ENTERPRISE PLANNING AND MANAGEMENT SKILLS

Transcription

1 LSP Project and Workshop Reports 4 Livelihoods Diversification and Enterprise Development Sub-Programme ENTERPRISE PLANNING AND MANAGEMENT SKILLS Participatory Training and Workshops for on- and-off farm diversification in 5 SPFS sites in Laos February 2005 FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS Livelihood Support Programme (LSP) An inter-departmental programme for improving support for enhancing livelihoods of the rural poor

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4 ENTERPRISE PLANNING AND MANAGEMENT SKILLS Participatory Training and Workshops for on- and-off farm diversification in 5 SPFS sites in Laos Special Program for Food Security of the FAO (SPFS) & Livelihoods Diversification and Enterprise Development Sub Programme of the LSP (LDED) Vientiane, February 2005

5 The Livelihood Support Programme The Livelihood Support Programme (LSP) evolved from the belief that FAO could have a greater impact on reducing poverty and food insecurity, if its wealth of talent and experience were integrated into a more flexible and demand-responsive team approach. The LSP works through teams of FAO staff members, who are attracted to specific themes being worked on in a sustainable livelihoods context. These cross-departmental and crossdisciplinary teams act to integrate sustainable livelihoods principles in FAO s work, at headquarters and in the field. These approaches build on experiences within FAO and other development agencies. The programme is functioning as a testing ground for both team approaches and sustainable livelihoods principles. lsp@fao.org Website: From inside FAO: From outside FAO: The Livelihoods Diversification and Enterprise Development Sub-Programme (LDED) The Livelihoods Diversification and Enterprise Development (LDED) sub-programme aims to improve the effectiveness of FAO in addressing the needs and interests of poor people in livelihood diversification programmes and projects. The objectives of LDED are: a. To appraise inhibiting and enabling factors, and approaches supporting livelihoods diversification and enterprise development. b. To catalyze and facilitate innovative practices for supporting livelihoods diversification. c. To increase inter-disciplinarity and learning in FAO and partner agencies for supporting livelihoods diversification and enterprise development. The LDED will add value to FAO s regular programme and projects with a particular focus on addressing obstacles and promoting opportunities for people. It will capitalize on existing FAO strengths related to LDED in addition to identifying and addressing gaps related to livelihoods diversification and enterprise development. Doyle.Baker@fao.org

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7 Table of contents LIST OF ACRONYMS...2 EXECUTIVE SUMMARY...3 BACKGROUND...4 INTRODUCTION...5 CHAPTER 1: WORKSHOP REPORT SOCIO-ECONOMIC SITUATION OF THE VILLAGES OVERVIEW OF TRAINING STAGES METHODOLOGY AND APPROACHES USED OUTCOME OF PARTICIPATORY ACTIVITIES SUPPORT NEEDS...20 CHAPTER 2: BUSINESS PLANS OF ACTION FOR 15 VILLAGE LEVEL ENTERPRISES MARKET OUTLETS TECHNOLOGIES (INPUTS AND EQUIPMENTS) COST AND RETURNS FINANCING NEEDED...23 CHAPTER 3: STAKEHOLDERS MEETING INTRODUCTION AND OVERVIEW LESSONS LEARNT ON GOOD PRACTICES FOR ENTERPRISE PLANNING POTENTIAL AREAS OF SUPPORT AND COLLABORATION BY LOCAL PROJECT PARTNERS FOLLOW UP ACTION TO IMPLEMENT BUSINESS PLANS...28 CHAPTER 4: LIVELIHOOD DIVERSIFICATION AND ENTERPRISES DEVELOPMENT LESSONS APPRAISAL OF PARTICIPATORY LEARNING AND OUTCOMES APPRAISAL OF PARTICIPATORY WORKSHOP AND OUTCOMES GAPS AND AREAS OF FURTHER ASSISTANCE...31 ANNEXES

8 LIST OF ACRONYMS APB BDS DAFO EDC IDOS (I)NGO FAO LDED NAFES NTFP PAFO PRA RRA R&D ROI SNV SPFS Agricultural Promotion Bank Business Services District Agricultural and Forestry Office Enterprise and Development Consultants Institutional Development & Organizational Strengthening (International) Non Governmental Organization Food and Agriculture Organization of the United Nations Livelihood Diversification and Enterprise Development National Agriculture and Forestry Extension Service Non Timber Forestry Products Provincial Agricultural and Forestry Office Participatory Rural Appraisal Rapid Rural Appraisal Research and Development Return on Investment Netherlands Development Organization Special Program for Food Security - 2 -

9 EXECUTIVE SUMMARY The aim of the project discussed here is to contribute to the awareness-building of project staff and villagers in general good practices related to small enterprise development and participatory training in real world enterprise plans for local village entrepreneurs. The project is the follow-up to a successful capacity building exercise in financial planning for enterprise development and diversification, which was undertaken in Nam Len and Luang Nantha, Laos, in May The SPFS Laos had identified a strong need to train villagers and project staff in enterprise planning and management skills and, as such, worked with the LDED support facility in this follow-up. Prior to the enterprise planning, the team conducted rapid socio-economic studies in the villages in order to up-date the village resource maps and gather some socio-economic data, which is summarized in chapter 1. The training then consisted of three main stages: 1. Preparation during this stage, the market potential of the target villages was assessed; 2. Conducting participatory training workshops in five SPFS sites the main purpose of this was to identify potential on- and off-farm diversification activities in the proposed areas, and then to provide guidelines on key enterprise planning and management skills, as well as to assist potential entrepreneurs to develop action plans for applying these skills and forming their own enterprise 3. Multi-stakeholder workshops were organised at the provincial level in the three provinces this allowed stakeholders to exchange their opinions on the lessons and to identify good practices for enterprise planning. Out of 128 business plans prepared by the villagers fifteen were selected for further development and implementation. The selection was undertaken by the team according to a variety of criteria product/ service description; customer and competitor identification; marketing strategy; calculation of total investment; calculation of profit and loss and ROI; and other strategies This report, then, covers these main project activities: The participatory planning and training workshops The business plans of action The multi-stakeholders meeting Overall, it was widely acknowledged that enterprise planning and development is new for villagers and district staff in the SPFS target sites. In fact, so far, enterprise planning is carried out by large enterprises who usually submit their business plans to the concerned departments or to the banks for official approval, licenses or loans. The activities undertaken in this project were, as such, relatively new to most stakeholders, particularly as they encouraged the active involvement of stakeholders from all levels in Laotian society

10 BACKGROUND This project is a follow-up to the successful capacity building activity in financial planning for enterprise development and diversification which was carried out in May 2004 in Nam Leu and Luang Namtha, Laos. This was financed by the Livelihoods Diversification and Enterprise Development sub-programme (LDED) of the Livelihood Support Programme (LSP), under the direction of the Special Program for Food Security (SPFS) of the Food and Agriculture Organization of the United Nations (FAO). The SPFS-Laos has identified a strong need to train villagers and project staff in enterprise planning and management skills for on- and off-farm diversification and, as such, solicited the support of the LDED sub-program on this follow up activity. The aim of the project is to contribute to the awareness building of project staff and villagers in good practices related to small enterprise development and participatory training in real world enterprise plans for local village entrepreneurs. The main project activities are: (i) Participatory training workshops, in 5 SPFS sites, on enterprise planning and management skills for on- and off-farm diversification. (ii) Participatory learning by 15 enterprise planning groups (3 per SPFS site) of real world enterprise plans that can be implemented by participants following the training-cumplanning activities (iii) Multi-stakeholder meetings, in 5 SPFS sites, to exchange business plans, lessons learnt and good practices. FAO contracted the Netherlands Development Organization (SNV) to implement the project. SNV implemented the project in collaboration with Enterprise and Development Consultants (EDC), a local private consultancy firm on enterprise development

11 INTRODUCTION This report covers the main project activities: the participatory planning and training workshops, the business plans of action and the multi-stakeholders meeting. Furthermore it presents the key lessons learned on livelihood diversification and enterprise development. The project team is presented below: Enterprise and Development Consultants: Mr. Thanomvong Khamvongsa, Trainer Ms. Somchai Soulitham, Trainer Ms. Nongnout Daothong, Trainer Special Program for Food Security Ms. Thongsawath Boupha, Deputy Head of Planning and Cooperation Division of NAFES and Constraints Analysis Expert of SPFS SNV Netherlands Development Organization: Ms. Thiphaphone Xosanavongsa, Advisor Micro and Small Enterprise Development Mr. Michel Ligthart Senior Advisor Local Governance Mr. Eelco Baan Senior Advisor Private Sector Development - 5 -

