Inside Laos: Coffee and Development
Bordered by Myanmar, China, Cambodia and Vietnam, the Lao People's Democratic Republic lies right in the heart of Southeast Asia. Known for its beautiful temples, waterfalls, rivers and caves, many have traveled far and wide to catch a glimpse of Laos’ pristine beauty.
The Golden Buddha sits at the edge of the hill, watching over the Mekong River and the communities that depend on it. An unspoken tranquility illuminates the Southern city of Pakse, adding a rhythmic calm to the everyday hustle and bustle. Majority of the population subscribe to Theravada Buddhism here.
While only 4% of the land in Laos presents arable conditions, agriculture employs a whopping ~80% of the country’s 6.8 million-strong population. Majority of these farmers participate in subsistence farming, with only 6% of farmers selling their total output.
Coffee is one of the top five export earners for Laos. Enriched with top quality soil after a volcanic eruption millions of years ago, the Bolaven Plateau at Champasak Province plays host to majority of the country’s coffee production. The coffee export industry offers a strong strategy for the country’s economic development because of strong international demand for high-quality coffee. This demand potentially translates into higher prices and higher income for coffee farmers.
To fully unleash the potential of Laos’ coffee production capability, farmers require greater technical and financial support. Farmers face regular agricultural challenges, such as pests and diseases, as well as market and price fluctuations. To continuously incentivize socially and environmentally friendly practices, responsible farmers must be economically rewarded.
Farmers typically encourage their children to attend school, and perceive education as the gateway out of farming. "Because the kids want to go to school, and they want to work (somewhere else), they do not want to work in the farm. For their future, they need to go to school," a farmer shared.
Can farming someday become a viable option for today's youth?
Key questions that Laos needs to explore include:
- How can Laos play a role in enabling the world to achieve Sustainable Development Goal 12 of ensuring sustainable consumption and production patterns?
- What measures can Laos take to strategically pursue economic development through sustainable agriculture?
- How can small and medium-scale farmers attract higher prices and secure better yields?
- What interventions must be taken to simultaneously protect the environment?
- How can the country’s agricultural sector attract young talent to drive food security?
- What is the role of Impact Enterprises and responsible corporations?
We believe that businesses can create change in powerful ways. As part of the Shujog ACTS program, an innovative technical assistance program that enables impact enterprises to raise growth capital and scale their impact, IIX and Shujog provide capacity building services to McCullagh Laos, a coffee supplier and exporter that aims to create social, economic and environmental benefit for village communities and farmers in Laos.
Most notably, McCullagh Laos seeks to encourage adoption of the Rainforest Alliance certification amongst its farming partners. The Rainforest Alliance certification mandates the achievement of a series of standards aimed at conserving biodiversity and improving livelihoods.
Commit to sustainable development with us and join the movement on impact investing. If you know of an Impact Enterprise that could use support to grow their impact, let us know at info@shujog.org.
Macey Tan
Research and Programs
Originally published at impactquarterly.asiaiix.com.
This post is a part of the March 2016 series on Inclusive Business and the Sustainable Development Goals. View the whole series for more examples, tools and insights to help you understand what the SDGs mean for business.