In September 2000, flooding which also affected neighbouring Cambodia and Vietnam devastated monsoon rice crops in central and southern parts of Lao PDR. The worst affected provinces were in the country's rice basket and included Bolikhamsay, Khammuan and Savannakhet. In addition, rice production was also seriously damaged in Attapeau and Champassak, which are relatively more food insecure. In view of flood damage and concerns over developing food shortages, an FAO/WFP Crop and Food Supply Assessment Mission was requested by the Government and fielded to the country from 10 to 24 February. The main objectives of the Mission were to assess the overall rice supply situation and possible need for food aid for the 2001 marketing year (January/December). The findings of the Mission are based on discussion with Government and UN agencies and on field visits to affected rice producing provinces including Bolikhamsay, Khammuan, Savannakhet and Attapeau. In view of the growing commercial and trading importance of Vientiane Municipality and Vientiane Province, the Mission also visited these areas to assess any impact on markets.

The Mission found that in keeping with the Government's strong emphasis on agricultural development in recent years, there has been appreciable growth in rice output due to increased adoption of high yielding varieties and an increase in the area under irrigated dry season farming. In addition, in spite of the floods during the last wet season, rainfall overall was satisfactory, resulting in generally favourable production. Although precipitation was slightly lower than in 1999, it was normal in most of the main rice producing provinces. Moreover, relative to flood losses in other countries, especially in Cambodia and Vietnam, and to the devastating floods in Lao PDR in 1991 and 1996, the extent of damage to agriculture in 2000 was lower. Based on official data for 2000 wet season production and a tentative forecast for the 2001 dry season, the Mission projects milled rice production for the current marketing year at some 1.28 million tonnes. In addition there are around 22 000 tonnes of bilateral programme and emergency rice aid pledged or delivered for 2001. Total rice availability will amount to approximately 1.30 million tonnes which would entirely cover estimated utilisation needs.

However the Mission notes that the area under dry season cropping may not entirely materialise due to flood damage to irrigation pumps and structures and high pump and other input costs which may deter producers. As the extent of dry season output would have a significant bearing on total rice availability and, possibly, needs, it is recommended that a subsequent assessment be undertaken at the time of the dry season harvest to verify the overall food supply situation.

Although based on current projections Lao PDR will have a generally satisfactory rice situation in 2001, poorer sections of the population are unlikely to benefit as the level of market integration and development remains low due to enormous problems of transport and access, inadequate market information and because rice production remains largely for subsistence and agricultural incomes are low. Moreover, these factors, together with the precariousness of farming systems and the lack of adequate coping strategies, will mean that in areas where the entire rice crop was lost to the floods last year, households in 2001 will be exposed to serious food shortages. Such households, therefore, will need external assistance to bridge the gap between now and the next harvest. In addressing their needs, the Mission used ongoing WFP vulnerability analysis undertaken in collaboration with the Government and other partners. Based on this analysis, it is estimated that approximately 450,000 people were most affected by the floods last year, of whom an estimated 390,000 do not have access to dry season cropping. Based on village baseline data, an estimated 170 000 are transitory food insecure due to the floods These people will on average have food deficits of six months on average, and 52 percent of these will have more than eight months deficit. To cover the food needs of these vulnerable groups, the Mission advocates a total of 15 000 tonnes of rice, of which 8 680 has already been covered under EMOP6300 and 6311. Up to mid February almost 3 000 tonnes of glutinous rice have been delivered to 111 000 beneficiaries in 266 villages.



The People's Democratic Republic of Lao (Lao PDR), is a landlocked country with borders with China in the North, Vietnam to the east, Cambodia in the south and Thailand and Myanmar to the west and north west. The country is well endowed with forests, though there has been extensive and serious deforestation, which has depleted a considerable part of the resource. It also has extensive river systems of which the most important is the Mekong, which constitutes a natural border with Thailand and Myanmar. The large number of rivers have considerable potential for generating hydro-electric power. Lao PDR has about 25 percent of the total area of the highly productive Mekong River basin, which encompasses almost 90 percent of its entire land area.

