Sowing Seed of Success -...

Sowing Seed of Success:

The Experience of the Organic Coffee Producers

Group

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REPORT

Systematization and share of good practices in rural development

Attapeu province, Sansai district, Lao PDR, December 2012

Lao’s People Democratic Republic Ministry of Agriculture and Forestry, Department of Planning and Investment

Rural Livelihood Improvement Programme (RLIP) International Fund for Agricultural Development (IFAD)

PROCASUR Corporation

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The Experience of the Organic Coffee Producers Group

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ACKNOWLEDGEMENT

This report presents the innovative experience of the Organic Coffee Producers Group in the environmentally friendly production of biological coffee, in line with the successful implementation of a Public-Private-Partnership.

The systematization of this experience has been possible thanks to the cooperation between the Ministry of Agriculture and Forestry, Department of Planning and Investment of Lao’s People Democratic Republic, the Provincial Department of Industry and Commerce, Lao PDR, the Rural Livelihood Improvement Programme (RLIP), the International Fund for Agricultural Development (IFAD) and the PROCASUR Corporation, that provided technical and methodological support in the process of documentation of the experience. The systematization process took place between December 6 and 8 2012 in Attapeu province, Laos PDR; it involved the Organic Coffee Producers Group, one representative of the local government, and 4 trainees selected by RLIP. Of these, two people were staff from RLIP. Besides that, two local talents from other experiences participated in the systematization process: the head of the Organic Asparagus Producers Group and the head of the Taliang Natural Dyes Group. These two experiences had been identified by RLIP as successful Public-Private-Partnership (PPP). Activities have been carried out using PROCASUR knowledge management methodology through exchange of best practices and innovations, as part of a regional IFAD financed Learning Route Programme for Asia and the Pacific.


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TABLE OF CONTENTS

1. BACKGROUND AND RATIONALE......................................... ............................ 4

2. SOWING SEEDS OF SUCCESS: THE EXPERIENCE OF THE ORGANIC COFFEE

PRODUCERS GROUP..................................................................................... 5 2.1 Contextualising the Experience.................................................................... 2.2 Learning from the Organic Coffee Producer Group.......................................... 2.3 History and Development of the Group.......................................................... 2.4 The Know-How of the Organic Coffee Producers Group: Growing Natural, Eco-friendly and Healthy Coffee........................................... 2.5 Main Actors Cooperating in the Experience..................................................... 2.6 Future Plans............................................................................................

5 8 9

12 16 17

3. ANALYSIS OF THE GROUPS’ EXPERIENCE: GOOD PRACTICES, LESSONS LEARNED, CHALLENGES AND OPPORTUNITIES..................................................

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4. ANNEX......................................................................................................

I. Training agenda December, Systematization Process.................................. II. List of participants...............................................................................

22 22 23

TABLE OF BOXES

Box 1: Ethnic Groups of Laos.................................................................................... 6 Box 2: The Ethnic Group of Alak............................................................................... 7 Box 3: Coffee Cherries........................................................................................... 12 Box 4: Organic Coffee Cultivation.............................................................................. 14 Box 5: The Organic Coffee Industry in Laos................................................................. 14 Box 6: The Success Story of Mr. Bouthan................................................................... 15


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1. BACKGROUND AND RATIONALE 1. In the frame of the IFAD-PROCASUR Learning Routes Programme for Asia and the Pacific, PROCASUR Corporation is supporting knowledge management and capacity building strategies for scaling up best practices and innovations for poverty reduction among IFAD stakeholders in the Asia and Pacific Region. The programme aims to increase knowledge sharing and learning capacities at project and country levels by building up human capital, facilitating the adoption of best practices and improving the results and impacts of IFAD operations in the region. This will be done by identifying, systematizing and disseminating existing knowledge on innovations and best practices; identifying local champions who are playing a key role in promoting innovations and enabling them to organize and share their experience using Learning Routes (LR) methodology, to make it available to other people; designing and implementing LR and furthering the dissemination and scaling up of the knowledge acquired. 2. In this context, in November 2011 a first mission in Lao PDR was carried out by PROCASUR Corporation in order to present the LR Programme to IFAD partners and carry out an initial assessment of training demands and innovations in the country. As a result of the mission, partners from the Rural Livelihoods Improvement Programme (RLIP) and the Sustainable Natural Resource Management and Productivity Enhancement Project (SNRMPEP) showed interest in the Learning Routes methodology. In order to follow up on these agreements, from March 19 to 30 2012 and from June 22nd to 23rd, a specific knowledge management and capacity building process was carried out by PROCASUR Corporation. It has involved local champions and their association of two successful experiences in Attapeu and Champassak provinces and trainees from RLIP and SNRMPEP projects respectively. From September 22 to 25 2012, a third systematisation and training process has taken place in Attapeu province. Local talents as well as trainees from RLIP had an active part in the knowledge management process facilitated by PROCASUR Corporation. Finally, the last systematization process was carried out in a collaborative effort of PROCASUR, RLIP and local talents in Attapeu province from December 6 to 8 2012. 3. The following paragraphs report the outcomes of the systematization process of the experience of the Organic Coffee Producers’ Group growing coffee by using eco-friendly production methods and materials. The content presented below is the result of the research and analysis during the community meetings, conducted and validated by the group members themselves with the support of RLIP staff and PROCASUR Corporation.

