There is a generally low-level of internal migration in Laos. The 2015 Census indicated that only 7.4 percent of the Lao population could be considered internal migrants . Those that did migrate tended to be young and primarily rural. Despite a degree of migration to urban areas for employment or education, this involved only 40 percent of the migrant population;
most migrations were from one rural area to another.
Of any individual region, Vientiane Capital had the largest net migration62, while the northern provinces showed a negative net migration. This was most pronounced in Huaphan, where out-migrants exceeded in-migrants by more than 21,000 individuals, followed (in descending order) by Luang Prabang, Xiengkouhang and Phongsaly.
Figures on international migration are more difficult.
While there is some amount of migration to near-neighbors China and Vietnam, the largest recipient of Lao migrants, particularly rural youth, is Thailand. In 2016, it was estimated that around 300,000 Lao individuals were working in Thailand, most of whom (71 percent) were from rural areas (IOM, 2016). The outmigration of young people from rural communities is significant for several reasons, with implications for agricultural labour. Nearly 42 percent of those working in Thailand owned farm land in Laos, while a further 8 percent had previously worked as farm laborers prior to emigration. In some cases, remittances from migrant labourers contribute substantially to household income in their villages of origin. The large-scale movement of Lao rural youth to Thailand is symptomatic of the struggle to provide them with adequate opportunities due to the lack of employment and land availability in rural areas.
Socio-economic context
Laos has achieved rapid GDP growth over the past decade, averaging 7.7 percent per year between 2007 and 2016 (World Bank, 2017). While the majority of its population remains involved in agriculture, this development is increasingly attributable to the non-agricultural sectors. While commercialization, investment projects and the expansion of local and regional markets have fostered some modest growth in the agricultural sector, its relative contribution to GDP shrank by nearly 16 percent between 2007 and 2016, increasingly replaced by industry and services, whose proportion of GDP grew by 4 percent and 11 percent, respectively (Figure 27).
While this shift is due to a number of factors outside of agriculture—including rapid increases in FDI-related development in the non-agricultural sectors and, especially, a growing service industry stimulated by international tourism—smallholder agricultural production itself has shown only modest progress.
Rural farmers struggle to compete with regional neighbors in terms of production volume and quality, limited by a general lack of investment capital as well as land scarcity—both in absolute terms (given its mountainous topography) and due to competition for land resulting from FDI-based investments and forest conservation policies.
Socio-economic dynamics of the agricultural sector have arguably been dominated over the past two decades by two inter-related features: large-scale land investments and the burgeoning trade in land-intensive commodities. Given its abundance of natural resources, general lack of internal investment
62 In-migrants minus out-migrants Data Source: Epprecht et al.
2018b
capital and critical limitations of domestic markets, Laos’s impressive economic growth has been achieved through policies that leverage its natural resources to attract foreign investment, global and regional integration and market expansion. Alongside this growth, however, is the increasingly apparent reality that the costs of this strategy have been borne largely by rural and agricultural communities, while the benefits of growth have accrued disproportionately to the non-rural and non-agricultural segments of society. Though natural resource exploitation has been foundational to economic growth in Lao PDR since its independence (perhaps especially since the economic reforms of 1986), the pace and scale of exploitation over the past decade have been dramatic.
In 2006, GoL policies related to TLIC set the stage for rapid, large-scale land investments that began in earnest during the 2008 global food and energy crisis.
Today, these investments involve more than 1 million ha of land concessions to foreign and domestic firms (see below).
These land investments have played a formative role in the concurrent and equally rapid growth in the export of land-intensive commodities63. Between 2007 and 2016, Laos’s exports of land-intensive commodities to its three principal export partners (Thailand, China and Vietnam) grew three-fold, from US$ 726 million to 2.8 billion, with an annual average growth of nearly 19 percent. While Thailand was the main recipient of these exports, Chinese imports have seen the most impressive growth over that decade, increasing more than 10-fold with an average annual growth of nearly 44 percent.
The rapid expansion of land investments, trade and rural agrarian change intersect with key changes related to land use and land cover, with direct implications for agricultural communities.
