIANE CAPITAL AND PROVINCE



120

Livestock play multiple roles in farming systems and livelihoods in Lao PDR. They provide cash in-come from sales of animals and animal products, food from animal products, farm inputs (manure and draught), and are a source of savings, securi-ty, insurance and social status. In Lao PDR, live-stock are raised by households for consumption and for economic and social reasons. Farmers use livestock, in particular cattle, as a way to increase financial security. In the absence of other means of accumulating and saving money (investments or bank accounts), large livestock are used as a source of savings. Animals are sold to meet imme-diate needs (i.e. school fees, medical emergencies), secondary needs like a motorcycle or a TV, and large expenses like weddings and houses. House-holds typically have a small flock of chickens, 1 or 2 pigs and 1 or 2 cows or buffaloes. Generally, small-holders do not aim to maximize biological and market efficiencies from livestock production, despite the fact that economic returns could be increased through improved production and mar-keting strategies.

Vientiane Province and Capital are two of the provinces with the highest number of cattle. According to the latest Agricultural Statistics (2015), Vientiane Province had 163,000 heads of cattle and Vientiane Capital had 75,000, behind Savannakhet (with 429,000 heads of cattle). The provinces also had a large number of pigs, with Vientiane Province having 118,000 and Vientiane Capital 145,000, both well below Savannakhet province, which is reported to have 320,000 pigs. According to an informant at PAFO in Vientiane Province, in 2016 there were 447 pig farms in Vientiane Province.

As with other sub-sectors, statistics on employ-ment throughout the livestock/meat value chains are not collected by Government, so it is difficult to estimate the number of chain actors. Howev-er, there are an important variety of actors in the chain such as small and middle-scale producers/growers, traders, people employed in the slaugh-ter sector, people selling meat in wet markets, ser-



121


vice providers such as veterinarians, and extension staff, feed growers and traders, meat processors, and others. The vast majority of participants are small-scale in fragmented and labour-intensive structures in rural and peri-urban areas, frequent-ly working in close networks. There are also dif-ferent ways in which the supply chains organise.

The role of women in the meat sector is concen-trated in the production and retails areas. Women play an important role in feeding and looking af-ter livestock at the household level and in selling meat in wet markets. The mid stages of the chain, such as trading, slaughtering and transporting, are dominated by men.

7.1 Production

Most breeding by smallholders is natural breeding where households use their own animals or breed-ing using group bulls, in the case of cattle. There is very limited artificial insemination, given the lack of resources and staff to do so by Government and the limited private sector actors involved in this activity, partly due to Government restrictions and lack of support.

Disease of livestock is a significant problem for small-holers. Village Veterinary Workers (VVW) are trained by the District Departments of Agri-culture to support small-holders with raising and looking after livestock. However, government vets have limited knowledge on how to treat dis-eases, and households try to minimize expens-es on treating livestock. VVWs also have limited knowledge on livestock diseases and frequently have limited access to inputs, such as vaccines to vaccinate animals.

The Government produces or imports inputs, such as vaccines, and distributes them to VVWs. Large veterinary product and vaccine manufacturers do not provide services to farmers. Given the small

scale of demand and the fragmentation of the market, there are limited opportunities to for large veterinary product manufacturers and suppliers to reach farmers.

Most households feed their livestock from prod-ucts from their own farms or from nearby fields – from crop residues and from grasses or forages on bunds and perimeters. Very few farmers buy pro-cessed feed for their livestock. Farmers’ knowl-edge of feed preparation is limited.

Large-scale production

There are a number of commercial farms that raise small livestock for consumption in the lo-cal/national market. According to PAFO there are 39 large-scale commercial farms in Vientiane Province (mainly pigs).

One of the largest commercial livestock farms in Vientiane Province is UDA. UDA farm sells between 5,000 and 8,000 pigs per month. They breed piglets and sell them to local farmers for feeding, who then resell them to the farm. The farm has about 200 permanent staff divided in 8 units. About 20 per cent of staff have a Diplo-ma and only about 5 per cent have a Bachelor’s/University degree. Within the farm there is a fairly limited division of labour and new staff are trained to carry out most of the farm’s activities.

The main activities carried out by farm labourers are cleaning animal quarters, cleaning/washing livestock, feeding, conducting health monitoring and weighing, providing assistance in pig farrow-ing/calving, and transportation. There are a small number of veterinarians and feed specialists, mostly from Thailand, that are in charge of su-pervising the production of feeds, monitoring and ensuring livestock health (i.e. application of vac-cines, etc.) and pig farrowing/calving. A few veter-inarians from MAFF also work in the factory and


122

provide supervision on behalf of MAFF. The farm imports feed and other inputs (i.e. vaccines) from Thailand. They do not buy or produce feed locally.Contract farmers receive technical advice from the farm. The advice provided by the farm in-cludes how to build cages/pens, feeding, cleaning and health monitoring of pigs.

The farm sells their grown pigs to a number of regular traders. These traders then sell to butchers who will kill and sell the meat to retailers in wet markets and restaurants. About 80 per cent of the pigs sold by UDA are destined for Vientiane Capital and the rest are mainly sold in Luang Prabang. Trad-ers and butchers operate in a tight-knit network of relationships (see processing section below).

Prices for pigs have declined in the last five years from LAK 20,000 per/kilo in 2012 to LAK 16,500

per/kilo in 2017. UDA owners attribute the reduc-tion in price to the increase in meat imports from Thailand.

UDA has a good working relationship with the ag-ricultural colleges in Vientiane province. Teachers and students regularly visit the farm and each year some 50 students are able to do short-term in-ternships with the farm.

7.2 Marketing

Interestingly, Vientiane Province and Capital have no established cattle or livestock markets. Farm-ers and small-scale producers sell their livestock to traders that come to villages looking to buy or at impromptu “markets” where a number of sell-ers and traders meet to sell and buy. This makes it difficult to conduct public health and sanitation


Figure 4. Pig value chain in Vientiane Province and Capital



123


surveillance and is an area of major risk for public health. This situation also tends to work in favour of traders who are able to determine prices for livestock much more easily than if selling-buying was carried out at established markets with su-pervision from authorities. Middle-scale and large farms sell their livestock through established net-works of traders or butchers, frequently in long-term close-knit relationships.

7.3 Processing

Most meat consumed in Lao PDR, and specifical-ly in Vientiane Capital and Vientiane Province, is processed in very small slaughterhouses (ca-pacity of 200 kg meat per day), sometimes Gov-ernment owned. There is at least one licenced slaughterhouse in each district. The vast majority of slaughtering is done in unmechanised facilities (in service slaughter plants or backyard opera-tions), with a limited division of labour, and (close) links with a limited number of downstream actors. The sector is highly labour-intensive, but gener-ates limited employment.

Typically, these slaughterhouses employ one to two people with no formal education to work as butch-ers. Butchers at slaughterhouses learn their trade on-the-job. Animals are slaughtered for a fee. Slaughter-houses operate with very poor hygiene standards, very poor practices and limited oversight. There are number of hygiene concerns in slaughterhouses in-cluding butchering on the (dirt) floor, poor practices of slaughtering and facilities in which carcasses are cut, transporting, and others1.

In most slaughterhouses, there is a lack of critical infrastructure such as: 1 Despite existing Government technical norms to deter-mine good slaughtering practices and food safety standards, they are not applied or enforced in slaughterhouses or wet markets. Furthermore, in the current regulation there are no standards for management of residues.

• Water supply, pumps and towers for washing plants down

• Water and effluent treatment• Rails and hooks to hang carcasses for first stage

cuts (not on the floor) • Benches that are easily washed down (not butch-

ered on the floor)• Biogas, compost, collection of rumen fill.

District officials from DAFO supervise the slaughtering and the conditions at slaughter-houses (and collect fees for each animal killed), but their skills and equipment to monitor health and hygiene is very limited. In theory, DAFO offi-cials conduct anti- and post-mortem inspections to check for external signs of infection. Post-mor-tem (visual) inspection is conducted on the car-cass and by looking at the different organs such as the liver. Government officials expressed that the capacity of their staff to monitor and inspect the conditions at slaughterhouses and the meat are limited. It is not clear what is done with animals that are found to be infected.

Butchers at slaughterhouses have good relation-ships with buyers/retailers, and work in a close network. Cut meat is then distributed to local markets in the back of trucks with no refrigera-tion. Fresh meat is sold at local markets without being kept in any cold storage. The degree of meat cut differentiation varies by slaughter and retail channels, with higher levels of differentiation in butcher shops and minimarts and fewer (but still many) in wet markets.

Preserved meat and offal are small consumption items. The greatest proportion of meat purchased by households is “fresh” (meaning meat cuts that may be fresh, chilled or frozen) and cooked at home. Consumers also buy a significant propor-tion of meat already prepared by restaurants and stalls as “meals” (soups, fried meat, etc.).


124

During this research only two modern abattoirs were identified that purchase or raise cattle or pigs outright for slaughter and market their own beef or meat. These are CP Laos and Lao Fresh Meats. These companies are fully integrated from farm to processed product in poultry, pork and beef. Furthermore, they combine their business with slaughter activities, imports and/or food dis-tribution.

Lao Fresh Meats

Lao Fresh Meats is a fairly new company (3 years old) raising cattle and pigs for slaughtering and processing (see Figure 5). The company has a farm with 600 pigs and a further 1,400 pigs that are be-ing raised by farmers under contract. The compa-ny also has 600 heads of cattle. The farm has land to grow crops for feed, including fodder and corn.