12 The project was implemented in 5 selected SPFS sites in Lao PDR: Table 1: Five selected sites of SPFS No Village s name District Province Ethnic Date of completion 1 Nasenkham Xay Oudomxay Mixture Hmong and Khmu 2 Phiengdy Khonekeo Phonsavath Hinheup Vientiane Mixture Lao Lum and Khmu October 25 to November 1, 2004 November 8-12, Sisangvone Kasi Vientiane Lao Lum November 8-12, Phonekham Bolikhanh Bolikhamxay Lao Lum December 13-17, Kouay Hinlath Paksan Bolikhamxay Lao Lum December 13-17, 2004 This report is divided into four main chapters, which are summarized below: Chapter 1: Chapter 2: Chapter 3: Chapter 4: Presents the successful implementation of participatory training workshop in 5 selected SPFS sites Presents business plans of action for 15 village level enterprises Summarizes the outputs and results from the stakeholders meeting including lesson learnt on good practices for enterprises planning and potential areas of support and collaboration by local project partners Highlights the lesson learnt on livelihood diversification and enterprise development - 6 -

13 CHAPTER 1: WORKSHOP REPORT 1.1 SOCIO-ECONOMIC SITUATION OF THE VILLAGES Prior to the enterprise planning training in the village, the team conducted a rapid socioeconomic study in order to update the village resource map and to gather some socio-economic data, as presented in the Initial PRA and socio-economic baseline survey by Bureau D Etudes Lao (BEL) for SPFS/FAO in The socio-economic situation of the villages and the potential for small business development in the SPFS sites are summarized in table 2. Table 2: Summary of socio-economic situation of SPFS sites and their business potential SPFS sites Nasenkham Phiengdy--Khonekeo and Phonsavath Socio-economic situation of the village The village economy is dependent on agricultural production and some off-farm activities, as it is located near the provincial capital. Rice is produced on 52.5 hectares of low-land paddy fields, located next to the village, and on 53 hectares of shifting cultivation in lands demarcated and allocated to the village by the district government. The average low-land paddy field is about 0.95 ha per household. 55 households, or 43%, have access to low-land paddy cultivation. In the lowland area, farmers have constructed a traditional weir and canals (on the Huay Katoi stream) to supplement water during the wet season. The economy of these 3 villages depends on agricultural production and on the exploitation of forest products (timber and non-timber). Upland paddy yield is very low. Therefore, villagers are diversifying their usage of the uplands to include industrial tree plantation and cattle rearing. Crops and vegetables are cultivated on fields next to rivers, streams and natural ponds. Most of the crops are produced for household consumption. Recently a new irrigation scheme was constructed with the support of the SPFS, covering almost 39 ha. In the 3 villages there were only small quantities of pigs and poultry/fowls, as a result of the high incidence of animal disease and the lack of preventive measures. Although, due to vaccination campaigns, poultry and pig numbers have risen significantly since Potential Business Activities o Small animal and poultry raising o Fruit tree plantation o Seasonal cash crop cultivation o Large and small animal raising such as pig, and poultry o Vegetable and cash crop cultivations 1 Field Document 1/02 Initial participatory rural appraisal and socio economic baseline survey in the four provinces of Luang Namtha, Oudomxay, Vientiane and Bolikhamxay province, dated February

14 SPFS sites Sisangvone, Kasi district, Vientiane Province Phonekham, Bolikhanh district, Bolikhamxay province Kouay Hinlath, Paksan district, Bolikhamxay province Socio-economic situation of the village Agricultural production and the exploitation and trading of NTFPs (such as sugar palm, cardamom, bamboo shoots and rattan) are the key activities in the village. Rice is produced on about 36 ha of low-land paddy fields, situated next to the village and the Nam Lik River, and from short fallow shifting cultivation in a restricted area of 1.8 ha. About 36 households access low-land paddy cultivation with an average of 1 ha per household. Recently the village received support from SPFS project constructing an irrigation scheme that can supply water to around 37 ha of paddy fields. Yet it still needs some repairs for it to operate. The rice cultivated in the upland field on the opposite side of the Nam Lik River has a relatively low yield. Fruit trees, especially banana, are planted in the gardens or fields near the village. Banana plantations have became quite popular and are a good source of income for the villagers, as are other crops, such as sweet potatoes and pineapples, which are planted in the upland field on the other side of Nam Lik River. Vegetables are planted and cultivated in home gardens next to the village and Nam Lik River. They are one of the main sources of income for the villagers The village economy depends on agricultural production. Paddy is produced in 190 ha of lowland field. The yield is low (1.8 tons/ha). The average farm size is 1.4 ha per household. Almost all households (98%) have access to lowland paddy cultivation. Paddy cultivation areas represent two zones: 1. The large field (about 150 ha) located next to the village. 2) The area next to natural swamps (Kout Nia and Kout Veng swamps). Here there is both paddy and crop production. There is no shifting cultivation practiced in the area. Industrial crops, such as sugar cane, and fruit trees, including banana, pineapples, are grown in large flood-prone areas, located on the road linking the village to the district town. Food crops, such as maize, beans, starchy roots and vegetables, are grown in the swamp area and in the fields on the bank of the Namsan River. Animal husbandry is not fully developed due to diseases in poultry, pigs and cattle. The village economy depends on agricultural production. Paddy is produced in ha of lowland rain fed paddy field, out of which, with the new irrigation system supported by the SPFS project, 143 could be fed by irrigated water. The yield of the rain fed and irrigated paddy fields are 3.5 ton/ha and 5 ton/ha respectively. The average farm is 2 ha, for rain-fed paddy, and 0.7 ha for irrigated paddy. Almost all household have access to lowland paddy cultivation. Six households that do not have access to paddy land during the wet season have been allocated irrigated fields in the dry season. Paddy is cultivated in two areas: 1 The large field (about 140 ha) next to the village. 2. The area next to natural wetlands, where paddy production is subject to floods during the wet season and cultivation is only during the dry season. There is no shifting cultivation practiced in the area. Food crops such as maize, beans, starchy roots and vegetables are grown on the wet land areas and on the fields located on the bank of the Mekong River. Animal husbandry is not fully developed due to the incidence of disease in poultry, pigs and cattle. Potential Business Activities o Large and small animal raising o Vegetable and cash crop cultivation including seasonal crops o Industrial tree plantation o Industrial crop cultivation o Large and small animal raising, including poultry o Vegetables and cash-crop growing o Rice production in both rainy and dry seasons; o Seasonal cash crop cultivation that meets market demand o Large and small animal raising o Vegetable growing - 8 -

15 1.2 OVERVIEW OF TRAINING STAGES The different stages in the training project are presented in figure 1. The first stage of the training program focused on preparation. During this stage, the market potential of the target villages was assessed. Small enterprise promotion institutions including the Provincial Agricultural and Forestry Office (PAFO), the District Agricultural and Forestry Office (DAFO) and the Provincial and District Commercial Offices were visited. During this time, RRA and PRA tools were applied and the training outline was designed. This was followed by the second stage of the project - conducting participatory training workshops in five SPFS sites. The main purpose of this stage was to identify potential on- and off-farm diversification activities in the proposed areas, then to introduce and provide guidelines on key enterprise planning and management skills and to assist selected potential local entrepreneurs to develop action learning plans for applying skills and forming their own enterprises. Some PRA tools, such as village resources mapping, observation and other appropriate tools, were used in order to open villagers minds to the possible enterprises in their area. Finally, in the third stage, there were multi-stakeholder workshops organized in all three provinces at the provincial level. In the meeting all stakeholders who might be involved in the promotion of enterprises in the area were invited. The main intention of this was to allow the stakeholders to exchange their views on lessons learnt regarding business planning by local entrepreneurs, and identify the good practice of enterprise planning. One key output of this workshop was the identification of potential support and collaboration with local partners. Some IDOS (Institutional Development and Organizational Strengthening) tools were applied in this stage. Figure 1: Overview of training stages Preparation: market study, collaboration identification o Identifying market potential and gathering market information (demand and supply) o Priority and policy support by government Multi- Stakeholder workshop Training concepts Village enterprise planning and management training o Exchange view on lessons learnt o Good practices in enterprise planning o Potential support and collaboration with local partners o Identifying potential on- and offfarm diversification enterprises o Introducing and providing guidelines on key enterprise planning and management skills o Developing action-learning plans for applying skills - 9 -

