Document of. The International Fund for Agricultural Development. For Official Use Only LAO PEOPLE S DEMOCRATIC REPUBLIC

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1 Document of The International Fund for Agricultural Development For Official Use Only LAO PEOPLE S DEMOCRATIC REPUBLIC ANNUAL REVIEW OF THE IMPLEMENTATION OF THE RESULTS-BASED COSOP Main Report and Appendices Asia and the Pacific Division Programme Management Department REPORT No 15 December 2012 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without the authorization of the International Fund for Agricultural Development (IFAD).

2 ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank ADF Asian Development Fund APR Asia Pacific Region ARD-SWG Agriculture and Rural Development-Sector Working Group CIAT International Centre of Tropical Agriculture CCSAs Community Savings and Credit Associations CUSO-VSO Canadian University Service Overseas-Voluntary Service Overseas Canada DLF Department of Livestock and Fisheries, MAF EGDP Ethnic Groups Development Plan EMP Environmental Management Plan EW Extension Worker FLSP Forages and Livestock Systems Project (AUSAid) GOL Government of Lao PDR IFAD International Fund for Agricultural Development IRRI International Rice Research Institute JFPR Japan Fund for Poverty Reduction, administered by ADB LDP Northern Region Sustainable Livelihoods through Livestock Development Project LPG Livestock Production Group LWU Lao Women s Union MAF Ministry of Agriculture and Forestry MOF Ministry of Finance M&E Monitoring and Evaluation NSEDP National Socio-Economic Development Plan PRA Participatory Rural Appraisal PSC Project Steering Committee QPR Quarterly Progress Report RB-COSOP Results Based Country Strategic Opportunities Programme RLIP Rural Livelihoods Improvement Programme in Attapeu and Sayabouri NRSLLDP Northern Region Sustainable Livelihoods through Livestock Development Project SDC Swiss Agency for Development Cooperation SNV Netherlands Development Organisation SNRMPEP Sustainable Natural Resource Management and Productivity Enhancement Project SSJ-CBFEOP Soum Son Seun Jai - Community-Based Food Security and Economic Opportunities Programme VDC Village Development Committee VLF Village Livelihood Fund

3 A. BACKGROUND 1. The current Results Based Country Strategic Opportunities Programme (RB-COSOP) for the Lao People s Democratic Republic was approved by the International Fund for Agricultural Development s (IFAD) Executive Board in September It covers the five year period between 2011 and This report reviews the annual performance of the COSOP which is now in its second year of implementation. The main purpose of the Annual COSOP Review Mission is to (i) assess the progress in programme implementation; (ii) recommend actions to improve implementation and (iii) generate and facilitate the sharing and use of knowledge. The COSOP review mission also examined some emerging trends and issues that could have a potential impact on the country programme and its expected results. This review is part of IFAD s strategy to move increasingly towards a country programming approach which enables a more holistic and integrated review of the country strategy and projects. The review is expected to identify a common set of implementation problems and focus on the synergistic effect of various elements of the portfolio as well as the non-project activities undertaken at the country level, including those for knowledge sharing and policy dialogue. Mutual learning among various partners in the country programme was considered an important objective of the review. 2. A one person mission 1 visited the country between December 10 and 14, 2012 to undertake the COSOP review in partnership with key stakeholders. Key project staff, relevant government agencies such as the Ministry of Agriculture and Forestry and donor agencies participated in the process. The mission met with the staff of all the ongoing IFAD projects to assess performance, identify specific constraints and highlight successes and challenges. A COSOP Review workshop was held in Vientiane on December 12, 2012 to share the perceptions of the key stakeholders and implementing partners and discuss performance of the country programme. More than 28 participants from the Government, donor community, grant recipients participated in the workshop. The participants involved in the country programme shared lessons from IFAD s in-country experience. The representatives from the European Union, The International Centre for Tropical Agriculture (CIAT-Asia), International Rice Research Institute (IRRI), Canadian University Service Overseas- Voluntary Service Overseas Canada (CUSO-VSO), SNV, Lao Women s Union, the staff of the four on-going IFAD financed projects and grant recipients participated actively in the group discussions. 1 The COSOP mission comprised of Ms Maliha H. Hussein. She was assisted in-country by Ms Kongchay Vixathep and guided by the Country Programme Manager Ms Stefania Dina.