The feed farm has around 10 staff, without any previous formal education, that have been trained by a foreign agronomist hired by the company. The cultivated crops for feed are processed in a mill that has a capacity to mill 100 tons per day.

The company owns a slaughterhouse and pro-cessing plant where up to 60 pigs and 10 cows could be slaughtered and processed each day. At present, the plant is not working at full capacity. The slaughterhouse employs 25 staff including 2 managers (one of which is a specialist in meat processing). All the staff have high-school qualifi-cation and are trained internally to conduct mul-tiple activities. After a trial period staff are then allocated to a specific activity. These tasks include slaughtering cows and pigs, cutting, packaging and labelling meat, processing meat into different products like sausages and skewers, packaging processed meat and preparing it for delivery.


Figure 5. Value chain for meat processing in Vientiane Capital and province province



125


The factory has a small laboratory so that it can test meat for disease and contamination. How-ever, as the company is planning to export meat, they need to acquire a certification from a Thai or international agency. There is no formal system to acquire a certification in Lao PDR for exporting meat, and Thai authorities do not recognise Lao Government’s approval/certification.Lao Fresh Meats delivers their fresh and processed meat to customers and markets in a refrigerated truck. The company also retails their product in two shops in Vientiane Capital. About 80 per cent of their sales are processed meat and 20 per cent is sold fresh.

The company has a working relationship with TVET schools in the province and has been open for students to visit the farm and the slaughter-

Figure 6. Meat value chain with contract farming in Vientiane Capital and province


house-processing facility. A small number of stu-dents (about 10) come for day visits every term, but they do not have any internship programmes yet.

CP Laos

CP Laos, a subsidiary of a Thai company, CP Group, owns several pig and chicken farms in Lao PDR (see Figure 6). They have seven pig farms with over 10,000 pigs. The farms have 30 supervisors and 280 permanent workers.

The company also has agreements (informal con-tracts) with farmers who buy piglets from the farm, feed them for a number of months (pig fattening), and resell them to the company. The contracts cover the input and output sides, meaning that the company ensures the provision of inputs (feed,


126

7.4 Retailing

Wet markets account for the vast bulk of meat sales in Lao PDR. Stallholders in wet markets are specialised in selling meat, and often differ-ent types of meat products. Stallholders get their supply from butchers, through close working re-lationships and very often family and community relationships. Of those who buy meat at wet mar-kets, a large proportion of clients are household consumers, a smaller proportion are food stall-holders/peddlers and a very small proportion are restaurants and supermarkets.

Meat sold through modern channels accounts for a small proportion of overall meat sales. Su-permarkets and minimarts are slowly increasing their market share. However, there is little data to quantify increasing volumes.

7.5 Research centres

NAFRI manages a number of livestock research centres in Vientiane Province. The centres con-duct research on how to improve livestock breeds, preparation of optimal feeds, diseases and vacci-nations. 36 people work in three stations of the cattle research centre, of which only 8 are actually conducting research (six staff have a Bachelor’s degree and only two have a Master’s degree). They accept up to 50 students per year to work as in-terns and supporting the research being conduct-ed at the centre.


vaccines, etc.) and services (technical advice) and the marketing of the output (rebuying the pigs). Farmers are expected to construct cage systems and apply composite feed recipes regulated by the company. At present, more than 100 farmers in Vientiane as well as in the provinces of Savanna-khet, Champasak and Khamouan have joined CP’s contract-farming model. The company produces feed for their own pigs and for pigs being fattened by farmers under contract. To do this, they rent land from the Government to grow crops and they import supplements from Thailand.

The company sells live animals for slaughtering by private butchers and consumers. However, the company also slaughters animals for sale in the local market. The slaughterhouse is a 45-year-old facility that previously belonged to the Govern-ment. Presently they have a qualified operation where they kill between 100 and 200 pigs per day, depending on the season and demand. The slaughterhouse employs 20 people, five of which are production line supervisors. Government of-ficials also work in the factory and operate some of the machinery at the slaughterhouse. Gov-ernment veterinarians monitor for diseases, but the company has their own veterinarians as well. Quality control is conducted by the company. The factory has no laboratory, so meat has to be sent to Thailand for testing. Meat is sold at the factory door or distributed fresh to local markets. CP has a number of regular clients.

Staff are trained internally by other employees and by Thai trainers twice a year. Supervisors are trained in Thailand once a year. Tasks of line work-ers include cleaning, feeding, transporting, killing, cutting and boning. The highest level of educa-tion of staff is high-school. Staff at the company claimed that new employees need to be trained from scratch for them to be able to work, as they arrive to the company with very limited skills. The company has freezing equipment to store the

meat, but no packing is done at the factory. They plan to provide their staff with training on packing next year.

CP has no contact with agricultural schools or colleges in Lao PDR, but they would be willing to work with them to increase the skills of students.


127

The centre lacks basic equipment to provide ad-equate training to students or to conduct inno-vative research. Their infrastructure is outdated and they have limited budget for dissemination. Their communication and coordination with other Government departments, such as the extension department at MAFF, appears to limited. In order to raise income, the centre provides veterinary and insemination services to medium and large com-mercial farms for a fee. For smaller farms, they provide the service for free and only charge farm-ers for transportation and inputs.

7.6 Opportunities and constraints

The main constraints in this value chain are re-lated to the small scale of most operations and the high fragmentation of the chain. The vast majority of producers, processors and retailers are small household operations working with pre-carious and, at times, inadequate technology and practices. The provision of technical advice and access to newer technology is limited and of poor quality. Increasing the skills of those working at this level will be difficult given their low level of education, the small scale of their operations and how widespread and fragmented they are, in addi-tion to their expected reluctance to invest in new technology and knowledge. Building closer links between small-scale and medium to large scale value chain actors could provide some benefits to producers and processors, although most already operate in close-knit networks.

Currently, the relationships between medium and large-scale chain actors and other key actors, such as suppliers of inputs and services, are poor. Improving the links between medium and large-scale chain actors and input and service suppliers can provide important improvements for value chain work and for different actors in that chain, including small producers and service providers. For instance, a stronger and better relationship

between large farms and PAFOs and DAFOs could allow Government staff to understand and learn about livestock raising and management at a large scale. Furthermore, a closer relationship between livestock farms and agricultural technical schools and colleges can provide teachers and students with a much better understanding of and practical learning in real-life situations.

There is an important need to upgrade slaugh-terhouses and the skills of butchers. The im-provement of supervision and enforcement of existing regulations would be an obvious first step, but Government officials (veterinarians) first need to substantially improve their skills. There is also an urgent need to invest in laboratories and equipment to test meats for diseases and contam-ination. A number of people need to be trained on how to operate and manage laboratories.

The improvement of standards is also necessary to allow local producers to increase their mar-keting potential. At present, there are no institu-tions or companies in the country able to provide the required technical advice and certification to firms interested in accessing foreign markets.


The lowest level job in the meat sub-sector is the farm labourer. These labourers usually have no previous formal education (or only basic educa-tion) and are trained by the farms. They conduct a number of tasks such as feeding and watering an-imals; cleaning and giving maintenance to animal pens/quarters; examining and observing animals for signs of illness or injury; moving equipment, poultry or livestock from one location to another manually or using small trucks; spraying livestock with disinfectants and insecticides, or dipping or bathing animals; and marking livestock. The im-pact of investing in developing their skills through TVET education would be medium to high, as it



128

would allow farms to reduce the time and cost they devote to training and would immediately improve the quality of the work carried out. Fur-thermore, this job will have the higher number of positions in the farms.

Two important jobs in these sub-sectors are the livestock feed specialist and the animal care su-pervisor. DAFOs have a department and a number of staff focused on providing advice and guidance on livestock raising and veterinary services to farmers and companies. However, their resourc-es are limited and their capacity to reach a large number of farmers or companies is low. As in oth-er sub-sectors, private sector actors hire special-ists to provide this support. These specialists are frequently foreign or have been trained abroad, as the training provided in these areas in the ag-ricultural schools and colleges in Lao PDR is still limited.

The responsibilities of the livestock feed specialist are to assign tasks to farm labourers such as feed-ing and treatment of animals, and cleaning and maintenance of animal quarters; studying feed, weight, health or genetic production records to determine feed formulas and rations and breeding schedules. For the animal care supervisor, their re-sponsibilities include observing animals for signs of illness, injury, or unusual behaviour, and notify-ing veterinarians accordingly; monitoring animal care, maintenance, breeding, and transfer activi-ties; training farm labourers in animal care proce-dures, maintenance duties, and safety precautions.

Although the number of existing and upcoming positions for these two jobs are limited, given the relatively small size of the sub-sectors, the im-pact of investing in developing skills for the po-sitions through the TVET system would be high, as it would increase the quality and standards of the operations of livestock farms, having a direct impact on the quality of animals being raised in

terms of weight and health.

For obvious reasons veterinarians are extremely important for livestock farms. As with the previ-ous jobs, while the actual number of positions is not high, the impact of their work is high on the overall performance of farms and the value chain. The tasks of a veterinarian in a livestock farm in-volve examining animals to detect and determine the nature of diseases or injuries; treating sick or injured animals by prescribing medication, setting bones, dressing wounds, or performing surgery; advising on sanitary measures, feeding, general care, medical conditions, or treatment options; training or supervising workers who handle or care for animals; and inspecting animal housing facilities to determine their cleanliness and ad-equacy. Most veterinarians in medium and large size farms have been trained or come from abroad. The impact of having Lao staff with good skills in this area can be high and would benefit the entire value chain.