16 Training Preparation The following information was gathered from the preparation process in the three provinces, and was presented to the villagers / participants in order to serve as a reference for them in selecting their business ideas. a. Oudomxay Province Market Information In Oudomxay province there is an export market for industrial crops, such as corn, soybeans, peanuts, sugar cane, rubber, Non Timber Forestry Products (NTFP) and cattle. There is relatively high demand for these products in the Chinese and Thai markets. For instance, the Chinese demand for rubber is approximately 10,000 tons/day. Other crops, such as sugar cane and corn, have been exported to China for the past 2 3 years. Cattle have been exported to neighboring provinces, such as Luang Prabang, and Bokeo, from where they are further exported to Vientiane. There are some unofficial exports to Thailand. Nasenkham village, which is located in Xay district, has market potential within the district market itself. The village is located near the provincial town, and so may supply food products to the market in town. It is estimated that, in the town, there is a high demand for poultry, fish, vegetables, fruits, pigs and cattle. Every day there are 15 pigs and between 5 and 10 cows/buffalos supplied and processed in the slaughtering houses in town, but the quantity of pork and meat is still insufficient to meet consumer demand. There are also a growing number of restaurants (over 70), which need a regular food supply. Specifically, it was noted by the district authority that in the provincial town markets there is high demand for tomatoes, fish, lime and pineapples. These products are usually imported from Luang Prabang, China and Xiengkhouang. Nasenkham villagers can potentially produce these products as a substitute to their import. Priority and policy support by the government As part of its poverty reduction policy, the Oudomxay provincial authority supports agricultural production, animal raising, business service provision and handicraft production. It does this through providing technical knowledge to villagers and mobilizing funding for support. Oudomxay province changed its strategy from encouraging and promoting the production of enough rice for the consumption of the province s population to promoting higher productivity and a higher priced agricultural production. It also promotes the enriching of soil fertility. Rice production is promoted in the appropriate low-land areas only. The provincial authority promotes the production of crops, such as corns, peanuts, soybeans, as well as the production of rubber for export to China., especially of cattle, is also promoted. The provincial authority provides technical assistance and support for farmers to grow fodder to ensure the high quality of animals raised. b. Vientiane Province Market Information There is good potential within Vientiane province for a regular demand for agricultural produce. There is also a high demand for rice from the Vientiane capital, as well as for other food products, such as vegetable and meat and fish, and the Beer Lao factory continues to demand rice. In terms of supply, Vientiane province also has production potential as it has low-land areas and fertile upland areas, which are suitable for rice, crops, and fruit tree production as well as for animal rearing

17 Priority and policy support by the government The province prioritizes the production of rice, corn, cabbage and fish, as these are the key products supplied by the province for the domestic market. In promoting these, the provincial authority emphasizes the use of sustainable seeds and the exploration of niche markets, such as organic production for the export market. The province also promotes the production of industrial crops, such as tree plantations, tamarind, banana, and the rearing of animals, such as cattle. The province has allocated the following crops to be produced in different districts: Rice is produced in Phonehong, Keo-Oudome, Thoulakhom and Xanakham Corn is produced in Kasi, Vangvieng and Viengkham Cabbage is produced in Kasi and Vangvieng Fish is cultivated in Keo-Oudome. Fruits, such as oranges, are produced in Vangvieng district c. Bolikhamxay Province Market Information Its location, on the border with Thailand and close to the Ventiane capital, means that Bolikhamxay province has a relatively large market for agricultural produce. It also has the potential to supply rice to the Beer Lao factory and to the consumer s markets in Ventiane and other provinces. Furthermore, crops, such as soybean, can be sold to Thailand, and tobacco goes to Thailand and to the tobacco factory in Ventiane. There is a potential market for fish and cattle in Vientiane and Thailand. Priority and policy support by the government The province predominantly promotes rice production, although other crops, such as eucalyptus and eagle wood, are also promoted. The province also wants to encourage villagers to raise big animals for export. Horticulture is another agricultural activity in which the province supports active villager involvement. However, there is not a large local demand for horticultural produce The Training Outline The objectives for the participatory training workshop in the 5 SPFS sites were: o To identify potential on- and off-farm diversification enterprises o To introduce and provide guidelines on key enterprise planning and management skill such as identifying markets and assessing market potential, developing business plans, analyzing profitability, likely costs and returns, determining the financing needed, and identifying and evaluating different sources of financing o To develop action learning plans for applying skills

18 In order to achieve the above mentioned objectives, the training outline was designed as follows: DAY ONE: Registration Opening Ceremony Name Game Training rules Course objectives and schedule Village resource mapping Village resource mapping (Future map) Brainstorm business ideas and select the most potential business idea Determine form of business (Individual Vs Group Enterprise Introduction to Business Plan Mini Market (know your customers and competitors) Simple market research DAY TWO Know the size of your market Estimate your sales/sales pattern (Seasonality) Steps in organizing (group) enterprise - Decide who will do what? Determine the equipment, materials and space you will need Where will it come from Costing your products or services DAY THREE Estimate total project costs Sources of start-up capital Assessing your current income sources Economy pot and sale/income pattern Make Financial plan Profit and lost estimation Preparation of business plans presentation Assessing business plans and selecting three best plans DAY FOUR Identification of three best business plans Review and correct business plans Preparation of action plans Preparation of presentations of a business plan The details of each session are summarized step-by-step below: Step 1: Workshop registration In all five SPFS sites, the first day of participatory training workshop began with registration by the participants, followed by official opening remarks by the representatives from the National Agriculture and Forestry Extension Service (NAFES) and PAFO/DAFO

19 Step 2: Building rapport and introduction The next step was to build the rapport between the trainers and participants by using the Name Game. In this, the trainers brought cookies, allowing participants to have as many as they wanted. After this, each participant was asked to introduce themselves, including their personal life, their likes and dislikes, depending on how many cookies they chose. During the introduction the trainers informed participants that the more cookies they had, the more they should tell other participants about themselves. It was also used to illustrate that each participant had an equal chance to learn and acquire knowledge and experience from the course as they had an equal chance to get cookies. Therefore, the lesson was that opportunities for learning are equally provided, but how much the participants would get from them would depend on their commitment, intention to learn and involvement in the training activities. Step 3: House rule and training objective Next, the trainers and participants agreed upon the common training rules, the course s objectives and the three days training schedule. Step 4: Village resource mapping In order to assess the village s potential for on- and off-farm diversification, the training session - village resource mapping - took place in step four using Participatory Rural Appraisal (PRA) tools. The participants drew their own village resource maps by identifying the different type of resources available in the village, such as rice paddy fields, community forest lands, existing village facilities and problems faced by the community. Step 5: Identify and analyze business ideas The trainers gave a short summary of the results of the initial market survey with concerned government organizations such as PAFO, DAFO, Commercial and Trading Offices and private companies. Next, in order to identify business ideas, bbrainstorming techniques were introduced to the participants. Then, a group exercise on brainstorming of business ideas took place. It was followed by an info-market 2 session in which the sheets of papers that contained all the business ideas were posted on the wall and each participant was asked to walk around and select some business ideas from which they could generate income based on their existing circumstances. Several screening tools to select business ideas were applied such as macro analysis, micro analysis and SWOT analysis. Figure 2, below, illustrates the business screening process through which individual participants identified the most realistic and viable business idea. Figure 2: Business idea screening process Alternative Business Idea SWOT 1 to 2 business idea sand select most realistic and viable business idea Macro and micro screening: from 10 business idea select two potential business ideas Viable business idea 2 Info-Market is the process of sharing business ideas among other participants, it means that, each group was asked to select possible business idea from other participants

