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Article

Perceptions of the Institutional and Support Environment amongst Young Agricultural Entrepreneurs in Laos

by
Manithaythip Thephavanh
1,2,*,
Joshua Neil Monty Philp
1,
Ian Nuberg
1,
Matthew Denton
1 and
Silva Larson
3
1
School of Agriculture, Food and Wine, The University of Adelaide, Urrbrae, SA 5064, Australia
2
National Agriculture and Forestry Research Institute, Vientiane P.O. Box 7170, Laos
3
School of Science, Technology and Engineering, University of the Sunshine Coast, Sippy Downs, QLD 4556, Australia
*
Author to whom correspondence should be addressed.
Sustainability 2023, 15(5), 4219; https://doi.org/10.3390/su15054219
Submission received: 13 January 2023 / Revised: 18 February 2023 / Accepted: 22 February 2023 / Published: 26 February 2023
Browse Figure
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Abstract

:
Efforts to achieve inclusive and sustainable agricultural-sector growth in developing economies will benefit from agricultural entrepreneurship (agripreneurship) by young farmers. However, challenges that hinder transition from subsistence to commercial agriculture remain. A better understanding of enablers and constraints that young farmers experience can facilitate the development of an enabling environment for sustainably transitioning from subsistence into commercial agriculture. We interviewed 74 young agricultural entrepreneurs (agripreneurs) in Laos, a country with a young and highly rural population, to explore their perceptions of institutions and support functions that enable or limit agripreneurship. Respondents reported that institutions and support functions have generally improved to make agripreneurship easier than before, with infrastructure, logistics, and new platforms for information sharing, banking, marketing, and delivery identified as specific improvements. However, agripreneurs identified weaknesses in the nature, scope, and quality of agricultural information and extension services that limit their performance; difficulties in accessing loans with favorable conditions, which discourages investment; opaque and costly payments and red tape processes that frustrate business establishment, operations, and regulatory compliance; and a lack of targeted policy actions towards enabling youth agripreneurship, which leaves youth feeling unsupported. Improvements in infrastructure, promotion of agri-careers, and more transparency of taxation, registration, and administration fees/systems are recommended.

1. Introduction

Agricultural entrepreneurship (agripreneurship) by young farmers is essential to the sustained, inclusive, and sustainable economic growth of developing agrarian economies, with great potential to provide full and productive employment and decent work [1]. Approximately 87% of the world’s population of young people aged 15 to 24 years live in developing countries, with the majority living in rural areas in sub-Saharan Africa and South and South East Asia [2]. Employment and entrepreneurial opportunities for youth living in economically stagnant rural areas of developing countries remain limited, poorly remunerated, and of poor quality [3]. Rural youth continue to face challenges related to unemployment, underemployment, and poverty [4]. Accordingly, the UN has raised the need to increase opportunity for employment globally, especially for young people, through Sustainable Development Goals [4].
The agricultural sector’s potential to serve as a meaningful source of livelihood opportunities for rural youth is internationally acknowledged in both literature and practice, and agripreneurship has been hailed as a powerful tool for achieving the socio-economic integration of young people and the key to avoiding rural depopulation [5,6,7,8,9]. However, scientific literature on agripreneurship has largely focused on developed countries [10], whereas developing countries have been neglected by comparison [11]. A better understanding of the constraints, opportunities, and support that young farmers have in developing regions can facilitate the development of an enabling environment for transitioning from subsistence into commercial agriculture [12]. Specifically, research exploring young farmers’ perspectives of the institutions and support functions that enable or limit agripreneurship would contribute significantly to the literature on agripreneurship in developing countries [11].
Lao Peoples Democratic Republic (Laos) has the youngest population in Asia, with a median age of 23 [13]. Despite being a rapidly urbanizing country, 64% of the population lives in rural areas [14]. Similar to other developing countries, Lao youth are facing limited employment opportunities, limited education in rural areas, a lack of voice in decision-making, and a mismatch between youth workforce skills and the workforce market demand [13,15]. This lack of choices traps youth in a poverty cycle, as they remain in non-remunerated or subsistence-level work [15]. Consequently, approximately half of the young Laotians who practice agriculture are non-wage family workers [16]. In response, the Government of Laos identified the development of the agricultural sector as the “Major Battlefield”, prioritizing the shift from subsistence farming into commercial or market-oriented economy and development of agricultural market systems [17]. However, challenges related to support functions, and institutional, policy, and social challenges, still hinder this transformation [12,18,19], and the overall development of the agricultural sector in Laos is considered to be below its potential [17,20].
In this paper, we explore the perspectives of 74 practicing agripreneurs regarding the role the institutional and support environment in Laos plays in enabling their agripreneurship. In Section 2, we conceptualize the agriculture market systems in which they operate as being supported by institutions and support functions that together form an enabling (or otherwise) environment within which agriculture production takes place. We explore the role of both formal institutions, such as political and legislative systems, and informal institutions, such as norms, values, and attitudes, in addition to several support services reported in the literature, namely infrastructure, finance, and information. Using content analysis to identify negative and positive influences and processes, in Section 3 we report on obstacles perceived by participants, as well as their suggestions and recommendations for improvements. By relating these perceptions to the literature on the institutions and supporting functions that make up the enabling environment, in Section 4 we propose recommendations which may foster and support agripreneurship in Laos and other developing countries.

