Overview Objectives

This project aims to identify the socio-economic conditions under which improved technology and market booms in commercial crops such as cassava can make smallholder farming systems in mainland Southeast Asia more profitable and sustainable and thereby reduce poverty.
Smallholders and large companies in Cambodia and Laos invest in cassava production, supplying value chains across Southeast Asia.
Commercial crops like cassava have increased smallholder cash incomes, but the market outlook for cassava is linked to supply and demand in global starch, grain, and energy markets. This exposes smallholders to new risks and threats to their livelihoods, especially when they have borrowed heavily to embark on this enterprise.
Better value-chain linkages between smallholders and industry actors could make the cassava industry more productive, profitable, and sustainable. A multi-scale appreciation of farming systems and livelihoods, value-chains, and policies and institutions is needed to understand incentives and constraints to adopting improved production and marketing practices critical to developing a sustainable smallholder sector.

Progress Reports (Year 1, 2, 3 etc)

The overall aim of the project “Developing cassava production and marketing systems to enhance smallholder livelihoods in Cambodia and Laos” is to identify the socio-economic conditions under which improved technology and market booms in commercial crops such as cassava can be harnessed to increase the profitability and sustainability of smallholder farming systems in Mainland Southeast Asia and thereby contribute to poverty reduction.
The project officially began on 1st January 2016, but a project variation was required in order to postpone the inclusion of Myanmar, and as such financial resources could not reach partners until March-April. However, partners were able to pre-finance several activities to minimise slippage in the timeline. The main activities for the first 6 months of the project were directed at progressing Objective 1: Assess the current production, marketing, and institutional arrangements for cassava in major agro-economic zones and value chains in Laos and Cambodia
The regional cassava market experienced a significant policy shock in early 2016 with reductions in maize price supports in China. The price support to the domestic Chinese maize market in recent years was one of the factors that contributed to increased demand for cassava. The policy change in 2016 resulted in farm-gate prices falling significantly in Cambodia and Laos, although the value of cassava exported in the current harvest period remained well above all previous years, indicating the large area expansion in the crop year.
Value chain training and assessments were carried out in Kratie Province in Cambodia. In Lao PDR, value chain training was undertaken in Vientiane and value chain assessments were carried out in Bolikhamxai Province. The planned assessment in Xayabouli (Lao PDR) will occur in the second half of 2016. The assessments so far have shown the large variation in production systems and household livelihoods within and between the sites. New starch factories have been built recently in Lao PDR, however they have strong competition for feedstock from the dry chip market. Working capital is a problem throughout the value chain in both countries, resulting in delay in payments, with farmers often opting for value chains with quicker payment. The production of cassava in Kratie is completely dependent on export to Vietnam, either into Tay Ninh or Bnh Phc Provinces. Farmers tend to sell fresh roots to traders, unless they are more remote, in which case transporting chips is considered more viable.
In all sites farmers report declining cassava yields and very limited adoption of soil fertility and soil conservation management practices. There have been several new pests and diseases occurring in the past few years, which farmers also reported as having a negative impact on yields. Market fluctuations, including intra-day fluctuations in Cambodia, were identified as a problem that creates an uncertain investment environment. Although multiple sources of credit are generally available, access to capital on suitable terms was reported as a constraint by farmers. Credit sources were present; in some villages in Cambodia around 20 micro-finance institutions (MFI) were working in villages where there was evidence of significant debt and loss of assets (including land).
Preliminary training in sustainable cassava production systems was carried out in Laos and Cambodia. The training included staff from NAFRI, CARDI, provincial and district agricultural staff, and some private sector partners. The selection and multiplication of cassava varieties was part of the training and will allow for variety assessments in 2017.
The project has had strong engagement with provincial governments in Laos and Cambodia. Private sector actors have been involved in many training activities and have shown willingness for ongoing collaboration and in-kind support. However, the opportunities, threats, and sustainability of different levels of engagement require further analysis.

