A coordinator with the Lao Farmers\u2019 Network, Mr Phoutthasinh Phimmachanh, raised the issue on Friday, saying that banks and other financial institutions\u00a0imposed strict borrowing procedures and charged\u00a0high-interest rates.\u00a0Many financial institutions are charging interest at 2-3 per cent per month, which farmers can\u2019t\u00a0afford, he said.\u00a0Farmers in remote areas also require a great deal of capital to grow their crops but access to finance is\u00a0limited.\u00a0\u201cThis is still the main challenge in driving agricultural production in\u00a0weather-affected areas,\u201d he said.\u00a0\u201cThis is the time to plant rice and other dry season crops, but many farmers\u00a0lack the necessary capital.\u00a0Some areas are facing water shortages, which means people have to spend a lot of money on electricity after using pumps to draw up water from rivers to irrigate their crops,\u201d Mr\u00a0Phoutthasinh said.\u00a0This is a chronic problem that farmers\u2019 groups have raised with the authorities many times, but their calls for assistance have fallen\u00a0on deaf ears.\u00a0But farmers\u2019 groups\u00a0now hope that banks and ministries are getting the\u00a0message and giving due consideration to interest rates, and providing funds to help farmers affected by severe\u00a0weather conditions.<\/p>\n
Agriculture experts believe the difficulties in accessing finance will have a long-term impact on the sector\u2019s contribution to Gross Domestic Product, which is expected to fall\u00a0to 15.37 per cent this year.\u00a0While agricultural production has opened up to private sector involvement, which has resulted in\u00a0more financing as well as advisory services, the benefits of these changes for local populations have been relatively limited in remote areas, especially in\u00a0the uplands.\u00a0The government\u2019s turning-land-into-capital development model has negatively impacted many upland communities because they have been displaced or excluded from their traditional lands to make way for large\u00a0development projects.\u00a0The number of farmers\u2019\u00a0groups has risen from 2,950 to 3,630 but the reach and effectiveness of farm advisory services and access to sources of\u00a0finance are still limited.<\/p>\n
According to a recent report on the Agriculture and Forestry Development\u00a0Plan for 2017-2020, the\u00a0sector\u2019s slice of GDP has continued to decrease following last year\u2019s\u00a016.34 per cent due to\u00a0extreme weather, locust outbreaks, and difficulty in accessing finance to\u00a0expand production.<\/p>\n