Economic policy since 1986 has emphasised reforms from a centrally planned to a market driven economy. As part of this process there has been extensive privatisation of former state owned enterprises. Available estimates1 indicate that the number of state owned enterprises fell dramatically from some 800 in 1990 to 29 in 2000. As the majority of the population depend on farming in rural areas as their main livelihood, economic development is strongly linked to rural development. The Government focus in these areas is to develop access to markets, improve rural and micro finance and credit, expand the irrigation network and strengthen technology transfer.

Agriculture (including forestry and fisheries) is the most important sector in the economy, accounting for over 50 percent of GDP, though its relative share has been declining since the beginning of the 1990s. The sector is dominated by subsistence farmers, mainly engaged in wet season and, to a lesser extent, dry season rice production. In recent years, however, agriculture policy has strongly emphasised the development of irrigated dry season farming, to enhance rice production. As a result of heavy investment in irrigation and strengthening extension services, therefore, official estimates indicate that the area under dry season rice has increased almost five fold in the period 1996 to 2000.

Given considerable geographic diversity and access to resources and markets, there are significant differences in the potential for agricultural development in various parts of the country. In general, there are two important agro-economic zones, with differing agricultural economies and potential. These are the flatlands, which are relatively well developed, and sloping (uplands) which are dominated by subsistence agriculture and poor access. In the low flat lands, in line with Government policy, market forces are becoming more important in driving economic development through a growing commercial sector. Nonetheless, the main constraints remain lack of market information and linkages, quality control, inadequate credit lines and insufficient technology transfer, especially in more remote rural areas. In the uplands, the low input/low out put subsistence nature of farming coupled with poor infrastructure and limited market access, has meant that most of the population fall below the poverty line. The main constraints to agriculture development in these areas include: poor access and infrastructure; poorly developed markets; poor institutional development particularly rural credit; low technology transfer and insufficient irrigation development.

2.1 Trends in Rice Production

Until recently, agricultural production was insufficient to meet the requirements of the population and provide sufficient surplus for export. In the last five years, with increased emphasis given to food production and self sufficiency, official data indicate that there has been a discernible improvement in output.

The area under dry season cultivation has increased significantly from some 18 000 hectares in 1996/97 to 92 000 hectares in 1999/2000. The area target for the current 2001 crop is 120 000 hectares of which the Ministry of Agriculture estimates 94 000 hectares have been transplanted. The corresponding increase in the area under wet season rice (lowland and upland) in the same period was from 535 000 hectares to 630 000 hectares. During the 2000 wet season, 519 000 hectares were planted in lowland areas, of which an estimated 44 000 hectares were lost to the floods, while an additional 152 000 hectares where cultivated in upland areas, bringing the total harvested area last wet season to 627 000 hectares. See Figure 1.

In addition to Government emphasis to increase area under rice cultivation, particularly during the dry season, increasing agricultural productivity is also seen as a primary concern to counter poverty and malnutrition. Until recently, rice agriculture has been characterised by low yields, due to poor soils and low yielding rice varieties, in addition to a host of other constraints. With the adoption of higher yielding varieties and a more balanced approach to fertiliser use, there has been notable improvement in yields and hence output.

The increase in per hectare productivity is indicated in Figure 2.



3.1 Rice Cropping Systems.

Most farmers in Lao PDR are engaged in subsistence rice farming. The most important producing areas in the country are located in the central region and include the provinces of Savannakhet, Vientiane Municipality and province, Khammouane and Borikhamxay. There are three predominant systems of rice production, wet season lowland; wet season upland and dry season. During the wet season various varieties of rice are cultivated, though the proportion of high yielding varieties has increased phenomenally. It is estimated that in 1990 high yielding varieties only accounted for 5 percent of wet land area; currently it is around 60-70 percent. Irrigated dry season cropping is entirely under high yielding varieties. The crop sequence of various types of rice varieties is indicated in Figure 3.

3.2 2000 Rainfall Pattern and Floods

In spite of the floods during the last wet season, overall rainfall for the 2000 wet/monsoon season rice crop was satisfactory, resulting in favourable production. Although rainfall was slightly lower than in 1999, a record rice year, it was mostly average in the main rice producing provinces. See Fig 4.