4 3. The workshop provided an important forum for the exchange of ideas, strengthening synergy among development partners and further identifying opportunities for harmonization. Important recommendations were made by the participants on how to improve the effectiveness of IFAD s country programme, identify measures to improve the achievement of strategic objectives, innovate and scale up successful experiences, improve targeting to reach the poor, women and vulnerable groups and develop a strategy for policy reform. The workshop was an important event which was expected to contribute to donor coordination and harmonization to work jointly to help the Government achieve its objectives of poverty reduction and achieving food and nutrition security in the country. Some preliminary findings of the COSOP review were also shared at the workshop. The COSOP Annual Implementation Progress Report was finalized on the basis of comments received during this review workshop. B. OVERVIEW OF THE SOCIO ECONOMIC AND POLITICAL CONTEXT 4. The high growth rate achieved by the Lao People s Democratic Republic (LPDR) since the introduction of economic reforms in the mid-1980s has resulted in a steady decline in poverty. The economy has expanded on average by 7.1 percent per year from 2001 to 2010, and is expected to grow by 7.6 percent per year in Lao PDR reached a GNI per capita of US$1,010 in 2011 and moved up from its lower income economy status to a lower-middle income economy. At this pace, Lao is on track to achieve its long term vision: to graduate from the Least Developed Country status by The country has made impressive progress in economic growth, with the proportion of poor people falling from 39 per cent of the population in the mid-1990s to 27.6 per cent by However, the country remains one of the poorest and least developed in South-East Asia. Available data suggest that while Lao PDR has made significant progress on many of the Millennium Development Goals (MDGs), it is well behind in some including malnutrition (forty percent of under-five children are stunted), some dimensions of gender equality (for instance, girl s equal enrolment in tertiary education). Although social indicators have also shown an improvement, they are still among the lowest in the region. Poverty and extreme poverty are most common in mountainous regions, where the majority of the country s ethnic groups live. In upland areas, the poverty rate is as high as 43 per cent, compared with about 28 per cent in the lowlands. Figure 1: Changing Poverty Trends in Lao PDR 2 World Bank. January Country Programme Strategy. 3 World Bank

5 6. The share of agriculture has dropped consistently over the last decade, from 43 percent in 2000 to 30 percent by Agriculture and forestry are mainly subsistencebased, with some emerging plantation and contract farming. Agricultural exports (mainly crops) are limited and are about one-third of manufacturing exports. The transition towards a natural-resource intensive growth is expected to continue in the medium term with a projected share of industry of 38% in 2015, and a corresponding decline in agriculture, while the share of the service sector is expected to remain stable. However, more than three quarters of the total population lives in rural areas and depends on agriculture and natural resources for survival. Poor rural people depend on agriculture for food and income, but agricultural conditions are often unfavourable and productivity is low. Farmers struggle to meet food requirements, especially when their households are large. Most use traditional farming methods. They lack knowledge of new technologies and skills to improve yields, they have few inputs and their landholdings tend to be too small for paddy cultivation or production of other crops. Declining soil fertility also affects productivity. Few farm households have access to irrigation. Livestock diseases spread unchecked, causing loss of animals. Because of declining yields of rice and other crops, in many parts of the country households are forced to use wild forest resources to provide food and generate cash. This unregulated exploitation of important natural resources causes serious environmental damage and ultimately exacerbates poverty. 7. Poor, remote rural communities are also geographically and institutionally isolated. During the rainy seasons as many as half of all Lao villages become unreachable. Social isolation is a particular problem for upland ethnic peoples, who are marginalized in many ways because of their language, customs and religious beliefs. In addition, rural communities have very limited access to government social services, roads, markets, basic education and health services and financial services. They are largely cut off from the benefits of a market-oriented economy. The lack of education prevents them from gaining access to information, employment and improve their living standard. 8. The Lao People s Democratic Republic has formulated its development strategy for the period in its seventh National Socio-Economic Development Plan (NSEDP). Rural development remains central to the Government s development and poverty eradication efforts. The orientation of the country s new rural strategy, for the period through 2020, includes a strong focus on modernizing agricultural production and creating valueadded food and agricultural products. The strategy aims to reduce rural poverty, maintain food security and apply science-based management to natural resources. Development of the agricultural and natural resources 4 World Bank. Country Partnership Strategy. January 2012.