2. SOWING SEEDS OF SUCCESS: THE EXPERIENCE OF THE ORGANIC COFFEE PRODUCERS GROUP

2.1 Contextualising the Experience In the community of Dakseum, district of Sansai, Attapeu province, the Organic Coffee Producers Group comprises 54 families from the Alak ethnic group. The initiative is being supported by the International Fund for Agriculture and Rural Development (IFAD) through the Rural Livelihood Improvement Project (RLIP), in collaboration with the Department of Agriculture (District Level), Lao PDR. Attapeu province is located in the south-east of Laos and it comprises five districts, namely: Phou Vong, Samakkhixay, Sanamxay, Sansai and Xaysetha. Attapeu shares borders with Vietnam in the east, Cambodia in the south, Sekong province in the north and Champassak province in the west. With a population of about 120,000 people, Attapeu is one of the least densely populated areas of Laos; the majority of the


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population belongs to ethnic groups, the main ones being the Kleum, Katou, Alak, Katang, Tahoy, Nge, Suay and Nyajeung. In recent years Attapeu province, and particularly Sansai district, has experienced intensive government sponsored internal resettlement from mountain and upland areas to lowlands. Attapeu is one of the economically poorest provinces in Laos. Poverty analysis undertaken for IFAD COSOP 2011-2015 shows that Attapeu and Sekong are among the poorest provinces of the south, with the districts of Kaleum and Dakcheung in Sekong, and Sansai and Phouvong in Attapeu, ranked among the country’s priority 47 poor districts1. As defined by the Government of Laos, rice security is the primary indicator of poverty. The Government of Lao PDR defines a poor household as one in which the monthly income cannot provide 16 kilograms of rice per person each month. Recent estimates by the World Food Programme suggest that only about one-third of the rural population are truly “food secure” and that one household in seven has either poor or borderline food consumption and chronic malnutrition remains “alarmingly high”2. Most farmers in these districts keep livestock and practice subsistence agriculture, cultivating rice and some other crops. Landholdings are generally too small to be adequately productive and communities lack infrastructure for basic services and transport3. There are three basic farming systems in Attapeu, each of which revolves around rice cultivation: (a) upland rice; (b) lowland irrigated rice; and (c) lowland rainfed rice. Upland rice cultivation is the predominant activity; the rice is often grown together with other crops, e.g. maize, sesame and vegetables. Rice is grown mostly for household consumption rather than for sale, but a great many households are not able to grow enough rice to meet their own household consumption needs. The annual harvest is typically sufficient for only seven to nine months of the year. Rice yields are particularly low in upland areas and those re-settled from the uplands to the floodplains have little technical knowledge about paddy rice farming4. Most households have gardens, providing an additional source of food and in some cases an important source of cash. Many gardens are located on riverbanks or intercropped with upland rice. The productivity of these riverbank gardens is greatly dependent on the seasonal changes in water levels. Flooding is in fact a significant problem in much of the province. Entire crops are lost by increasingly severe flooding events. Peak floods usually occur in August; severe flooding occurred in 1997 and in 2001 while major floods occurred in 2009/10 creating widespread crop failure and loss of life. Attapeu is also a province facing rapid change. New road links have opened the province to economic development and to markets outside the province, stimulating investment in the local economy.

1 IFAD 2011, Lao’s People Democratic Republic, Country strategic opportunity programme, Executive Board 2 IFAD 2010, RLIP Supervision Report, IFAD 3 http://operations.ifad.org/web/ifad/operations/country/project/tags/laos/1301/project%20overview 4 Mekong Wetlands Biodiversity Programme- UNDP, 2006, Attapeu Situation Report. Mekong Wetlands Biodiversity Conservation and Sustainable Use Programme, Vientiane, Lao PDR

Map of Laos Attapeu province


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Box 1: Ethnic Groups of Laos The Alak is one of the ethnic groups living in the Lao PDR. The country has in fact the most ethnically diverse population on mainland Southeast Asia. The 2005 census identified 49 ethnic groups with at least 240 subgroups. These groups are divided into four broad ethno-linguistic groupings: Lao-Tai, Mon-Khmer, Chinese-Tibetan and Hmong-Mien. The Lao-Tai dominate politically, culturally and economically and generally inhabit the river plains, particularly along the Mekong. The majority of the other ethnic groups inhabit the mountain territory that covers about 79 per cent of the country. The national Ethnic Minority Policy upholds the principle that all ethnic groups should have improved access to services and that all discrimination must be eradicated. According to this Policy, Laos’ government is officially committed to embracing the multi-ethnic dimension of the country and improving the living conditions and equality of all peoples in the country. In this context, Laos’ ethnic groups were moved down to lowland areas where there are more economic opportunities, productive agriculture and better access to government services. However, relocation presents a threat to ethnic groups’ traditional lifestyles that are not always able to adapt to the new social and ecological conditions. Today, the highest incidences of poverty in Laos correspond with the provinces that also have the highest concentrations of ethnic minority groups5.