Last year's floods occurred for two primary reasons. In some areas heavy rainfall coupled with a high water table in areas along the Mekong River resulted in severe water-logging and, subsequently flooding, as there was grossly insufficient drainage in lowland areas. An estimated 50 percent of the rice areas lost can be attributed to this factor. The remaining 50 percent lost can be attributed directly to flooding from the Mekong River, which was exacerbated by cyclone and typhoon activity last September.

In 2000, the Mekong River reached it's highest level in August/September when it was above danger level, down stream, for a short period. Figure 5 indicates down-stream water levels in the Mekong in 2000, compared to 1996, the last severe flood year and the level of alert.

Relative to flood losses in other countries, especially in Cambodia and Vietnam, and to the devastating floods in Lao PDR in 1991 and 1996, the extent of damage to agriculture in 2000 was lower (see Figure 6).

Nonetheless, the precariousness of farming systems and the lack of adequate coping strategies has meant that in areas where the entire rice crop was lost in 2000, households will be exposed to serious food shortages during the current year.

3.3 2000 Lowland Rice Production

Lowland monsoon paddy is predominantly cultivated in the Mekong River basin. The crop is mainly rain-fed, though in some areas supplementary irrigation is available. Lowland soils are relatively fertile from river silt but are often low in organic matter and are acidic. Although organic manure is used the level of application is inadequate relative to plant nutrient requirement. Chemical fertilizer use is also limited partly due to the constant risk of flood damage and lack of rural credit. It is estimated that fertilizer use is not likely to be more than 10 kg per ha, mostly urea, ammonium phosphate or a compound mixture (15:15:0). Phosphorus is a limiting nutrient in large parts of the country and has significant bearing on fertiliser efficiency, especially nitrogen, as phosphate use remains low.

The use of improved varieties is increasing and even without fertilizer yields are much higher than from local varieties.

Flooding is the main risk to lowland monsoon cultivation and as seen in figure 5, has affected wet season production in 6 out of the last 10 years to varying degrees. For the 2000 wet season, some 520 000 hectares of lowland paddy were cultivated of which some 43 000 hectares were lost entirely due to the floods and a further 950 hectares to pests. Taking these losses into account, total 2000 lowland paddy production is estimated at 1.55 million tonnes.

3.4 2000 Upland Rice Production

Upland rice production is entirely based on a low input, low output technology. Land used is in marginal areas and production is entirely dependent on rainfall. The farming system is slash and burn, with average rotation periods declining significantly in the last few decades. This has also had a knock-on effect on productivity and output.

As rainfall was good, the 2000 upland crop was favourable. Around 152 000 hectares of rice were cultivated in upland areas during the last monsoon season producing 259 000 tonnes. Total lowland and upland monsoon paddy production, therefore, is estimated at 1.8 million tonnes.

3.5 2001 Dry Season Rice Production.

The target area this year is 120 000 hectares. The current crop was transplanted in late December/early January and field visits by the Mission to assess crop stands indicated a promising crop. However, the area and coverage of dry season rice this year, are likely to be constrained by flood damage to irrigation pumps and structures and also to high pump and other input costs which deter producers. In addition, as the crop will not be harvested for two months, only a tentative forecast of output can be made at this stage. Taking these factors into account, therefore, the Mission used average area harvested and yield figures for the past three years (1998-2000) as the basis for this year's dry season forecast. Based on these trends the Mission estimates 2001 dry season paddy production at 316 000 tonnes, and, in addition, makes a recommendation that a subsequent FAO/WFP dry season yield assessment be undertaken in April, at the time of harvest, to review the production and availability situation.

Paddy availability for 2001, including 2000 wet season lowland and upland production and a forecast for 2001 the dry season is estimated at around 2 128 million tonnes (see Table 1).

Table 1. Lao PDR: Paddy Production 1998/1999 to 2000/01

Area harvested ('000 ha)
Yield (t/ha)
Production ('000 t)
Area harvested ('000 ha)
Yield (t/ha)
Production ('000 t)
Area harvested ('000 ha)
Yield (t/ha)
Production ('000 t)
1 249
1 502
1 553
Dry 1
1 675
2 103
2 128

1 2001 Dry season forecast. All production figures rounded.