A farm manager is in charge of directing and co-ordinating the activities of workers engaged in production; enforcing safety and sanitation regu-lations; planning and establishing work schedules, assignments, and production sequences to meet production goals; inspecting materials, products, or equipment to detect defects or malfunctions; conducting training in equipment operations or work and safety procedures; reading and analys-ing charts, work orders, production schedules, and other records and reports to determine production requirements and to evaluate current production estimates and outputs; maintaining operations data, such as time, production, and cost records, and preparing management reports of production results; recommending or implementing mea-sures to motivate employees and to improve pro-duction methods, equipment performance, prod-uct quality, or efficiency; and calculating labour and equipment requirements and production



129


specifications, using standard formulas.

Farm manager positions will be in higher de-mand as existing and new farms grow and pro-fessionalise their operations. Better supervision and enforcement of rules and regulations by Gov-ernment will require that livestock farms recruit well trained managers to oversee their operations. While this might not happen in the short term, this is at least the intention from Government and will slowly materialize.

At the processing level, there are also a number of important jobs in this sub-sector. Firstly, the butchers are a critical job in the value chain giv-en the centrality of their activities. The tasks of butchers are to kill animals and to cut, trim, bone, tie, and grind meats, such as beef, pork, and poul-try to prepare meat in cooking form; to receive, inspect, and store meat upon delivery to ensure meat quality; to prepare special cuts of meat or-dered by customers; and to wrap, weigh, label, and price cuts of meat.

At present there are many people working as butchers, at public slaughterhouses (at least two butchers per district) and in private farms, as well as in wet markets and supermarkets. At public slaughterhouses, butchers have no formal train-ing and learn on-the-job. At private farms, butch-ers are trained in-house, often by foreign trainers. DAFO staff have limited knowledge and skills to provide training to aspiring and existing butchers, and research centres have very limited resources to do so.

Investing in developing the skills of existing and future butchers through TVET would have a high economic and social impact in the meat value chain. It would raise the standards of processes and improve food safety and hygiene levels, and animal welfare, despite other important improve-ments required in the chain, such as better infra-

structure – cattle markets, holding yards, slaugh-ter facilities and equipment in wet markets.

Secondly, the meat value chain requires a number of meat processors, able to prepare meat for dis-tribution and market. The role of the meat pro-cessors involves cleaning, trimming, slicing, and sectioning carcasses for future processing; cut-ting and trimming meat to prepare for packing; inspecting meat products for defects, bruises or blemishes and removing them along with any ex-cess fat; processing primal parts into cuts that are ready for retail use; preparing sausages, luncheon meats, hamburgers, and other fabricated meat products, using meat trimmings and meat.

The number of existing workers qualified for this job is limited, as very limited meat processing is carried out in Lao PDR at present. However, as in-comes rise and the demand for processed meats increases there is a high likelihood that the de-mand for people with skills to carry out this work will increase. Providing skills through the TVET systems for meat processors can have a high eco-nomic impact by helping to develop the value chain.

Thirdly, as previously mentioned, DAFO officials conduct inspections of public and private slaugh-terhouses, although their inspecting capacity is limited. It is therefore important to develop the skills of people to conduct proper inspections to ensure the implementation of proper food safe-ty and hygiene and sanitation standards as well as improve animal welfare. Inspectors should be able to conduct anti- and post-mortem inspec-tions of animals and to supervise the disposal of infected animals and of remains; the way the butchering is conducted, the meat is transported, and the hygiene conditions at slaughterhouses.


130




Farm labourer 1Between 10 and 300 per farm.

Between 10 and 300 workers per farm and this will increase as farms are likely to grow and new farms will open in the near future.

Medium – as farms grow and more farms open due to increased demand for meat there will be an increased demand for labourers, but required skills are minimal and salaries will be low.

Agronomist 4


At least two more per district in DAFO with knowledge of growing/ producing crops for feed.At least one in each livestock farm that produces feed.

High – this will substantially improve the quality of feed for livestock.

Livestock specialist/ Animal technician/

Breeder5

Nominally, at least two per district at DAFO but skills are poor.At least one per farm.

At least two per district in DAFO or in oth-er public or private organisation with knowledge of livestock raising, feeding and management, including artificial insemination, vaccination, farrowing/ calvingAt least one or two per commercial farm.

High – this will substan-tially improve the quality of livestock.

Table 6. Main jobs and skills required in the meat sub-sector in Vientiane Capital and province

There is a need for at least one qualified in-spector in each district, and when the number of public and private slaughterhouses increases, the demand for inspectors will also increase. The economic and social impact of training people to become inspectors is very high, not only for the value chain, but for the entire food market as well.



131

Veterinarian 5

One per village (village veterinary workers).DAFOs have a num-ber of veterinaries (usually one or two), but their skills and knowledge are low.One per commercial farm

Ideally, one per vil-lage, but at least 10 per district. Small and medium scale farms (of which there are hundreds in Vientiane Prov-ince and Capital alone) lack sup-port in veterinary services.At least 1 or 2 per livestock farm.

High – this would increase the quality, health and safety of small and large livestock produced at household and farm level.

Farm Managers 5

Each commercial farm has at least one manager, usu-ally with low formal education with skills learned by experi-ence.

At least one per commercial farm.

High – they will en-sure that the quality and productivity of farms increases as demand for meat and better quality also increases in the market.

Butcher 2

At least two per dis-trict in Government licenced slaughter-houses. Between 2 and 5 in commercial farms/ slaughter-houses.

At least two per district in district slaughterhouses. Between two and five in commercial farms/ slaughter-

houses.

High – this would increase the health standards in which livestock are being

processed.

Meat processor – middle scale pro-

cessing of meat1

Between 5 to 10 in each mid-scale meat processing factory.

High – there is an urgent need for qualified people in slaughterhouses and processing facilities.

Inspector 4

None – extension workers do not have the skills to inspect for disease or prob-lems at any stage of the supply chain.

At least two per district in meat producing districts.

High – the demand, quality and safety of meat produced and processed in Lao PDR would increase.


8. RICE VALUE CHAIN IN KHAMOUAN PROVINCE



134

Khamouan province is one of the highest rice producing provinces in Lao PDR. It is also an im-portant supplier of milled rice to Vientiane Capital and one of the main exporting provinces of rice in the country (see Figure 7). For several years, a number of development partners have been ac-tive in the province to support the development of the rice sector. This has included extensive support for farmers to improve rice cultivation techniques mainly through Provincial and District Departments of Agriculture and Forestry, invest-ments in infrastructure such as irrigation systems and canals, financial and technical support to rice millers to increase their milling capacity and the quality of their milled rice, and support in market-ing and export.

Khamouan produces between 350,000 and 375,000 tons of paddy rice annually in about 80,000 ha1, al-though it is highly susceptible to natural disasters and other shocks. As in most of Lao PDR, rice in

1 Agricultural Statistics Year Book 2015, Department of Plan-ning and Cooperation, MAF, 2016.

Khamouan is still mainly produced in small plots by smallholders with minimum use of inputs. Govern-ment seed breeders provide rice seeds for farmers that want to buy them, although individual farmers rarely buy seeds. Some villages have seed banks/breeders where farmers from the neighbouring area can draw from. Technical advice is provided through the District Departments of Agriculture and Forestry.

8.1 Production

Rice production in Khamouan, like in most of Lao PDR, is based on rain-fed small-holder produc-tion (average around 0.5 to 2 ha), with a limited use of inputs and mechanical equipment. Most farmers will produce only one crop per year, al-though farmers with access to irrigation will be able to produce two crops per year. Yields are among the lowest in the region with wet season rice achieving between 2 and 3 tons/ha, while dry season (irrigated) rice gets up to 4 tons/ha.

Individual farmers get seeds from other farmers that produce rice seed and other inputs suppliers in dis-trict markets. Farmers without cash to buy fertiliser directly from the market can obtain credit from trad-ers and make progressive payments, often with high interest rates and long payback periods. When farm-ers are organised in farmer groups they are able to buy inputs such as seeds and fertiliser from PAFO/DAFO (or other public sector suppliers), who also provide some technical support and extension. Indi-vidual farmers or farmer groups without a contract with a rice miller usually sell their rice to collectors.

Farmers producing rice for commercialisation are frequently engaged in a contract with a rice miller or rice mill association, sometimes through Farmer Groups. These farmers receive inputs such as seeds for free (from Government seed banks/seed multipli-cation centres or farmer seed production groups) or on credit from millers. Farmers and farmer groups can



135


obtain fertiliser from rice research and multiplication centres, from millers, traders and rural development projects. Except for the latter, when the supply of fer-tiliser could be for free, for all other actors, payment in cash, in kind or by credit is required. These farmers or farmers groups also receive technical advice from District extension workers (DAFO).

Prices for rice are set by buyers, such as rice mill-ers, in agreement with Provincial or District Gov-ernment officers. Farmers are usually not consult-ed on prices. The current price of paddy rice at farm gate is between LAK 2,200 to LAK 2,500 per kilo for glutinous rice and between LAK 2,400 and LAK 3,000 per kilo for non-glutinous rice.