2. Materials and Methods

2.1. Conceptual Approach

Our conceptual approach is guided by the Theory of Planned Behaviour, a model applied to understand and predict individual behaviors [21]. According to the Theory of Planned Behaviour, there are three independent determinants underlying an individual’s intention to perform a behavior that are the result of the individual’s beliefs: attitudes towards the behavior, subjective norms with respect to the behavior, and perceived control over the behavior [22]. Despite the uncertainty of the exact nature of the relationships between these three main factors, the accuracy in prediction of human behavioral intentions from these three factors is well-founded and broadly accepted [22,23,24]. In this paper, we specifically explore young agripreneurs’ control beliefs, that is, perceptions of the presence of factors facilitating and preventing the performance of a certain behavior (agripreneurship). Furthermore, the concept of control beliefs is closely linked to “perceived feasibility” as described in the Entrepreneurial Event Model [25,26]. In this model [27], perceived feasibility refers to individual self-evaluation of many aspects that together could determine whether an individual feels capable of performing a particular entrepreneurial career or not. This evaluation may include the perception of their ability to access particular resources for the purpose of starting or running their entrepreneurial career, and the assessment of their related knowledge, education, and context [28].
The aim of the research presented in this paper is to explore control beliefs or perceived feasibility in more detail. Our approach to identify influential factors was guided by the market system framework approach described by the International Labor Organization [29], as this framework was previously used in the literature to explore perceptions of market system participants in relation to the presence of facilitating and preventing factors [30]. In the market systems framework, potential facilitating and preventing factors are organized around the core production system of inputs and outputs (and the exchange of goods and services between the providers on the supply side and consumers on demand side); this is embedded in the enabling environment consisting of supporting functions and institutions. Supporting functions are defined as those that inform, support, and shape the market system, such as information, skills, infrastructure (public and private physical structures such as roads, railways, bridges, tunnels, water supply, sewers, electrical grids, and telecommunications), finance, and access to markets [29] (p. 17). We also included supporting functions identified in the literature from developing countries, specifically, education, access to information and communication technology (ICT), and exposure to agricultural extension agents [31]. Institutions included in the International Labor Organization framework [29] (p. 17) are the legislative and regulatory environment including policies, voluntary standards, laws and informal rules, and social norms. As per [32], in this paper we define “institutions” as the rules and norms that individuals follow in their daily lives, and formal and informal constraints and their enforcement characteristics. We thus include both formal institutions, such as political and legislative systems, and informal institutions, such as norms, values, and attitudes. Both types of institutions have been reported in the literature as facilitating or constraining entrepreneurial activities in the agricultural sector, depending on their characteristics [33,34]. An enabling environment for agripreneurship requires that formal rules are aligned with the informal norms that individuals follow, favor entrepreneurial activity, and are effectively enforced in an environment that operates under a rule of law [35].
Following the literature review, we conducted a pilot study eliciting perceptions of Lao youth about the enabling environment for agripreneurial careers. The pilot study was conducted in June 2019 as an online survey with open-ended questions. Nineteen young people from or living in rural areas of Laos, including high school and undergraduate students, young agripreneurs, business owners, and early- and mid-career professionals employed in private, government, and international organizations, participated. The pilot study reinforced the influence of certain institutions and supporting functions on agripreneurial capacity with a strong emphasis on the supporting functions. We thus arrived at our final conceptualization of the relevant institutions and supporting functions of the Lao agripreneurial market system (Figure 1), which was used to shape the questionnaire for our study.

2.2. Study Participants

A total of 74 young agripreneurs working in small- and medium-scale operations participated in this research (Table 1). Small- and medium-scale farms are defined in Laos as farms between 0.5 and 3 hectares [36], while youth is defined as all people aged between 15 and 35 [15]. Although the International Labor Organization [37] defines youth as people under the age of 25, it is not uncommon for youth policies in South East Asia to extend the limit upwards (as an example, the National Youth Development Policy of Malaysia defines youth as people aged 15 to 40 [38]). All participants in this study were below 40 years of age and 51.4% were 30 or younger (Table 1). Our study extended the age of respondents to 40 if those respondents were representatives of the younger members who were unavailable or were recommended for participation by other young respondents as their mentors or role models. Sampling was initiated through the Lao Farmers Network (LFN). The LFN is the biggest network of commercial farmer groups and organizations in Laos, comprising more than 4000 members in 58 famers’ organizations in 13 provinces throughout Laos [39]. It was established in 2014 in order to strengthen small holders’ cooperation, promote peer-to-peer learning, information sharing, and policy dialogues, and support farmers with farming techniques, processing of agricultural products, and marketing [39]. Sampling snowballed outside of the LFN to encompass young agripreneurs not belonging to any farmers’ organization but who were recommended for participation by either agripreneurs, communities, or organizations. More women (67.6%) than men participated, and a majority of the respondents were married (67.6%) and educated (Table 1).
Relatively new agripreneurs with less than 1 year of experience were 16.2% of participants, and 36.5% had been in agricultural business for between 2 and 3 years, while 23% had been operating as agripreneurs for more than 10 years. The most represented agricultural sector was coffee production, on its own or in combination with other crops, followed by vegetables and livestock production (Table 1). Respondents were interviewed across four provinces: Vientiane Capital (36.5% of respondents) and Vientiane Province (18.9%) in central Laos, and Champasak (31.1%) and Salavan (13.5%) provinces in southern Laos.

2.3. Data Collection and Analysis

Participants were interviewed face-to-face, using a semi-structured approach [40]. We asked participants to evaluate support functions and institutional arrangements, provided by either the government (public sphere), private companies, or (international) non-governmental organizations ((I)NGOs) and farmers groups/organizations. As per our conceptual model (Figure 1), discussions on support functions included access to agricultural information and extension services, financial support, and infrastructure. In terms of institutions, we first explored informal rules, norms, and values—specifically, positive and negative views that participants perceive society places on agripreneurship. Formal institutional arrangements discussed included taxation and registration, policy, and research and development.
Data were translated from Lao into English by an experienced agricultural researcher and entered into a spreadsheet database. Then, three content analyses [41] were performed: interactions with the embedded environment that were enabling; interactions with the embedded environment that were hindering; and participants’ suggestions and recommendations for improvements. For each content analysis, young agripreneurs’ responses were categorized in themes. Similar responses, based on words or meanings, were placed in the same category. The remaining content was placed as new lists, and the process was repeated. Reporting of the findings in the Results section followed logical chain data synthesis.