4.1 The Rice Market

Since the initiation of the economic reform process in Lao PDR, an important objective of the Government has been the development of an efficient market economy. The primary focus to achieve this has been privatization of former state enterprises and greater promotion of internal and international trade. The private sector now plays a more important role in the distribution of agricultural inputs and in the procurement and trade of rice. In spite of these developments, however, the level of market integration and development remains low, mainly because of enormous problems of communications and access, inadequate market information and because rice production remains largely subsistence and agricultural incomes low. Particularly amongst the rural poor, therefore, the level of market integration and response to market signals, such as prices, remains negligible.

The demand for rice in Lao PDR reflects consumer preference for glutinous rice, which accounts for 96 percent of total rice consumption. Moreover, the proportion is higher amongst rural than urban households and in the northern provinces than in central and southern provinces. The market for non-glutinous rice is also influenced by migrant workers from neighbouring countries, mainly Vietnam. In addition to consumer preference and incomes, which influence household demand, the growth in population is the other main determinant of aggregate demand. Based on current rate of population growth of 2.5 percent per annum, it is estimated that the aggregate demand for rice will increase by 18 000 to 20 000 tonnes per year.

As rice is mainly cultivated on family plots mostly to meet household food needs, the proportion sold is relatively small. Available estimates from socio-economic studies2/ indicate that of total household stocks 87 percent were for consumption, 5 percent for seed and roughly 8 percent for marketing. However, as these studies were undertaken in relatively good production years (1997/1998) it is likely that the level of marketable surplus is lower than 8 percent. As only a small proportion of production is marketed and as market integration and communications remain highly under-developed, there is wide variation in prices among provinces.

4.2 Rice Supply/Demand Balance for 2001

The rice supply/demand balance sheet for the 2001 marketing year (Jan/Dec) is based on the following parameters and assumptions.

The rice balance sheet is outlined in Table 2.

Table 2. Lao PDR: Rice Balance Sheet 2001 (`000 tonnes)

Domestic Availability
1 277
- Production
1 277
Total Utilisation
1 299
- Food use
- Other uses (seed, feed, losses)
- Stock build up and exports
Pipeline Food Assistance
Import Requirement



The rice balance in table 2, indicates that in 2001, Lao PDR will have a satisfactory rice situation overall. However, the food security situation in any given year remains susceptible to natural catastrophes such as floods and droughts and, therefore, precarious for large numbers of vulnerable people who are on the borderline between subsistence and food insecurity. It is this segment of the population that is the focus of food assistance in 2001.

5.1 Analysis of food insecurity in Laos

Food insecurity in Laos is primarily defined in terms of rice self-sufficiency as the crop constitutes the main staple and accounts for almost all cereal consumption in the diet. Although nationally there is no problem of rice this year, there are large spatial variations in the production and access to rice. Nine out of 18 provinces and 69 out of 141 districts still face food supply shortages. Combined with weak infrastructure, and low non-farm/natural resource based income opportunities, the purchasing power of food deficit populations is highly constrained.

A preliminary draft of a household survey4, estimates that some 27 percent of households face rice shortages annually, whilst the LECS II 1997/98 study5 estimated that about 30 percent of the households are below the food poverty line. In addition, health and nutrition indicators point to serious problems amongst sizeable segments of the population. Over 40 percent of the children are malnourished, and the infant mortality rate is 82 per 1000 live births.

As in most developing countries, rice/food access and hence vulnerabilities (or lack thereof) are largely based on natural resources and geography especially for the rural poor. Lao PDR can be broadly classified into six food economy/access areas based on geography. These areas are primarily selected on differences in access to food. The resultant food economy zones enable analysis of vulnerability and assessment of both chronic and emergency food needs. The primary zones are as follows.

1) Rainfed agriculture: This is primarily practised in lowland areas in central and southern provinces. A single rice crop is cultivated, followed by grazing. Improved local glutinous rice varieties are cultivated on 60-70 percent of the area. The zone comprises roughly 475 000 hectares or approximately 66 percent of aggregate rice area. About 2.15 million people depend on rainfed paddy farming.