20 Step 6: Determine form of business In this stage, participants were supported in determining the form in which they preferred to operate - individually or as a group enterprise. None of the participants opted for the group enterprise. The main reason for this was that they considered a private enterprise easier to manage. The participants did indicate, however, that they are ready to cooperate and often help each other in the production process. Step 7: Introduction to business plan In this stage, the business planning process was introduced in a simple way using large flipcharts. The following major components of a business plan were explained: (i) Identification of target customers and potential buyers; (ii) Operation and management; (iii) Production planning and (iv) Financial management. A simplified business plan was tested and used during the training in order to access ethnic groups and people with lower education levels. The format used for developing the business plan is presented in the annexes. The experimental learning game - Mini Market - was integrated at this stage. During this game, the trainers assigned participants to sell something to customers (the trainers), and to try to make as much profit as they could. They were allowed to bring their products from home. Through this game, participants learned that they need to study their customers and competitors, and their needs and expectations regarding the products (why do they buy and how much do they buy per annum). By the end of this exercise trainers added some tips on simple market research and encouraged each participant to get information before preparing their business plan. Step 8: Estimate your sales/sales pattern (seasonality) Here, participants were requested to identify their potential buyers or customers and estimate their market size and their annual sales, taking into account the seasonality. For this, a sales estimation sheet was used. Step 9: Steps in organizing (group) enterprise In this part, participants decided who will do what in the business. The enterprises that the villagers selected were small-scale and family-based. Therefore, there was no need to plan the operational and management system as such. During this stage, the participants identified the form of business, the owner/manager, labor needed, indicated wages and the need for an official license. Step 10: Production planning Based on the anticipated annual sales from step 8, each participant planned for the required equipment, materials and space for the enterprise. Each participant determined the raw materials needed for the production process and where to obtain them. Finally, each participant identified the cost for a particular product or service. In this regard, the trainer provided instruction on how to set the price of a product, depending on four main factors illustrated in the pricing chart in figure 3 below

21 Figure 3: Price setting strategy Ceiling price Demand Competitor s price Fundamental price Selling price Unit cost Price sensitivity Step 11: Financial planning and management Day 3 of the program focused on financial planning and management. Each participant calculated and estimated his/her total costs including the cost of investing in assets and working capital. It was the first time for the participants to consider depreciation costs. The trainers provided a simple form for calculating depreciation and other expenses for business. Furthermore, the participants assessed the resources for start-up capital. They had to make a decision on where they would get the needed capital - how much would be their own contribution and how much they would have to borrow from the bank or relatives. Where participants chose to borrow from the bank or from relatives, they were taught how to calculate interest. The participants estimated their potential profit and loss and learned how much they could earn from their proposed business as well as being shown how to calculate the return on investment (ROI). Finally, looking at the results of ROI calculation, the participants discussed how to increase their profits by carefully looking at their costs - direct and indirect. At the end of the 3-day training in each of the 5 villages, the three best business plans were selected. These plans were further developed on day 4 in a participatory business plan action workshop for the 15 enterprises. The objectives of the workshop were to: o Develop real world enterprise plans that can be implemented by participants following the training cum planning; o Build enterprise planning skills of village participants and related support capacity of provincial/district staff The criteria for selecting business plans were: (i) Customers and competitors; (ii) Enterprise form including operation and management; (iii) Production planning, (iv) Financial planning including profit & lost and return on investment (ROI). The trainers, together with the representative from NAFES and the trainers from the PAFO and DAFO, assessed and selected the plans. In the workshop, the trainers guided and allowed entrepreneurs to improve and correct their business plans and to identify their support needs. After this, the participants prepared the presentation of their business plans and learned some presentation techniques

22 Venue and Timing The training courses were conducted in village meeting places and in temples. The village "business planning and management skills" training was accomplished within three days, undertaken from 08:30 AM to12:00 AM and 13:30 PM to 16:30 PM, with a one and a half hour lunch break in between and with a fifteen-minute coffee break in both the morning and afternoon sessions Selected participants There were approximately 30 participants per training course. The participants included up to 28 villagers per workshop plus district trainers. The district trainers in some sites, for instance in Kasi and Hinheup, could not join the training course the whole time. It was agreed, in the Terms of Reference and during the first preparation meeting with FAO, that there at least 30 % of participants should be female. This target was realized and, in one village, 61% of the participants were female. Participants included village authorities, representatives of production groups, representatives of the better-off, medium and poor households (please see annex for a full list of participants). A summary of selected participants is presented in table 3 and 4. Table 3: Summary of selected participants in five SPFS sites SPFS sites Total participants Number of Villagers Women % District trainer Nasenkham % 3 Phiengdy Khonekeo Phonsavath % 3 Sisangvone % 2 Phonekham % 3 Kouay Hinlath % 3 Grand Total % 14 Table 4: Summary of selected participants who attended business plan action workshop SPFS sites Total participants Number of Villagers Women % District trainer Nasenkham % 2 Phiengdy Khonekeo Phonsavath % 0 Sisangvone % 0 Phonekham % 1 Kouay Hinlath % 0 Grand Total %

23 1.3 METHODOLOGY AND APPROACHES USED The key principle is learning by doing, with interactive and people-centered methods, such as PRA tools, dialogue, presentation, group work, and simulation games, used during the training events in order to facilitate and maximize learning. An overview of the methodology is presented below. Self introductions o Introduction and application of PRA tools (resource mapping, wealth ranking, market chain mapping or other as appropriate) in order to identify potential diversification activities and problem faced by poorer members of the community in enterprise diversification o Combination of lectures, role playing, group discussion and simulation games to introduce, explain and increase understanding of enterprise planning and management skills o Villagers identified key enterprises they wanted to develop or strengthen, were divided into small groups according to interests, and were assisted in developing an action plan. 1.4 OUTCOME OF PARTICIPATORY ACTIVITIES Village resources mapping The village resource maps are presented in the annexes. Table 5 presents the availability of different resources in 5 SPSF sites. It helped villagers to identify the potential for business development in their particular area. Table 5: Village resource mapping in 5 SPSF sites SPFS sites Agriculture land Forest land Water resources Grazing land Other resources Nasenkham, Xay district, Oudomxay province Phiengdy, Khonekeo and Phonsavath, Hinheup district, Vientiane Province - Sloping agricultural land - Some rice paddy field available in village; ha of shifting cultivation land - Good soil suitable for agriculture production - There is a lot of flat land that is utilized for lowland paddy - Some home gardens - Cash can be produced seasonally - village forest using land - there are not many NTFP species available in the forest - A lot of forest land is utilized for sources of NTFP and industrial tree plantation; - Sources of timber for housing; - Huay Katoi stream used as main source of irrigated water - Construction of the small irrigation system just completed - Villagers used to grow their home gardens along the stream for family consumption only - Quite limited grazing land for large animal raising - Very large area of grazing land, but little grass during dry season, if villagers wish to form of livestock farms, an irrigation system is needed; - Availability of seasonal labor - Seasonal labor in town near the villages Sisangvone, Kasi district, Vientiane Province - There is 36 ha seasonal rice paddy; - Some home gardens ; - There is 34.2 ha of fruit tree plantation - NTFP is one of main sources of income for the villagers - there is an irrigation scheme from SPFS project; - Nam Lik is a vital sources of water for agricultural proposes in village; - There is a large area of grazing land for livestock raising propose; Off-farm wage is one of invisible village s resources

24 SPFS sites Agriculture land Forest land Water resources Grazing land Other resources Phonekham, Bolikhanh district, Bolikhamxay province Kouay Hinlath, Paksan district, Bolikhamxay province - There is a large area of lowland paddy land around 190 ha - There is some seasonal land for cash crop production; - There is largest low-land paddy land in SPSF site - about ha - Some seasonal land for cash crop production; - some cash crops such as maize, beans starchy roots and other vegetable grow on wet land areas and river bank; - Availability of forest land, which villagers use for fire wood, fencing and wild vegetable for consumption; - Availability of forest land, which villagers use for fire wood, fencing and NTFP - irrigation scheme just completely constructed; - main sources of water come from Nam San River; - SPSF project just supported constructing an irrigation scheme with irrigated area 143 ha; - Availability of grazing land for livestock raising propose, but it needs quit big investment on fencing; - Villagers utilize their lowland paddy for seasonal livestock raising - Off-farm wage is one main village s source of income; - Off-farm wage is village s main source of income; Business idea identification and analysis Participants used the resource map and the provided market information to generate business ideas. Table 6 presents the business ideas generated in 5 SPSF sites, which, among others, relate to cash crop production, seasonal crop, livestock and fishery, fruit trees and some industrial tree plantation. The main criteria used during the screening of business ideas were: (i) Market potential; (ii) Easy access to and availability of raw materials; (iii) Skills and know-how for producing particular product; (iv) Resources available; (v) Supportive policy by government and other criteria. After the screening process, each participant selected the most viable and realistic business idea, which was further developed in the business plan