3. Results

The findings presented in the sections below are organized as per our conceptual model to present data gathered on agricultural information and extension services, financial support, infrastructure, informal rules and values, taxation and registration, agricultural policy, and research and development. Each of these domains has been discussed as an enabling environment, before young agripreneurs identified specific aspects as barriers potentially hindering their success. Our findings are summarized in Table 2 and are presented as percentages of respondents mentioning a specific theme. The data in Table 2 are disaggregated by gender and presented as percentages of all female and all male respondents mentioning a specific theme. We note in Table 2 that some themes were mentioned by a higher percentage of female participants, while other have been mentioned by proportionally more males than females. However, given the size of our sample, more evidence would be needed to form the basis of recommendations related to gender.

3.1. Agricultural Information and Extension Services

As presented in Table 2, the enabling information and extension services most frequently highlighted by young agripreneurs were improvements to technical advice, guidance, and training (44.6%) that pertained variously to horticulture, commercial production, pest and disease prevention and management, post-harvest management, production planning, agribusiness, product promotion, agro-tourism, new techniques, animal raising, fertilizer application, chemical use, non-chemical use, and Good Agricultural Practice. Extension staff, organizations, and projects were reported as visiting farmers in their villages to share information and give advice (33.8%). Platforms on social media, TV and radio programs, and community speakers were used for sharing and exchanging agricultural information (23%). Young agripreneurs, both in groups and as non-group members, also reported getting information from their peers and farmer groups/organizations (31.1%).
Young agripreneurs identified three salient limitations to agricultural information and extension services that constrain commercial agriculture or young agripreneurship in Laos: inadequate performance of extension staff (43.2%); lack of coordination and consumer education (33.8%); and limited nature (28.4%) and scope (36.5% technical and 18.9% non-technical) of information provided (Table 2). Regarding the nature of information provided, agripreneurs suggested more practical hands-on activities, follow up, and monitoring. Agripreneurs also recommended more visualization and innovation such as the use of posters and videos, particularly when working with ethnic minorities. In terms of scope, young agripreneurs identified additional technical and non-technical areas that require more support. Technical areas suggested included the following: non-typical crops that are newly introduced to Laos; effective pest management; disease control and management; compost and fertilizer making; fertilizer application; soil improvement; climate change adaptation; production of vegetables in the rainy season; processing; productivity improvement; and product quality. Limitations linked to information about agricultural machinery were also discussed, including concerns about the risk of injury when using machinery and technology without appropriate training. A lack of knowledge about farm machines also increases the risk of agripreneurs buying a poor-quality machine from dishonest suppliers. Non-technical areas discussed were product development, branding, and marketing. However, most discussions were on the need for entrepreneurial training, business planning, and financial literacy. It was noted that the educational system in Laos does not provide any such training; thus, although young agripreneurs might be familiar with agriculture, they lack market system skills.
Agripreneurs suggested improvements in performance of extension staff (43.2%, Table 2). Visits to villages should be more frequent and extended to more villages that currently do not get any support. Participants reported that extension staff sometimes lacked accountability in performing their tasks, lacked honesty in keeping commitments, and paid little attention to the work of agripreneurs. In addition, they reported extension service providers’ lack of suitable knowledge, leadership skills, and an understanding of their roles, as well as poor delivery and communication. The need for “incentives” and “motivation” to “inspire” the extension staff was also noted.
A lack of coordination amongst different government offices, (I)NGOs, projects, and other agricultural services stakeholders was also noted as a major obstacle by over one third of respondents (Table 2). They suggested that service delivery, including distribution of information such as weather forecasting, price fluctuation information, and disease outbreaks, should be faster. In addition, the information should be accurate, clear, up to date, workable, and easy to understand. In particular, there were discussions on the need for consumer education about good agricultural practice and organic production. The promotion of niche markets like organic agriculture was discussed frequently, as well as the need for environmental protection, including water management and tree planting in suitable land areas, as well as the need for coordinated assistance with branding and advertising.

3.2. Financial Support

The improved availability of financial providers, including the Agricultural Promotion Bank, was reported by around 42% of agripreneurs as an enabling aspect (Table 2). However, high interest rates with short loan periods (33.8% of respondents) and extensive “red tape” (20.3%) remain obstacles (Table 2). This discourages some agripreneurs from applying for a loan from the financial providers as they are afraid they will end up with debt. Agripreneurs, especially small-scale ones (10.8%), reported a preference for borrowing from the farmers group or village’s fund. The interest is lower, and they do not need to have an asset guarantee. However, farmer groups and the village funds have a limited amount of funds available for loaning, and if some members borrow and do not return, others cannot access that fund. As a result of the inaccessibility of credit, some agripreneurs reported the need to turn to “informal” loans, with extremely high interest rates. Although often creating hardship and suffering, the practice of informal loaning is maintained as there are few other choices. Non-group agripreneurs also commented on the lack of transparency with respect to grant funds (Table 2).
Proposed solutions to problems with financial services included the need for general and specific financial training, including training in the process of accessing finance, writing the application/business proposals, and the consequences of loan defaulting (mentioned by 17.6% of respondents, Table 2). Increased access to, awareness of, and variety of providers of small and medium enterprise loans were discussed. Agripreneurs also raised concerns regarding the failure of their business when there is some emergency such as a natural disaster (9.5% of respondents, Table 2). Therefore, comprehensive emergency/risk insurance is needed for the compensation of production and financial losses in such cases.