2) Irrigated agricultural areas: These areas produce two crops, one in the wet season (July - Dec) and another in the dry season (Jan - May). They are usually surplus areas with considerable proportions of production being for sale purposes. Currently this food economy accounts for about 91 800 ha or roughly 13 percent of the rice area in the country. About 460 000 people live in such areas.

3) Highland farming systems in the north: This farming system is mainly practised in areas over 1000 m in altitude. Agriculture is primarily based on slash and burn. The only source of the minimal cash income for these groups is the sale of opium and livestock. Forestry foraging is also widely practised in these areas. These areas are also very remote and have low physical access to services and markets. Very diverse coping strategies are followed depending on season, access, and other factors. Roughly 108 000 ha (57 percent) are cropped with upland rice and only 40 percent are grown as rainfed rice.

4) Upland farming systems in the south and centre: Slash and burn agriculture is the predominant practice, though mixed farming systems are found in some areas. These are similar to the north, though without opium production and the presence of distinctly different sets of minority cultures. These areas also suffer from high rice deficits (like the northern highlands), with extremely weak access to roads/markets. Forest foraging and livestock also form an important part of the household food economy. Approximately 45 000 ha of upland rice are grown in these areas.

5) Urban areas: Primarily consisting of Vientiane and other Provincial capitals, approximately 17 percent of all households (900 000 people) in the country are classified as urban. They primarily rely on wage income, business and cash crops. In general they are rice sufficient due to exchange.

6) Plateau areas: The three major plateaus are the Bolaven plateau in the south, and Xiankhoang and Nakay plateau's in the center. Main agricultural activities include animal husbandry and cash crops (coffee, tea, fruit trees, etc.). They are also generally rice sufficient by exchange.

5.2 Food economy zones and household food access

Based on food economy zones, Vulnerability Analysis (VAM), indicates that those most susceptible to chronic food deficit are mainly located in upland areas, though there are also some vulnerable groups in the lowland. The analysis is based on a combination of parameters including food access (rice, forest, trade, and livestock) and social indicators (health and education). The analysis was also compared to other studies of poverty to assess significance. A recent Asian Development Bank Participatory Poverty Assessment undertaken in 100 villages across Laos shows that most of the poor are in the upland areas. The most common indicator chosen by the villagers for their well being was "rice sufficiency". Household level food access is extremely poor in these areas which are also accompanied by poor health, nutrition and education outcomes. Unlike the large rice deficits of upland areas, the lowland people suffer from chronic food shortage prior to the harvest. As mentioned earlier, approximately 1.5 million people fall under this category of chronically food insecure.

Simultaneously a macro-economic analysis based on the Laos Expenditure and Consumption Survey revealed that approximately 30 percent of the population were below the food poverty line at country level. This amounts to approximately 1.59 million people out of a projected 2001 population of 5.3 million people. Average food deficit per year was calculated on the level of poverty and amounts to approximately 1.5 months deficit.

As for the emergency affected areas, these populations predominantly practice lowland rainfed farming of which only an estimated 13 percent of all farming households have access to irrigation. Most years, they are self-sufficient and do not need any assistance. Due to the floods in 2000, these farmers have been temporarily pushed into high food deficits and hence need assistance to cope with severe household level food deficits. Those without access to dry season agriculture and other coping strategies are expected to resort to unacceptable coping strategies (high borrowing, sale of valuable assets, etc.) Approximately 450 000 people fall under this category.

5.3 Methodology for Identifying Food Assistance for Chronic Flood Affected People

In terms of the emergency, flood affected areas were ranked by the extent of rice area destroyed by floods. The area destroyed was then compared to total area planted/yields to arrive at per capita deficits at village level. This was then compared against relative levels of chronic food insecurity/poverty in those areas to arrive at a first set of villages. Third stage of analysis involved extensive checking by WFP field staff and govt. staff at the Province, district and village level to arrive at the final set of villages for WFP food aid interventions. Villages with adequate coping strategies were dropped from consideration. Only those villages with high deficits (of more than 4 months up 10 months) and inadequate coping strategies were selected for WFP assistance. Two distinct phases of assistance were planned for. One was an immediate distribution to people in the affected areas based on Food for Rehabilitation Activities and the other was based on food for work in a smaller number of very poor villages. Small quantities of food were distributed by other agencies such as the Lao Red Cross, just after the floods. These distributions are estimated at about 1000 tonnes.