Farmers do not process paddy (i.e. drying), there-fore providing them with access to post-harvest technology can lead to improvements in rice qual-ity and prices.

Figure 7. Rice value chain in Khamouan province



Provincial and District Departments of Agricul-ture and Forestry provide advice and support to farmers in rice cultivation. For the most part, Government extension workers advise farmers not to use chemical inputs such as fertiliser and pesticides due to the environmental and health

risks they present. However, despite the Govern-ment’s reluctance to provide farmers with training and skills to use chemical fertilisers, many farmers still use chemical inputs and are frequently using them incorrectly given the lack of proper advice.

Input suppliers provide some information to farmers on how to use chemical inputs, but the reliability and accuracy of this information is not clear. In input shops, many – and in some cases, most – of the inputs are not labelled in Lao and employees at the shops do not speak other lan-guages. Equally, DAFO and DoIC inspectors vis-


136

it the input shops regularly, but their capacity to monitor whether shops are selling only authorised products and verify if shops are providing ade-quate advice to farmers is limited. This is an area where better training and skills are required.

It is clear that farmers need information and ad-vice on the potential benefits of fertiliser use, to-gether with appropriate fertiliser selection and effective application for their particular soil type. Practical training for farmers is needed on how and when to apply fertiliser.

8.3 Processing

Rice millers are for the most part small and medium size firms with 2 to 15 employees and workers. There is a large number of small-scale rice millers operated mainly by the owners and some temporary support that service local mar-kets. A smaller proportion of middle-scale rice millers have modern technology and more organ-ised and professional operations. Employees and workers usually have a high-school level educa-tion. Workers have to conduct a multitude of op-erations within the company, such as transport-ing and unloading paddy rice, operating milling machines, packing and loading. Workers learn to carry out these activities from firm owners and, when available, managers. In particular, knowl-edge of how to operate machinery is learned from owners who learn from the suppliers of machin-ery or trainers, usually from Thailand or China. All business owners interviewed claimed that there are no specialised trainers or training centres/schools in rice milling in Lao PDR. This was cor-roborated by Government officials from different departments.

The most popular institution used by rice millers in Khamouan for learning about rice milling is Ra-jamangala University of Technology in Thailand, where some business owners go to acquire more

specialised training. Some training, visits and ex-changes have also been organised with the Pro-vincial and District Departments of Agriculture and Forestry.

Small and medium-scale rice millers in Khamouan are organised into associations. At present there are five rice miller groups or associations, one per district. The Khamouan Development Rice Group represents the five rice miller groups. In total they have 111 members that are mainly medium to small size firms. A rice miller can mill between 1,200 and 54,000 tons of glutinous rice per year.

8.4 Retail and marketing

Rice millers in Khamouan province sell the ma-jority of their milled rice within Lao PDR, how-ever they do export some of their production to Thailand. The milled rice is usually packed in 50 kg bags, but some millers have the equipment to pack in smaller bags ready for retail. Some millers pack the rice ready for export and retail in Thai-land. Current prices of milled rice are around LAK 5,000 per kilo for glutinous rice and LAK 7,500 per kilo for non-glutinous rice. However, these prices do vary depending on local and international pric-es and demand.


The main constraint for the further develop-ment/growth of this sector is the capacity of farmers to increase productivity. Rice productiv-ity in Lao PDR is one of the lowest in the region and demand is further curtailed by the vulnerabil-ity of farmers to shocks. Furthermore, the Govern-ment’s policy of minimizing the use of chemical inputs further reduces the opportunities for in-creasing productivity in a rapid manner. Access to technology and irrigation is very limited and the progress in introducing and promoting mechani-sation has been slow.



137


Furthermore, there is a need for skills develop-ment in milling. Most rice millers are learning and improving their processes by trial and error and the space for improvement through proper tech-nical advice is significant. Development of skills in planning, operation and maintenance of ma-chinery and marketing is highly required.

Finally, business owners indicate that further work is required to improve the business environment for production and marketing of rice. Businesses face challenges in accessing the required infor-mation and advice on standards, export require-ments and fees, access to credit, etc.


One of the most important existing and required jobs in the rice sub-sector in Khamouane is that of agronomist/technical advisor. At present, DA-FOs have a number of staff that provide advice and support to rice farmers, but their resources to do so are limited, and are largely dependent on donor/project funds. Additionally, some rice traders in Khamouane provide some advice and support (i.e. inputs and credit) to farmers on rice cultivation and harvesting.

An agronomist or technical advisor would be re-sponsible for providing advice and support to farmers on crop production activities, such as planning, tilling, planting, fertilising, cultivating, and harvesting rice, including demonstrating or explaining working techniques, practices, or safe-ty regulations to farmers. Furthermore, the rice specialist would be able to inspect farm equip-ment to ensure proper functioning and advice on its best use.

Agronomists or technicians capable of working as rice seed breeders in research centres or providing advice to different rice seed producers and breed-

ers are an important part of the rice value chain. At present the number of people able to provide advice to rice breeders is limited and this hampers the potential of the sector. The tasks of this job will include developing new rice varieties that are resistant to floods, droughts, pests or diseases; es-tablishing quality assurance systems for seed sup-ply; and increasing seed production. The impact of investing in developing qualified personnel to conduct these tasks would have a high impact on rice production and eventually on the income of farmers.

The number of technical advisors required will depend on the number of farmers growing rice per district. How-ever, having at least two technical advisors in each dis-trict would be useful to develop a system of learning in their districts (i.e. farmer-to-farmer learning).

Rice millers hire workers to conduct basic pro-cessing of rice, such as unpacking, drying, oper-ating mills and packing. Improving and increas-ing the skills of labourers to operate equipment to perform these tasks would help in improving the quality of rice. Labourers should know how to operate (and in some situations, fix) equipment used in rice mill plants. The number of work-ers required for processing activities would be around 1-10 per rice mill, with hundreds of mills operating in the province.

Farmers usually learn how to operate agricul-tural equipment from other farmers, and in a few cases from other chain actors, such as ex-tensionists, traders or providers of agricultural equipment. However, developing the skills of workers to operate (and fix) agricultural machin-ery can improve the way the equipment is used and spread the knowledge on the best ways to use agricultural machinery. The tasks of an ag-ricultural equipment operator include preparing and mixing specified materials or chemicals, and dump solutions, powders, or seeds into planter or


138

sprayer machinery; using hand sprayers to spray fertilizer or pesticide solutions to control insects, fungus and weed growth, and diseases; operating or tending equipment used in agricultural pro-duction, such as tractors, combines, and irrigation equipment; and adjusting, repairing, and servicing farm machinery.

The impact of developing the skills of existing and future farmers and other positions to oper-ate agricultural machinery can be high. The use of agricultural machinery is one of the key factors in helping to increase productivity in rice and oth-er agricultural sectors. The use of agricultural ma-chinery is low at present, given the reluctance and/or impossibility of farmers to use it due to lack of skills, access to finance, and risk aversion. Howev-er, the use of agricultural machinery is likely to in-crease rapidly in the near future (as has happened in other countries in the region), once the benefits become evident to different stakeholders. Having qualified resources in place to make the best use of agricultural machinery will help to accelerate this process.

In Lao PDR, there are a variety of input suppli-ers, from Government research centres that are breeding and developing seeds to private sec-tor suppliers importing fertiliser and pesticides from neighbouring countries. However, for the most part, the different actors supplying inputs to farmers have limited knowledge of how best to use them and how to share that information to farmers. Developing skills in the right use of inputs would also have an important impact on rice cultivation as it could trigger a substantial increase in productivity and reduce losses due to droughts, floods and pests. Currently, the num-ber of input suppliers to farmers is relatively low (compared to other countries in the region), but their capacity to impact rice production and pro-ductivity is high.

As stated previously, workers in rice milling firms tend to have very limited formal education and receive their training from other workers or from mill owners or managers. As a result, their knowledge and skills on how to operate machin-ery are limited and often incorrect. The main tasks of workers in rice milling factories include setting or programming rice milling machines; monitoring their performance; and packing and carrying rice bags by hand or in small transporta-tion vehicles. The number of workers in rice mills is relatively high – between 1 and 15 workers per rice mill. The impact of training current or future rice mill workers could be high, as they would help ensure the quality of milled rice and ensure that losses are reduced to a minimum.



139





Rice seed breeding spe-cialist

4

One in each seed multiplication cen-tre and/or research and extension centre.

High – increased capacity in developing new rice varieties, establishing quality assurance systems for seed supply and in-creasing seed production will strengthen resilience against pests and diseas-es and ultimately increase yields and quality of rice.

Agronomist 4At least two per district.

Increase the level of existing extension workers.At least one agron-omist for each commercial farm or farmer group.

High – this will increase the productivity and quality of paddy rice.

Agricultural Equipment Operators

3 None identified.

Limited number as mechanisation of rice farming is still low.

Medium – as rice culti-vation is mechanised the demand for equipment operators will rapidly increase.

Input suppliers 1-2

One or two per in-put shop – between five to ten shops per district town.

Increase level of knowledge of inputs among extension workers.Increase level of knowledge of input suppliers.

High – this will allow for increased production and productivity.

Operator and mechanic of milling machines

3

Between 2 and 5 per rice miller, but with limited specialised/formal knowledge.

