Vientiane Times | 22 June 2010
by Ekaphone Phouthonesy
The government will allow foreign companies and individuals to invest in rice cultivation in Laos, Prime Minister Bouasone Bouphavanh announced on Friday.
Speaking at the 9th Ordinary Session of the Sixth Legislature of the National Assembly in Vientiane, Mr Bouasone said the government had approved a proposal to allow a foreign investor to conduct a feasibility study into rice cultivation in Laos.
“If the investor establishes that there is good potential in rice cultivation, the government will grant a concession for large-scale rice cultivation, including building irrigation systems, a research centre, processing plant and marketing,” he told assembly members.
The move is a first for the country where most of the population is involved in agricultural production.
About 80 percent of people in Laos grow rice for their own consumption. However, the quality of rice produced is poor due to a lack of modern technology and outdated farming methods, and also because it is not grown on a commercial basis.
Laos produces about 3 million tonnes of rice per year, according to the Ministry of Planning and Investment.
A ministry report claims that many Lao farmers have abandoned agricultural work to take up employment in the industry and services sector, leading to a drop in agricultural outputs.
Mr Bouasone said the government made the decision to allow foreign investors to grow rice in Laos because it will enable Lao farmers to learn about new technology in rice cultivation, processing and marketing.
He said the move would also boost the nation’s food security, adding that if the investors grow rice in Laos they will have to build a warehouse to stockpile the grain.
“We will be able to purchase rice from the investor at a low price if a natural disaster occurs,” he said.
The government is introducing measures to conserve farmland, in particular rice fields, as many farmers are taking advantage of rising land prices and selling their land to businesses and individuals for property development.
One such measure is the imposition of higher fees when farmland is sold for commercial development.However, some commentators have said that the government’s initiatives just exacerbate the current shortage of land available for commercial development.