Based on the above analysis, tables 3 and 4 outline total food assistance needs and current food aid operations.

Table 3: Lao PDR, Estimated food deficit population and food needs in 2001

Number of people
Food Gap (tonnes of rice)
Chronically food insecure people
1 500 000
21 000
Social groups (handicapped, orphans, etc.)
150 000
(food gap yet to be estimated)
2000 flood affected people
450 000
15 000

Table 4: Lao PDR 2001WFP/Bilateral Planned food assistance and unmet needs

Number of people
Planned food aid (tonnes of rice)
Unmet need
(tonnes of rice)
Chronically food insecure people
(WFP only)
100 000
3 000
18 000
2000 flood affected people (8 000 MT covered by WFP and 1 000 MT by others)
170 000
9 000

Japan on average, donates about 10 000 tons of rice each year to Lao PDR. Two-thirds of this rice is sold in the open market to support infrastructure rehabilitation projects and lines of credit for agricultural lending. The remainder is more or less evenly distributed and approximately works out 100 to 150 tons for each province.

5.4 Types of additional food aid intervention

The chronically food insecure are currently being served through the WFP food for work mechanism. This scheme helps villagers plan their priorities and uses food assistance to enable them to implement activities identified by the community (roads, canals, etc.). WFP works closely with the Ministry of Labor and Social Welfare to implement its projects and NGO's/other bilateral and international agencies.

The Ministry and WFP jointly decide on areas of intervention. Appropriate NGO's who can bring in complementary resources are also involved in the planning and implementation of the projects. A joint list of districts and villages are decided upon and a village planning exercise decides on the type of intervention.

In terms of the emergency, WFP has set up a decentralized coordination structure with Provincial departments of Rural Development, Labor and Social Welfare, Agriculture and others. This group in conjunction with govt. district officers makes decisions at village level for food aid interventions. Detailed analysis of crop loss, and coping strategies are done both using quantitative data at central level and qualitative analysis at Province level and the overlaps between them are chosen.

For the first phase of WFP assistance the community and WFP officers jointly decide on the light activities that allow for the first food distribution to take place. For the second phase a detailed process of community based planning drives the intervention after a further finer selection of most affected villages is arrived at.


6. Logistics

WFP currently has an international short term logistics consultant coordinating the Emergency Operation while the development project is being coordinated on a part-time basis by the Programme officer. A combination of local purchases and food aid imports are being handled by these personnel. Private transport companies are hired for distribution of food.


7. Medium Term Recommendations

In view of frequent occurrence of natural disasters, crop damage assessments, especially rapid assessment capabilities for flood damage needs to be strengthened between FAO, WFP and Government. A joint FAO/WFP programme, for institutional strengthening and capacity building in crop assessment and yield verification could be considered.

A series of disaster mitigation measures based on capacity building in national early warning systems and using food for work/other mechanisms should also be considered. Many people live on the margin of poverty in flood and drought prone areas and disaster mitigation measures are critical to ensure adequate and remedial measures be taken before the food situation becomes critical

This report is prepared on the responsibility of the FAO and WFP Secretariats with information from official and unofficial sources. Since conditions may change rapidly, please contact the undersigned for further information if required.

Abdur Rashid
Fax: 0039-06-5705-4495
[email protected]

John M. Powell
Regional Director, OAC, WFP
Fax: 0039-06-6513-2863
[email protected]

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1 The Economist Intelligence Unit Country Report 2000.

2 Social and Economic Indicators Lao Expenditure and Consumption Surveys (LECS II). State Planning Committee.

3 Although earlier missions had used a higher milling rate, current conditions and discussions with Government and other organisations involved in the agriculture sector suggest that a rate of 60 percent would be more appropriate.

4 National Health Survey of Lao PDR 2000 Preliminary Draft.

5 Social and Economic Indicators Lao Expenditure and Consumption Surveys (LECS II). State Planning Committee.