3.3. Infrastructure

In general, as reported by more than 40% of the respondents, infrastructure in Laos has improved over time (Table 2). Agripreneurs reported improved access to roads, rail, irrigation, electricity, and private and shared vehicles. Improved telephony and IT infrastructure is allowing not only for new platforms and services, such as online delivery and access to logistics companies, but also for financial services such as banking services and money transfers. Improved road and rail linkages with other countries in the region raise the opportunity to transport domestic agricultural products to other countries, and several agripreneurs were particularly interested in exports. They also reported schools and hospitals/clinics as components necessary for their well-being and quality of life.
Despite these positive developments, agripreneurs also reported limitations of the infrastructure in Laos (Table 2), mostly regarding poor road conditions (52.7%), lack of logistics, storage, hospitals, schools, and other aspects (9.5%), insufficient irrigation for agricultural production (5.4%), and expensive and unreliable electricity (4.1%). Long-distance travel still requires a long time, affecting the quality of agricultural products. In the worst cases, especially with a lack of proper storage, agripreneurs have to dump their products. It was also noted that the condition of the roads are getting worse during rainy seasons and that roads often flood, preventing agripreneurs from reaching markets and selling produce, and preventing traders from coming to buy produce at the farm gates/communities. Electricity was reported as being very expensive and sometimes unreliable (Table 2). There was also a desire for irrigation systems to be improved and better maintained. Another concern discussed by agripreneurs located along the main river was a recently built upstream hydroelectric dam (Table 2). They reported that the dam resulted in difficulty in accessing water for agriculture and household consumption, as well as a reduced availability of food sources (i.e., fish). Some reported that the dam created changes in the water flow, which made the river unsuitable for their traditional mode of transportation.

3.4. Informal Rules and Attitudes

No informal rules or norms that would prevent certain population segments (i.e., ethnic minorities, women) from achieving agripreneurial careers were noted. Discussion on this topic mainly pertained to societal views and the perception of agripreneurship as a suitable career for young people. Respondents reported experiences with, and the perceptions of, both positive and negative norms towards agripreneurship in Lao society.
The dominant positive views were related to the economic benefits of agripreneurship. More than a quarter of the respondents perceived that agripreneurship can create employment and income, with high market demand for agricultural products both domestically and for export, and is thus considered a good job (Table 2). Nearly 18% of young agripreneurs reported emotional benefits to being in a career as small- and medium-scale agripreneurs. The benefits included feeling proud and loving the job. Some saw themselves as respected, in an important sector contributing income for their communities, districts, and provinces, and some are even seen as a role model for youth. Approximately 16% of participants reported that there is a high demand and growth potential for niche markets of agricultural products in Laos, such as organic, natural, and native species, due to the news and health concerns of consumers. The next most prevalent positive view was related to the extrinsic benefits of agripreneurship (14.9%). For example, it is perceived as an honest job, which allows agripreneurs to manage their own time, continue their Lao ancestors’ family tradition, be food self-sufficient, and select diverse varieties of crops and animals to invest in. They also stated that agriculture is regarded as the “Backbone of the nation”, with farmers contributing to national food security and incomes. As a result, more people see value in this career. In addition, the career does not require a large initial investment, and there are modern technologies available to assist with the job (Table 2).
The negative perceptions of agriculture that might be present in Lao society, as reported by young agripreneurs (Table 2), mainly included negative perceptions of farm conditions/tasks such as a hard work, being exposed to the sun, smelling bad and being dirty, and requiring labor and capital (23%). Additionally, it might be perceived as a risky investment because agricultural products are perceived by some as being difficult to sell, not achieving a good price, having a short shelf-life, and exposed to the risk of disease and natural disasters. As a result, returns and income were perceived as being insecure (16.2%). The young agripreneurs also believed agripreneurship lacks support by the government in comparison to other sectors (Table 2). Some indicated that society looks down on farming-related jobs and perceives farming as a poor and backwards career. Public statements such as, “agriculture never makes people rich”, “it is a job for poor people”, and “only those who cannot find any other jobs do agriculture” were encountered by respondents. Moreover, some reported that agricultural work is not good for their health, for example, when the farmers apply chemicals on the farms. Producing organically usually requires more work and investment to be certified and gain trust but leads to a higher price than that of non-organic products. The higher price could then result in fewer consumers buying the products.
Formal education was also reported to limit agripreneurship by shaping norms regarding agricultural careers. Participants reported that they believed the education system prefers non-agricultural careers as an indicator of success and therefore young people do not have much interest in agriculture. A broader critique of the education system was that it does not promote entrepreneurship more generally, including critical thinking, creativity, ambition, and vision. Furthermore, young agripreneurs said that students do not have opportunities for study tours to see successful agripreneurial cases and hence do not have any agripreneurs as role models.

3.5. Taxation and Registration

Agripreneurs discussed land and vehicle taxes and administration fees that they need to pay to implement their business. More than 10% of agripreneurs stated that the tax system in Laos had improved, thanks to a new “one door service” system (Table 2). Most agripreneurs reported no issues with paying tax; they claimed that it is their duty, and that they pay tax to follow the law. Paying certain fees, such as business registration fees and annual fees for organic certification, allows them to obtain receipts which they can present as a proof of registration/certification to consumers. This was seen as a good way to gain trust from the consumers. To maintain product quality and make consumers confident in their products, some agripreneurs even reported inviting inspection and certification. Group members stated that they are happy to pay a fee to the district, village, and farmers groups because when there is a problem, they have someone to help immediately. Furthermore, the fee collected is used as the group’s shared fund for the benefits of the group members. Businesses registered under the farmers organization do not need to pay business tax, but pay only agricultural land tax. In terms of the service support for tax payments, young agripreneurs reported that it is convenient to pay tax these days, as they no longer need to go to the town as there are village tax officers located in their communities.
Some respondents complained about the high cost of some taxes and administration fees associated with being an agripreneur (Table 2). For example, the business registration fee, annual fee for organic certification, and vehicle tax have been reported as expensive. Some group members in particular reported that they are not happy to pay tax beyond a certain point. They complained about the need to pay for many things and at too many levels: the farmers group, village, district, province, and the central government (Table 2). In addition, practices of collecting “service fees” and fee collection at checkpoints remain, and these should be made faster and more transparent. The main argument was that the government should not collect any tax other than agricultural land tax from small- and medium-scale agripreneurs or enterprises (Table 2). Some non-group agripreneurs argued that it is not fair: if the government has supported foreign investment in Laos, the government should also support Lao people by not collecting tax from local Lao agripreneurs. One participant also suggested that the government should increase tax on imported agricultural products.