25 Table 6: Summary of brainstorming on business ideas Cash crops Seasonal crops Animal raising and fishery Fruit tree/ industrial tree plantation Handicraft and weaving Other - Soybean - Peanut - Cucumber - Chilly - Garlic - Vegetable - Eggplant - Taro - Pumpkin - Other - Job s tear - Maize - Pineapple - Banana - Papaya - Cassava - Sesame - Water melon - Rice - other - Buffalo - Cattle - Pig - Poultry: duck, turkey, chicken - Fish - Frog - Dog - other - Orange - Lemon - Jackfruit - Peach - Guava - Mango - Eagle wood - Rubber - Rattan - Mulberry Paper - Rattan handicraft - Weaving (Hmong style) - Wooden chair, table - Bamboo basket - Sewing - other - Bamboo can - Mushroom - Fire wood - Home industry - NTFP - Wild vegetable - Other Business Planning Market potential The target buyers or potential customers as identified by the participants are presented in table 7. Table 7: Market potential in five selected SPSF sites SPFS sites Customers Competitors Marketing strategy Nasenkham, Xay district, Oudomxay province Phiengdy, Khonekeo and Phonsavath, Hinheup district, Vientiane Province Sisangvone, Kasi district, Vientiane Province Phonekham, Bolikhanh district, Bolikhamxay province Kouay Hinlath, Paksan district, Bolikhamxay province - The market in Xay district - far away from the villagers about 5 km; - Few traders from Ban Houy Hintid village (neighboring village) - Traders from Phonhong district - Phonehong and Hinheup market - Military camp nearby; - The traders from Kasi, Vangvieng, districts, Luangprabang and VTE - Muang Kao market - Trader/middle men from Paksan district - Tobacco factory from Vientiane Capital - Merchant from Paksan and Vientiane Capital - Paksan market - Competitors from Namback district and their neighboring villages; - There are no serious competitors so far - Some competitors in their neighboring villages - There are no serious competitors so far - Some competitors in their neighboring villages - There are no serious competitors so far - Some competitors in their neighboring villages - Understood that there are some competitors in their neighboring village - Produce products that can be sold during Hmong new year with high price - Giving free additional product to clients when they buy big volume - Using mouth-to-mouth promotion - Giving free additional product to clients when they buy in big volume - Using mouth-to-mouth promotion and advertisement strategy - Giving free additional product to clients when they buy in big volume It was observed that villagers spend little of their investments in marketing strategies and, in most cases, they use word-of-mouth promotion. There is an interesting case in Nasenkham village (Hmong ethnic), Xay district, Oudomxay province, where Mr. Sengko (fruit tree plantation business) planned to give fruit (especially oranges) for free to his target customers for marketing purposes. Sales estimations in all five SPFS sites are mainly dependent on skill, know-how, capital or own resources including labor and the market

26 Production Based on annual sales, each participant planned for their production. They estimated the requirement of materials including: (i) Required raw materials (ii) Other tools and equipments to be used during production; (iii) Labor costs and (iv) Other indirect costs of production. In all cases it was found that villagers spent almost all their money on buying raw materials and very little on labor. Interestingly, wage -labor was more common among the Hmong ethnic group than other groups. Financial potential It was observed that villagers invest most of their money in working capital, rather than in assets. For many participants this stage was difficult as it was the first time for them to make financial calculations. Hmong participants, especially women, had more difficulties (compared to other groups) in business planning due to the language barrier. Almost all villagers had difficulties in calculating the depreciation of their invested assets. On average, more than 60% of participants applied for a loan, needed for investing in working capital. It was also the first time for participants to calculate the return on investment (ROI) and most found this difficult. The ROI of the vegetable business is the highest compared to other business. 1.5 SUPPORT NEEDS Before organizing the stakeholder workshop, the trainers and the representative from NAFES and the trainers from the PAFO and DAFO identified the support needed by villagers for the implementation of the business plans. The main support needs are: o o o o o Technical training including new extension of agricultural and forestry production soil improvement and some appropriate technology; Business development services; Micro finance services including saving and credit; Marketing and business management training, including training on pricing and simple business survey approach; Market information service

27 CHAPTER 2: BUSINESS PLANS OF ACTION FOR 15 VILLAGE LEVEL ENTERPRISES Out of 128 business plans prepared by the villagers in the 5 SPFS locations, fifteen plans were selected for further development and implementation. The selection was done by the team and based on several criteria: product/service description, customer and competitor identification, marketing strategy, calculation of total investment, calculation of profit and loss and ROI, and other strategies. 2.1 MARKET OUTLETS The selected business plans have relatively good marketing strategies. For the most part, they plan to sell in the district market nearby and to traders coming to their villages. Oudomxay. Business plan owners in Nasenkham village, in Oudomxay, have different distribution approaches and marketing strategies according to their products. Industrial crops can be sold to traders who can either be middlemen or export companies from the provincial town. Due to the high demand for these products, the export company would provide seeds to the villagers and buy the products from them during the harvest season. Nasenkham is in a relatively advantageous position in terms of location and transportation, as it is close to the provincial town and has a good access road, which is easy for traders to use to travel to the villages. The marketing strategy that the plan owners will employ is to focus on the quality of the products, i.e. the corn and job s tears should be dry and clean and not contaminated with stones or sand. Chicken and pig raising enterprises target the local market Oudomxay provincial town. As mentioned earlier, local demand for chickens and pigs is relatively high. Enterprises can benefit from their location. The chicken-raising plan owner specified that there is a good relationship with traders/merchants in the market who regularly order chicken from him. Pigs can easily be supplied to the slaughter house in town. The plan owners will use similar marketing strategies, focusing on raising quality chickens and pigs, particularly the Hmong breed, which is in high demand from consumers in town. The fruit plantation enterprise in Oudomxay aims to sell in the local market, substituting imports from other provinces, such as Luang Prabang, and China. The plan owner has, in fact, succeeded in winning his customers hearts over the last two years. During the fruit seasons he will have his own stand in the market, selling fruits. He plans to use the same strategy of giving fruit to customers to taste for free to attract new customers. Discounts for customers who buy a lot will be another strategy that he will employ. Another strategy is a quality guarantee, especially regarding the freshness of the fruits. In order to do this, he plans to open his fruit garden so customers can directly buy the produce. However, there were concerns from stakeholders about the size of the local market, which is rather small and there is strong competition. Thus, there was a suggestion to export to markets in neighboring provinces, such as Luang Prabang, and to Vientiane. Vientiane province Enterprise planners from Vientiane province have mostly targeted the local market. Owners of chicken and pig-raising plans from Sisangvone village, Kasi district, target the military camp next to the village. The demand from the camp is relatively high. Traders from Kasi districts are also target customers. Similarly, chicken and pig enterprise plan owners in Hinheup district target the military camp nearby as well as traders from Houay Hintid village. Apparently, all enterprise plan owners from Vientiane province mostly target the traders, who come to buy from their villages and further supply district markets or sometimes markets in the Vientiane capital. These village enterprises have access to big markets in Luang Prabang and Vientiane

28 Bolikhamxay Business plan owners from Khouay Hinlath village also target local markets, including the Bolikhan district market and the Paksan district market. The vegetable enterprise owner has his own temporary stand in the market, generally open early in the morning. He also has regular customers who have vegetable stands in the market. In order to be able to compete with others, he will ensure the quality of his vegetables and emphasize less pesticide usage. Additionally, good planning of planting time means he could avoid planting at the same time as others and ensure that he will get a good price at market. The fish-raising enterprise similarly targets the local market. The enterprise intends to keep its size small, due to strong competition. In fact the enterprise owner targets friends and acquaintances in his area and some traders in the market. The pig-raising business aims to supply traders from Paksan market as well as traders from the Vientiane capital. So far, the demand from traders is still relatively high, though competition in the area is quite high. In fact, the enterprise owner did not specify a specific marketing strategy for competing, but was sure of the demand from traders and his good relationship with them. In Phonekham village, the pig enterprise owner was also confident of a high demand for local breed pigs which she raises in the local market. It was interesting to observe that the trend of hybrid pig-farming is growing. Therefore the hybrid pig supply is high, yet local people prefer local breed pigs. 2.2 TECHNOLOGIES (INPUTS AND EQUIPMENTS) Most villagers who attended this participatory business training course use basic and simple agricultural inputs for their production (see also table 8). Table 8 : Tools and equipment used by the participants Planned Business Large livestock raising Pig raising Poultry raising Vegetable business growing Proposed Technology to be used making fence searching for young animal injection vaccine for two times over the year; making pig house searching for piglets injection vaccine for two time over the year; chicken house searching for chick vaccination two time a years site preparation soil ploughing seed sowing planting watering and fertilize harvesting and sale to market Required Agricultural Input (Tools and equipment) barbed wire wooden and concrete poles labor vaccine and injection tools simple house with thatching roof pig feed; labor vaccine and injection tools simple chicken house with thatching roof chicken feed; labor vaccine and injection tools simple fence with some barbed wire seed (lettuce and other) fertilizers ploughing tools watering tools Consideration for Technology used high breed of livestock raising grazing land improvement using high quality seeds (forage improvement) modern animal house for using its manure afterwards using high breed piglet ensure high quality of pig and hygienic pig pig raising in proportion to pig breeding pig raising with growing and storing for pig feed using market demand chicken chicken raising in proportion with breeding chicken raising with growing and storing for chicken feed using high demand vegetable seeds utilize more technology and modern tools likes water pump using biological vegetable growing

