The Challenge

The tropics possess great wealth in raw materials that have potential demand in local and international markets. Changes in market trends and consumption habits are creating niches for exotic fruits, nuts, medicinal plants, and organic raw materials such as essential oils, natural colorings, spices, and tannins. New opportunities (including new products) have also arisen for traditional commodities such as cassava, sugarcane, and livestock, and for local seed production.

However, small-scale farmers and entrepreneurs face numerous barriers to taking full advantage of these marketing opportunities: unfavorable economic models and policies; lack of business experience; ignorance of technologies, markets, and prices; and little support in terms of training, advisory services, and credit.

The challenge for CIAT's program in agroenterprise development is to link small farmers to expanding markets so they can develop sustainable livelihoods in the rural sector.

The Small Scale Agroenterprise Development in the Uplands (SADU) Project

The upland areas of both Laos and Vietnam endure continuing high levels of poverty (40%-50%). As rural development programs aim to alleviate poverty, market limitations persist as a major impediment to success. Agroenterprise development can help alleviate poverty by creating more diverse income sources through, for example, improving access to markets, adding value to raw products through intermediate processing and improving product quality, and providing service industries.

The SADU project proposes to develop approaches that will operate at district and community levels and are appropriate to the economic, cultural, and political settings of Lao PDR and Vietnam.

The project's goal is "to develop sustainable agroenterprise initiatives with upland rural communities that generate income and employment opportunities through diversifying and adding value to local natural resources". The objectives based on that goal embody the process that will be followed to facilitate agroenterprise development, ensure its sustainability, and set the context for extending the approaches developed to provincial and national levels and to other regions. The steps of this process include:

• Identifying and evaluating market opportunities for agroenterprise development through local stakeholder interest groups.
• Designing and facilitating the implementation of agroenterprise initiatives with supply chain actors.
• Establishing a strategy and local capacity for promoting agroenterprises and strengthening local business support services.
• Institutionalizing agroenterprise development at district, provincial, and national levels.

The project will operate in areas where no services are yet provided by governmental agencies. Although a project of this nature is new to development in Vietnam and Lao PDR, international and local examples exist where the facilitation and support of agroenterprise development have successfully increased incomes of poor households. Hands-on training for facilitators from agroenterprise development organizations at national, provincial, and district levels will introduce a new competency into these organizations, thereby promoting private enterprise initiatives in the rural sector.

Organizations and individuals in the public and private sectors will implement the project at provincial and district levels. Linkages will be maintained at the national level through liaison officers assigned to the project. Operating regionally rather than bilaterally is advantageous because the issue of agroenterprise development is common to both countries, and expertise and experiences can be shared between the two nations. By not being tied to a particular governmental department in one country, the project would also be freer to operate across governmental departments and between private and public sectors.

CIAT will implement the project over 4 years, starting in 2003, with funding from the Swiss Agency for Development and Cooperation (SDC).

CIAT Contacts

Ounkeo Pathammavong
Agroenterprise Development Specialist
P.O. Box 783
Vientiane, Lao PDR
Phone: +856 (21) 770090
Fax: +856 (21) 770091

Cu Thi Le Thuy
Research Assistant
67 To Ngoc Van,
Tay Ho,
Ha Noi
Vietnam
Tel: +84 (4) 7182845
Fax: +84 (4) 7182811