Since 1978, IFAD has been actively engaged in Laos PDR collaborating with governmental agencies and development partners to increase opportunities for sustainable food security and economic livelihoods to poor rural people6. IFAD’s poverty reduction strategy in Laos embraces a holistic approach involving education, health, economic growth, food security and income and the improvement of local infrastructures. Within this framework, IFAD’s operations have been focussing specifically on the improvement of community-based access to and management of natural resources and of sustainable, adaptive and integrated farming systems and on the increase of access to market’s opportunities. These interventions are targeting mostly highly vulnerable food-insecure households with limited access to markets and poor households that are moderately food-insecure but have a great potential to access markets. In this context, IFAD’s interests meet with the Alak families’ needs, as the latter belong to the most food-insecure and vulnerable rural poor communities. Nonetheless, they have a great potential to improve their livelihoods by creating alternative sources of income, for example by advancing and increasing their agricultural or handicraft production in order to gain access to new marke

5 IFAD, Country Technical Note on Indigenous Peoples’ Issues, Laos PDR, January 2010, IFAD 6 IFAD 2011, Lao’s People Democratic Republic, Country strategic opportunity programme, Executive Board 103rd session, Rome 14-15 September 2011, IFAD


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Box 2: The Ethnic Group of Alak

The Alak (also called Arac, Alack, Hrlak, Harac, Harlak) in Laos mainly inhabit the provinces of Salavan, Sekong and Attapeu. They belong belong to the Mon-Khmer language groups, likewise speaking two different dialects (Katuic and Bahnaric). Until today, little was known about the history of the Alak people7. Traditionally, the Alak practice swidden and permanent rice cultivation. They grow fruits, vegetables and crops such as pumpkins, peanuts or maize. Hunting, fishing and gathering supplement their diet. Animal husbandry, however, is rather limited among the Alak, and only a few buffaloes, pigs and chickens are raised only for sacrificial purposes. During the last decade, many Alak resettled from remote areas to locations closer to infrastructures and with better access to local markets, often sharing territories with

the Taliang. The Alak’s most important social unit is the village, with a village head leading the villagers. Their social structure is organized in lineages called yang, such as tchatchun (pig), tchakapiou (buffalo) and tchaoir (chicken). In the past, Alak women used to have skills in weaving and dyeing, but nowadays more time is invested in agricultural field work. Like other Mon-Khmer ethnic groups in Laos, the Alak

produce bamboo baskets and containers for different

purposes, such as rice or food storage. The Alak believe in a wide range of natural and supernatural beings, such as the spirits of forest, rivers and mountains that they worship in collective ceremonies. The village shaman is responsible for the protection of the villagers from sickness and misfortune8.

7 Linguistically, Katuic people are closely affiliated with the Northern part of the Central Highlands in Vietnam while the Bahnaric people are connected with the South of the Central Highland. 8 See also: Schliesinger, Joachim (2003). Ethnic Groups of Laos. Volume 2: Profile of Austro-Asiatic-Speaking Peoples. White Lotus Co. Ltd., Bangkok.

Picture 1: Dakseum village, a traditional Alak community


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2.2 Learning from the Organic Coffee Producers Group

The experience of the Organic Coffee Producers Group is a successful learning model for the improvement of livelihoods of extremely poor and food-insecure rural communities by securing market access through the establishment of sustainable long-term PPP. Even if the Organic Coffee Producers Group in its contemporary form was established relativity recently, their natural production and commercialization processes can already provide important lessons for transfer and replication in other contexts. In this sense, it can already give valuable insights and orientations for communities that face comparable development challenges regarding:

! Strategies to secure stable market access by creating and maintaining sustainable partnerships between public and private sectors;

! Innovative production processes that ensure human safety, environmental compatibility and biologically diverse agriculture;

! End products that provide health benefits to consumers.

Picture 2: A member of the Organic Coffee Producers Group working on her coffee plantation.

1.1 History and Development of the Group The inhabitants of today’s Dakseum village originally settled in higher mountainous areas. During the 1950’s the first families started to move down to the actual location of the community. They selected the area for its rich and dense forest vegetation, its natural resources and proximity to several streams and rivers, with the Thon river being the major one. Gradually, other Alak families moved down from higher areas to Dakseum’s current location, where the village was formally established in 1954. By the


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end of the 1950s, the village had approximately 110 inhabitants (30 families or 20 households). At that time, the community was still practicing traditional farming methods, shifting cultivation of upland rice, combined with the production of cassava and corn for family consumption. The presence of rivers and streams around the village allowed them to practice slash and burn techniques without risks. Coffee was not grown yet. Villagers also relied on hunting, fishing and gathering of forest products. Women used to produce handicrafts, such as natural dye fabrics and baskets for family use. Villagers were also skilled in iron production, fabricating knifes and kitchen utensils. Between 1965 and 1975, Attapeu province was dramatically affected by the war. During massive aerial attacks by the US Army, a number of people were killed, and large areas of land were contaminated with UXOs. After the end of the conflict, the region was cleaned from UXOs and awareness raising campaigns were implemented, as UXOs still pose a risk of detonation and can negatively affected soil productivity for decades. In the nineties, the first families started cultivating and commercializing coffee. It was only after the year 1999 that development projects entered the area of Dakseum village in Sansai. Through RLIP, IFAD started to support the development and improvement of marketable products by establishing Public-Private-Partnerships with the objective being to promote economic growth and food security among poor rural people in Sansai. In Dakseum village, this included the improvement of infrastructure and equipment for the extension of the organic coffee production as well as capacity building on coffee cultivation practices through various training programmes. Most importantly, the establishment of a stable partnership between a Laotian coffee company and the producers by RLIP ensures market access and alternative sources of income for the villagers.

Picture 3: Map of the past. The map of the past depicts the situation of the community after its establishment. The thin blue lines indicate tracks and field paths, roads are not paved yet. The thin red lines refer to smaller streams, the thick red line to the main river in the settlement’s surrounding. The villagers live in small houses in proximity to the river. The map shows a few cultivation areas (represented by grids),


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plenty of trees and thick forest vegetation. The small yellow building refers to a French Army training camp. A school has not been etablished in the village yet.