6 sector is to be closely aligned with the Millennium Development Goals (MDGs) and to support regional programmes, especially those of the Greater Mekong subregion and the Economic Community of the Association of Southeast Asian Nations. C. THE IFAD COUNTRY PROGRAMME 9. IFAD began operations in the Lao People s Democratic Republic in Since then, it has provided a total of US$107.6 million in loans and grants for 12 programmes and projects. IFAD supports the Government in implementing the objectives of the seventh National Socio- Economic Development Plan (NSEDP) and the National Growth and Poverty Eradication Strategy, and achieving the MDGs. IFAD s strategy is to ensure that poor rural people have increased opportunities for sustainable food and nutrition security and economic livelihoods. Together with government agencies and development partners, IFAD has identified areas in which it has a comparative advantage and complements other donors activities. Specifically, the IFAD Country Strategic Opportunities Programme has three main Objectives; (i) Communitybased access to and management of land and natural resources; (ii) Access to advisory services and inputs for sustainable, adaptive and integrated farming systems and (iii) Access to markets for selected products. The crosscutting issues underlying its strategic objectives include capacity-building of government line agency staff, beneficiaries and service providers, engagement with ethnic groups, women as key partners in all production and marketing systems, investment in strategic infrastructure related to farming systems (e.g., small-scale village irrigation) or markets (e.g., farm-to-market roads), formation of farmer and producer common-interest groups and resilience to climate-related risks and enhanced capacity to adapt to climate change. 10. At the time of this review, there were four on-going projects in the country which included the following; (i) the Rural Livelihoods Improvement Programme in Attapeu and Sayabouri (RLIP); (ii) the Northern Region Sustainable Livelihoods through Livestock Development Project (NRSLLDP); (iii) Sustainable Natural Resource Management and Productivity Enhancement Project (SNRMPEP) and the (iv) Soum Son Seun Jai - Community-Based Food Security and Economic Opportunities Programme (SSSJ-CBFEOP). These projects have been designed, financed and supervised in close partnership with other multilateral and bilateral agencies including the Asian Development Bank, GIZ, Swiss agency for Development and Cooperation, Government of Luxembourg, World Food Programme, etc. The total cost of these projects is approximately USD 100 million and IFAD contribution to them in terms of loans and grants is about USD 50 million or around 50% of the total original cost. The Lao country programme is outstanding in terms of its ability to leverage IFAD resources with the funds of other agencies.

7 Table 1: Summary of On-Going IFAD operations Project Period Co-financing Agencies Total Cost USD million IFAD Loan USD million RLIP German Development Service (US$0.3m) IFAD Grant USD million GIZ (US$1.7 m). WFP (US$1.3 m) NRSLLDP ADB (US$10 m) SDC (US$3.5 m) SNRMPEP ADB (US$ 20 m) SSSJ- CBFEOP WFP (US$3.7 m) GIC$ 0.4) The Rural Livelihoods Improvement Programme in Attapeu and Sayabouri ( ): The programme targets three districts in Attapeu and five districts in Sayabouri, all of which are poor or extremely poor. The programme has four components: (a) social development; (b) economic development and natural resource management; (c) rural infrastructure; and (d) institutional development and capacity-building. The target group consisted of 26,200 poor and food insecure households living in the upland and households that have recently resettled from the remote uplands to more accessible areas. The project was very broad based and involved strengthening the capacity of the target population and village-based organizations, investments in social and physical infrastructure (local roads and warehouse construction), introducing new farming technologies and crop diversification, improving livestock health care, supporting the development of off-farm income generation, small enterprises and market linkages, setting up villagebased savings and credit societies, introducing measures for natural resource management, such as zoning and land-use planning and strengthening capacity for policy analysis. The programme works towards the sustained improvement of livelihoods among poor households and communities, and particularly targets women and marginalized groups in poor villages in the uplands and in resettled or merged villages in the lowlands. Its objectives are to improve food security, basic education, health services and road access. 12. Northern Region Sustainable Livelihoods through Livestock Development Project ( ): Smallscale farmers in mountainous districts in the country s northern region face declining productivity that is linked to

8 limited access to productive land and forests and to appropriate technologies. They also lack marketing linkages for better livestock production and trade. The project is designed to help improve living conditions and sustainable livelihoods for poor upland communities of the Lao Theung and Lao Sung ethnic groups in the northern provinces of Bokeo, Houaphanh, Luang Namtha, Luang Prabang and Xieng Khouang. The project was expected to impact positively on the incomes of at least 17,000 ethnic households and women in 408 villages. The project is designed to improve livestock productivity and profitability and help develop linkages to export and domestic markets. The project has three main components: (i) enhanced village livestock systems (with subcomponents of productivity initiatives, market linkages and enterprise development, and participatory extension network); (ii) capacity-building for community-driven development; and (iii) implementation management. The project will help improve nutrition and food security and increase the selfreliance of upland communities, particularly of women. Activities include: developing livestock enterprises and market linkages for small-scale farmers, supporting the creation of village-based producers associations and revolving fund groups, developing materials in ethnic languages for radio broadcasts in project areas, building the capacity of extension workers to enable them to work effectively with diverse cultural communities. 13. Sustainable Natural Resource Management and productivity Enhancement Project ( ): An IFAD grant is being used to finance this project, which has the objectives of achieving more efficient and sustainable natural resources management and improving agricultural productivity in the southern part of the country. The grant supports the government s efforts to maximize the productivity of existing arable land in an area that is limited by topography, undeveloped water resources and inadequate market access. The project has three components: (i) capacity-building for agriculture and natural resource sector management; (ii) implementation of agricultural productivity and commercialization subprojects; and (iii) project management. Increasing agricultural productivity is crucial to maintaining the recently achieved national self-sufficiency in rice. Pockets of food security are still common in the country, particularly in areas where the road network is underdeveloped. IFAD funds are designed to contribute to build capacity for informed management in the agriculture and natural resources sector. The project includes a policy link at the national level that anchors it to a similar initiative in the northern uplands. Through the project, agency staff at the national, provincial, district and village level are expected to receive capacity-building support. One of the project s main target groups comprises poor farming households in lowland areas, characterized by lack of market opportunities, limited marketing surpluses and lack of secure land tenure. Another target group includes poor farmers in upland areas whose livelihoods are

