{"id":1494596,"date":"2024-02-09T20:09:00","date_gmt":"2024-02-09T20:09:00","guid":{"rendered":"https:\/\/www.rfa.org\/english\/news\/laos\/exports-02092024141323.html"},"modified":"2024-02-09T20:09:00","modified_gmt":"2024-02-09T20:09:00","slug":"laos-to-reap-little-profit-from-growth-of-farm-exports","status":"publish","type":"post","link":"https:\/\/radiofree.asia\/2024\/02\/09\/laos-to-reap-little-profit-from-growth-of-farm-exports\/","title":{"rendered":"Laos to reap little profit from growth of farm exports"},"content":{"rendered":"\n \n

A 20% year-over-year increase of agricultural exports from Laos in 2023 was largely on the back of Chinese plantations, according to trade officials, meaning that the country will reap few of the profits.<\/span><\/p>\n

<\/p>\n

Members of the business community told RFA Lao that the government needs to review its approach to foreign investment while improving its agricultural output to avoid a deepening trade deficit and improve the living standards of farmers in Laos.<\/span><\/p>\n

<\/p>\n

The Lao Ministry of Industry and Trade recently reported that last year Laos exported 9.5 million tons of agricultural products worth US$1.4 billion \u2013 an increase of just over 20% from 2022.<\/span><\/p>\n

<\/p>\n

However, the ministry acknowledged that most of the exported goods were produced by Chinese investors who leased land and grew vegetables and fruit in Laos to sell to China.<\/span><\/p>\n

<\/p>\n

Produce exports from Laos are largely cassava, potatoes, coffee, bananas and sugar. The country exports most of its products to China, Vietnam and Thailand, respectively.<\/span><\/p>\n

<\/p>\n

Chinese nationals run 933 projects in the agricultural sector in Laos, and their investments in the country are on the rise. Most of the projects adhere to what the Lao government refers to as the \u201c2+3 System,\u201d in which Laos provides land and labor, while foreign investors supply capital, expertise and a market for goods.<\/span><\/p>\n

<\/p>\n

\n\"Laborers<\/a>\n
Laborers at a Chinese-invested banana plantation in the Sing district of Luang Namtha province in northern Laos, in May 2019. (RFA)<\/figcaption>\n<\/small>\n
\n\n\n<\/a>\n<\/div>\n<\/figure>\n<\/span><\/p>\n

An official with the Ministry of Industry and Trade confirmed to RFA that most agricultural products in Laos \u2013 including cattle, vegetables and fruit \u2013 are produced by Chinese nationals for export to China, rather than by Lao farmers.<\/span><\/p>\n

<\/p>\n

\u201cChina won\u2019t allow goods produced by Lao farmers to enter China,\u201d said the official who, like other sources interviewed for this report, spoke on condition of anonymity due to security concerns. \u201cThey only accept goods produced by Chinese factories and investors that meet their quality standards.\u201d<\/span><\/p>\n

<\/p>\n

The Lao government will only receive a small portion of the US$1.4 billion in exports last year through taxes, tariffs, land concession fees and transportation fees, he added.<\/span><\/p>\n

<\/p>\n

Real value of foreign investment?<\/b><\/p>\n

<\/p>\n

A Lao businessman in Luang Prabang province said the government and the people of Laos \u201cwill only get 10% of [the export value] because most goods were produced by the Chinese.\u201d<\/span><\/p>\n

<\/p>\n

He questioned whether the Lao government \u2013 and by extension, the people \u2013 gains more than it loses from foreign investment.<\/span><\/p>\n

<\/p>\n

\u201cThe government must be more competitive by improving the quality and increasing the quantity [of agricultural products]; if not, Laos can expect to face a large trade deficit every year,\u201d the businessman said. \u201cTo do that, the country must increase its knowledge, budget and access to modern technology.\u201d<\/span><\/p>\n

<\/p>\n

\n\"A<\/a>\n
A laborer at a Chinese-invested banana plantation in the Sing district of Luang Namtha province in northern Laos, in May 2019. (RFA)<\/figcaption>\n<\/small>\n
\n\n\n<\/a>\n<\/div>\n<\/figure>\n<\/span><\/p>\n

The Lao Ministry of Industry and Trade reported that in 2023, Laos imported US$6 billion worth of products and exported $5.3 billion, resulting in a trade deficit of US$700 million.<\/span><\/p>\n

<\/p>\n

Laos can export 33 agricultural products to China \u2013 most of them fruits, vegetables and cattle \u2013 15 products to Vietnam and 15 products to Thailand. China is the main market for Lao exports and the market is growing annually.<\/span><\/p>\n

<\/p>\n

An official with the Asian Development Bank, or ADB, told RFA that in order to grow its exports, Laos must produce more of its own goods and improve their quality.<\/span><\/p>\n

<\/p>\n

\u201cChina has opened up its market for Lao products \u2013 particularly bananas, cassava, corn and\u00a0<\/span>fruit,\u201d the ADB official said. \u201cLaos exported about 300 million tons of bananas last year. These export can boost the Lao economy.\u201d<\/span><\/p>\n

<\/p>\n

Translated by Max Avary. Edited by Joshua Lipes and Malcolm Foster.<\/i><\/b><\/p>\n \n \n


\r\nThis content originally appeared on Radio Free Asia<\/a> and was authored by By RFA Lao.
<\/p>\n

This post was originally published on Radio Free<\/a>. <\/p>","protected":false},"excerpt":{"rendered":"

The increase was led by Chinese investors, meaning Laos will only receive taxes and fees.<\/p>\n","protected":false},"author":17168,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2242,6156,4227,42620,42607,17170,8710,60469,34045,785,27149,74184,27150],"tags":[],"_links":{"self":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/1494596"}],"collection":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/users\/17168"}],"replies":[{"embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/comments?post=1494596"}],"version-history":[{"count":1,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/1494596\/revisions"}],"predecessor-version":[{"id":1494597,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/1494596\/revisions\/1494597"}],"wp:attachment":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/media?parent=1494596"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/categories?post=1494596"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/tags?post=1494596"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}