1954: The village of Dakseum is formally established. 1954-1966: Villagers rely on forest resources for livelihood purposes, living as hunter-

gatherers and shifting cultivators. 1967-1975: Attapeu province is heavily stricken by the Vietnam War. 1994: The first few families begin cultivating Arabica and Robusta beans, and

soon are able to sell seeds from Sansai district to Paksong. The small-sized coffee plantation of approximately 5 ha generates a production of about 150 Kg per year, with a family income of 7,000 LAK per kilo (around USD 0,87).

2002: The Asian Development Bank supports the improvement of the village’s basic infrastructure as well as a school building project. At the same time, the GTZ launches the so-called Food for Work Programme in order to advance, intensify and diversify crop production in the area. It starts to engage in road planning and construction in order to link the community to the wider Sansai district.

2004- 2005: The Dakseum villagers are able to grow and sell coffee beans on a small scale. In order to sell their products in the surrounding Sansai district and Sekong region, however, producers need to walk or use public transportation - a long and tortuous journey, while the income gained from coffee production is still very low.

2005: Health Unlimited establishes a new drinking water system in the village. The agricultural production, rice and crops, is enhanced.

2007: IFAD starts a pilot project on coffee production with some families in Dakseum village, including need assessment, awareness raising campaigns and capacity building trainings. It further supports the enhancement of crop production through the intensification of corn cultivation.

2008: IFAD focuses its operations on the completion of road work linking the village to Sansai district with the objective of facilitating trade and communication between villages as well as to provide access to health care provision in the surrounding areas.

2009: IFAD supports the establishment of a producers group and the extension of the coffee production, involving 32 families at first, and later on the entire village, in the production process. Moreover, the producers are being linked to the Agriculture Department of Sansai in order to gain support for further training. During the following two years, the area of coffee production is successively expanded while technical training programmes are mainly focusing on natural coffee cultivation practices.

2011: RLIP partners with Lao Sansai Coffee Company in Attapeu to provide secure and stable market access to the Dakseum coffee producers. The company guarantees the buying of the entire families’ productions. Since the company can buy the seeds directly in Dakseum, villagers no longer need to travel long distances within the district or even to other provinces.

2012: Today, the community of Dakseum is still affected by extreme poverty and food insecurity, and only 10 families are food secure throughout the whole year. However, the coffee cultivation raises hopes for finding a long-term way out of poverty and for the improvement of the villager’s livelihoods. The coffee production site in the village has been extended to 120 ha, and the community has two nurseries for growing seedlings. Altogether, 54 families are involved in the production of coffee. Currently, the community is able to sell 1000 kg of undried (red coloured) coffee beans for 2,500 Kip per Kilo (USD 0,31), and the dried and milled (white coloured) coffee seeds for 15,000 per kilo (USD 1,87). For the coming year the group expects to produce up to 2,000 kg of beans.


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The village today counts on a population of 413 people or 65 households, all belonging to the ethnic group of Alak. Apart from coffee, the community members grow upland rice and other crops and vegetables. They continue to use the forest for hunting and gathering of non-timber forest products and to raise small animals, such as chickens, pigs and buffalos. As in the past, they produced handicrafts for personal or family use. The settlers also still practice their traditional animist ceremonies related to the rice cultivation cycle.

Picture 4: Map of the Present. The map of the present shows the current situation of the Dakseum community. Over the last decades, the number of residents and houses has in-creased. The black saw-toothed lines indicate streams and rivers. As in the past, the vil-lage is surrounded by dense forest vegetation, but now, smaller coffee plantation plots are set up around the area. The agricultural site has expanded. Compared to the past,

the village’s infrastructure has slightly improved: nowadays, it has better road conditions and a small school. However, the established electrical grid has not been used yet, as electricity has not reached the area.

Picture 5: The Time-Line. Interestingly, the villagers depicted the development of their community over time in a circular movement. It starts with the formation of the vilage during the 50’s (on the top of the circle) moving clockwise towards its present situation.


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1.2 The Know-how of the Organic Coffee Producers Group: Growing Natural, Eco-friendly and Healthy Coffee

The Organic Coffee Producers Group is composed of 54 ethnic Alak families. There is no hierarchical structure among the farmers, but the network is led by the village head. The experience in its present-day form is still rather young. The group started with a small number of families in the nineties and increased over the course of time. During the last decade, the producers were able to gain valuable experiences in coffee cultivation practices. As RLIP has promoted the group in various ways since, members were able to further develop their skills in coffee farming through capacity building trainings. RLIP also assisted the farmers with access to grants for the expansion of their organic plantations. The group produces organic coffee by

using only natural fertilizers and composts, made from natural substances and recovered organic materials, such as animal manure and animal by-products as well as plant residues (leaves and other waste). Therefore, the production process has environmental and health benefits. Within the Organic Coffee Producers Group, produce is sold individually per family as there is no shared fund or investment management yet. As only 10 families in the village, in fact, are food secure throughout the year, the income is mainly used to supply the families‘ basic needs, i.e. to purchase rice and other edible products, or clothes and school supplies for children. The table below shows the increase of Dakseum’s coffee production over the past 10 years as well as the sales price resp. income gained in LAK per kilo. In 2002, 100 kg of coffee berries were produced while the sales price amounted to 2000 LAK per Kg. Today, the coffee production has risen up to 1000 Kg peryear, with an income source of approximately 15.000 LAK per Kilo. The last row estimates the quantitiy of coffee beans within the next year with the production expected to double. The PPP established between the village and the LaoCoffee COmpany allows producers to sell their products at a fixed price, protecting them from potential market price fluctuations.