9 threatened by lack of secure land tenure, limited land for agriculture, inadequate awareness of their rights, poor access to markets and low literacy levels. The project will encourage poor farmers to join farmers organizations and producers associations, making them more attractive partners for the private sector and increasing their capacity to negotiate with potential investors. At the provincial and national levels, the project will work to enhance capacity to manage natural resource-based development and promote agricultural productivity. A significant innovation is devolvement of responsibility for natural resource management to the provincial and district levels, with policy guidance provided at the national level. 14. Soum Son Seun Jai - Community-based Food Security and Economic Opportunities Programme ( ): The SSSJ programme targets approximately 17,000 households in 225 villages where the incidence of poverty is greater than 30 per cent. It comprises nine districts in Sayabouly and Oudomxay provinces. The main target group consists of ethnically diverse poor rural households. The two primary sub-groups are: Highly vulnerable, food-insecure households with limited capacity to enter the market Poor households that are moderately food-secure and have a greater potential to enter the market. Both categories share a common livelihoods system based on rain-fed cropping, raising livestock, collecting forest products and wage labour. Youth will also be part of the target group; they will be involved in mentoring activities through linkages with agricultural universities and ethnic schools. The goal of the programme is to contribute to the reduction of extreme poverty and hunger in the two provinces. The development objective is to ensure sustainable food and nutrition security and income generation for the rural poor in the target villages. The programme will develop new pilot approaches to creating integrated farming systems and links to markets. These two components are closely interconnected, since the target group lacks access to services promoting enhanced subsistence farming or marketing of cash crops, and is at a disadvantage when contracting with traders. In this context, an integrated and flexible approach is essential to address location-specific challenges among the rural poor. Capacity building, knowledge management, community-based natural resource management, farmers organizations and gender mainstreaming will be integral to all programme activities. 15. The country programme also consists of several grants which have been provided to the Center for Tropical Agriculture (CIAT) for a programme for Linking Livelihoods of Poor Smallholder Farmers to Emerging Environmentally Progressive Agro-Industrial Markets. This partnership is aimed at the development of improved production of cassava, forage and livestock. IFAD has also provided a grant to the International Rice Research Institute (IRRI) for assistance on improved varieties of rice and is part of the Consortium for Unfavourable Rice Environments. IFAD has

10 also provided a grant to PROCASUR for learning routes and exchange visits. PROCASUR has in particular been very active in the area of managing forests, land tenure, communal land issues especially for indigenous people and ethnic groups. The organization has produced two reports based on the work of IFAD financed projects with coffee producers in Champassak province and with Organic Asparagus Producers Group in Attapeu. D. EFFICIENCY OF PROJECT-LEVEL MANAGEMENT 16. There are several aspects in which the IFAD country programme in Laos is quite outstanding even if the Project Score Ratings do not always illustrate this. This is in area of partnership building, monitoring and evaluation and the time taken for effectiveness. Some of these aspects have been discussed in the relevant sections. The average time lapse between approval of projects to effectiveness (6.37 months) for Lao is well below the regional average for effectiveness of 10.9 months and the IFAD average of 12.1 months. 5 Lao is among the leaders in terms of the efficiency with which the Government meets the conditions for effectiveness. Furthermore, over time, the lapse has decreased with every project showing that the efficiency of the Government in this regard is increasing. Figure 2 below shows the performance of each of the on-going projects and the trend line. Figure 2: Effectiveness Lag of IFAD financed projects in Lao 5 This includes CMP. 17. An assessment was made of how well project activities are coordinated and managed. Quality of project management has generally been satisfactory and is at par with the APR average for most projects. All the IFAD financed projects are located in remote and poor areas of the country with difficult socio-economic and physical conditions and weak institutional capacity. Lack of qualified staff is a serious constraint facing project implementation. A related issue is the ethnic diversity and the difficulty in finding staff able to communicate in local languages and appreciate the diversity in ethnic cultures. Nevertheless the projects have generally performed at par with the APR average. 18. The differing periods for which technical assistance is provided under the various co-financed projects has often led to the early withdrawal of some technical assistance but the projects have tended to deal with these issues through its local project staff. In RLIP, for instance, the GIZ Technical assistance was withdrawn prior to the closure of the project and was not replaced with the exception of a Programme Management Advisor, fielded in late The performance of monitoring and evaluation has not been rated very well except in the case of the Natural Resource

