Diagnosis and Activities for the Local Economic Development of the Districts Hongsa and Ngeun

What is the objective of PACA? Identify, with a rapid appraisal, the main strengths and weaknesses of the local economy and its main sectors (duration: weeks) Identify options for practical activities to strengthen the competitiveness of firms -- Criteria: –feasible with local resources –quickly implementable (starting next week) –quick, visible results (with 3 months)

What is the sequence of activities in the PACA Exercise in Hongsa/Ngeun? PACA-Project PACA-Exercise ( – ) Fieldwork (24-31/01) / onwards Results- Workshop: Diagnosis + Proposals Mini-workshops Imple- mentation Hypothesis Workshop Kick-off Workshop Presentation Event Way-forward Workshop Interviews Preparation: *Organisation *Advance Info

What have we been doing? Kick-off workshop (24 January 2006) Interviews with businesspeople and stakeholders in Hongsa / Ngeun (24 – 31 January) Mini-workshops (7) with –Maize Farmers & Traders (18 January) –Rice Farmers (25 January) –Garlic Farmers (25 January) –Tourism (26 January) –Supporting Institutions (27 January) –Handicraft (27 January) –NTFP (30 January) Internal Results Workshop (1-2 February 2006) Presentation Event (3 February) Way-forward workshops (from 3 / 4 February onwards)

Kick-off Workshop

Interview

Mini-Workshop

Rice Maize Garlic Handicraft (Weaving) Tourism NTFP (Mulberry) What are the sectors mainly considered?

Analysis of the Local Economies in Hongsa / Ngeun

Rice Production

Suitable soil and climate conditions Irrigation system supported by IFAD project Government support (technique, market access) Villagers with experience in planting rice High market demand Basis for various products Supports the livestock raising Diversity of varieties Strengths Rice Farming

Weaknesses Limited land for rice plantation Insufficient water supply Long distance in hours to markets Only one season by year Soil erosion damaged irrigation system and parts of paddy fields Fuel price hike raises production cost (tractors) Traditional planting techniques, lack of modern technology Lack of budget of agricultural extension services Villages use traditional varieties (to reuse the same seeds) Rice Farming

Maize Production

Good seed variety provided by the Rural Development Company Good soil fertility Experience of farmers in maize growing High market demand Motivating support from DAFO Strengths Maize Farming

Weaknesses of contractual arrangement - Government involvement - Low prices compared to southern districts - Belated purchase of maize harvest by Rural Development Company - Late collection of harvest lead to post-harvest problems (pests) - Hybrid variety does not produce new seeds Lack of seed quality control Low productivity due to lack of tools and machines Poor road conditions hamper transport / increase cost Technical support and training from DAFO limited DAFO staff lacks experience Weaknesses Maize Farming

Garlic Production

Strengths Garlic Production Long tradition on garlic production Climate and soil suitable for garlic production Sufficient water supply Low investment capital and cost of production Easy to grow and cultivate Good quality (taste, smell) appreciated by consumers No usage of fertilizers or pesticides Government authorities promote and support 30% export to Thailand (smuggling)

Weaknesses Traditional Production Family-based, fragmented production Small, unsustainable market Collection is not regular Lack of garlic processing Small cloves of garlic hampers the sale on markets in Vientiane Thailand protects its market against garlic import from Laos Garlic Production

Handicraft (Weaving)

Experience and skills of weavers Traders have sufficient capital available to provide raw material (cotton) Traders having market access to Thailand Strengths Handicraft

Thai authorities have increased import tax Thai traders pay in credit Low income of weavers (50 – 70 Baht per set) Export is not well organised by traders Limited amount of raw material due to price increases Patterns and design is limited due to the provision by Thai consumers Weaknesses Handicraft

Tourism

Provincial & district authorities consider tourism as priority sector in the strategy plans Tourist companies (e.g. in Laung Prabang) are marketing the location Hongsa Long and interesting history Good security situation Cultural and natural tourist attractions Hospitality of people Elephant riding as first attraction Guided trekking on developed paths (2) as further attraction Tourist company organizes group tours to Hongsa Border to Thailand in Ngeun not international Small variety of souvenirs Strengths Tourism