Coffee production Year Quantity Sales Price 2002 100 Kg 2000 LAK per Kg 2004 150 Kg 7000 LAK per Kg 2012 1000 Kg 15000 LAK per Kg 2013 (prevision) 2000 Kg 15000 LAK per Kg Table 1: The increase of Dasksuem’s coffee production during the last decade.

Picture 6: Coffee beans drying after the harvest.


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Box 3: Coffee Cherries Coffee plants are small, evergreen trees with dark green leaves and white blossoms. Blooming is followed by the maturation of coffee cherries. When immature, the cherries are green, later turning yellow and red (similar to a cherry) over the ripening process. Finally, they turn black after drying. Every berry contains a pair of coffee beans. Coffee trees become productive only three or four years after planting. Then, they produce constantly, so that one plant can bear blossoms, unripe fruit and mature cherries at the same time. Even though some producers start to use automatic harvest devices, most coffee is still harvested by hand9. Box 4: Organic Coffee Cultivation Organic Coffee is grown without the use of chemicals, such as artificial pesticides, herbicides or fertilizers. The absence of toxins contributes to the maintenance of a healthy eco system and helps prevent soil depletion and erosion. Moreover, only natural fertilizers are used (such as compost, mulch or animal materials) that are beneficial for crops and soil as they replenish soil fertility. Shadow grown coffee also offers a habitat for various animals by maintaining and preserving forest cover. Besides being useful for environment and agriculture, organic coffee has various health benefits. For example, health risks of conventionally grown coffee due to chemical and pesticide residues can be reduced. As Organic coffee is often shadow grown, valuable natural nutrients in the soil are preserved that are usually destroyed by sun exposure (e.g. vitamins, minerals). Therefore, it contains a high level of antioxidants that support the consumer’s immune defense against a variety of diseases. Compared to conventional coffee, organic coffee is more expensive as its cultivation requires more effort and time. Because of the use of organic fertilizers that permit a slower growing of the plants, yields are slower. However, as the beans mature more 9 see also: http://www.thenibble.com/reviews/nutri/matter/2006-10.asp

Picture 8: Coffee trees produce coffee cherries that turn bright red when they are ripe and ready to pick.


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slowly, the plants can absorb more natural nutrients from the ground, giving organic coffee a more intense taste. For certification processes, organic coffee cultivation has to meet a set of standards related to production and processing practices. This includes standards for soil and water quality, equipment, for seeds and planting stock, crop rotation, and pest, weed, and disease management10. Some organically produced coffee is not certified yet, as producers face high certification costs, and often lack of market information and strategies. Yet, organic coffee is an important export commodity for many developing countries with the organic coffee market located in the developed countries11.

Box 5: The Organic Coffee Industry in Laos The French introduced Coffee cultivation to Laos in the 1900s. Almost 100% percent of Laos Coffee is produced in the South of the country: in Champassak province (Boloven Plateau around 59 percent), Saravane, Sekong and Attapeu provinces (31 percent). Many coffee farmers belong to ethnic minority groups and depend on the income from the coffee production in order to make a living12. Most coffee plantations are pesticide-free and maintained by natural farming practices. In the Lao National Chamber of Commerce and Industry (LNCCI), there are 32 companies registered13. Some coffee products are already traded as “Lao Organic Coffee”, even if they are not formally

10 For example, the standards for disease prevention and fertility management include biological methods such as the introduction of predators and parasites along with mechanical traps and lures. 11 see also: http://www.buzzle.com/articles/organic-coffee-benefits.html www.ota.com/pics/documents/CoffeeTalkMagazineExcerptNovember2009.pdf 12 LCA [Lao Coffee Association]. (2008). Value Chain Report Year and Coffee Association Statistics 2008. Vientiane, Lao PDR, http://www.laomountain.com/laocoffeehistory.html 13 Lao Coffee Association, 2008, cited in: LCA [Lao Coffee Association]. (2008). Value Chain Report Year and Coffee Association Statistics 2008. Vientiane, Lao PDR, http://www.laomountain.com/laocoffeehistory.html

Picture 7: Rows of organically grown small coffee trees on the coffee plantation in Dakseum.


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certified. Support and promotion of organic coffee is rather new in Lao PDR. The Lao government has committed itself to promote organic agriculture, especially organic coffee under its national development strategy and its trade facilitation policies. Its aim is to improve the quality of production, and to increase export in order to contribute to poverty reduction14. Box 6: The Success Story of Mr. Bounthan

Mr. Bounthan, 38 years old and married with children, is the head of the village of Dakseum. In the past, Mr. Bouthan was making his living as a farmer and hunter-gatherer, facing severe hardship to feed his poverty-stricken family. He started receiving training on coffee cultivation practices by RLIP (IFAD) in 2009. During the trainings, he was able to gain knowledge in sustainable production methods, such as chemical-free cultivation techniques and the use of natural fertilizers.