Alongside the expansion of land investments has been the rise of contract farming in recent years. While available systematic data in 2011 indicated that only 14 percent of agricultural households are engaged in contract farming, regional variations are important.
In Huaphan, for example, more than half of all households are engaged in contract farming while Luang Namtha and Xayabouri had similar, but lower rates, due to cross-border firms from China and Thailand (Epprecht et al. 2018a).
The rise in FDI in land concessions, export-oriented trade, and contract farming reflect a general trend toward the commercialization of Lao agriculture, a dominant feature of change in recent decades.
Between 1999 and 2011, the proportion of farmers engaged primarily in the production of agricultural commodities for trade rose steeply, from around 6 percent to more than 33 percent. As with contract farming, and related to it, this pattern has been more pronounced in northern provinces such as Xayabouri (involving 55 percent of households) and Luang Prabang (45 percent) as well as in central provinces such as Savannakhet and, in the south, Champasak.
While updated data is lacking, evidence suggests that this trend has largely accelerated in recent years with increasing investments in the agricultural sector and the expansion of large, multinational corporations such as the Thai-based Charoen Pokphand (CP) Group.
While the commercialization of agriculture is a cornerstone in MAF’s Strategy to 2025 and brings some key benefits to rural communities, there are risks as well, pertaining both to food security (as communities re-orient their agricultural production toward market commodities, MAF 2013- RVS) and to rural indebtedness (as farmers borrow money for agricultural inputs to improve yields). Population growth, land investments and the expansion of commercial agriculture also entail key impacts on land use and land cover in Lao PDR, to which we now turn.
63 Wood, agricultural products, rubber latex, and minerals
©Thomas Calame
State of Land in the Mekong Region State of Land in Lao PDR 93
State of Land in Lao PDR
Figure 27: GDP structure by sector in Lao PDR (2006-2016)
Thatheva Saphangthong,
Deputy-Director General, Department of Agricultural Land Management, Ministry of Agriculture and Forestry, Lao PDR
Perspectives: Policy coherence
National development planning and strategies have struggled to achieve credibility at the local level and to provide an adequate framework for development. This is due to several factors, but a critical issue is the basic disagreement between these various plans and strategies and a lack of consistency in how they address fundamental, strategic issues affecting local areas. There is an urgent need for closer coordination between government agencies, and between the central level and local stakeholders, to ensure a clear framework and direction for development that is coordinated and responsive to local realities and needs.
Data Source:
World Bank Database
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State of Land in the Mekong Region State of Land in Lao PDR 95
State of Land in Lao PDR
The land resource base: Forests and agriculture in tension
Land use land cover
Forests comprise the largest individual share of Laos’s territory, at around 43.5 percent (DoF, 2018, and Map 34). Lao PDR’s forest cover steadily declined between 1982 and 2010 at an average annual rate of 0.3 percent, with even higher deforestation rates in provinces adjacent to the Vietnam border (Lestrelin et al., 2013). In 2010, the GoL estimated forest cover to be around 9.5 million ha, or 40.3 percent of total land area. From 2010 to 2015, official figures indicate an increase in forest area, though these increases were largely attributable to the expansion of commercial tree plantations, especially rubber (DoF 2018), with a small share arguably contributed by the regrowth of shifting cultivation fallows.
Despite these modest advances, the GoL (2010) estimates that due to the expansion of commercial plantations and other land-based investments, the country will continue to lose around 67,000 ha of natural forests per year through 2020. In addition to other ecosystem service values, including watershed protection that supports national hydropower goals, forests provide key resources for local communities.
Due primarily to the constraints imposed by Laos’s mountainous topographical character, agricultural land area is low, comprising approximately 7.9 percent of total land area. While FAO data indicates that agricultural land area increased by around 39 percent between 1997 and 2016 (Figure 28), comparison between the 1999 and 2011 agricultural census data suggests a much more rapid increase in agricultural land of 59 percent, from less than 1 million hectares up to 1.49 million ha in 2011 (Epprecht et al. 2018a).
Figure 28: Land use and land cover change in Lao PDR (1997-2016) Source: FAOSTAT 2018
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© Jack Kurtz
Map 34: Land use and land cover in Lao PDR