Sugarcane in Savannakhet province, Lao PDR: Evidence for contract farming, land lease, and investment policies

This Case Study describes the experiences of the actors involved in sugarcane investment in Savannakhet province, Lao PDR. Sugarcane is an example of a large-scale agro-investment involving different contract arrangements and a range of actors from smallholder farmers and traders to transnational corporations. These arrangements include State land concessions, private land leases, and contract farming out-grower schemes. The study highlights the varying challenges that emerge from these investment models that companies have utilised to establish and expand their operations. Each has had a range of positive and negative outcomes for local farmers, companies and the government. The findings of this report are intended to inform policy reforms initiated by the Lao government. A range of practical recommendations are proposed for supporting contract farming and land-based investment legislation with the aim of protecting the rights of both smallholder farmers and investors, avoiding negative social and environmental consequences, and, more broadly, improving the performance of an industry that could make a much stronger contribution to rural communities, government revenues and long-term returns to the companies.

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