At the same time, he also became a trainer for the other villagers. Mr. Bounthan enjoys conducting trainings to pass his knowledge to other group members. In 2011, he started growing and selling his own coffee. Nowadays, he mainly works as a coffee producer and farmer, while also growing rice, crops and vegetables. The additional income from his coffee production allows Mr Bounthan to support the basic needs of his family, and his living conditions have improved. In the future, the village head would like to expand the communities’ coffee production and make better use of its potential. He plans to further improve his coffee cultivation skills by being a good example as a farmer for the villagers.

1.3 Main Actors Cooperating in the Experience Without the collaboration among some key actors around the Organic Coffee Producers Group, the successful development of the experience would not have been possible. At a governmental level, the Agriculture Department (District Level) is playing an important role for the promotion of the initiative. It partners with Rural Livelihoods Improvement Project (RLIP) which is active in the improvement of the livelihoods of rural poor in various parts of Sansai district, Attapeu province, through the promotion of PPP, and by supporting the Organic Coffee Producers Group in various ways. Finally, the Lao Sansai Coffee Company represents a stable partner for the villagers that ensure market access to the producers. The map of actors (see below) is a drawing by community members representing the system of actors with their mutual relations; it shows the network and the strength of the relationships between the main stakeholders in the development of the experience. The main actors with whom the group maintains a regular and solid relationship are:

14 LCA [Lao Coffee Association]. (2008). Value Chain Report Year and Coffee Association Statistics 2008. Vientiane, Lao PDR, http://www.laomountain.com/laocoffeehistory.html


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(1) RLIP at the provincial level as well as at the district level. RLIP in collaboration with the Agricultural Department has supported the organization of several skills and capacity building trainings in order to improve the quality of coffee growing in the village. It has further provided technical equipment and grants to the group members. RLIP has helped to establish a sustainable partnership between the producers and the Lao Sansai Coffee Company, and thus, to create stable sources of regular alternative income for the villagers. (2) The Agricultural Department (district Level). This Department ensures capacity building through technical support and trainings on the cultivation of coffee beans and good plantation management in terms of fertilizing and composting techniques. Improved quality of cultivation is, in turn, the basis for maintaining sustainable and stable market access. Besides training activities, the department is responsible for the monitoring and the follow up of production processes as well as for controlling the quality of the produce. (3) The Village Cluster (10 villages). The Village Cluster is an informal network of 10 communities working separately in coffee production. Its main objective is to raise awareness among villagers regarding the importance of the correct maintenance of the coffee plantations, as well as regarding the potential of growing coffee as a way to generate additional income. The members coordinate activities between villages and promote collaboration among producers. The cluster serves as a forum for the villages to share information of all kinds (e.g. regarding laws, agricultural or administrative management and other development issues). It acts as a representative towards district governors. The head of the cluster regularly reports to higher government offices.

Picture 9: Map of Actors. The drawing of the group members shows the key actors involved in the experience. The coffee producers’ group is located at the center. The different organizations and institutions that collaborate with the group are arranged in a circle around the experience.


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(4) Lao Sansai Coffee Company Lao Sansai Coffee Company buys the whole production of the group members at a fixed price and sells it to the local market, diminishing the producers’ dependence on the price of coffee in mainstream markets as well as on market fluctuations. (5) The Producers Group. It produces coffee beans without using artificial chemicals such as fertilizers or pesticides thereby contributing to the maintenance of a healthy ecosyste. 2.6 Future Plans

First and foremost, the group wishes to improve the infrastructure facilities in the village. This particularly includes the village’s coverage with an electricity system. Currently, there are electricity cables installed, but electricity has not reached the area yet. Besides that, the community lacks other basic services, including health facilities and efficient irrigation, sanitation and communication systems. In this context, the villagers imagine the construction of a health care center or hospital and of a new, bigger school with good teaching equipment. They visualize the village with a working communitcation network and an easily accessible water system. The new and better irrigation system will allow a more stable harvest and the expansion and change of agricultural activities. Moreover, they depict Dakseum with more residents, improved buildings, and good road conditions and transportation systems. In the villager’s vision, vegetable, crop and fruit production as well as the raising of livestock and small animals (such as pigs and chickens) should increase. The community is planning to achieve these improvements by further enhancing their coffee production. They would like to produce and sell coffee in larger quantities, and with an improved quality. In this context, the community members further express the wish to have a coffee mill to be able to directly process their coffee beans. Revenues from coffeee production could allow an improvement of various aspects of the village’s infrastructure. Moreover, gainings could be re-invested in raising animals and in an enhanced handicraft production. The group members imagine to purchase other assets and basic commodities from the income gained through the increased coffee production, animal breeding and handicraft manufacturing. In this way, a gradual improvement of the community’s’ overall situation is visualized.


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Picture 10: The vision of the community in the future is represented in the “Map of the Future”.

3. ANALYSIS OF THE TALIANG NATURAL DYES GROUP’S EXPERIENCE:

GOOD PRACTICES, LESSONS LEARNED, CHALLENGES AND OPPORTUNITIES Today, the community of Dakseum is still suffering from extreme poverty. Most of the villagers lack food security and are unable to produce enough food to provide for their families throughout the year. The lack of infrastructural facilities, such as an electricity and an efficient irrigation system exacerbates the situation, and agricultural productivity is limited. In this context, the cultivation of organic coffee in Dakseum village is undoubtedly an innovative way for the villagers to gain additional income. This, in turn, can contribute to poverty alleviation and the improvement of livelihood and living conditions of poor rural families. In the following, good practices and lessons learned from the experience are summarized. The section further points out challenges and opportunities connected to the production process of organic coffee, particularly in Dakseum, but also in more general terms. One of the key insights related to the advancement and success of the experience is the need to consolidate, expand and improve the organic coffee production in Dakseum. In this context, it is crucial to find further solid and long-term links with external markets as currently, the Lao Sansai Coffee Company is the only buyer of the produce. Increased access to reliable markets, combined with further skill development of the farmers in all areas related to coffee production could allow the group to further tap its potential. Moreover, producers could diversify their production in order to be able to link with other potential buyers and to expand their market options. In other words, reliable market access has to be secured by the establishment of more permanent partnerships with additional markets.