3.6. Agricultural Policy

Nearly 23% of young agripreneurs noted the current agricultural policy aspiration to support commercial agriculture in Laos (Table 2). Guiding direction and advice under the governmental policy support on commercial agriculture drove Lao agripreneurs to be more curious to learn new techniques to improve their farm productivity, consider market demand-based production plans, produce more varieties of produce, observe other agripreneurs’ succeed, work together with other agripreneurs and other stakeholders, and aim for export abroad. It is also perceived by 18.9% of respondents as playing a part in increasing the likelihood of support, grants, and loans from private and (I)NGOs sectors and donors, as well as attracting foreign customers and creating jobs for communities and individuals, including youth (13.5% of respondents). Having an agricultural policy that supports commercial agriculture also motivates agripreneurs to be persistent despite having problems. The government has also issued other relevant measures to facilitate commercial agriculture in Laos, namely, a policy on establishing farmers groups/organizations and promoting niche agricultural products such as organic foods.
The main areas for policy improvement reported (Table 2) were the lack of appropriate follow-up strategies and oversight, as well as the lack of a budget to implement the policy. In addition, agripreneurs would like more input and inclusion in policy making, as they see it as impractical and not focused on youth (Table 2). Finally, broken promises damage the trust agripreneurs have in government support. For example, one agripreneur relayed, “last year, [the government] said they would provide us fertilizer and seeds. They did not come. Also, earlier years they said they would provide loan without interest. Four years later, there has not been anything happening”.

3.7. Research and Development

Perceptions of research and development provided by agripreneurs mainly related to seed production (14.8%, Table 2). Laos was seen as producing rice, vegetables, and animal cultivars in specialized research centers (12.2%); however, some respondents reported that the cultivars and seeds produced do not meet their needs, while others are not available in Laos. However, a problem with the imported seeds is that they cannot be kept, as the next generation results in lower quality. Agripreneurs claimed that, with the exception of rice, other Lao seeds are not well suited to local climate and conditions (25.7%) and need to be of better quality (16.2%); some germinate, some do not; some have lot of weeds, and are not resistant to pest, fungi, and viruses. This lack of support results in investors and agripreneurs doing their own research and experimentation and relying on imported expensive seeds. Agripreneurs suggested that the government should improve support for seed production and cultivars, support or promote agripreneurs on seed saving, and improve and promote the use of Lao native seeds. The increasing availability of modern technologies was reported by agripreneurs as providing convenience, time, and labor savings, and accelerating the growth of agriculture at a greater pace in recent years (10.8%). There was a difference in the technology narrative of agripreneurs belonging to and not belonging to farmers groups. While those in farmers groups wanted more project support with machines and tractors, several independent agripreneurs were not in favor of support regarding access to vehicles, machines, and input materials. They claimed that those assets are not sustainable and that in the long term they make farmers dependent on help from governments or (I)NGOs.

4. Discussion

The agricultural sector is described in the entrepreneurship literature as being both highly regulated and receiving a high level of support [10,42]. However, the agripreneurial literature is heavily focused on American and European markets and is not representative of the sector context in Laos or many other developing countries. Few studies have been conducted in a developing context, but they highlight the role of institutional effects, education, access to information and communication technology, and exposure of agricultural extension agents in shaping youth entrepreneurship [31,43]. Economic parameters such as the size of the business, turnover, capital investment, profits, and employment are also of critical importance but are beyond scope of this study.
The extent to which supporting functions and formal and informal institutions in Laos create an enabling environment for agripreneurship is largely unknown. Our literature review and pilot study resulted in the selection of seven domains to explore. Domains such as financial support, infrastructure, and taxation and registration were discussed by our participants in ways similar to those reported in the literature. Discussions on the domain of agricultural information and extension services clearly indicate the importance of ICT, in particular social media sites, as means of obtaining information. This, indeed, is increasingly the case across countries, but is nonetheless an important finding that opens up novel means of communication, information sharing, and education. Another observation of interest is related to agricultural policy domain. Participants in the research perceive and acknowledge that recent official governmental support for commercial agriculture in Laos has resulted in increased support from (I)NGOs and donors for agripreneurship. It comes as no surprise that (I)NGOs and donors respond to national policy changes, but we find it encouraging that this response has been observed and perceived by agripreneurs—the intended beneficiaries—themselves.
The participants in our study appeared more educated than the average for rural youth in Laos. Only 18% of our cohort had not finished secondary school, in stark contrast to reports by [44] that while 54% of rural students attend lower secondary school, only 28% attend upper-secondary school or continue with higher education. The high education levels of our study cohort might indicate that agripreneurship is indeed an entrepreneurial career attracting well-educated youth. However, given our relatively small sample size and participant elicitation methods, this proposition requires further study. We also propose further study in terms of the influence of gender on agripreneurial perceptions. In our data (Table 2), we note some differences, potentially gender-based, in the percentages of male and female participants discussing specific themes. We also note findings from the literature that suggest that gender influences intentions and/or preferences towards a particular career, including agripreneurship, however the effect varied between studies [19]. Although the effect of gender on intention towards agripreneurship has not been studied in Laos, [45] reported rural females had a more favorable attitude towards off-farm activities and modern, non-traditional economies than males. Given the limited sample size, we do not provide any strong recommendations in this respect but rather suggest that further gendered research is needed.
In the next two sections, we discuss our findings in relation to the positive and hindering influences of supporting functions and institutional arrangements, before making specific recommendations for further improving the agri-system environment for young agripreneurs in Laos.