Between 2 and 5 per rice miller.

High – production and quality of milled rice can increase substantially.

Table 7. Main jobs and skills required in the rice sub-sector in Khamouan

9. SUGAR VALUE CHAIN IN SAVANNAKHET PROVINCE



142

Savannakhet is the highest producing province of sugar cane in Lao PDR, after a substantial in-crease in planted area since 2014. In 2015, 15,230 ha of sugar cane were cultivated in Savannakhet, a substantial increase from only 1,550 ha in 20131. The productivity of sugar cane cultivation was 64.23 tons/ha in 2015, with a total production of 978,155 tons. This production of sugar cane is driven by the demand of two sugar companies based in the province.

The sugar value chain in Savannakhet is a short supply chain dominated by one large multi-na-tional enterprise that buys sugar cane mainly for export. The supply chain was established by the multi-national company with support from the Provincial Government. As such, the enterprise has a dominant position to set prices and condi-tions for producers.

1 Agricultural Statistics Year Book 2015, Department of

Planning and Cooperation, MAF, 2016.

9.1 Production

Two large sugar mills rent land from the Gov-ernment to grow sugar cane. They also have con-tracts with local farmers to buy the sugar cane they grow. The largest of the two sugar mills, Lao MITR, is currently renting around 14,000 ha from the Government for their own plantations and buys sugar cane from farmers planting sugar cane in around 3,000 ha of their own land. The second company, Savan, also rents land from the Government and buys sugar cane from local farmers cultivated in their own land.

Farmers enter into agreements with the sugar mills in which they can receive different de-grees of support. In the most common agree-ment, known as 2+3, farmers provide the land and labour, while the sugar mills provide equip-ment, investment and inputs on credit. In a dif-ferent agreement, known as 1+4, the farmer only provides the land and the sugar mill provides all other factors of production. Finally, in the 5+0 agreement, the farmer provides all the inputs.

At present, there are a wide number of villages/farmers growing sugar cane. Farmers interviewed claimed that not all farmers/households are inter-ested in growing sugar cane. Most farmers wait to see the benefits gained by other farmers engag-ing in sugar cane cultivation before they consider growing it themselves. In the village visited as part of this study (Kenghet village in Xaybuly district), only 18 households were growing sugar cane, al-though the number was increasing every year.

Farmers grow sugar cane in their own plots. Ac-cording to interviewed farmers, each household grows around 5 ha of sugar cane. The company that they work with provides inputs, such as cut-tings, fertiliser and herbicide on credit with a 6.5 per cent interest per cycle. The company also pro-vides the service of ploughing mechanically and



143

water supply on credit. Farmers plant and harvest the sugar cane between October and January. They claim to obtain a minimum yield of 6 ton/ha and a maximum yield of 12 ton/ha, which seem very low and a miscalculation. [An informant at POIC/SVK claimed that they could produce up to 50 ton/ha.] The sugar mills set a target of produc-tion per village. In the village that was visited, a target of 560,000 tons was set by MITR. Both men and women work in sugar cane cultivation.

All of the sugar cane produced by these farmers is bought by the factory at a price set by the fac-tory at the beginning of the season. According to interviewed farmers, more farmers are growing sugar cane as they see the potential for a secure income. However, few farmers grow only sugar cane. Most farmers also grow other commodities for self-consumption (i.e. rice) and for commer-cialisation (i.e. vegetables). The price of sugar cane is between 275,000 and 330,000 kip/ton.

Figure 8. Sugar value chain in Savannakhet province




144

Farmers rotate sugar cane cultivation every two to three years with other cash crops such as maize, cucumber, peanuts, watermelon and pumpkin. The income from sugarcane represents about 30 per cent of their total household income. Other sourc-es of income include livestock, bamboo shoots and other NTFPs and temporary work as labour-ers. Interestingly, the figures provided by different farmers do not show a large profit. This suggests that they may expect their margins to increase in the future, that other commodities provide even lower margins or that they are being strongly per-suaded to produce sugar cane for the mill.

Sugar cane is harvested by farmers, sometimes with support from hired labour. They then “clean” the sugar cane before delivering it to the factory, which is just a few meters away. No processing is done to the sugar cane at the farm level. The sugar cane needs to be delivered to the factory within 48 hours of harvesting and the factory tries to deter-mine a delivery schedule for each village or group. However, this schedule is not always implemented and farmers are sometimes penalised if they do not deliver on their specified time. Furthermore, some farmers have to wait before they can deliver their sugar cane if other communities are deliver-ing at the same time.


The sugar mills provide training once per year on a number of areas, such as agricultural tech-niques and business planning. The Provincial and District Departments of Agriculture do not pro-vide any support to farmers on sugar cane culti-vation. According to officials, extension workers lack the technical knowledge to provide this type of support. In order to improve their skills, exten-sion workers attend the trainings provided by the sugar mills. They also support the communities in group formation and encourage them to increase their production.

The local agricultural college and university do not provide any training related to the sugar sub-sector. They have no teachers or specialists with the required knowledge in production or processing of sugar. They also have no links with the companies producing sugar.

9.3 Processing

MITR has an average crushing capacity of 500,000 tons of cane per annum, yielding sugar output of approximately 72,000 tons per year. However, the mill is not operating at full capacity and is only able to obtain sugar cane for about 40 per cent of its capacity. All the production by MITR and most of the production by Savan is exported to Thailand as red sugar to be processed into white/brown sugar and then exported to Europe. According to Gov-ernment sources, the two sugar companies are exporting around 600,000 tons of red sugar every year worth about US $33.5 million, at a price of US $550 per ton. Around 80 per cent of this pro-duction is from the larger of the two companies, MITR.

MITR has around 50 permanent employees, most of whom work as supervisors in the firm’s plan-tations. A small group of workers are employed in the factory operating machinery. The company also hires a large number of temporary workers in high season (up to 500), mainly to work in their planta-tions, i.e. planting or harvesting, and in the factory after harvest time when the machinery is working at a higher capacity. According to several informants, the factory trains its own workers. They bring Thai experts or employees from their factories in Thai-land to provide training to employees. Training is provided every year. Training provided by the facto-ry is very basic, i.e. sorting, cleaning, packing, and the basic operation of machinery. Factories have no links with agricultural colleges or universities to bring in students for training and internships or to invite teachers to provide training to staff.



145



The main constraints for the further develop-ment of the sugar sector are the lack of expertise and training provided to producers (farmers) and processors (potential employees of the firm) on sugar cane cultivation and processing. Govern-ment extension workers need to upgrade their skills to be able to provide more, and higher qual-ity, technical advice to farmers. TVET schools and colleges need to obtain the knowledge to provide training to students on cultivation and processing of sugar cane.

Links between value chain actors are weak. Bet-ter communication and coordination between actors can lead to more opportunities for differ-ent actors, in particular producers. Furthermore, a number of other actors could potentially integrate into the value chain, if they have the know-how to provide valuable inputs into the sector. These include input sellers, collectors and traders, and small-scale processors.

The industry as it exists (i.e. the existing process-ing capacity by the two sugar mills) clearly requires higher production of sugar cane. Better incentives must be developed for farmers to increase their products. These can include higher prices, more and improved technical advice, access to machin-ery, and support in carrying out processing to ob-tain better prices for their sugar cane.


Under the current production model, sugar mills rent land where they grow sugar cane. During some parts of the year, the farms hire a consid-erable number of labourers, usually farmers from neighbouring villages. These farmers tend to have no formal education and limited previous knowl-edge of sugar cane cultivation. While sugar cane plantations provide some training to farm labour-

ers, developing further skills through technical and vocational education could allow them to ob-tain better salaries and also increase the quality and productivity of the sugar cane plantations, in-directly benefitting independent farmers supply-ing the sugar mills.

One of the most important jobs (both existing and required) in the sugar sub-sector in Savannakhet is that of an agronomist/technical advisor. DAFOs extension officers have little knowledge of sug-ar cane cultivation, and limited resources to assist farmers. Advice on sugar cane cultivation comes mainly from technical advisors hired by the large sugar mills based in the province. Agronomists or technical advisors are responsible for providing ad-vice and support to farmers on crop production ac-tivities, such as planning, tilling, planting, fertilising, cultivating, and harvesting sugar cane, including demonstrating or explaining working techniques, practices, or safety regulations to farmers. Further-more, the sugar cane specialist would be able to inspect farm equipment to ensure proper function-ing and advice on its best use.

The number of technical advisors required de-pends on the number of farmers growing sugar cane in each district. However, having at least two technical advisors in each district would be useful to develop a system of learning in their districts (i.e. farmer-to-farmer learning). While the num-ber of advisors required is not high, their impact can be substantial as they would lead the spread of knowledge on best practices and can moni-tor farmers’ activities or support when problems emerge (i.e. pests or diseases).

Sugar cane plantations managed by the sugar mills also require farm managers able to manage and monitor the cultivation of sugar cane. More specifically, farm managers are in charge of direct-ing crop production operations, such as planning, tilling, planting, fertilizing, cultivating, spraying,


146

or harvesting; monitoring activities such as irri-gation, chemical application, harvesting, milking, breeding, or grading to ensure adherence to safety regulations or standards; planning crop activities based on factors such as crop maturity or weath-er conditions; and demonstrating or explaining working techniques, practices, or safety regula-tions to farm workers. The number of farm man-agers required for sugar cane cultivation is small, as only two large plantations exist in the province. However, this is likely to increase if the production of sugar cane and sugar continues to grow.