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The experience of the Organic Coffee Producers Group is a successful example of the establishment of a government-supported programme to grow coffee with various strengths and opportunities. As will be discussed in the following, a complex interplay of external and internal factors can contribute to the success or failure of an experience. External factors, such as environmental conditions (e.g. climate or geography), and infrastructure facilities such as electricity, irrigation, transportation or communication are key elements that can affect the progress of an experience- e.g. infrastructures that facilitate market access for small producers. As described above, inadequate infrastructure and poor road conditions remain a challenge for the villagers of Dakseum. Therefore, further improvements of basic infrastructures could significantly expand the basis for continuing the success of the group. Besides that, internal factors of a community contribute influence to an enterprise’s development. In this context, key elements for the success of a group are the member’s commitment and motivation. Groups are more likely to succeed when they are intrinsically motivated to work together. All members of the Organic Coffee Producers Group are highly motivated to expand and improve their plantation as the coffee cultivation offers them a promising way to alleviate extreme poverty and to overcome food insecurity. The establishment of a reliable PPP allows the farmers to produce independent of market fluctuation and drops in prices that usually severely affect the producer’s livelihood. Internal factors that can further consolidate and enhance intrinsic motivation to work together are, strong group cohesion and mutual social support. This includes, for example, the social characteristics of the village before group establishment, or the existence of networks at cluster level that can be used to activate and maintain new initiatives (such as the formation of producers’ groups). The Dakseum community has naturally grown together over decades rather than being artificially composed by a third party. As the community chose their settlement site voluntarily, they are also able to uphold important parts of their traditional life style and customs that play a crucial role in the maintenance of their social-cultural integrity. The Alak’s group identity, shared social capital and their common tradition are favourable conditions for trustful cooperation and the sharing of risks and benefits. For the long term sustainability of the experience it is crucial to support capacity building among the group members. This encompasses the strengthening of the group structure. There is a high potential to increase group efficiency by building up more elaborate formal organisation and thus group structure. The definition and assignment of key responsibilities for individual members or small groups (such as management, marketing or financial coordination) or shared fund management can contribute to a long-term strengthening of the group performance. The development of an experience can also be positively affected by a committed, strong, and respected leader, such as Mr. Bounthan. Thereby, the group could benefit from identifying their preferred model of leadership by reflecting power distributions and by defining regulations regarding leadership assignments (e.g. rotational leadership). Systematic and targeted coordination activities among group members could support their mutual sharing and exchange of knowledge. It could also help promote a regular common set up of production plans and objectives to achieve. For the long term success of the experience it is crucial to strengthen capacity building of all actors involved. This includes skill development on all aspects of organic coffee production, on management of the coffee production, on harvesting and processing techniques, on gaining market access and acquiring marketing skills, as well as on product research and development. For further development of the group and for the creation of synergetic effects through collaboration, the exchange of knowledge and experience with other organisations and groups (such as the Organic Asparagus Producers group, the Taliang Natural Dyes Group and other producer groups) offers promising opportunities. In this way, the groups can


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learn various skills from each other, e.g. regarding in-group management or coordination.

The experience of the coffee producers group can be further analysed regarding the opportunities and challenges connected to the coffee cultivation process in more general terms. In an analysis of the promotion of organic coffee products for export in Lao PDR16, it was found that the policy trend to promote organic coffee products is able to increase income for farmers, as well as contribute to the achievement of the government’s overall objective of rural development. The cultivation of organic coffee is a successful example of how marketing a product valuing environmental and health conditions can positively influence small-farmers livelihoods and living conditions. An enhanced awareness of environmental and social aspects of production processes as well as trends toward a healthy life-style have led to a worldwide growing demand for ‘green’ produce and for sustainable coffee. Therefore, the import of organic coffee has also largely grown around the world over the last years. Also in Laos, some companies are already exporting coffee, and one company is planning an internationally accredited certification. Organic coffee belongs to the fastest growing sector of the specialty coffee market and it is able to provide a higher income than conventional coffee to small-scale farmers17. There is also a domestic market demand for organic coffee in Laos, for example among tourist. This opens many opportunities in connection with eco tourism, since Laos is a popular tourist destination, and tourism in Laos is increasing. The government is also promoting awareness among consumers in the country. Special programmes have been

15 RLIP has identified the two experiences as successful resp. promising initiatives in terms of the establishment of sustainable PPP. 16 For the following information see: LCA [Lao Coffee Association]. (2008). Value Chain Report Year and Coffee Association Statistics 2008. Vientiane, Lao PDR, http://www.laomountain.com/laocoffeehistory.html 17 Ibid.