4.1. Perceived Enablers of Agripreneurship

Positive experiences and perceptions were reported in relation to all domains tested. The main positive development in relation to agricultural information in Laos was related to a better connection of new and digitalized communication technologies, with young agripreneurs now able to access and exchange agricultural information through online and remote platforms and social media. This trend is in line with trends in other developing countries, where social media and mobile telephony have been linked to improved information access in remote areas [46,47,48,49,50,51,52]. With the reforms in the financial system in Laos during 2016 and 2018 [53], agripreneurs reported both improvements in access to financial services and an increase in the number of financial providers. They were also of the opinion that infrastructure, such as transportation systems and logistics, has significantly improved in recent years.
Agripreneurship was perceived by many as a desirable career. The main positive societal views found were similar to feelings reported in the literature, such as pride and heritage [54], farmers providing the “back bone of the nation” [55], and playing a vital role in contributing to national food security [56]. Interest was particularly high in relation to market-oriented farming in niche markets, such as organic production [54,57,58]. The trend of additional value being placed by society on organic, natural and native species products could create an opportunity for young agripreneurs to identify niche markets in these value chains [59]. Alternatively, young agripreneurs could take advantage of these new trends by engaging in other related businesses, such as processing, service providing (i.e., linking farmers to the markets), and ICT optimizing (i.e., market information service, e-advisory service) [60].
Young agripreneurs reported having to pay land tax only, and reported that they receive a business tax exemption for agricultural products if they pay a regular membership fee and register their businesses under farmers organizations. They also acknowledged the positive impacts of current agricultural policy in Laos, with aspiration to support commercial agriculture and other positive measures implemented by the government, such as policy on establishing farmers groups/organizations and promoting niche agricultural products such as organic foods [61]. Government support encourages young Lao agripreneurs to be more curious, to learn new techniques, and to improve their farm productivity. They also reported increasing opportunities to obtain support, grants, and loans from private and (I)NGOs sectors and donors. This support reportedly allows them to develop market demand–based production plans, produce more varieties of produce, work together with other agripreneurs and other stakeholders, and aim for export abroad. Importantly, agripreneurs reported that having an agricultural policy that supports commercial agriculture motivates them to be persistent despite having problems. In relation to research and development in Laos [18,56], agripreneurs noted the presence of many research institutes and expressed hope for further improvements in terms of the variety and quality of seeds and advice provided.

4.2. Perceived Limitations to Agripreneurhsip

Agricultural extension in Laos is supported by the government, private organizations, and (I)NGOs. Our findings suggest that agricultural extension services are ineffectively implemented, in line with a study that also reports ineffective agricultural extension in Laos [56]. Specifically, young agripreneurs perceived a limited nature and scope of information services provided, inadequate performance of extension staff, and a lack of coordination and consumer education as key impediments. Agriculture in Laos remains largely subsistence-based, with lower usage of improved technologies and machinery [62,63]. As suggested both in our study and elsewhere [56,64,65,66], there should be increased support regarding non-technical aspects, such as business planning, financial management, and market access and linkages. This support should be provided both at the individual agripreneur level and at the level of leadership for farmers groups and organizations [61]. Particularly poor access to agricultural information and knowledge exchange opportunities for rural remote regions, ethnic minorities, and small-scale farmers previously reported in the literature [67] were validated with our study. It appears that Laos is predominantly focused on production aspects and is less focused on technology transfer and information dissemination [68]. The educational system in Laos was perceived as providing some knowledge and skills relating to farming, but limited or no education on agripreneurship and business skills. The literature also indicates a lack of entrepreneurship- and business-related activities [12], not only in agriculture but more widely, with Laos scoring the lowest compared to other ASEAN members [69].
Access to finance and credit was reported as a challenge in this study, specifically with respect to high interest, short loan periods, and difficulty in getting loans. Significant limitations imposed by the lack of insurance were also noted. Finance and insurance limitations reported in our study are in line with findings from other studies in Laos [56,61,64,70,71], other ASEAN countries such as Cambodia and Myanmar [69], and other developing countries, especially low-income African counties [72,73]. In comparison to other ASEAN countries, the financial system in Laos was reported in the literature as under-developed [69], with the World Bank [53] assessing it at a much lower level than other regional East Asian countries. The need for financial literacy and awareness and understanding of support already available was also noted, here and elsewhere [69], as well as the need to address the specific financial needs of youth [12,74].
Limitations reported in relation to infrastructure, in this study and elsewhere, include transportation, storage, and irrigation facilities [53,56,62,75,76]. In addition, this study found that the lack of continuous function across seasons is limiting the capacity of agripreneurs to benefit. Examples include road quality conditions, electricity supply, agricultural products storage facilities, and water ways for boat transportation, which suffer during rainy seasons.
Negative societal views of agricultural work as being dirty [77], old-fashioned [78], and harsh [54,79] relegates agriculture as less-promising career for the poor, the elderly, and the poorly educated [57,78,80]. However, there appears to be a growing differentiation between “agriculture” and “agripreneurship”, with latter perceived as a career of interest.
Better information and understanding with respect to policy, tax, and the legal system would reduce negative impacts on business growth and livelihoods [81]. Agripreneurs reported that “unofficial” payments persist, adding to calls in the literature for transparency in the system [53,69,82]. Lack of policy focus on small- and medium-scale enterprises and on young agripreneurs was also noted here and in the literature [18]. Indeed, policy support for commercial agriculture in Laos, such as the National Agricultural Commodity Production and Food Security Programme (NACPFSP), issued in 2015/2016 in response to the Agriculture Development Strategy to 2025 and vision to the year 2030, should account for all three main commercial farming modalities in Laos: concessions, contract farming, and small-investor farming. However, its follow-up, Strategic Action and strategic programs, were more focused on the first and second modalities of commercial farming, providing little technical and financial support for small farmers [63]. Better translation of agricultural policy into specific actions, and in particular actions targeting youth, is also required. To achieve this in a meaningful way, youth should be included in decision-making at all levels [15].
Research and development in Laos was regarded by young agripreneurs as less modernized than in other countries in the region. A lack of research and development has also been reported in the literature as one of the institutional challenges faced by farmers in Laos [18,56]. OECD [69] (p. 62) concluded institutions in Laos “…lack a strong research base and mechanisms for co-operation between academia and the private sector. Policy makers may also lack necessary skills and experience, and may be constrained by requests coming from the donor side”.