Farmers and other actors rent the services that require the use of agricultural equipment (i.e. ploughing, spraying pesticides or harvesting), sometimes on behalf of the sugar mills. These agricultural machinery operators learn how to operate the machinery from specialised techni-cians hired by the companies. Investing in the development of skills to operate (and fix) agri-cultural machinery could improve the way the equipment is used and spread knowledge on the best ways to use agricultural machinery among farmers and other actors. The tasks of an agri-cultural equipment operator include preparing and mixing specified materials or chemicals, and dump solutions, powders, or seeds into planter or sprayer machinery; using hand sprayers to spray fertilizer or pesticide solutions to control insects, fungus and weed growth, and diseases; operating or tending equipment used in agricultural pro-duction, such as tractors, combines, and irrigation equipment; and adjusting, repairing, and servicing farm machinery.

The impact of developing the skills of existing and future farmers and other positions in oper-ating agricultural machinery can be high. The use of agricultural machinery is one of the key factors to help increase productivity in most agricultural sectors, and skills are usually transferable between commodities. The use of agricultural machinery is

low at present, given the reluctance and/or im-possibility of farmers to use it due to lack of skills, access to finance, and risk aversion. However, the use of agricultural machinery is likely to increase rapidly in the near future (as has happened in other countries in the region), once the benefits become evident to different stakeholders. Having qualified resources in place to make the best use of agricultural machinery will help to accelerate this process.

Workers in sugar mills have very little formal edu-cation and receive their training from other work-ers or from mill owners/managers. As a result, their knowledge and skills on how to operate machinery are limited and frequently incorrect. The main tasks of workers in sugar mill factories include setting or programming machines; monitoring their per-formance; and packing and carrying sugar bags by hand or in small-scale transport. The number of workers in sugar mills is low as there are only two sugar mills operating in the province.



147





Farm labourer 1100 but up to 500 in peak season per sugar plantation.

Between 100 and 150 skilled labourers.

Medium – there is high demand for low skilled farm labour-ers during planting and harvest but the wages are low.

Agronomist 4

At least two per district per district at DAFO.Each plantation will have at least two or three technical advisors.

Increase the level of existing extension workers.At least one or two agronomists for plan-tations.

High – this will increase the produc-tivity and quality of sugar cane produced by both smallhold-ers and by planta-tions.

Farm supervisor 4-5One or two per planta-tion.

This can reach up to 10 if production of sugar cane remains the same or increases.

High – better management of farms should lead to higher yields and quality.

Input suppliers 1-2One or two per input shop – between 5 to 10 shops per district town.

Increase level of knowledge of inputs among extension workers.Increase level of knowledge of input suppliers.

High – this will allow for increased production and productivity.

Operators and mechanics of milling

machines 2-3

Up to 20 per sugar mill, but with limited special-ised/formal knowledge.

Up to 20 per mill con-ducting a multitude of tasks.

High – production and quality of sugar can increase sub-stantially.

Sugar mill supervisors/managers

5 4 or 5 per mill. 4 or 5 per mill.

High – production and quality of sugar can increase sub-stantially.

Table 8. Main jobs and skills required in the rice sub-sector in Savannakhet

10. KEY FINDINGS AND CONCLUSION



150

This study has examined eight value chains in six provinces in Lao PDR to understand the agricultur-al and food processing sectors with the highest po-tential for development in the short and medium term. Furthermore, the study explored the current and future skills requirements of each of those sec-tors to make an assessment of areas worth focusing on for TVET education development.

The study found that all of the value chains un-der assessment have a wide potential for devel-opment. Yields of all studied commodities are low, due to a number of factors including limit-ed knowledge of farmers of water and nutrients management and crop protection, limited mech-anisation, and shortcomings in knowledge that prevent the use of appropriate technologies and best practices.

In addition, processing for most commodities is extremely basic, and is labour-intensive, with limited use of technology and modern or best practices. As a result, processors are creating little value and most products are exported for further – more capital-intensive – sophisticated process-ing. While the reasons for this problem are multi-ple, among the most salient are the lack of access to modern technologies and finance to acquire them and limited knowledge among traders and processors of which technologies are suitable to add more value in processing.

Relationships in the value chains are generally weak. While much of the production is carried out under some kind of contract or informal agreement (i.e. in sugar, maize, cassava, coffee and rice), farmers have little power to negotiate prices or terms of engage-ment. Similarly, traders have little power in compar-ison to processors and exporters, who in turn have limited bargaining power with foreign buyers. These weak relationships are a disincentive for investments, and actors are unsure if their commercial relation-ships will last and under what terms.

The analyses found that value chain actors gain skills and knowledge from multiple other chain actors. For instance, farmers obtain knowledge and skills from other farmers, from public and private input providers, from traders, and from buyers (i.e. millers and processors). Large farms develop the skills of their staff mainly through hiring foreign trainers, while processing firms ob-tain knowledge and skills from suppliers of ma-chinery, from buyers in other countries and from other firms.

It is noticeable that very few actors in all loca-tions mentioned gaining new skills from the pub-lic extension system and agricultural colleges or universities. On the one side, this is partly under-standable given that the public extension system has mainly focused, for a number of years now, on trying to ensure the implementation of agricul-tural policy and encouraging producers to respect and/or reach established production quotas. Fur-thermore, provincial and district agricultural de-partments (PAFOsand DAFOs) have few resources to support farmers. However, it was concerning to find that value chain actors perceive agricultural education institutions as being out of touch with their needs. It is clear from this study that there is an important disconnect between what schools and colleges are teaching and what the market re-quires. It is important to note, however, that most authorities within these institutions and at PoES understand that this is a problem. Nevertheless, they seem to lack the tools and resources to ad-dress it.

The areas with most potential for skills develop-ment and where the impact is likely to be most significant if investments are made are:

• Agricultural technical advisors for commer-cial farms or independent small-holders. Given that at present the Provincial and Dis-trict Agricultural Offices are unable to provide



151

technical advice to private sector actors and farmers, private sector actors, such as com-mercial farms, obtain this advice by hiring foreign specialists, although this comes at a high cost. Farmers, in contrast, have no such possibility and are therefore forced to obtain knowledge from any source nearby, such as other farmers or traders, frequently of poor quality. Developing skills so that individuals can provide advice either independently or as part of a public or private organization can have an important impact in commodity pro-duction.

• Livestock specialists for commercial farms or independent farmers. Equally, there is a scarcity of livestock specialists in the country. This includes feed specialists, livestock advi-sors, veterinarians and butchers in slaughter-houses. Developing skills in these areas would have a substantial impact on the livestock and meat value chains, improving the quality of livestock, ensuring food safety and hygiene levels, and safeguarding animal welfare.

• Food processing machinery operators. There is a noticeable lack of skills in food process-ing, and firms struggle to add value when pro-cessing as they lack the technical knowledge and staff with the necessary skills to oper-ate processing machinery, from pasteurising machines and cassava flour machines to rice milling machines. Workers need to be trained by foreign technicians adding to the cost of operations. A group of workers trained in op-eration (and repair) of processing machinery can have a high impact in developing the val-ue chains in this study.



152

ANNEX 1: Interview checklists

General information (background, buyers, sales, income) Suppliers Workforce Technical knowledgeMarket information/

pricesKey constraints, opportunities and

interventions

Dairy firms • When did the firm start operations?

• What are the main products sold by the company (i.e. milk, processed products like cheese or yoghurt, live animals, in percentages)

• Sales trends over the past three years (i.e. increase or decrease; how much in percentage)

• Who are the firm’s major clients (location, size, legal status, local, international, etc.)? Long-term/short-term relationships?

• Who are the firm’s main suppliers of inputs?

• Long-term/short-term relationships with suppliers?

• Number of workers and trends in past three years (i.e. in-crease or decrease in number of workers)

• What are the char-acteristics of the workforce in the firm/sector, i.e. male, female, young, old, skilled, unskilled?

• Where does the workforce come from?

• Skills - main gaps in skills. What are the most needed skills in the sector? Who provides those skills at the moment?

• Training - problems to provide training? Who is providing training to this workforce? Is it good quality, in the areas that you re-quire? What formal training is needed in this sector?

• Do you have links to industrial groups, LNCCI?

• What are the standards? How have they changed in the past three years?

• Price trends over the past three years (i.e. increased, decreased, stayed the same)

• Are there significant price differences between grades/qualities of products?

• Are there significant price differences between local and imported products in the Lao market?

• Expectations about prices and requirement trends (will this change drastically in the next 3 years? If so, how?)

• What are the main challenges for the sector?

• What policies or regulations are affecting the sector?

Farmers/ producers • Number of households in village

• Typical incomes• Main sources of income• Main crops• Percentage of income from

sugar cane/ rice• Average size of sugar cane /

rice farm• Changes in scale of sugar

cane farmers• Sales trends over the past

three years

• What are the main inputsused?

• Who are their main input suppliers?


• Do they provide other services, such as technical, inputs, credit (loans)?

• Work force – what are the characteris-tics of the workforce in the farm, i.e. male, female, young, old, skilled, unskilled?


• Salaries• Skills - main gaps in

skills. What are the most needed skills in the sector? Who provides those skills at the moment?


• Where does the farmer obtain new knowledge/ information about production, technology, inputs, prices, markets?