11 Management project (SNRMPEP). Coherence between the Annual Work Plan and Budget and its implementation has been rated well in RLIP and SNRMPEP but its rating has dropped in the last two investments. Figure 3: Project Management Performance 19. Quality of financial management has been generally satisfactory, disbursement rate did exceptionally well under RLIP but since then the quality has gone down in the two projects which were co-financed with ADB. It is too early to judge the disbursement performance of SSSJ which became effective only a year ago. During the process of the Asia Pacific Region (APR) specific comments made about the Lao Country Programme related to the financial management of the projects. It was recommended that a Financial Management consultant is to be recruited for all supervision missions in 2013 and that periodic training events need to be organized for staff managing the financial aspects of projects in the country. The adherence to loan covenants is considered to be satisfactory as is compliance with procurement procedures. Audits have not been timely in RLIP but have been rated satisfactory under SNRMPEP and NRSLLDP. The Government has been very good with the availability of counterpart funds and in this regard the performance of projects is judged to be satisfactory. Figure 4: Fiduciary Aspects 20. In co-financed projects, IFAD s disbursements and expenditures have tended to be somewhat delayed due to a host of issues. In the Livestock Project (NRSLLDP) a Joint donor review mission (May 2011) was agreed that the components of the loan needed to be redesigned to make it more useful and value added. Concerns had been raised on the effectiveness of the allocation for the marketing component. IFAD had therefore requested the project to submit a proposal for reallocating the IFAD funds. The project has reviewed the loan components to determine the most effective way that these funds can be applied. A proposal has been submitted to the ADB recommending a reallocation of these funds for utilization in poultry and village infrastructure activities. 6 E. RESULTS OF THE ONGOING PORTFOLIO (i) Coverage of IFAD Projects 21. The four on-going projects are designed to cover 71,450 households. This represents around 9% of the rural 6 Quarterly Progress Report. April to June 2012, Dr. Syseng Khounsy, National Project Director. Northern Region Sustainable Livelihoods through Livestock Development Project (NRSLLDP 17 July 2012.

12 households assuming that the rural population is around 4.14 million and there are around 753,000 rural households in the country based on an average household size of 5.5 people. The country strategy does not specify any targets with respect to the number of households it expects to cover. Its targets are in terms of percentages of people trained, receiving services or organized in production or other types of community groups. Thus it is difficult to assess whether the country programme has met its targets or not because they are not specified in a manner which can be easily identified or monitored. However, at the project level projects do identify the number of households they expect to cover. Another issue with the COSOP results framework milestone and outcome indicators as identified in the COSOP is that the targets are not consistent with those expected to be achieved through the projects in most cases and do not match the project level targets. For the purposes of this review, the targets were derived from the appraisal documents of projects and as subsequently modified during the process of supervision and review. IFAD per capital allocation for the four ongoing projects is USD 699 per household or USD 127 per capita. Figure 5 below shows the expected coverage of each of the four-ongoing projects. Figure 5: Appraisal Targets of On-Going Projects (Households) 22. An assessment was made of the extent to which the ongoing operations had met their target in terms of coverage. The RLIP has been completed in Sayabouri and is close to completion in Attapeu. The Project Completion Report for Sayabouri reports that 24,213 have benefitted from the project. 7 However, it also notes that due to the inconsistency of the data provided by the programme, it is impossible to assess the exact number of beneficiaries. In terms of the coverage in Attapeu 8 it was reported to be 42,338 people in the last AWPB in terms of different programme services. However this figure includes multiple counting of people who received more than one programme service. The cumulative figure of 129,587 beneficiaries, 318% of the appraisal target, reflects multiple counting, and also counts multiple times people who received services over more than one year. 9 The issue of coverage also gets somewhat fussy when beneficiaries are converted to households or vice versa. There is no specific convention which is followed in this regard and it is 7 Rural Livelihoods Improvement Programme in Attapeu and Sayabouri (RLIP). Programme Completion Report Sayabouri Province. June Rural Livelihoods Improvement Programme in Attapeu Province (RLIP). Supervision Mission: October 2012 Aide-Mémoire. 9Rural Livelihoods Improvement Programme in Attapeu Province (RLIP). Supervision Mission: October 2012 Aide-Mémoire.