29 2.3 COST AND RETURNS As already mentioned, most participants invested in fixed assets, including tools and equipment, rather than in running capital. Almost nothing was invested in labour and modern technology. For example, in the vegetable growing business, they invested quite little on running capital, especially on seeds and other agricultural inputs such as fertilizers, pesticides and others. In almost all the business plans, participants planned to use their own labour for free. This partly explains the high return on investments of the business plans. It was observed that almost all participants had difficulty in the calculation of ROI, because it was the first time for them to come up with such calculations. The formula used during the participatory business planning training was: ROI = Profit Total Project Cost X 100 The format used for the development of the business plan is presented in the annexes as well as a summary of the 15 selected business plans. 2.4 FINANCING NEEDED Most villagers invested their money in both: (i) Fixed assets and (ii) Working capital. However, they preferred borrowing money from the bank to invest in working capital rather than fixed assets. On average, more than 60 percent of participants applied for a loan and they really need such loans for investing in running capital. The amounts needed from external financing vary from Kip 200,000 (US$19.10) to Kip 20,242,000,.(US$ ) The Agricultural Promotion Bank was considered the main source of financing

30 CHAPTER 3: STAKEHOLDERS MEETING 3.1 INTRODUCTION AND OVERVIEW The multi-stake holder meeting was organized after the participatory training and business action planning workshops were finished. It was organized at the provincial level, and had three main objectives: (i) To report on business plans developed during the participatory learning; (ii) To exchange views on lessons learnt and good practices identified during the participatory learning and (iii) To identify means of public-private-village collaboration for enhancing village enterprise development. Preparation The preparation for the multi-stakeholder meeting was done during the preparation trip, prior to the actual enterprise planning training in the villages. The team discussed potential participants with the director of PAFO. Then it was decided which organizations to invite. The SPFS provincial coordinator was responsible for preparing official invitations and for sending them to potential participants. Outline To achieve the objectives of this workshop, the schedule was initially designed with four main sessions: (i) Business Plan, where the business plans would be presented and discussed; (ii) Good Practices, where good practices would be shared and discussed and the coverage matrix developed; (iii) Market Place, in which consultation between business plan owners and stakeholders would take place and (iv) Enabling Environment, where factors regarding business development at the village level would be identified and an action plan for further support would be developed. However, during the implementation, due to time constraints and taking the local situation into account, the schedule was revised. The workshops followed the format below:: Registration Opening Ceremony Presentation of the summary of the business plan followed by discussion Lessons learnt on good practices for enterprise planning and implementation Who is doing what in supporting business development at the village level What are the issues in terms of business development at the village level Wrap up Closing Ceremony Venue and Timing The multi-stakeholders meeting in Oudomxay and Bolikhamxay were organized in the meeting hall of PAFO, while in Vientiane province it was organized in the meeting room of the Thalad EDL (Electricite du Laos) campus. The workshop went for one full day. It started from 08:00 AM to12:00 AM and 13:30 PM to 16:30 PM with fifteen-minute coffee breaks in both the morning and afternoon sessions

31 Participants The number of participants varied from 25 to 31 participants. They included the villagers who developed the business plans; village authorities; district trainers; head or deputy head of DAFO; SPFS provincial project coordinators; technical staff from PAFO; the directors of PAFO; representatives of relevant departments, such as the department of commerce, the department of planning and cooperation, the department of industry and handicraft, the Lao Women s Union, donor-supported projects, NGOs working in the area, and some large private businesses. Methodology The facilitators focused on involving all participants from the different levels: provincial, district and village. As well as presentations and a plenary discussion, the facilitators used analysis tools, such as a coverage matrix and factogram. These tools were introduced by facilitators and used in the group work by participants. 3.2 LESSONS LEARNT ON GOOD PRACTICES FOR ENTERPRISE PLANNING It was generally acknowledged that enterprise planning and development is new for villagers and district staff in the SPFS target sites. Many stakeholders at the district and provincial level appreciated that villagers need support in these areas. In fact, so far, enterprise planning is carried out by large enterprises who usually submit their business plans to the concerned departments or to the banks for official approval, licenses or loans. In the past, most support focused on providing technical advice in the areas of production techniques or providing inputs, such as material and financial inputs to villagers. In the SPFS sites, this training was the first time villagers and district staff/trainers were exposed to entrepreneurship and enterprise planning activities. In the multi-stake holder meetings there was a session in which stakeholders commented and discussed the business plans which were presented and exchanged experiences on enterprise planning and promotion. The comments focused on: o The importance of market potential and stability of the demand for products o A need to demonstrate, in the business plans, the previous experience of the owner, highlighting financial successes. o The need to consider support to organizing group enterprises. o For agricultural production business, the owners should consider integrating post harvest processing and environmental issues such as soil degradation. o In preparing business plans, the village entrepreneurs should consider all costs including labor costs. It was observed that villagers/agricultural producers lack knowledge about market situation and trends. They mostly focus on production, but not on customer s demand or competitors. Therefore, it was recommended by stakeholders that villagers/entrepreneurs should focus more on the marketing side of their agricultural production activities. They should be able to observe trends in market prices of agricultural produce, as well as trends in competition, so that they can plan accordingly and are able to reduce risks. Villagers could be more pro-active in obtaining market information from different sources, such as from traders and relevant departments, in particular the department of commerce, at both district and provincial level. At the same time, the district departments, especially the commerce office should work more closely with villagers by providing market information and facilitating local level trading. So far, the district commerce departments have not worked at village level, but mainly focused on the district level

32 In addition to exchanging comments on business plans, the participants discussed areas of interventions by stakeholders in terms of enterprise development. In general, government interventions involved attempts to regulate small enterprises, the organization of enterprise groups or associations, the provision of training on enterprise management to limited number of small entrepreneurs, and the provision of funds, technical training and technical inputs. Donorsupported projects and the provincial government were able to link producers to buyers to a certain extent. Table 8 Enterprise planning and management interventions Oudomxay province Vientiane province Bolikhamxay province Provide technical training Provide fund Develop infrastructure Provide technical inputs: seeds, techniques and technology Financial analysis training (potential) Link with buyers and export market Assist in arrangement contract farming (rubber plantation, corn, soybean production, sugar cane plantation) Incentives for export agricultural produce Provide technical training Provide fund Develop infrastructure Provide technical inputs: seeds, techniques and technology Regulations Organization of group/ association (pig and fish raising) Assist the group with production planning and selling schedule (fish raising) Connect producers to buyers Provide funding Provide technical training Provide technical inputs: seeds, techniques and technology Develop infrastructure Provide business management training Oudomxay. There have not been that many best practices regarding enterprise planning and promotion. Oudomxay is one of the poorest and most mountainous provinces and the economy still depends heavily on upland agricultural production and shifting cultivation. So far there are several organizations, such as the Lao Women s Union, the Agricultural Promotion Bank, and some INGOs working here, as well as projects that support income-generation activities at the village level, by providing small loans, revolving funds and some other technical inputs. However, these forms of support were generally not considered to be very sustainable. Recently, the local government has been able to link producers to buyers, for instance for rubber and some industrial crops. However, villagers are not prepared in terms of negotiation or selling skills to enter into such contract farming arrangements. As such, they are likely to be in a disadvantaged position. Vientiane province: Similarly, in this province a lot of technical assistance on production was provided. Yet there has not been any organization that supports enterprise planning and development.. Bolikhamxay: In Bolikhamxay, there has been some support for enterprise development at the village level. In addition to technical assistance on production, some organizations in Bolikhamxay support building linkages between the villagers/producers and buyers. The project, supported by the Luxembourg government, helped to bring a Thai trader, interested in purchasing soybean, into contract farming arrangements with the target villagers. The project, in this case, assisted in the first phase by providing production inputs. Later, the project and local government will assist with contractual arrangements. The provincial department helped fish and pig-raising enterprises to organize groups and regulated these groups so as to facilitate the input purchasing process. At the same time, the department facilitates a business dialogue among the groups in planning their production and selling schedule, in order to reduce competition and cases of dramatic price drops

