Laos Rice

Impact

The overall goal of the project was to rapidly increase the quantity and stability of supplies of good quality milled rice for domestic consumption and trade. The main outcome set by the project was to facilitate the production of 20,000 metric tonnes of good quality milled rice through 20 rice mills via fair trading relations with 20,000 farming households within 23 months of the project’s duration. We outline below whether these outcomes were reached, as well as some other outcomes and impacts of the project.

The project was able during its entire 23 month duration to connect 21,361 smallholder rice producers with the 21 rice mills. The producer network of each miller typically comprises 10 to 15 villages with about 1,000 inhabitants.

Improved grain quality

Most of these farmers previously used a variety of seeds, which in some cases were over a decade old. Supply of high yielding varieties of fresh seed by the millers to farmers resulted in (a) production and supply of single variety paddy rice being returned to the mills; and (b) intact, soft and aromatic grain. The final project evaluation carried out by an independent external evaluator mentioned the following impact from increased grain quality:

  • Mills shifted from a 100% mixed/general grade mix to an increased proportion of single variety grade grain, from at least 100% mixed variety to 20 to 70% single variety.
  • Mills are obtaining 9 to 14% gains in prices for quality milled rice
  • Farmers are receiving a 10% gain in terms of premium prices with those mills accessing quality markets

One of the 21 mills has started marketing Grade A quality rice in branded bags and another mill is considering something similar. This should place these millers in a more confident marketing position. They have become price makers rather than price takers, i.e. the miller guarantees the quality of the rice through branding, meaning the miller can set their own price in terms of a competitive market. They no longer have to follow general market prices for non-branded loose rice.

Farmer crop yields and incomes

The crop yields of small holder farmers have significantly increased based on anecdotal evidence on typical yields prior to receiving support from mills in recent seasons. The increases have varied from 20% to 100% but were typically between 30-50% as per the final project evaluation report. This increased income is due to both higher prices and increased yields, amounting to €224 gain over the €367 normally obtained, equivalent to a 60% increase in income (note 1).

The main factors delivering increased crop yields were; fresh high yield variety seed; improved practices and modest increases in the application of fertiliser. There were three elements that contributed to this success; contracts with millers provided a more reliable market for farmers, inputs were made available via the miller and technical advice was co-ordinated and provided through the millers in an effective manner.

Mill throughput and efficiency

Mill throughput for all 21 mills increased from 12,400 mt of paddy rice in 2009 to a projected 36,523 mt of paddy rice in 2011. Throughput doubled in the first year, and for 2011 is projected to triple 2009’s figures. These increases have been made possible through improved mill equipment, with a measured capacity from of 3.8 mt/day increased to 8.7 mt/day, an increase of over 200%. In addition, rate of milled rice recovery increased from the measured baseline of 57.7% to 63%, representing a 9% gain. The increase in milled rice recovery rates directly contributes in increased revenue and profits for the millers.

Improved policy environment

The project also contributed to an improved framework for rice production and trade. Key results from the organisation of series of public-private policy dialogues at a provincial and national level were; the opening of rice exports to neighbouring countries, which had been closed by provincial governments and a substantial reduction on import taxes on agricultural inputs. In addition, the national policy dialogue also contributed in the formation of a team at the Department of Agriculture to work on drafting a national rice strategy for the country.

(Note 1) This calculation is based on rough estimation by taking a lower-end increase of a farmer in Huaphou Village with a yield that increased from 2,000 kg (50 bags) to 2,800 kg (70 bags). The calculation does not include other fixed costs regarding land preparation, labour etc. and therefore is not a full indication of income from rice production. 

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