13 unclear the basis on which this conversion is generally made. 23. The Northern Region Sustainable Livelihoods through Livestock Development Project (NRSLLDP) was expected to target 17,000 ethnic households and women in 408 villages. 10 By June 2012 the project had covered all 18 target districts and initiated its activities in 327 villages. 11 The initial appraisal target had been reduced during one of the supervision missions based on the expectation that reducing the number would help to enhance the impact of the project. Thus far the project has helped to organize 1,608 livestock production groups (LPGs) with a membership of 13,206 households compared to the target of 12,000 which were expected to participate in livestock activities None of the documents of the Sustainable Natural Resource Management & Productivity Enhancement Project indicate the number of households that are expected to benefit. The appraisal documents mention only that 42 districts of which 19 poor districts would be targeted. The number which is used here to estimate the beneficiaries of the project are taken as 11,200 as this number was reported in one of the summary reports. However, the origin of this number is not clear. 25. Soum Son Seun Jai - Community-based Food Security and Economic Opportunities Programme was expected to target 225 villages, where the incidence of poverty was higher than 30 per cent, in nine districts in two provinces: four districts in Sayabouly Province and five in Oudomxay Province. It plans to raise the incomes and the quality of life of about 17,000 rural households. 13 The project started its implementation in January 2012 and as such it is too early to assess its coverage. (ii) Targeting 26. The RB-COSOP had a very clear definition of its main target group and identified them as ethnically diverse group of poor households in rural areas. Within this main group, it highlighted that there would be two primary subgroups: (i) highly vulnerable food-insecure households (more than four months rice deficit per year) with limited or no access to markets; and (ii) poor households that were moderately food-insecure, but had a greater potential to access markets. The COSOP also visualized targeting of women, woman-headed households and youth and indicated that it would ensure gender mainstreaming 10 Presdients Report Quarterly Progress Report. April to June 2012, Dr. Syseng Khounsy, National Project Director. Northern Region Sustainable Livelihoods through Livestock Development Project (NRSLLDP 17 July Quarterly Progress Report. April to June 2012, Dr. Syseng Khounsy, National Project Director. Northern Region Sustainable Livelihoods through Livestock Development Project (NRSLLDP 17 July Presidents Report

14 activities by formulating gender sensitive work plans and raising gender awareness among its staff and partners. The strategy claimed that inclusive targeting measures would build up a woman-friendly environment and empower women and youth to actively participate in IFAD activities. The programme would target youth, especially through agricultural universities and ethnic schools and through support to mentoring activities. The strategy envisaged the following modes of targeting: (i) geographical targeting based on poverty ratios; (ii) selftargeting based on type of programme activities; (iii) targeting geographically organized farmers organizations having production and market linkage potential The Lao Government defines poverty as the lack of essential needs of daily life such lack of food, the lack of clothing, the lack of permanent accommodation, the inability to afford fees for medical treatment in case of illness, the inability to afford payment for education of members of the family and the lack of conditions for convenient communications. The projects have adhered to poverty targeting and gone to great lengths to do the targeting correctly. As a result, the portfolio has been showing that there are significant and positive changes taking place in reducing poverty levels. However, the economic context in Laos is rapidly changing. Regional markets are more integrated, there are more private sector players, value chains are developing. In an environment of limited fiscal resources, the question is the approach, which would have the greatest poverty impact. In the case of Laos, rather than promoting a stringent targeting policy, promoting an inclusive growth model has shown to have a greater impact. 28. RLIP indicated that its target group would consist of poor and food insecure households in the upland and households that have recently resettled from the remote uplands to more accessible areas. Women were to be an important part of the target group because of their disadvantaged position in society and their important role in productive and reproductive activities. Unemployed rural youth were also expected to be a more general part of the target group because of their potential role in national and local economic development and social stability. 15 The last supervision mission of RLIP raised questions with regard to the criteria used to select target families, as well as the very small numbers of benefitting families (30 households on poultry promotion in ) The Northern Region Livestock Development Project has kept specific records of the poverty profile of its beneficiaries from different activities which enable the 14 Lao People s Democratic Republic. RB-COSOP. IFAD. August Presidents Report Aide Memoire. Supervision Mission: October Rural Livelihoods Improvement Programme In Attapeu Province.

15 separate identification of these households. 17 In the Northern Region Livestock Development project the targeting approach consists of geographical targeting of poor and the poorest and self-targeting mechanisms to benefit the poor and the poorest wherever possible. 18 The Joint Review Mission of November 2011 noted some concerns with regards to poverty targeting especially with regard to the distribution of livestock. However, subsequently it was observed that participation of the poor and ethnic group households has been increased especially for villages that have strong leadership in the form of a village head The design of the Sustainable Natural Resource Management Project noted that its targeting approach was in accordance with the IFAD Policy on targeting, subprojects aiming specifically at rural poverty reduction would receive a higher weight and the number of target group households reached will be one of the ranking criteria to be applied in prioritizing sub-projects. The report further noted that poor farmers would be encouraged to join farmer organizations and producer associations. The strategy was to launch a widespread information campaign to publicize the availability of subproject financing at the grass-roots level to ensure that the target group participated in the formulation of the subprojects. It was also envisaged that training would be provided to the district and khumban staff for this purpose. 20 The latest progress report of the Sustainable Natural Resource Management Project noted that the Project was being implemented in villages with high rates of poverty and was targeting more than 40% participation from poor and very poor farmers. Sub-projects were identified and prioritized with men and women, poor ethnic household beneficiaries during the series of village/kumban level community consultation. 21 The Project also reported developing safeguard systems for the indigenous people and gender, environment and resettlement The SSSJ Community Based Food Security and Economic Opportunities Programme was designed to be implemented in villages where the incidence of poverty was higher than 30 per cent. The Project s main target groups are expected to consist of ethnically diverse poor rural households, with two primary subgroups: (i) highly vulnerable food-insecure households with limited capacity to enter the market; and (ii) poor households that are moderately food-secure and have a greater potential to 17 Joint Review Mission. Northern Region Sustainable Livelihoods through Livestock Development Project. November President s Report. Northern Region Sustainable Livelihoods through Livestock Development Project. IFAD Joint Review Mission. Northern Region Sustainable Livelihoods through Livestock Development Project. August President s Report. Sustainable Natural Resource Management and productivity Enhancement Project Sustainable Natural Resource Management & Productivity Enhancement Project. Annual Progress Report FY Report Period: October 2011 September October Annual Progress Report FY Sustainable Natural Resource Management & Productivity Enhancement Project. October 2012.