The head of the Organic Asparagus Producers Group, as well as the head of the Taliang Natural Dyes Group15 actively participated in the systematization process of the Organic Coffee Producers Group process. Drawing on their own experiences, both group leaders formulated direct recommendations to the Organic Coffee Producers Group, stressing the importance of group strengthening and organization. Mr. Phimsa (head of the Organic Asparagus Producers Group) pointed out group strengthening as crucial for success: “You have to work together as

a group. You have to increase the participation of the people and share ideas among your members and the head of the group. You also have to take care of the cultivation land because you will need to find alternatives in order to diversify your production and to link to other markets.” Also Aiengkham, head of the Taliang Natural Dyes Group emphasized the need for group strengthening through sharing of knowledge: “You need to assist each other. Those who have more experience and knowledge have to share it with the others. When you have a group, you help and support each other”.

Picture 11: Mr. Phimsa and Mrs. Aiengkham


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launched in order to offer organic coffee in first class restaurants and hotels throughout the country18. As described above, the cultivation of organic coffee has many environmental and health benefits for Laos’ eco systems, as no toxic substances are used in the farming process. Therefore, the production minimizes environmental damage such as soil exhaustion and erosion, and producers and consumers are less exposed to health hazards. However, challenges can be seen in some of the organic coffee’s characteristics, as organic coffee needs more care to preserve, and its processing is more time-consuming than conventional coffee. Accessing markets and taking advantage of market opportunities remain challenges for the producers in Laos’ remote rural areas. Regarding production and marketing, rural farmers all over the country often face various constraints, such as the lack of technical and financial support, the lack of modern processing facilities, quality supply chain management, up-to-date market information and of a legal framework for farmer cooperatives, amongst other issues. For the Organic Coffee Producers Groups, a certification process could be considered as an opportunity to further valorize the products. The lack of formal organic certification prevents farmers from earning premium prices even if their coffee production is entirely natural. Small-Scale farmers face various constraints when it comes to certification procedures though, such as high costs of certification and inspection visits. Moreover, standards and rules are very complex as different markets also may set different criteria. If a producer intends to certify his products under an organic label, requirements for the products and the production processes and connected costs must be considered carefully. The increasing demand for organic coffee worldwide offers good opportunities for Laos that has all appropriate conditions and a suitable environment for organic coffee growing. The organic coffee production in Laos is growing, and is able to positively contribute to the socio-economical development of the country and to the improvement of rural poor communities, for example, through creating more income earning opportunities and increasing entrepreneurial development in rural farming communities. However, the full potential of the organic coffee industry is far from being exhausted19. In conclusion, the institutional support provided by the Lao government, and by the international organization working in cooperation with it, is fundamental in order to ensure the sustainability of this experience over time. A long-term vision and commitment to secure a market and to receive active cooperation from local government, development agencies and the private sector is the key to create a successful public private partnership. At the same time, the support of international partner organizations is important to guarantee that innovative solutions are replicated in contexts that share similar needs. In this sense, IFAD, through RLIP, has the added value to be in the position of promoting the spread and the scaling up of best practices in the frame of its area of intervention. Linked to this, is the possibility to give increasing visibility to those actors that have played, and continue to play, a key role in the development of the Organic Coffee Producers Group, as it is the talented local practitioners that are at the core of this experience. Their knowledge and skills should be employed to promote the development of similar experiences in other contexts.

18 Ibid. 19 Ibid.


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4. ANNEX II: Agenda Training and Systematization

Agenda Training and Systematization, Attapeu, Laos PDR

06-08 December 2012

Day One – Thursday 06 December

Time

Activity Additional Information

09:00 – 12:00 Procasur: Training session to the Team Review of the main steps of the systematization process to be undertaken in the field with the community (coffee producers).

At RLIP office

12:00 – 13:00 Lunch 13:00 – 16:00 Travelling to the community

Day Two- Friday 07 December

08:30 – 12:00 Community Meeting Presentation of the Team and presentation of participants; Presentation of the systematization process and its main objective;

Group exercise: “Looking back at the past to draw our future”, working at the drawing of the map of the past/ present/ future

At the community school

12:00 – 13:00 Lunch 13:00 – 16:00

Work in group Team working with 2 or 3 people from the community in the analysis of the information contained in the maps. Outputs: Time Line and Map of Actors

Day Three – Saturday 08 December

08:30 – 12:00 Field visit and interviews Team working with community, collecting information through interviews to local talents and field visit.

Visit to 3 coffee plantations and seed nursery. One to one Interviews conducted by the training team.

12:00 – 13:00 Lunch 13:00 – 16:00 Community meeting

Presentation of the information collected. Validation of the information by community members; Structuring the Learning Route visit and share responsibilities among community members; Delivery of certificates.

Evening time Travel back to Attapeu

4. ANNEX II: List of Participants

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List of participants

The training team was composed of 2 staff people from RLIP, one representative of the local government, the leader of the Organic Asparagus Producers Group (Darkhied village) and the leader of the Taliang Women Natural Dyes Group (Vang Xai village). The two group leaders of the two experiences previously systematized have been actively part of the systematization processes undertaken in March-July and September in Attapeu. Their contribution to this systematization process, as peer-to-peer trainers, has been key to transfer the experience and methodology to the community. Furthermore, the sharing of the same ethnic language (Alak) facilitated the process of understanding. Participants:

1. Mr Leeken, RLIP 2. Mr Phoutalon, Agriculture Advisor, RLIP 3. Mr Somvang, Director OPI 4. Mr Phimsa, Leader of the Asparagus Producers Group 5. Ms Aiengkham, Leader of the Taliang Natural Dyes Group

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