33 3.3 POTENTIAL AREAS OF SUPPORT AND COLLABORATION BY LOCAL PROJECT PARTNERS During the workshop there were several areas of enterprise promotion discussed: Input provision Technical training Marketing information Financial support Research & Development Business Development Services Promotion policy These areas were discussed during the workshop, using the coverage matrix tool. During this mapping exercise, the participants analyzed which organization is involved in which service, including their degree of involvement. There are 14 organizations or stakeholders involved and the results of the exercises are presented in annex 5. Some observations on the results of the coverage matrix and discussion about it are presented below. First, there were different perspectives as to the extent to which each organization was involved in enterprise development activities at the village level. At the provincial level, organizations perceived that they have been providing many services and are involved in many services to a large extent. There is an annual meeting of all departments at the provincial level where departments share their achievements and discuss key issues. At the district and village level, on the other hand, there is low level of awareness about services provided by the organizations at the provincial level. It seems that at the district level the staff of one office do not know much about another office s activities or about activities at the provincial level, especially those in different technical fields. People at the village level are often not even aware of the services provided at the district level. In general, they know about the services and activities provided directly to them at the village level mostly by the project, especially the SPFS project, which is known as the FAO project. In fact they did not even realize that the FAO project is implemented under PAFO, NAFES or Ministry of Agriculture and Forestry. Therefore it seems that the exchange of information between the levels is inadequate. There are many organizations involved in providing technical training and R&D. All stakeholders were requested to consider this overlap and coordinate among themselves. However, during the discussion it was commented that, although the technical training was provided by many different stakeholders, they focused on different target areas. Many organizations claimed to be involved in R&D. However, the results of these activities are not disseminated widely or shared. Finally, business services, including market linkages, are provided by few organizations. For the most part, the services relating to enterprise promotion are provided by the department of trade and the department of industry and handicraft, yet these services are still not available in any of the three provinces. In Vientiane province and Bolikhamxay, there are some business management courses provided by the department of industry and handicraft and some market information is provided by the trade department, but mostly at the provincial level

34 3.4 FOLLOW UP ACTION TO IMPLEMENT BUSINESS PLANS All stake-holders expressed their interest in supporting the implementation of the presented business plans. In Oudomxay there was an action plan developed, but there were few activities identified and all the activities are to be implemented at the village level. Many stakeholders indicated they have, or should have, a role in village enterprise promotion. But in identifying future support, the focus was on SPFS/FAO and the district trainers who work closely with villagers. There was discussion about how the village needs would be met in the future. The results of the discussion are presented in table 9. Technical training should continue to be provided by PAFO and DAFO, the Vientiane Haiyeuang cooperation center and the Lao Women s Union. These organizations have expertise and a wide network at both district and village level. It was further suggested that, while the center can provide training at the provincial level, DAFO and LWU are better positioned to provide training at village level using their existing networks. In terms of inputs, techniques and technology supply, it was suggested that these should be provided by agriculture and forestry sector companies. PAFO and DAFO might have limited budgets but can play a coordinating role and /or can provide information and advice about the source of the mentioned supply. The commerce sector, including the department of commerce at the provincial level and the commerce office at the district level, should be responsible for disseminating marketing information and providing some kind of BDS. Market information should be streamlined from provincial departments of commerce to district commerce offices and down to the villagers. On the other hand, once the information is available at the district level, the villagers should also try to acquire information from the district for their own benefit. Traders and middlemen at the district level play an important role in the dissemination of market information. It is they who currently inform villagers about market demand. They collect products from villagers to sell in the district or provincial markets. However, they often have limited capital and skills in enterprise planning and management. Therefore, it is suggested that in the future, these traders should be trained and given financial support. In terms of financial support, it was suggested that the banks and projects continue to support villagers. In this case, the bank (APB) also suggested that villagers should continue to create and adjust their enterprise plan and approach the bank for loans

35 Table 9: Action plan for further support enterprises at the village level Village s needs Technical training Inputs supply Techniques and technology supply Marketing information provision BDS Financial support Supporters - Agriculture Forestry Sector - Vientiane-Hai Yeuang cooperation center - Lao Women Union - Agriculture Forestry Sector - Companies - Agriculture Forestry Sector - Vientiane-Hai Yeuang cooperation center - Department of commerce - District commerce office - Traders/middle persons - Villagers/producers - Bank - Commerce sector - Projects and concerned departments - Banks Cooperation and collaboration methods Promote traders/middle persons in terms of finance and knowledge about enterprise planning and management Enterprises register and ask for support from Commerce sector Villagers continue to make business plan and submit to the bank for loan Other suggestions Villagers ask market information from commerce office Villagers can ask for funding from Industry and Handicraft sector for small industrial production or handicraft production Villagers should contact concerned departments Fund from external donors is needed Villagers continue to learn about bank loan regulations

36 CHAPTER 4: LIVELIHOOD DIVERSIFICATION AND ENTERPRISES DEVELOPMENT LESSONS 4.1 APPRAISAL OF PARTICIPATORY LEARNING AND OUTCOMES In the villages, there is a high level of illiteracy among the elderly and the Hmong ethnic group. As such, the training contents and teaching methodology for participatory business planning will be further developed using pictograms, multi media and short story videos about successful entrepreneurs. The trainers involved in training design and implementation should have an initial site visit and learn more about the target villagers and business opportunities beforehand as this would benefit the training. Most business plans were based on what villagers were already doing. Villagers need to be supported in identifying new opportunities, especially through the provision of market information and the facilitation of linkages between sellers and buyers. They also need to be made aware of the various support services available. A simple market study approach for the farmers should be further developed. The approach to selecting local individual and group enterprise members to attend the participatory enterprise planning training should be further developed. There are some criteria, which should be taken into consideration: (i) (ii) (iii) Willingness, confidence, and enthusiasm Entrepreneurial characteristic; Capacity and personal goal and vision for being self reliant; etc. Some of the key participants were selected because of their position (village head) and they did not participate full-time throughout the training program. Potential local business development service providers or local entrepreneurs who are interested in providing services must be identified and included in this training. This will facilitate business to business linkages and follow up support for the business plans. An introduction to the concept of self-help group formation and the management or formation of local enterprise association networks should take place. In addition, the concept of an agriculture and forestry enterprise franchise approach should be introduced to the target villagers. 4.2 APPRAISAL OF PARTICIPATORY WORKSHOP AND OUTCOMES Participants in the multi-stakeholder workshop focused on providing critical feedback and suggestions for the improvement of village business plans. Although stakeholders showed interest in supporting follow-up, little commitment could be secured. Traders and private companies, who could become alternative or potential future buyers for particular agricultural products, should be invited. This allows the development of further linkages between buyers and sellers. The representative from the local Agricultural Promotion Bank (APB), who was invited by the workshop organizers, should have a chance to present the bank s policy and terms of lending to the participants. Moreover, local loan providers (both semi-formal and non-formal should be involved in the workshop, so that linkages with these financial service providers are created

37 4.3 GAPS AND AREAS OF FURTHER ASSISTANCE There is a need for further assistance and the building of local skills and support services for enterprise planning and development. An agriculture and forest product market survey must be conducted as early as possible. This would allow all stakeholders to better understand the actual domestic, local and international market for local produce, as well as providing a list of potential buyers for these products. Before beginning the training program for potential entrepreneurs, a short business awareness workshop should be organized. At the end of the workshop participants for the business development workshop could be selected. In order to sustain the process of business planning and development in the project s area, selection and strengthening of potential Local Service Agents need to take place. The Local Service Agents will be representatives of individual farmers and production groups and will play an important role in doing business with those and other farmers as well as groups providing marketing services, technology, skill and agriculture and forest input supply. After electing the right participants (including individual farmers, production groups and Local Service Agents) the training on enterprise planning and development will take place. The market survey results and demand information will be used in this stage. Next, it is time contact selected buyers and invite them to join the stakeholder workshop. It was found that most representatives from the private companies could not stay the whole day of the workshop, due to time constraints. The trainers suggested that a first half-day workshop should be organized for a buyers-sellers meeting. The other half of the day could be allocated for other stakeholders or service providers (PAFO, DAFO, Bank and others)

38 ANNEXES Annex 1: Annex 2: Annex 3: Annex 4: Annex 5: Annex 6: Annex 7: Annex 8: List of participants Village Resource Map Multi-stakeholder meeting schedule List of participants at multi-stakeholder meeting Results of coverage matrix Summary of 15 business plans Result of participatory enterprises planning training (evaluation) Final version of business plan