16 enter the market. 23 Target villages are 160 in Oudomxay and 65 in Sayabouly and these were selected based on criteria which looked at food insecurity, low income, lack of social infrastructure, lack of access roads, poor housing All projects have generally been very specific about the target groups that they intend to reach. However, the supervision missions have not rated the projects very highly on its poverty and gender targeting record or approach. RLIP was rated better on poverty targeting compared with its gender targeting. Sustainable Natural Resource Management project was rated better on gender than it was on its poverty targeting. However, the Northern Livestock Project was rated poorly on all accounts. The SSSJ- has obtained the highest rating so far on all aspects of targeting. Figure 6 provides a graphic illustration of the PSR scores as derived from the latest supervision reports. Figure 6: Targeting Performance of IFAD Financed Projects 33. IFAD financed projects have focused on gender aspects during the formulation of the country strategy, project design and especially focused on gender aspects during supervision and implementation support. The 2011 COSOP identified the engagement with women as key partners in all production and marketing systems. The strategy had noted that women and men constitute equal parts of the agricultural workforce, and women play by far the dominant role in household nutrition. Moreover, women continue to be disadvantaged in communities in terms of leadership and opportunity. Ethnic women are particularly disadvantaged due to poor language and numeracy skills, which too often results in difficulty in accessing information. Many ethnic groups traditionally restrict women s access to public meetings and out-of-village training. And while all government ministries have strategies and action plans to promote gender equality at national, provincial, district and village levels, the actual implementation of such plans tends to be uneven. The COSOP had envisaged that the delivery of tangible benefits to women would be promoted through partnership with the Lao Women s Union (LWU). Project design documents had also noted that women generally work longer hours than men, often taking on about 70 per cent of farming and household tasks, as well as caring for young children. They also receive less schooling. Women s literacy rate is 54 per cent, compared with 77 per cent for men. Ethnic women and girls, especially those in the highlands, are the most vulnerable members of rural communities. Women in ethnic groups comprise 70 per cent of the illiterate 23 The President Report Soum Son Seun Jai Community-Based Food Security and Economic Opportunities Programme. IFAD. 24 Aide Memoire. Soum Son Seun Jai Community-Based Food Security and Economic Opportunities Programme Grant. Supervision mission: 1-13 October 2012.

17 population and suffer further isolation given that so few of them speak the national language. 34. However, despite the emphasis on gender in design, several supervision missions noted the limited attention given to gender in IFAD financed projects. In response to weakness of RLIP in this regard, the project supported a programme of gender mainstreaming activities, including training of government staff, training of Village Gender Committees and launching village campaigns for gender mainstreaming. Results reported by women met by the last RLIP Supervision mission in the district of Xaysettha were reported to be impressive, and included a fairer distribution of roles for carrying out household chores, taking care of children and, to a lesser extent, sharing tasks in productive activities. Respondents indicated that as a result, their life had become easier and they had gained more free time. In most of the other district s visited, women reported how they felt more at ease to participate in village meetings and express their views and proposals. Improvements are also reflected by the women who took on leadership roles in community groups. These achievements have to be assessed against an overall cultural context which is unfavourable for women, and indicates that close support by dedicated staff is a very effective tool to induce change. Programme data however showed that there was further scope for improvement of women s participation in trainings provided on economic activities, particularly on crop production, fish production, natural resource management, processing and marketing. Women s participation in livestock trainings had reached 50%, from 16% last year. The RLIP Mission also pointed out that promotion of gender equality should not be the sole responsibility of the Lao Women s Union, but it should equally be shared by the staff of all implementing line agencies The Supervision Mission for the Northern Livestock Project noted that women accounted for more than 90% of depositors in the Village Livelihood Fund component. 26 The Mission stressed the need to include in each quarterly progress report the updated status of Gender Action Plan (GAP) and Ethnic Group Development Plan. 27 The Sustainable Natural Resource Management & Productivity Enhancement Project also noted that gender mainstreaming activities were largely focused at facilitating women's participation in subproject where the concern was for increasing the number of women who would participate and have improved access over subproject inputs and resources as well as participate in various technical training and organization-focused capacity-building to ensure they received socio-economic benefits from the activities. The 25 Aide Memoire. Supervision Mission: October Rural Livelihoods Improvement Programme In Attapeu Province. 26 Aide Memoire. Northern Region Sustainable Livelihoods through Livestock Development Project -Joint Review Mission, August Aide Memoire. Northern Region Sustainable Livelihoods through Livestock Development Project -Joint Review Mission, August 2012.