4.3. How Can Agri-System Environment Be Made More Supportive for Young Agripreneurs?

Like many developing countries, Laos has a very large proportion of youth [13] and, in particular, rural youth [14]. Improving entrepreneurship education, employment opportunities, education in rural areas, and youth voice in decision-making are all needed in order to improve livelihood outcomes for young generations [13,15,16]. Our findings and other research indicate that further improvement could be made in the areas of agricultural information and extension services, financial support, infrastructure, promotion of agricultural careers, taxation and registration systems, policy implementation, and research and development. The challenges we identified have elements in common with the broader challenges facing agripreneurship in the developing world [10], specifically:
  • Our research supports calls for further improvements to the nature, scope, and quality of agricultural information and extension services. In particular, there is a need for agripreneur education in relation to non-agricultural, non-technical aspects such as business planning, understanding of financial systems, market linkages, and customer needs. We also recommend providing information on alternative agricultural products such as organic products and new species.
  • Barriers agripreneurs and young people in general face in relation to access to finance and financial products are well documented in the literature and are supported by this research. Our findings confirm the need for lower-interest credits and longer loan periods. Specifically, we recommend the development of a system of agricultural insurance against pests, diseases, and climate events. The availability of agricultural insurance is vital for de-risking agripreneurial investments, and perceptions of risk were high in our study, both within respondent groups and as wider societal concerns.
  • We support the general call for further improvements in infrastructure, but in addition recommend addressing specific difficulties faced during rainy seasons, as noted in our research.
  • In terms of taxation, registration, and administration, further transparency at all levels is encouraged.
  • Agricultural policy is noted as moving in the right direction. Our findings support calls for more targeted actions towards enabling the work of small enterprises and youth in general.
  • There appears to be room for improving the “image” of agricultural careers, where farmers are not seen only as poor subsistence farmers but modern entrepreneurs, filling exciting niches and meeting emerging consumer demands. Research and development initiatives should follow suit, moving beyond rice to new products and varieties.
  • We note some potentially gender-based differences in our data, and note findings from the literature that suggest that gender influences intentions and/or preferences towards a particular career. We therefore recommend the study of the influence of gender on agripreneurial perceptions, both in terms of perceived barriers and enablers.

5. Conclusions

In this paper we explored the perspectives of 74 practicing young agripreneurs regarding the role the institutional and support environment in Laos plays in enabling their agripreneurship. Similar to what has been found in other developing countries, we found that our participants perceive supporting functions and institutions as essential for enabling youth agripreneurship, and that the enabling environment in Laos has generally improved to make agripreneurship easier than before. Our research supports calls for further improvements to the following: the nature, scope, and quality of extension services; the provision of information on alternative agricultural and organic products; non-technical education such as business planning; access to lower-interest credits, longer loan periods and agricultural insurance; improvements in infrastructure during rainy seasons; the promotion of agri-careers; improved system transparency; and further targeted policy actions towards enabling the work of small enterprises and youth in general.

Author Contributions

Conceptualization, M.T., J.N.M.P., I.N., M.D. and S.L.; methodology, M.T., J.N.M.P. and S.L.; validation, MT., J.N.M.P. and S.L.; formal analysis, M.T.; investigation, M.T.; resources, M.D.; data curation, M.T.; writing—original draft preparation, M.T. and S.L.; writing—review and editing, MT., J.N.M.P. and S.L.; visualization, MT., J.N.M.P. and S.L.; supervision, J.N.M.P., I.N., M.D. and S.L.; project administration, M.T. and M.D.; funding acquisition, J.N.M.P. and M.D. All authors have read and agreed to the published version of the manuscript.

Funding

This research was funded by (1) the Australia Awards John Allwright Fellowship from the Australian Centre for International Agricultural Research (ACIAR), grant number OASIS ID: ST000S6T8, (2) ACIAR research projects SMCN/2012/075 and (3) ASEM/2014/052, and (4) the Crawford Fund Student Award, grant number SA-889-2019. The APC was funded by ACIAR project SMCN/2012/075.

Institutional Review Board Statement

The study was conducted in accordance with the Declaration of Helsinki and approved by the Human Research Ethics Committee of The University of Adelaide (H-2019-110).

Informed Consent Statement

Informed consent was obtained from all subjects involved in the study.

Data Availability Statement

Not applicable.

Acknowledgments

We gratefully acknowledge the generous financial support received from The Australia Awards John Allwright Fellowship, Australian Centre for International Agricultural Research (ACIAR), and the Crawford Fund Student Award. Special thanks to the Lao Farmer Network (LFN) for access to profiles and contact details of young farmers for selecting samples and collecting data. We extend our heartfelt gratitude to a large number of people participated in this research, especially 19 young people from or living in rural areas of Laos who participated in online surveys, and 74 young agripreneurs who participated in face-to-face semi-structured interviews. Many thanks to The National Agriculture and Forestry Research Institute in Laos (NAFRI) for providing authority to facilitate communication with LFN and allocating office spaces, facilities, and research assistants to facilitate the main author during her fieldtrips in Laos for data collection. We are deeply grateful to Manivanh Phimphachanvongsod, Phonealoun Chanthabouasone, Chanphasouk Phialathounheuan, research assistants from NAFRI, and Manilitphone Thephavanh, freelance research assistant, for their assistance in data collection and entry.

