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Laos taps into growing agricultural output
The export value of rubber from Laos is expected to see a big surge over the next few years as thousand of hectares of plantations reach maturity.
According to a report from the Ministry of Planning and Investment on the implementation of the national socio-economic development plan over the first six months of this fiscal year to the first session of the 7th Legislature of the National Assembly, local and foreign investors have planted rubber trees on a total area of 153,000 hectares across the country over the past few decades.
About 1,000 hectares of trees have reached maturity, with the capacity to produce about 3,159 tonnes of raw rubber a year. The nation's raw rubber output will see a large jump as more and more plantations reach maturity over the next few years.
The Luang Namtha provincial Industry and Commerce Department, working in one of the largest rubber plantation areas in Laos, said the price of raw rubber in the province is currently about 12,000 kip, up from about 7,000 kip per kg last year.
The main markets for Lao rubber are China, Thailand and Vietnam. These countries use rubber to produce vehicle tyres and other goods.
The report also showed that in addition to rubber trees, Laos has 29,000 hectares of coffee plantations with a potential yield of 46,000 tonnes a year, and 30,100 hectares of cassava plantations with a potential yield of about 451,000 tonnes a year.
The country also has large areas of sugarcane plantations, particularly in the central province of Savannakhet. Total sugarcane production is about 818,000 tonnes a year and the nation can also produce more than 649,700 tonnes of sweetcorn a year. There are also 25,513 hectares of eucalyptus plantations across the country.
The increasing output of agricultural products has not only boosted the export value of Lao goods to international markets but also created a solid foundation for the development of agricultural processing industries. Two sugarcane processing factories have opened in Savannakhet province.
There are many small and medium sized rubber processing plants in the northern province of Luang Namtha, helping to add more value to Lao products before they are exported.
Laos has plenty of fertile land suitable for producing raw materials to supply food processing plants.
The government has a policy to promote investment in the agricultural processing industry as part of its efforts to balance output between the natural resource and non-resource based sectors to ensure sustainable economic growth.
However, one major challenge is limited market access for Lao food processors since the country is not a member of the World Trade Organisation. Laos also needs to develop a more skilled labour force to work in factories.
About 70 percent of the Lao workforce is employed in the agriculture sector. The government is working to move a greater proportion of the nation's workforce into the processing industry.
vientiane times
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