18 mission recommended that gender mainstreaming was to be included as part of project s M&E system and included in its Management Information System The October 2012 Supervision Mission for the Soum Son Seun Jai Community-Based Food Security and Economic Opportunities Programme noted that field visits suggest that the programming process carried out so far at village level has been inclusive and no families were left out and target household participate in at least one activity groups, and efforts have been made to target women. This has been supported by the organisation of gender training of trainers for line agencies in each province and focusing on fostering women s participation in programme activities. The training included on-the-job practice in villages. The mission noted that this was already a good start which should be followed by ensuring that the trainees were able to further train their colleagues and that the gender targeting and strategy described in the design report was fully implemented. 29 (iii) Impact of IFAD Projects 37. The Project Completion Report of RLIP Sayabouri reports that despite the lack of reliable data, it seems that the number of poor households has decreased significantly during the RLIP implementation. The supervision mission for the RLIP Attapeu also reported that impact surveys carried out by the programme, revealed a significant decrease of poorer families in target villages (from 58% in 2006 to 20% in 2012), and an increase of the better off (from 10% in 2006 to 46% in The supervision mission noted that the impact assessment report did not provide poverty figures for non-target villages; hence the comparison between poverty ratios in programme supported and non-programme supported villages could not be undertaken. 31 A key point which was missed in the report was that there was an overall decline in poverty in the country during this period and the assumption to attribute the decline in poverty solely to the project may have been somewhat optimistic. The reports do acknowledge that subsistence agriculture is still the norm in the target areas but the programme activities have contributed to decrease in food insecurity, as revealed by the impact assessment Annual Progress Report FY Sustainable Natural Resource Management & Productivity Enhancement Project. October Aide Memoire. Soum Son Seun Jai Community-Based Food Security and Economic Opportunities Programme Grant. Supervision mission: 1-13 October Aide Memoire. Rural Livelihoods Improvement Programme in Attapeu Province (RLIP). Supervision Mission: October Aide Memoire. Supervision Mission: October Rural Livelihoods Improvement Programme In Attapeu Province. 32 b: Aide Memoire. Supervision Mission: October Rural Livelihoods Improvement Programme In Attapeu Province.

19 38. The RLIP PCR for Sayabouri noted that the programme has mainly impacted on the physical assets with a substantial number of infrastructures built (schools, dormitories, water supply schemes, latrines, irrigation schemes, roads), despite the lack of preventive maintenance. More could have been done on creating new terraced rice fields with food/cash for work in upland villages. In terms of human assets, malnutrition is still a burden. However, the overall health status of the beneficiaries has improved due to the construction of social infrastructure. Regarding social capital and empowerment, villagers still lack the necessary empowerment to translate their assets into tangible long lasting improved livelihoods. However, Women have especially benefited from gender roles awareness campaigns which aimed at greater solidarity between men and women in domestic tasks. Financial assets: the Village banks have developed a savings culture and eased access to credit, but few loans have been contracted to invest in agriculture which is still considered risky. Limited activities have been directly supported by the programme to increase household agricultural surpluses and incomes. 39. The power balance in negotiating prices for cash crops is still in the hands of traders and local authorities while farmers are not yet organised and don't access the needed market information even though the road construction has increased commercial exchanges. A contract-farming system is increasingly promoted by the private sector which also provides the needed inputs. Field interviews with RLIP beneficiaries showed that income had increased, especially for those farmers who had a contractual arrangement with a trader/company, as in the case of coffee and asparagus. The mission reiterated the recommendation of the last supervision mission to modify the data analysis process by including aggregate households income and weight of each source of income and by analyzing the changes in households incomes in monetary terms A decline in overall agricultural production has been noticed in upland villages (paddy yields due to absence of soil fertility management, and livestock due to outbreaks of diseases. However, the proportion of households reporting rice/food shortages seems significantly reduced and food security improved. The conversion from slash and burn practice seems to have had negative environmental effects (reduction of soil fertility, reduction of yields, increase in weeds and use of weed killer with secondary effects on livestock grazing) but also positive ones on the protection of forest resources. Regarding institutions and services, the line agencies and provincial and district staff have been significantly strengthened by the programme; they are better trained and better equipped to do their jobs. However there is still a lot of room for improvement in targeting the poorer upland communities and developing 33 Aide Memoire. Supervision Mission: October Rural Livelihoods Improvement Programme In Attapeu Province.