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Topic:Impact of Commercial Agricultural Production on Poverty Reduction:

A case study of Vientiane Province

Sengpheth SENGMEUANGLaos

Agricultural policy LaboratoryKyushu University

March 29, 2011

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Contents

• Introduction• Problem overview• Study area• Research objectives• Scope of study• Method of study• Result expectation

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Introduction• Area: 236,800 sq km• Population : 6.7 Million (2008)• GDP per capita: 1,069 USD (2008-2009)– Agriculture: 38.6%– Industry: 35.7 %– Service: 25.7 %

• Export of agricultural production: 923.64 million USD (2006-2007)– Agriculture and forestry: 15.95%– Manufacturing and Handicraft: 17.15%– Electricity and Mining: 66.9%

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Problem Overview• In Laos, a large majority of the population depends

on agriculture and use of natural resources for livelihood, and most of them living in the rural areas.

• Laos is one of developing country as based on agriculture and natural resources to boost economic growth.

• In 2006, Lao government applied the new policy called Commercialization of Agriculture and Commodity Production (shift from household consumption to a market based agricultural production).

Source: Lao National Socio-Economic Development Plan(2006-2010)

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Problem Overview (Con’t)

• The poverty is defined as the lack of ability to fulfill basic human needs such as not having enough food, lacking adequate clothing, not having permanent housing and lacking access to health, education and transportation services

Source: decree of poverty (Laos)

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Study Area

Vientiane Province

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Research objectives

• To understand the policies and situations of agricultural commercial productions in Laos

• To investigate impact of agricultural productions on households‘ income to boost poverty reduction.

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Scope of study

• The research will be conducted in the poor district.• The research is implementing and promoting of

commercial crops production. • The villages and family farmers who has started

practicing commercial crops will be priority focused

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Method of study

• Preparing and gathering the general information of the focus area such as planted area, harvested area, yield, production and etc.

• Study the transaction of goods in that area, which shows the market chain of products by surveillance and questioners.

• Summarize the data information from research and holding seminar for getting feedback and recommendation from relevant sector and communities.

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Result expectation

• Identify the potential commodity product of a poorest district

• the collaboration among communities, private and government sector in promoting commodity products

• Recommendations for further development of promote the products in order to contribute to generate income to household and improve living standard

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References

• Lao National Socio-Economic Development Plan(2006-2010)• Socio-Economic Development Plan of the Ministry of Industry

and Commerce (2006-2010)• The Manufacture and Commerce Developed Strategy (2011-

2020): the Ministry of Industry and Commerce.• National Growth and Poverty Eradication Strategy,

Government of Lao PDR, 2004

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Thank you!

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Study on the Factors that Caused Increasing Food Prices in LaosCase study: Pork in Vientiane Capital.

Sengpheth SENGMEUANG

Agricultural policy LaboratoryKyushu University

May 17, 2011

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Contents

• Introduction• Problem Overview• Study Area• Study Objectives• Method of study• Expected result

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Introduction

According to the World Bank’s food price index , the Global food prices continue to rise. The prices increased by 15% between October 2010 and January 2011 and are only 3% below its 2008 peak.

Source: http://www.worldbank.org/foodcrisis/food_price_watch_report_feb2011.html , 15th May 2011

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IntroductionBesides, the price of crude oil has risen from USD

28.1 (2003) to USD 133.37 per barrel in 2008, and decreased rapidly at USD 39.09 in 2009 and continues risen to USD 109.53 in 2011.

Source: EIA Weekly Petroleum Status Report; 16th May 2011

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Problem Overview

Laos is one of developing country that relies on agriculture etc. to boost economic growth.

Besides, Laos experienced GDP growth of 7,5% per year, which is 914 USD in 2009. The structure of the GDP is as follows: 38.6% agriculture, 35.7% industry (10.2% manufacturing) and 25.7% services.

Source: MOIC and NATIONAL SOCIO-ECONOMIC DEVELOPMENT PLAN (2006-2010)HTTP://WWW.NSC.GOV.LA/

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Problem Overview

But Laos imports almost all the material for agriculture, livestock and industry as material for garment, fertilizers, food for animal etc. Moreover, Laos import 100 percent of fuel. And Laos farmers largely dependent on that material to input to food processing and transfer goods to market or factory.

Import value is 1,670.97 million USD in 2009-2010 with 23.17% for fuel and gas, 6.27% for foods, 4.89% for goods to agriculture production, and 2.53% for goods to industry production etc.

Source: MOIC and NATIONAL SOCIO-ECONOMIC DEVELOPMENT PLAN (2006-2010)

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Study Area

Source: MOIC

Vientiane Capital• Area: 3,920 sq km• Population: 795,159

people (Growth rate 3.3 %)

• Economic growth:• 2001-2005 = 9.79%.• 2006-2008 = 11%.

• GDP per capita: 1,829 USD per year

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Study Area

Source: MOIC

Vientiane Capital• Pork Demand per

day: 40 tons (2008)• Pork supply:

Vientiane. C and Khammouane province.

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Study objectives

• To study the main cause of price increases in pork due to oil price, the depreciation of the dollar etc.

• to examine if the oil price or the Kip appreciation has the main impact on pork prices.

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Scope of study

• The research will be conducted in the market channel of Vientiane Capital.

• The research is implementing of pork price structure in each level of market chain.

