Field trips to a farm and a city market in Luang Prabang, Laos
This post was co-authored by Dr. Isaac Lyne, Dr. Rida Akzar, Dr. Salika Onsy, Dr. Daovy Kongmanila, Mr. Khamtou Kanyavong and Dr. Erin Taylor.
As part of our workshop in Laos, the DiFF Team undertook a field study tour to a farm in Xienglom village in Luang Prabang Province on Wednesday 25 January 2023.
In Xienglong, cooperative farmers' groups, and supported demonstration households, have been benefitting from a China-aided program to develop characteristic industries such as cattle farming, vegetable cultivation, weaving and rural tourism.
Before our visit to the farm, we met with the village authorities who informed us about the three-year pilot programme, and in particular the horticulture project benefiting nearly 80 families and more than 840 villagers in total. The project involves setting up both green housing and outside farming, which is attracting wholesale sellers coming from community markets in Luang Prabang. Some produce is also sent to neighbouring provinces.
Meeting in Xienglong
One of the main vegetables under cultivation is long eggplant, which has proven to be advantageous because it grows all year round in the Luang Prabang climate, yielding four crops per year. The abundance was evident when we saw fresh long eggplant provided as food for raising rabbits.
Broccoli has also proven to be a successful product. We were informed by a farmer that demand is rising as the villages have gained in reputation. They can’t meet all of the demand, but prices have been rising in what seems to be a sellers’ market: wholesalers are visiting together with employees to pick the produce from the field.
The land available to families varies, although all the village’s residents fit the definition of a smallholder household, farming on between 1 to 4 hectares. We were informed that the men and women help each other in the farm labour, although there is some separation of tasks: for instance, men prepare the soil (which might involve machinery) while women do the planting.
The team found that it is normally women who are paying for the produce and men who pick and load it onto their trucks. While some of the female traders are equipped to make digital payments, the use of mobile money for farming is still limited.
Farm produce in Xienglom village, Luang Prabang (Pictures: Isaac Lyne)
For receiving payments, cash is preferred because it means the farmer does not have to go into Luang Prabang city to make bank withdrawals and everything he acquires locally is also paid for in cash. Also, farmers are dealing with the Village Bank for small amounts of credit at low interest for farming inputs, which still operates using cash at this time.
Inputs including seed are bought mainly from a large market in the city. A farmer told us that he has a QR code on his phone but that he (and other farmers, to his knowledge) still use cash to buy these items. However, the farmer, who owns a smartphone, informed us that he does use digital transfers by mobile money (the U-Money service in Laos) for sending money to or receiving money from family members outside of the village, making use of a local agent to transfer funds or cash out the payment that is sent to his mobile phone.
Project team visiting farm in Xienglom village, Luang Prabang (Picture: Rida Akzar)
Phosy Market in Luang Prabang
In addition to the farm visit, the project team also had the opportunity to visit a local wet market, Phosy Market in Luang Prabang, where local people go to buy fresh produce such as vegetables, fruits, and meats, and also some locally processed foods, as well as toiletries and household items. The idea of visiting the market was to observe market activities, especially the use of mobile money.
The project team observed the use of mobile money in the market both by sellers and buyers, with QR codes for digital payments from various banks displayed on a number of stalls. Among the sellers, it was observed that some of them share access to a QR code depending on the circumstances: for instance, a female vegetable seller who almost always receives payment in cash because the amounts are small, can sometimes receive a digital payment from a customer by calling on a woman at the neighbouring stall who sells meat dealing with larger transactions, and has the OnePay App (operated by BCEL) on her phone. The neighbouring meat trader will receive the payment to her bank account using OnePay and give the cash amount back to the vegetable seller.
We also observed an unexpected factor driving adoption, which is that the provider of services might employ the digital finance technology as a marketing tool. A female vegetable vendor had the ACLEDA bank payment QR code, and ACLEDA logo on her basket. ACLEDA began as a Cambodia microfinance institution, before becoming a bank that now also operates in Laos. The vendor’s stall is the first that comes into view when entering the market through the gate on the left side. She had the payment App because ACLEDA had asked her to display it. She had only had an account with them for a few days. This was her first day displaying the code. She had received three payments and was quite excited by it.
During this visit, Laos team members led the use of questionnaires to gather some data about digital payment use on one hand among vendors (led by Dr Salika Onsy) and on the other with customers (led by Dr Daovy Kongmanila and Mr Khamtou Kanyavong). Out of ten merchants, seven had a smartphone and used it to transfer money using BCEL’s OnePay bank (QR code). We found, however, that cash is the main way to pay, especially for relatively small amounts: this is for both convenience and partly on account of fees charged to customers once their transfers exceed 10 million kip (around $600 USD) within a month.
Vendor produce and QR Codes in Phosy Marker (Pictures by Rida Azkar)
We found that the fact that people often need to pay for things in cash (e.g., when buying in the wholesale market) also makes them prefer to accept cash; they don’t want to have to go to an ATM to get cash out which can be unreliable. However, other people find it useful that they can save directly to the bank, especially because there are safety concerns with carrying cash.
Pictures from Phosy Market by Rida Akzar and Khamtou Kanyavong
We learned much about the way that market traders and customers are engaging with these new digital payments, how they find ways to navigate and access it, what some of the constraints are, including constraints in accordance with everyday lives that still revolve around cash, and also about some things that might be driving the banks to provide this service. We are keen to know much more about these issues which have given cause for thought. If you would like to contact the authors to find out more, you can email Dr. Isaac Lyne at i.lyne@westernsydney.edu.au or Dr. Rida Azkar at rida.akzar@adelaide.edu.au, or alternatively, send email to info@diffproject.org.