The overall aim of the project “Developing cassava production and marketing systems to enhance smallholder livelihoods in Cambodia and Laos” is to identify the socio-economic conditions under which improved technology and market booms in commercial crops such as cassava can be harnessed to increase the profitability and sustainability of smallholder farming systems in Mainland Southeast Asia and thereby contribute to poverty reduction.
The project officially began on 1st January 2016, but a project variation was required in order to postpone the inclusion of Myanmar, and as such financial resources could not reach partners until March-April. However, partners were able to pre-finance several activities to minimise slippage in the timeline. During the first 6 months of the project activities were mostly at progressing Objective 1.
Project activities from July 2016 to June 2017 have covered all three objectives, but with a greater concentration on progressing Objective 1: Assess the current production, marketing, and institutional arrangements for cassava in major agro-economic zones and value chains in Laos and Cambodia and Objective 2: Increase the adoption of improved cassava production, resource management, and post-harvest practices by strengthening linkages between farmers and research, extension, and industry actors.
The regional cassava market has continued to experience significant price declines resulting from the reductions in maize price supports in China in early 2016. During 2016 farm-gate prices fell significantly in Cambodia and Laos, although the value of cassava exported remained well above all previous years, indicating the large area expansion in the crop year.
During 2017, farm-gate prices in both Cambodia and Laos continued to decline with prices reflecting developments in the regional markets in Thailand and Vietnam. The regional cassava market has continued to experience price declines with a major driver being the reductions in maize price supports in China in March 2016. During 2016, root prices fell significantly in the neighbouring markets of Thailand and Vietnam where a large percentage of roots and dry chips are destined before export to final destinations. Despite the correction in prices, export of starch from Vietnam remain at all-time high levels reflecting the growing demand. A large percentage of cassava from Cambodia’s eastern Provinces are exported into Tay Ninh as fresh roots for processing. Alternatively, the demand for cassava chips has fallen significantly as China deals with huge maize stocks. This has particularly impacted the western Provinces of Cambodia and Bolikhamxai in Lao PDR.
Official Vietnamese imports from Cambodia and Laos have continued to increase. Thailand’s imports from Laos have also increase however Thai imports from Cambodia have declined relative to the same period in 2016 (see Appendix 1 for more details).
In Lao PDR, local value chain assessment was undertaken in Xayabouli during October 2016. This assessment included farmer focus groups and semi-structured interviews with value chain actors in Kenthao and Paklai Districts. The value chain assessments undertaken in Bolikhamsay, Xayabouly and Kratie have shown a large variation in production systems and household livelihoods within and between the sites. New starch factories have been built recently in Lao PDR, however they have strong competition for feedstock from the dry chip market. Working capital is a problem throughout the value chain in both countries, resulting in delay in payments, with farmers often opting for value chains with quicker payment. The production of cassava in Kratie is completely dependent on export to Vietnam, either into Tay Ninh or Bnh Phc Provinces. Farmers tend to sell fresh roots to traders, unless they are more remote, in which case transporting chips is considered more viable.
In all sites farmers report declining cassava yields and very limited adoption of soil fertility and soil conservation management practices. Preliminary analysis of the household survey data shows almost 100% of household do not use any inorganic fertiliser. There have been several new pests and diseases occurring in the past few years, which farmers also reported as having a negative impact on yields. Market fluctuations, including intra-day fluctuations in Cambodia, were identified as a problem that creates an uncertain investment environment.
Baseline household surveys to determine current farm-household types, livelihood activities, production practices, market linkages, decision-making, and constraints to adoption of improved practices have been developed in conjunction with partners in Laos and Cambodia. Surveys have been translated into Lao and Khmer and loaded onto electronic tablets running the Commcare app. Training on the household survey and the use of electronic tablets for surveys was undertaken for the Laos survey team in Vientiane in April 2017. Household surveys were completed in Bolikhan and Viengthong districts of Bolikhamsay in May-June 2017, with a total of 180 surveys undertaken for the province. Surveys were undertaken in Xayabouly in July 2017 with total of 180 surveys. Household survey training and pre-testing will be undertaken in Cambodia in late July 2017, with surveys planned to be carried out in Kratie in August.
Variety, fertiliser and intercropping trials have been planted in Kratie, variety and fertilizer trials have been planted in Bolikhamsay, and variety, fertiliser and intercropping trials have been planted in Xayabouly. The trials were planted in April-May 2017 and are expected to be harvested in February-March 2017. The results of these trials will form the basis of economic analysis and participatory evaluations with farmers.
The project has had strong engagement with provincial governments in Xayabouly and Bolikhamsay in Laos, and Kratie in Cambodia. Private sector actors have been involved in the agronomic training activities and participated in value chain assessments in all sites. The value chain assessments have shown that some private sector actors have strong incentives to collaborate with the project and are indicate a willingness to provide some in-kind support. However, the opportunities, threats, and sustainability of different levels of engagement require further analysis over the next year. Some actors were seen as too high risk for activities in 2017-18 season due to high levels of debt and likelihood of not being able to pay farmers in the near future.

Project ID
ASEM/2014/053
Project Country
Inactive project countries
Commissioned Organisation
University of Queensland, Australia
Project Leader
Dominic Smith
Email
d.smith1@uq.edu.au
Phone
0412 099 264
Fax
07 3365 9016
Collaborating Institutions
International Center for Tropical Agriculture, Vietnam
National Agriculture and Forestry Research Institute, Laos
Cambodia Agricultural Research and Development Institute, Cambodia
Yezin Agricultural University, Myanmar
Department of Agricultural Research, Myanmar
Project Budget
$1,598,912.00
Start Date
01/10/2015
Finish Date
30/06/2019
Extension Start Date
01/07/2019
Extension Finish Date
31/12/2019
ACIAR Research Program Manager
Dr Jayne Curnow