39 Annex 1 List of participants in the participatory training workshops Nasenkham Village No. NAME Responsible Current incomegenerating activity Business ideas 1 Ms Noy Villager Onion growing Job s tear Corn 2 Ms Khamlar Villager Job s tear Job s tear 3 Ms Deng Villager Onion growing Job s tear Corn 4 Ms Nivone Villager Onion growing Job s tear Corn 5 Ms Dear Villager Job s tear Pig-raising 6 Mr Seng Ko Villager Pineapples Oranges Chicken-rearing 7 Mr Po Veu Deputy chief of the Job s tear village Orange Chicken-rearing Fruit trees 8 Mr Bounheuag Villager Job s tear Job s tear 9 Mr Veu Ly Xay Por Village chief Pig-rearing Pig-rearing 10 Ms Koua Villager Ginger planting Ginger planting 11 Mr Sie Ly Va Villager Job s tear Job s tear 12 Mr Tu Yey Villager Pig-rearing Chicken-rearing 13 Mr Bounta Villager Ginger planting Job s tear Corn Pig-rearing 14 Mr Ju Veu Villager Job s tear 15 Mr Tang Villager Job s tear 16 Mr Phat Villager Up-land and low-land rice Job s tear farming 17 Mr Xay A Villager Job s tear Job s tear 18 Mr Va Meng Villager Chicken-rearing Fruit trees Pig-rearing 19 Ms Sonemany Villager Livestock raising Pig-rearing 20 Mr Kor Veu Villager Livestock raising Pig-rearing 21 Mr Bounpanh Villager Livestock raising Pig-rearing 22 Mr Bounthong Villager Chicken-rearing Chicken rearing 23 Ms Chanthip Villager Job s tear Corn 24 Mr Ju Vang Villager Job s tear Corn Job s tear Corn Rubber 25 Mr Tong Va Villager Job s tear Corn Livestock raising Corn plantation Rubber plantation 26 Mr Thavone Villager Rubber seedlings Rubber seedlings 27 Mr Phaivanh District trainer Livestock technician 28 Mr Ngonh Xay District trainer Forestry technician 29 Mr Vilaysack District trainer Agriculture technician

40 Khonekeo, Phiengdy and Phonsavath Villages No. Name Role Current Income-Generating Activity 1 Mr Vanxay Phonhor villager 2 Mr Xiengkham Khonekeo villager 3 Mr Boudy Khonekeo villager Rice mill 4 Mr Bounkong Khonekeo villager Big animal raising Chicken raising 5 Mr Vanthong Phonhor villager Banana tree plantation Pineapples Corn 6 Ms Lingthong Phonosavath villager 7 Ms Boua Khonekeo villager Big animal raising Poultry raising 8 Mr Bounpheng Phiengdy villager Fish breeding 9 Ms Viengkham Phiengdy villager Poultry raising Big animal rearing 10 Mr Maisy Khonekeo villager Pig rearing Chicken raising Fish breeding 11 Ms Khamla Phiengdy villager 12 Mr Bountha Phonosavath villager Pig-rearing Chicken raising 13 Ms Bounma Khonekeo villager Big animal rearing Chicken raising 14 Ms Boun Phiengdy villager Fish breeding Poultry raising Vegetable planting 15 Ms Thongsy Villager Retailer Poultry raising 16 Ms Phet Khonekeo villager 17 Mr Khenthong Phiengdy villager 18 Mr Maitui Khonekeo villager 19 Mr Bouslar Phiengdy villager 20 Mr Khieokham Phiengdy villager 21 Mr Thongdy Phiengdy villager 22 Ms Khamlar Phonosavath villager 23 Ms Phonesamay Phonosavath villager Big animal rearing Poultry raising 24 Ms Syda Phonosavath villager Business idea Banana tree plantation Pineapples Corn Bean planting Vegetable planting Vegetable planting Pig rearing Chicken raising Fish breeding Pig rearing Chicken raising Poultry raising Vegetable planting Fish breeding Poultry raising Poultry raising Vegetable planting Chili planting Watermelon planting Watermelon planting Chili planting

41 Sisangvone Village No. Name Role Current Income-Generating Activity 1 Ms Bounpheng Villager 2 Ms Houg Villager NTFP Business idea Big animal rearing 3 Mr Thurg Villager NTFP 4 Mr Touy Villager 5 Ms Than Villager 6 Mr Sy Villager NTFP 7 Mr Lae (A) Villager NTFP 8 Mr Xiengmoun Villager 9 Mr Lae (B) Villager NTFP 10 Mr Khamka Villager 11 Ms Noy Villager 12 Mr Khamfong Villager Fruit tree planting 13 Mr Kam Villager 14 Mr Khampha Villager Fruit tree planting 15 Mr Seng Villager 16 Ms Chan Villager Fruit tree planting 17 Ms Foy Villager NTFP 18 Ms Vone Villager 19 Ms Noy Villager 20 Mr Sing Villager 21 Mr Phonh Villager NTFP 22 Ms Ma Villager NTFP 23 Mr Lam Villager 24 Mr Kan Villager 25 Mr Bounpheng Villager 26 Mr Sieo Villager 27 Mr Khammai Villager Vegetable planting Watermelon planting Chili planting

42 Kouay Hinlath Village No. Name Role Current Income-Generating Activity 1 Ms Khathaly Villager Chicken and duck raising 2 Mr Sonexay Villager Inthavong Chicken raising 3 Ms Phuttasin Villager Poultry raising Pig rearing Fish breeding 4 Mr Sonexay Vongsui Villager Livestock rearing Mushroom growing Tree seedlings 5 Mr Khamnoun Villager Livestock rearing 6 Ms Ae Villager Poultry raising 7 Ms Thongphoun Villager Livestock rearing Fish breeding 8 Ms Khammoun Villager Livestock rearing 9 Ms Noy Villager Poultry raising Livestock rearing 10 Ms Dok Mai Villager Livestock rearing 11 Ms Nouphone Villager Livestock rearing 12 Ms Phusone Villager Poultry raising Sawing 13 Ms Chathala Villager 14 Ms Chathima Villager Chicken raising 15 Ms Chansom Villager Livestock rearing Business idea Cow breeding Poultry raising Mushroom growing Tree seedlings Big animal rearing Vegetable planting Livestock rearing Fish breeding Livestock rearing Mushroom growing Poultry raising Pig rearing Pig rearing Mushroom growing Big animal rearing Pig rearing 16 Mr Art Villager Retailer Retailer Goat rearing Tree growing 17 Mr Bounlam Villager Livestock rearing 18 Mr Bounlieng Villager Vegetable growing Fish breeding Big animal rearing Integrated farming 19 Ms Keo Villager Vegetable planting Vegetable planting 20 Mr Phetsome Villager Fish breeding Fish breeding 21 Mr Vandy Villager Run my own business Retailer 22 Ms Ketkeo Villager Livestock Agriculture 23 Ms Khamxay Villager Run business Duck raising 24 Br Bounheuag Villager Poultry raising

43 Phonekam Village No. Name Role Current Income-Generating Activity 1 Ms Nod Villager Livestock rearing 2 Ms Sisouphan Villager Livestock rearing 3 Ms Mone Villager 4 Mr Bounmy Villager 5 Ms Phan Villager 6 Ms Lay Villager Rice mill business Transport pick-up0 7 Mr Pheang Villager 8 Mr Phi Villager 9 Mr Bouavanh Villager 10 Mr Yong Villager 11 Mr Vongdeuan Villager 12 Mr Samane Villager 13 Ms Mon Villager 14 Ms Oob Villager 15 Ms Vone Villager 16 Ms Tounkham Villager 17 Ms Khamhou Villager 18 Ms Bounthieng Villager 19 Mr Khemphone Villager 20 Mr Sykhai Villager 21 Ms Dok Villager 22 Mr Sangthong Villager 23 Mr Sythat Villager 24 Mr Say Villager 25 Ms Khampheuy Chief of village 26 Mr Khammay District trainer Business idea Livestock rearing Livestock rearing Livestock rearing Tobacco planting Livestock rearing Tobacco planting 26 Mr Xayasith District trainer 28 Mr Othai District trainer

44 Annex 2 Village Resource Maps Nasenkham Village Sisangvone Village

45 Khonekeo, Phonsavath and Phiengdy villages Kouay Hinlath Village

46 Phonekam Village