Weaknesses Tourist actors in Hongsa are unable to communicate in foreign languages Poor road conditions hampers tourist transport to and from Hongsa Transport services are not provided on a regular basis Natural tourist attraction are destroyed by logging Limited number of hotels/guesthouses and limited number of tourist services The provision of elephants for tourism purposes is competing in Hongsa with other activities (elephant riding in Luang Prabang, logging) Promotion material creates unrealistic expectations The tourism sector in Hongsa is poorly organised Tourism

Non-Timber Forest Products (Mulberry)

Strong demand by traders Traders pay full amount in cash Locations are close to the Thai border in Ngeun Low investment cost required Easy cultivation of mulberry trees Exemption from natural resource tax District authorities encourage villagers for planting Strengths Non-Timber Forest Products (Mulberry)

No appropriate tools for scraping used Plantations are difficult to protect from cattle Low quality of products Low prices paid Price differentiation between grades is too small to offer incentives for quality upgrade Villagers have only weak bargaining power No value added to pre-processed mulberry Export tax levied that finally reduces the price paid to villagers Weaknesses Non-Timber Forest Products (Mulberry)

LED Proposals to Strengthen the Local Economies of Hongsa / Ngeun

Short-term LED Proposals 1.Clear separation of land allocated to farming and to livestock / fining in the case of violation 2.Founding of an association of maize growers 3.Identify and introduce more appropriate peeling tools for mulberry collectors and farmers 4.Training in planting and harvesting for mulberry farmers 5.Learn from RDMA Bokeo about mulberry semi- processing and marketing 6.Training on storing techniques for garlic farmers 7.Founding of an association of weavers and traders of woven textile mainly to increase their bargaining power 8.Provision of language training to tourism service providers

Medium-term LED Proposals (1) 9.Technical Training of farmers in sustainable rice production (planting, harvesting, soil improvement) 10.Develop new market channels by convincing potential rice traders to enter the market 11.Collect samples and identify speciality rice varieties and their markets 12.Convince the Rural Development Enterprise (RDC) to discontinue involvement in maize trading and identify new local private investors. Immediately mitigate the negative consequences of the current contractual agreement between RDC and farmers.

Medium-term LED Proposals (2) 13.Organize a study tour of mulberry farmers and traders to experience the mulberry processing and to see the final product (e.g. to Luang Prabang, Thailand) 14.Enforcement of regulations restricting the logging along tourist trekking paths 15.Reactivate traditional activities in cultural villages (dances, games etc.) and market them as additional tourist attractions

Long-term LED Proposals 16.Identify new domestic and possibly foreign maize markets by involvement of NGO from Bokeo (NPI) 17.Enter into inter-provincial negotiations with Thailand to exempt garlic from import tax duties 18.Training on planting techniques for garlic farmers 19.Establishment of a tourist information center in Hongsa 20.Increase capacity of staff of local tourist office (training, study tour)

Who is the PACA Team? Bounsoth Symoung (Planning and Financial Office / Hongsa) Bounsot Inthapanya (Planning and Financial Office / Ngeun) Phomma Phommahane (Agriculture and Forestry Office / Hongsa) Khamfeau Phanthulack (Agriculture and Forestry Office / Ngeun) Sonsanith Phetsay (Info and Culture Office / Hongsa) Somsay Phophommachith (Commercial Office / Ngeun) Khatha Lamache (GTZ-RDMA / Hongsa) Bandit Sisoukda (GTZ-RDMA / Hongsa) Keoduangsone Syhalath (GTZ-RDMA / Ngeun) Veronika Utz (DED-RDMA / Ngeun) Somchay Soulitham (EDC / Vientiane) Oloth Sene-Asa (EDC / Vientiane) Christian Schoen (mesopartner / Germany)

Thank You!