Can Laos Be a Rice Exporter?
By Anoulack Khammalavong, Vientiane Times, Laos
Laos has been ashamed for years to see its neighbours, Thailand and
Vietnam, which have poorer land conditions, become the world’s No.1 and
No. 2 rice exporters. And it will have to wait longer.
Thailand’s rice exporters, Mr. Vichai Sriprasert, who is also the
president of Thailand’s Riceland International Ltd., said that Laos was
not ready to be exporter since its infrastructure was not
"Your infrastructure is poor. You don’t have roads to
bring rice from farmers," he said.
Laos, a country with a
population of 4.9 million people living in a territory of 236,800 square
kilometers, is not affected by serious natural disasters. The country is
also rich in water and fertile production land. Thailand and Vietnam have
become the world’s No. 1 and No. 2 rice exporter for years, while Laos has
to import rice from them most of the time. Mr. Vichai, who has been
involved in rice business for the last two decades, said that farmers
would not have an incentive to cultivate their farms if they cannot bring
their products to the market place.
"In Laos and in Cambodia,
people have rice but they cannot bring it into the roads," Mr. Vichai
emphasized. He believes that people near the Lao-Thai border export rice
to Thailand because they find that the access to the market is much nearer
than to Laos’ main cities.
"You need investment, which is
productive, not put in Switzerland," he said, referring to
government officials putting investment funds in private bank
A businessman of the Thai Business Initiative in
Rural Development Programme, Mr. Tanothai Sookdhis, who has been
successful in bringing development into the rural areas, said that the
development in one country has to cover both the countryside and the
"The first two things that people in the countryside
will ask for are roads and electricity," he said.
" When people in the
rural areas have roads and those in the cities have cars, the latter will
take their cars to buy goods from the former."
infrastructure is the most important factor for rice production
development. However, Mr. Vichai finds that political philosophy also
plays an important role in this business since it will encourage people to
produce more or less. He raised an example that before the World War II,
Myanmar used to export millions of tonnes of rice. But it exported only
100,000 tonnes every year since the government took away the incentives
from the farmers.
"Vietnam 30 years ago also had surplus to
export rice but it stopped after the country had the new administrative
regime and it began to export again in 1989 when the policy was more open
for the market economy. It now becomes world No. 2 or No. 3," Mr. Vichai
Financial conditions also have an implication on rice
export as all of Thailand’s rice exporters this year have faced terrible
financial deficits caused by the collapse of the financial
Thailand wants to keep its share of the world market
(6 million tonnes per year) to make sure that other competitors would not
take that space. That’s why the exporters had to use all the funds they
had to buy rice from farmers to supply the markets.
most of the exporters made a mistake. Earlier this year, when the Thai
baht initially became weak, about 30 baht per one US dollar, they rushed
to change their dollars into baht hoping to get much profit. However, the
baht became weaker than they expected, 50 baht or sometimes 60 baht per
one US dollar, so the companies lost about half of their saving. Mr.
Vichai said that when the banks collapsed, they did not have enough money
for the rice exporters, and the latter had to buy the rice from the rice
mills by providing higher prices and promising to pay them sometime later.
The rice mill owners also used the same techniques to buy rice from
farmers. This caused the debt to increase more and more.
" I have
exported rice for 20 years and this year is the worst year," he
When asked if Laos can become a rice exporter since there
are still many problems it has to solve, Mr. Vichai said that Laos could
become a big exporter if the government was able to invest in
infrastructure. However, he believed that the most governments would not
want to be responsible for this field.
Mr. Vichai also said
that Laos is now at a low level of development, so it has the potential to
go to a higher level but it needs to get good lessons from experienced
"You can look at Thailand, you can get the lead
from Thailand and you can tell your farmers to do the same," Mr. Vichai