• The farmers, middleman and slaughter house will be priority focused

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Method of study

• Preparing and gathering the general information of the focus area such as farm, demand/supply, oil price(inside/outside), exchange rate (Thai Bath and USD to Kips)

• Study the transaction of goods in that area, which shows the impact factors on market chain of products by surveillance and questionnaires.

• Summarize the data information from research and analysis

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Expected result

• Identify the significant factor that impact on pork price rising and also can be basic for study further.

• Help to planning policy on create stability of agriculture and foods product price.

• Understand the price structure of pork and connected food products.

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References• NATIONAL SOCIO-ECONOMIC DEVELOPMENT PLAN (2006-2010)• The Manufacture and Commerce Developed Strategy (2011-2020): the Ministry

of Industry and Commerce.• World Bank: Food Prices Watch in Feb 2011. Retrieved on May 15th 2011 from

http://www.worldbank.org/foodcrisis/food_price_watch _report _feb2011.html

• Asia Monitor: Macroeconomic Forecast Laos (Feb 2nd 2011). Retrieved on May 15th 2011 from http://www.asia-monitor.com/ file/7476/laoshomepage.html

• EIA weekly Petroleum Status Report: Monthly West Texas Intermediate Crude Oil Prices. Retrieved on May 16th 2011 from http://www.eia.gov/emeu/steo/pub/cf_query/steoNotes.cfm?formula=WTIPUUS&periodType=Monthly&startYear=2003&startMonth=1&startQuarter=1&endYear=2011&endMonth=5&endQuarter=4

• Lao Statistics Bureau: Lao GDP. Retrieved on May 17th 2011 from http://nsc.gov.la/index2.php?option=com_content&view=article&id=31&Itemid=32&lang=en

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Thank you!

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Study on the Factors that Caused Increasing Food Prices in LaosCase study: Pork in Vientiane Capital.

Sengpheth SENGMEUANG

Agricultural policy LaboratoryKyushu University

June 21, 2011

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Contents

• Methodology• Questionnaire• Overseas Research Plan

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Methodology

First concept of establishing model:

Output = Input 1+ Input 2 + input 3+ Input 4+ Input 5

Where Output denotes the cost/prices of Pork Input 1 represents the prices of oil/fuel (Kip/litre)

Input 2 represents the prices of feed (Kip/Kg) Input 3 represents the inflation (percent/month) Input 4 represents the prices of rice (Kip/Kg) Input 5 represents the prices of corn (Kip/kg)

30Note: CPI-Consumer Price Index by region (Dec,99=100)Source: Ministry of Planning and Investment, Bank of Laos, 20 th June 2011

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

20406080

100120140160180200220240

26.957.84 10.55

15.5610.55 7.16 6.85 4.51 7.64 0.03 5.98

108.33 116.84129.26

149.28164.90

176.72188.70 197.30

212.30 212.40 219.90

Figure 1: Inflation and CPI of Laos, period 2000 - 2010

Inflation (%) CPI

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B1Jan-05

B1Apr-05

B1Jul-05

B1Oct-05

B1Jan-06

B1Apr-06

B1Jul-06

B1Oct-06

B1Jan-07

B1Apr-07

B1Jul-07

B1Oct-07

B1Jan-08

B1Apr-08

B1Jul-08

B1Oct-08

B1Jan-09

B1Apr-09

B1Jul-09

B1Oct-09

B1Jan-10

B1Apr-10

B1Jul-10

-

5,000

10,000

15,000

20,000

25,000

30,000

Figure 2: Glutinous rice, Ordinary rice, Pork and Diesel in Market Prices (Average for 8 provinces),

2005-2010

Pork (1 Kg) Glutinous rice (1Kg) Oridinary rice (1Kg)

Kip

(Lao

cur

renc

y)

Source: Ministry of Planning and Investment

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Figure 3: Oil Prices in Laos and OPEC Price

2007-2010

super gasoline gasoline diesel

monthly

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r li

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Source: Ministry of Industry and Commerce, www.opec.org

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Questionnaire

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Overseas Research PlanPeriod Place Activities Contact

Phone number

2011/09/26To

2011/09/28

Ministry of Industry and Commerce, Vientiane, Laos- Permanent

Secretary Office- Department of

Domestics Trade- Department of

Industry- etc

Collect: - Annual

reports- Weekly food

and oil prices report

- Pork’s demand and supply in Vientiane

- etc

+856 21 412434

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Overseas Research Plan

Period Place Activities Contact Phone

number2011/09/2

9Ministry of Agriculture and Forestry, Vientiane, Laos- Department of

Livestock and Fisheries

- Department of Planning

- etc

Collect:- Information

about pig farms

- Livestock annual report and planning

- etc

+856-21-412345

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Overseas Research PlanPeriod Place Activities Contact

Phone number

2011/09/30To

2011/10/14

Districts in Vientiane Capital:- Farm- etc

- Survey: over 30 farms

2011/10/17To

2011/10/24

Ministry of Industry and Commerce, Laos- Permanent

Secretary Office

- etc

To check up the data and information that complete or not.

+856 21 412434

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References

• Bank of Laos: Annual Report 2009. Retrieved on June 18th 2011 from http://www.bol.gov.la/english/index1.php

• Bank of Laos: Inflation and CPI rate. Retrieved on June 19th 2011 from http://www.bol.gov.la/english/index1.php

• Ministry of Industry and Commerce: Monthly Report (2007-2010).

• Lao Statistics Bureau: Consumer Price Index (2000-2010). Retrieved on June 17th 2011 from http://nsc.gov.la

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Thank you!