• Who sets prices (to buy inputs and to sell rice/sugar cane)?

• Are there significant price differences between grades/qualities and between seasons?

• Are there significant price differences between local and imported products?

• Price trends over three years• Expectations about prices and

requirement trends• Main costs• Costs per ton planted/sold

• What are the factors driving/ hindering technology adoption (e.g. price incentives, technical know-how, physical access to inputs, post-harvest applica-tion, grading system, other)?

• What are the main challenges for the farmers/ producers?



153



interventions

Dairy firms • When did the firm start operations?

• What are the main products sold by the company (i.e. milk, processed products like cheese or yoghurt, live animals, in percentages)



• Who are the firm’s main suppliers of inputs?


• Number of workers and trends in past three years (i.e. in-crease or decrease in number of workers)

• What are the char-acteristics of the workforce in the firm/sector, i.e. male, female, young, old, skilled, unskilled?



• Training - problems to provide training? Who is providing training to this workforce? Is it good quality, in the areas that you re-quire? What formal training is needed in this sector?









Farmers/ producers • Number of households in village

• Typical incomes• Main sources of income• Main crops• Percentage of income from

sugar cane/ rice• Average size of sugar cane /

rice farm• Changes in scale of sugar

cane farmers• Sales trends over the past

three years

• What are the main inputsused?

• Who are their main input suppliers?


• Do they provide other services, such as technical, inputs, credit (loans)?

• Work force – what are the characteris-tics of the workforce in the farm, i.e. male, female, young, old, skilled, unskilled?





• Where does the farmer obtain new knowledge/ information about production, technology, inputs, prices, markets?

• Who sets prices (to buy inputs and to sell rice/sugar cane)?

• Are there significant price differences between grades/qualities and between seasons?



requirement trends• Main costs• Costs per ton planted/sold

• What are the factors driving/ hindering technology adoption (e.g. price incentives, technical know-how, physical access to inputs, post-harvest applica-tion, grading system, other)?




154



interventions

• Where do you sell?• Who are their major clients/buy-

ers (location, size, legal status, etc.)? Long-term/short-term relationships?

• Do you provide other services, such as transportation, drying, processing, packaging, credit (loans)?

• Do buyers provide other services, such as transportation, drying, processing, packaging, credit (loans)?

• Training - problems to provide training? Who is providing training to this workforce? Is it good quality, in the areas that you require? What formal train-ing is needed in this sector?

Input suppliers • When did they start operations?• Sales trends over the• past three years• Who are your major clients/buy-


• Do you provide other services, such as technical, inputs, credit (loans)?

• Number of staff and trends in past three years

• Work force – what are the characteris-tics of the

• employees, i.e. male, female, young, old, skilled, unskilled?





• Do you have any knowledge of farming and post-harvesting, agro-chemicals use for sugar cane/rice, Seed

• How does the retailer find out about new agro-chemicals/seeds in the market? Which of these sources of information is the best and why?

• What is missing or gaps in your technical know-how?

• Where does the input sup-plier obtain new knowledge/ information about production, technology, inputs, prices, markets?

• Who sets prices of the inputs?• Price trends over three years




155



interventions

• Where do you sell?• Who are their major clients/buy-



• Do buyers provide other services, such as transportation, drying, processing, packaging, credit (loans)?


Input suppliers • When did they start operations?• Sales trends over the• past three years• Who are your major clients/buy-


• Do you provide other services, such as technical, inputs, credit (loans)?


• Work force – what are the characteris-tics of the

• employees, i.e. male, female, young, old, skilled, unskilled?





• Do you have any knowledge of farming and post-harvesting, agro-chemicals use for sugar cane/rice, Seed

• How does the retailer find out about new agro-chemicals/seeds in the market? Which of these sources of information is the best and why?

• What is missing or gaps in your technical know-how?

• Where does the input sup-plier obtain new knowledge/ information about production, technology, inputs, prices, markets?

• Who sets prices of the inputs?• Price trends over three years




156



interventions

Meat producers • When did the firm start opera-tions?

• What are the main products sold by the company (i.e. eggs, processed meat, live animals, in percentages)



• Who are the firm’s main sup-pliers of inputs? Long-term/short-term rela-tionships?

• Number of workers and trends in past three years (i.e. increase or decrease in number of workers)

• Work force – what are the characteristics of the work-force in the firm/sector, i.e. male, female, young, old, skilled, unskilled?



• Training - problems to provide training? Who is providing training to this workforce? Is it good qual-ity, in the areas that you re-quire? What formal training is needed in this sector?

• Do you have links to indus-trial groups, LNCCI?








Sugar/rice mill • When did they start operations?• Sales trends over the past three

years• Where do you sell?• Who are their major clients

(location, size, legal status, etc.)? Long-term/short-term relation-ships?

• Who are their main suppliers? Long-term/short-term rela-tionships?


• Work force – what are the characteristics of the work-force in the sector, i.e. male, female, young, old, skilled, unskilled?






• Are there significant price differences between grades/qualities?



requirement trends




157



interventions

Meat producers • When did the firm start opera-tions?

• What are the main products sold by the company (i.e. eggs, processed meat, live animals, in percentages)



• Who are the firm’s main sup-pliers of inputs? Long-term/short-term rela-tionships?

• Number of workers and trends in past three years (i.e. increase or decrease in number of workers)

• Work force – what are the characteristics of the work-force in the firm/sector, i.e. male, female, young, old, skilled, unskilled?












Sugar/rice mill • When did they start operations?• Sales trends over the past three

years• Where do you sell?• Who are their major clients

(location, size, legal status, etc.)? Long-term/short-term relation-ships?

• Who are their main suppliers? Long-term/short-term rela-tionships?


• Work force – what are the characteristics of the work-force in the sector, i.e. male, female, young, old, skilled, unskilled?






• Are there significant price differences between grades/qualities?



requirement trends




158



interventions

Trader • When did they start operations?• What products do they trade?• Sales trends over the past three years• Where do you sell?• Who are their major clients (location,

size, legal status, etc.)? Long-term/short-term relationships?


• Who are their main suppliers? Long-term/short-term relationships


• Work force – what are the char-acteristics of the workforce in the firm, i.e. male, female, young, old, skilled, unskilled?



• Training - problems to provide training? Who is providing training to this workforce? Is it good quality, in the areas that you require? What formal training is needed in this sector?


• What are the stan-dards? How have they changed in the past three years?

• Who sets prices (to buy and to sell)?• Are there significant price differences

between grades/qualities and between seasons?


• Price trends over three years• Expectations about prices and require-

ment trends• Main costs• Costs per ton traded



Provincial Department of Education and Sports

• What are the most important food-processing sectors in your province, regions, sub-sectors, sizes, markets, supplies?

• Main players in the industry: who are they? How long have they been in your province?

• What are the most promising food-processing sectors in your prov-ince, regions, sub-sectors,

• markets?

• What are the characteris-tics of the workforce in the food-processing sector, male, female, young, old, skilled, unskilled?

• Where does the current workforce for each sub-sec-tor come from?

• Skills - main gaps in skills. What are the most needed skills in the food-process-ing sectors in Laos? Who provides those skills at the moment?

• Training - problems to provide training? Who is providing training to this workforce?

• Do you provide education, technical training for the food-processing industry? What type? How many stu-dents?

• Do you have any links to the sugar/rice industry? Do they ask for any support with development of skills?

• What are the main challenges to train people for the agri-culture and food-processing sector?


159



interventions

Trader • When did they start operations?• What products do they trade?• Sales trends over the past three years• Where do you sell?• Who are their major clients (location,

size, legal status, etc.)? Long-term/short-term relationships?


• Who are their main suppliers? Long-term/short-term relationships


• Work force – what are the char-acteristics of the workforce in the firm, i.e. male, female, young, old, skilled, unskilled?



• Training - problems to provide training? Who is providing training to this workforce? Is it good quality, in the areas that you require? What formal training is needed in this sector?


• What are the stan-dards? How have they changed in the past three years?

• Who sets prices (to buy and to sell)?• Are there significant price differences

between grades/qualities and between seasons?


• Price trends over three years• Expectations about prices and require-

ment trends• Main costs• Costs per ton traded



Provincial Department of Education and Sports

• What are the most important food-processing sectors in your province, regions, sub-sectors, sizes, markets, supplies?

• Main players in the industry: who are they? How long have they been in your province?

• What are the most promising food-processing sectors in your prov-ince, regions, sub-sectors,

• markets?

• What are the characteris-tics of the workforce in the food-processing sector, male, female, young, old, skilled, unskilled?

• Where does the current workforce for each sub-sec-tor come from?

• Skills - main gaps in skills. What are the most needed skills in the food-process-ing sectors in Laos? Who provides those skills at the moment?

• Training - problems to provide training? Who is providing training to this workforce?

• Do you provide education, technical training for the food-processing industry? What type? How many stu-dents?

• Do you have any links to the sugar/rice industry? Do they ask for any support with development of skills?

• What are the main challenges to train people for the agri-culture and food-processing sector?


