ADB supports Laos’ response to rising food costs

The Asian Development Bank (ADB) has signed a US$10 million grant agreement with the government that will strengthen the country’s response to ongoing food security issues.

The poorest families in Laos are suffering from soaring food prices.

ADB has helped the Ministry of Agriculture and Forestry to secure US$10 million in grant financing from the Global Agriculture and Food Security Programme.
The ADB said the funds would be used to help bring down the cost of essential farm inputs such as pesticides, fertiliser and machinery, and also make them more widely available.
“The grant will also support efforts to diversify the country’s dietary preferences by encouraging fish as a regular food staple and source of protein and helping people to establish home gardens. The grant will also be used to clear land of unexploded ordnance so that more land is available to grow crops,” the Bank stated.
“Rising food prices have affected households’ welfare and purchasing power, with many families coping by eating less,” said ADB Country Director for Laos, Sonomi Tanaka.
“This grant financing provides vital support to address food security and nutrition challenges. It will help local communities respond to inflationary pressures through the provision of grants to farmers and the extension of services that promote climate-resilient farming practices.”
High inflation has continued to curb household spending in Laos throughout 2023, with consumer price inflation averaging 32 percent over the first 11 months of the year.
Food price inflation averaged 40 percent over the same period due to the higher price of imported food caused by the depreciation of the kip and higher production costs due to the use of more expensive agricultural inputs by Lao farmers.
The government is attempting to stabilise currency exchange rates and boost domestic production in an attempt to reduce the amount of goods that are imported by replacing them with locally-made items.
In addition, the government has set an ambitious target to reduce the average rate of inflation to 9 percent over the course of 2024.
The US$10 million grant will also provide additional financing for the ongoing Sustainable Rural Infrastructure and Watershed Management Sector Project.
This project aims to boost rural incomes by diversifying farm outputs to include dry season high value crops and improving rice yields in the rainy season by investing in irrigation in the northern provinces of Huaphan, Luang Prabang, Xayaboury and Xieng Khuang.
The project also protects watersheds through ecological services and promotes community nutrition through awareness-raising activities.

By Times Reporters
 (Latest Update December 18, 2023)