Laos Rice

Implications for scaling

The following important lessons were learned through the implementation of the project:

  • The idea to use millers to organise producers effectively and efficiently is basically sound and seems to be able to deliver results better than traditional methods in the context of the Lao lowland paddy rice sector. Rice millers are a very powerful tool to link producer groups to services, inputs and new ideas.
  • Openness and transparency during the miller selection process was vital to the success of the project. Mills that were selected using a competitive process performed substantially better than mills selected due to recommendations from local informants such as district government officials. This finding has a number of implications for the future planning and implementation of agricultural value chain projects in the Lao PDR. In particular it would be good to pre-select a few extra millers and then remove the worst performing millers before providing full investment support.
  • Working through the private sector through the application of smart subsidies gives the project much more freedom to reward good performance and punish poor performance than is the case in traditional projects providing direct support to farmers through government department or NGOs. This dramatically reduced the potential for conflict over resource allocation and has allowed for fast and effective decision making.
  • Investment by EMRIP has had a major stimulating effect on private investment by millers participating in the project. Many millers decided to conduct additional equipment and upgrades including the purchase of new milling machines and the construction of new mill buildings in many areas.
  • At a government level, there was a strong acknowledgement of the importance of agricultural development at all levels. Rice production was seen as a key factor in addressing domestic food security. There was thus strong momentum to work together with SNV-Helvetas in addressing issues in the rice value chain and to commercialise rice production through a policy dialogue. This led for instance to the streamlining of trade procedures, reduction of import taxes on agricultural inputs, and the retraction of trade bans.

Overall the rice value chain is far more integrated, the actors collaborate more closely and are better able to plan and make informed decisions. Farmers have greater confidence in marketing their crop and are more heavily committed to it as a commercial crop. The millers have become proactive in seeking new markets. Through its support for policy dialogue, EMRIP has seen specific outcomes with a streamlining in trade procedures; reduction in import taxes on agricultural inputs; and retraction of trade bans. This process has opened the door to the inclusion of millers in constructive dialogue with provincial authorities which should continue to inform decisions at this level.

These results are exceptional and of great significance for development strategies related to rice production nationally. The EMRIP project is essentially an Inclusive Business model and succeeded in gaining substantial yield increases both at a farm and macro level.

A mechanism that could scale-out this Inclusive Business model for rice production is the establishment and strengthening of miller groups. This provides the opportunity for core members experienced in the mechanism to introduce support to farmers as ‘standard practice’ to new mills joining a group. The replication of the EMRIP approach by the millers not participating in the project has already started in some of the target provinces through miller groups. Several actors are interested in scaling up the programme further; for instance SNV receives funding from the Rabobank Foundation to strengthen the farmer groups and in partnership with Helvetas other options to upscale the programme are being explored.