160

ANNEX 2: Fieldwork schedule

SavannakhetTIME CONTACT/LOCATION

Wednesday 23 August 2017

10.30 - 11.45Travel from Vientiane to Pakse on the following flight: 10.40 - 11.55

11.45 – 15.30Travel by plane

Travel by car from Paksé to Savannakhet

Thursday 24 August 2017

08.30 - 10.30

Meet with Savannakhet Provincial Agriculture and Forestry OfficeAddress: Savannakhet provincial centreContact person: Ms. MalilamonePosition: Officer at the Department of Planning and CooperationMobile: 020-55151505

10.30 - 12.00

Meet with Savannakhet Provincial Office of Education and SportsAddress: Savannakhet provincial centreContact person: Mr. Lamgeun KeomanivanPosition: Head of the Department of Technical and Vocational EducationMobile: 020-55440101

12.00 - 13.00 Lunch

14.00 - 15.00

Meet with Agriculture and Forestry College Address: Savannakhet provincial centreContact person: Mr. Boulan SilipaseuthPosition: DirectorMobile: 020-22604409

15.00 – 16.30

Meet with Faculty of Food Sciences, University of SavannakhetAddress: Savannakhet provincial centreContact person: Mr. Satheuan KikeoPosition: Vice-DeanMobile: 020-2277536

Friday 25 August 2017

8.30 – 9.30

Meet with Provincial Office of Industry and CommerceAddress: Savannakhet provincial centre Contact person: Mr. Vongphachanh KhamvongsyPosition: Head of the industrial processing sectionMobile: 020-96391999

10.00 – 13.00 Travel to Xaybouly District and meet with sugar cane farmersAddress: Kenghet village, Xaybouly DistrictContact person: Mr. KavinPosition: Head of the village sugar cane associationMobile: 0309016107


161

KhammuaneTIME CONTACT/LOCATION

Friday 25 August 2017

13.00 – 14:30 Travel by car to Thakhek

15.30 - 16.30

Meet with Khamouan Provincial Agriculture and Forestry Office

Address: Thakhek

Contact person: Mr. Dedsackda Manikham

Position: Deputy Director

Mobile: 020-23692333/020-91380333

16.30 – 17.00

Meet with Khamouan Provincial Industry and Commerce OfficeAddress: ThakhekContact person: Mr. VisedPosition: Head of the Industry Promotion SectionMobile: 020-56694889

Saturday 26 August 2017

08.30 – 10.00

Visit rice mill – Vanida rice millAddress: Laophokham village, Thakhek DistrictContact person: Mr. Phetsamone BuaphanthavongPosition: OwnerMobile: 020-55650890

10.30 – 11.30

Visit rice mill – Xayboua rice millAddress: Nonghang village, Thakhek DistrictContact person: Mr. BoungnongPosition: OwnerMobile: 020-91083004

12.00 – 13.30 Lunch

Sunday 27 August 2017

08.00 – 14.00 Travel by car from Thakhek to Vientiane Capital


162

TIME CONTACT/LOCATION

Monday 28 August 2017

9:30 Horticulture Research Center Address: Haddokeo village, Hadxayfong Dis-trict, Vientiane Capital Contact person: Thongkhoun Sisaphaithong, PhDPosition: ResearcherMobile: 020-55857550, 021360377Email: [email protected]

16:00 Visit Lao fresh meats Visit Lao fresh meats Address: Samesenthai Road, Vientiane CapitalContact person: Serge SelbePosition: DirectorMobile: 021453508-10Email: [email protected]


Tuesday 29 August 2017

7:00 am Travel to Vientiane Province

9.00-10.30 Visit Crysta FarmAddress: Naxay Neua village, Naxaythong DistrictContact person: Ms. Sengmany YathortuPosition: DirectorMobile: 020-56699788

11.00-12.00 Visit Cattle Research StationAddress: Sivilay Village, Naxaythong DistrictContact person: Mr. SitonPosition: DirectorMobile: 020-2246 8069

12:00 Lunch

14.30 – 15.30

Visit livestock farm – U.D.A Import-Export Public Company (U.D.A FARM)1) Pig farm2) Cattle farmAddress: Km 46, Mai village, Phonghong district, Vientiane provinceContact person: Mr. Nitsavanh Loungkhot PravongviengkhamPosition: Chief Executive Officer (CEO)Mobile: 023 190378, 020 2248 4888

15.30- 16.30 Travel to Phonemee village, Viengkham District, Vientiane Province

Vientiane Capital

Vientiane Province


163


Wednesday 30 August 2017

09.00 – 10.00 Meet with Vientiane Provincial Office of EducationAddress: Phonemee village, Viengkham DistrictContact person: Mr. Avasith ChanthalathPosition: Officer at the Vocational Education Depart-mentMobile: 020-59572889

10.00 – 12.00 Meeting with Vientiane Provincial Industry of Com-merceAddress: Phonemee village, Viengkham DistrictContact person: Mr. Singkham SingvongkhamPosition: Head of the Commerce Promotion SectionMobile: 020-55620450

12.00 – 13.30 Lunch

13.30 – 14.30 Meet with Vientiane Provincial Agriculture and Forest-ry Office Meet with Vientiane Provincial Agriculture and Forestry OfficeAddress: Phonemee village, Viengkham DistrictContact person: Mr. Sithaheng ThongsavanhPosition: Deputy DirectorMobile: 020-22410861 / 020-55553576

15.00 – 16.00 Travel from Phonemee village to Vangvieng District

Overnight Hotel - Phonemee village, Viengkham District, Vien-tiane Province


164



AM Travel from Vientiane Province to Sayaboury

Contact person: Ms. Sengthong Phengdy

12.00-13.30 Lunch

14.00-15.30

Meet with Xayaboury Provincial Agriculture and Forestry OfficeAddress: Xayaboury Provincial CapitalContact person: Ms. Sengthong PhengdyPosition: Head of the Crop Promotion DepartmentMobile: 020-55877793

Friday 1 September 2017 Meet with Provincial Office of Industry and Commerce

08.30 – 9.00

Meet with Provincial Office of Industry and Commerce Address: Xayaboury Provincial CapitalContact person: Ms. Latdavone PhomsouvanhPosition: Officer at the Commerce Promotion DepartmentMobile: 020-55778218

09.00 – 9.30

Meet with Provincial Office of Industry and CommerceAddress: Xayaboury Provincial CapitalContact person: Ms. Khamxaylao LeuteursaPosition: Head at the Industry Promotion DepartmentMobile: 020-56767677 / 020-55678765

9:45 – 10:30

Meet with Provincial Office of Education and SportsAddress: Xayaboury Provincial CapitalContact person: Mr. Kabkeo SibounmaPosition: Deputy DirectorMobile: 020-55779469 / 020-91975555

Xayabury


165



10:45 – 11:30

Meet with Technical and Vocational Education Training (TVET)Address: Xayaboury Provincial CapitalContact person: Mr.Thongdy NaohvanhphengPosition: Deputy DirectorMobile: 020-55779643

12:00 – 13:00 Lunch

13.30 – 14.30

Meet with Errecson Export-Import Co., LtdAddress: Simoungkhoun village, Xayabury DistrictContact person: Ms. PhoumjayPosition: Managing DirectorMobile: (856-74) 211888 / (856-20) 55577778-55577776

15:00 – 16:00

Meet with Lao Prosper Co., LtdAddress: Xayaboury Provincial CapitalContact person: Mr. Khamman PhomsouvanhPosition: OfficerMobile: 020-55675566

Saturday 2 September 2017

10.00 – 11.00

Meet with Mr. Chanteng XongAddress: Nampouy village, Phieng DistrictContact person: Mr. Chanteng XongPosition: TraderMobile: 020-22996600

12.00 – 13.00 Lunch

13.00 – 15.00

Meet with Ms. SoneAddress: Xayaboury provincial capitalContact person: Ms. SonePosition: TraderMobile: 020-59661597

15.00 – 17.00 Travel from Xayaboury to Luangprabang

Sunday 3 September 2017

9.00 – 14.00 Travel from Luangprabang to Oudomxay


166

Friday 8 September 2017

9.00 – 10.00

Meet with Phunphet Agricultural Development Co., LtdAddress: Nahai village, Hatxayfong districtContact person: Mr. Thongsavanh BounmyPosition: DirectorTel: 020-99999963


Monday 4 September 2017

9.00 – 10.00

Meet with Oudomxay Provincial Office of Education and SportsAddress: Xay DistrictContact person: Mr. Somsanith SouthivongPosition: Deputy DirectorTel: 08121167

12.00 – 13.00 Lunch

13.30 – 14.30

Meet with Provincial Office of Industry and Commerce Address: Xay DistrictContact person: Mr OunekhamPosition: Officer at the Commerce Promotion DepartmentMobile: 020-23309456

14.30 – 16.00

Meet with Oudomxay Provincial Agriculture and Forestry OfficeAddress: Montay village, Xay DistrictContact person: Mr. Sykham SyphakhounPosition: Head of the Provincial Agriculture and Cooperatives Extension section (PAEC)Mobile: 020-22060333Email: [email protected]

Tuesday 5 September 2017

8.30-9.30

Meet with Mr. Chanteng XongAddress: Nampouy village, Phieng DistrictContact person: Mr. Chanteng XongPosition: TraderMobile: 020-22996600

10.00 – 12.00

Visit to coffee farmers Address: Xay DistrictContact person: Mr. Souvick ChanthakodPosition: Deputy Head of PAECMobile: 020-56669479

13.00-18.00 Travel back to Luang Prabang and fly to VTE

12.00-13.00 Lunch

Vientiane Capital

Oudomxay