Conflicts of Interest

The authors declare no conflict of interest. The funders had no role in the design of the study, in the collection, analyses, or interpretation of data, in the writing of the manuscript, or in the decision to publish the results.

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Sustainability 15 04219 g001 550
Figure 1. Conceptualization of the agripreneurial market system embedded in institutions and supporting functions that together form an enabling (or otherwise) environment.
Figure 1. Conceptualization of the agripreneurial market system embedded in institutions and supporting functions that together form an enabling (or otherwise) environment.
Sustainability 15 04219 g001
Table
Table 1. Key characteristics of participating young agripreneurs (n = 74).
Table 1. Key characteristics of participating young agripreneurs (n = 74).
NumberPercent
GenderFemale5067.6
Male2432.4
Age≤303851.4
31–403648.6
Marital statusSingle2432.4
Married5067.6
EducationNone11.4
Primary school1216.2
Secondary school4459.5
Higher degree1723
Member of farmers groupNo1621.6
Yes (groups under LFN)
Yes (group outside LFN)		52
6		69.0
9.4
Years as agripreneur≤1 year1216.2
2–3 years2736.5
4–9 years1824.5
≥10 years1723.0
Agricultural sectorOnly coffee or combined with other crops/livestock/tourism3040.7
Mainly vegetables1925.7
Mainly livestock1216.2
Only rice or combined with other crops/poultry810.8
Fruits34.1
Agriculture and education22.7
ProvinceVientiane Capital2736.5
Vientiane province1418.9
Champasak2331.1
Salavan1013.5
Table
Table 2. Enabling and hindering factors for each domain explored, as reported by young agripreneurs: percentage of respondents (%) and number of respondents mentioning (n), and as percentage of all female respondents (%F, n = 50) and all male respondents (%M, n = 24). Total respondents: 74.
Table 2. Enabling and hindering factors for each domain explored, as reported by young agripreneurs: percentage of respondents (%) and number of respondents mentioning (n), and as percentage of all female respondents (%F, n = 50) and all male respondents (%M, n = 24). Total respondents: 74.
DomainEnabling Factors% and n% F% MHindering Factors% and n% F% M
Agricultural information and extension servicesReceiving technical advice/training44.6 (33)5033Inadequacy of extension staff and their service43.2 (32)3854
Village visits33.8 (25)2650Limited scope: more training in technical areas36.5 (27)2854
Peers and farmer groups/organizations31.1 (23)2642Lack of coordination and consumer education33.8 (25)3629
Social media, TV, radio23.0 (17)2421Limited nature of information provided28.4 (21)2437
Limited scope: more non-technical training18.9 (14)248
Financial supportAvailability of financial providers41.9 (31)4046High interest rates with short loan period33.8 (24)3821
Financial support from farmer groups/village funds10.8 (08)1013Extensive “red tape” and asset guarantees20.3 (15)1433
Loans/ grants from development projects or (I)NGOs4.1 (03)60Awareness and assistance with application17.6 (13)1817
No emergency insurance9.5 (07)108
Lack of transparency in case of a grant4.1 (03)44
InfrastructureImprovements in infrastructure40.5 (30)3846Poor road conditions, especially in rainy seasons52.7 (39)5842
Access to private and shared vehicles5.4 (04)64Lack of logistics/storages/hospitals/schools9.5 (07)617
Improved telephony and IT infrastructure5.4 (04)48Lack of irrigation5.4 (04)64
Expensive and unreliable electricity4.1 (03)60
Negative impact from dam construction2.7 (02)40
Expensive and unreliable transportation2.7 (02)24
Informal rules and attitudesEconomic related benefits25.7 (19)2625Negative perceptions of farm conditions/tasks23.0 (17)1637
Emotional benefits17.6 (13)1817Perceptions of agripreneurial investments as risky16.2 (12)1421
High market demand and niche market potentials16.2 (12)1421Lack of support and education for this career16.2 (12)1812
Extrinsic benefits14.9 (11)188
Modernization of agriculture 4.1 (03)60
Taxation and registrationOnly few payments16.2 (12)224Expensive16.2 (12)1421
Tax system in Laos has improved10.8 (08)817Need to pay for many things and at too many levels8.1 (06)104
Happy to pay fee to village/farmer groups9.5 (07)140Slow and not transparent procedures8.1 (06)88
Should be no tax on small agripreneurs4.1 (03)60
Increase tax on imported agricultural products1.4 (01)20
Agricultural policySupporting commercial agriculture in Laos23.0 (17)2617Lack of appropriate strategies for policy follow-up13.5 (10)1021
Increases chance to get support from (I)NGOs and donors18.9 (14)1821Ineffectively implemented and monitored9.5 (07)108
Creating jobs, including youth13.5 (10)184Not applied thoroughly9.5 (07)421
Motivates agripreneurs to be persistent6.7 (05)84Not focused on youth9.5 (07)108
Lack of budget to implement the policy5.4 (04)64
Research and developmentRice, vegetables and animal cultivars are available14.8 (11)1221Cultivars suitable to or adaptable to Lao climate25.7 (19)2821
Many research organizations and agricultural graduates12.2 (09)1213Cultivars of low quality and insufficient16.2 (12)1225
Availability of the modern technologies10.8 (08)1013Need for further R&D to reduce imports12.2 (09)148
Low progress compared to other countries and region8.1 (06)417
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Thephavanh, M.; Philp, J.N.M.; Nuberg, I.; Denton, M.; Larson, S. Perceptions of the Institutional and Support Environment amongst Young Agricultural Entrepreneurs in Laos. Sustainability 2023, 15, 4219. https://doi.org/10.3390/su15054219

AMA Style

Thephavanh M, Philp JNM, Nuberg I, Denton M, Larson S. Perceptions of the Institutional and Support Environment amongst Young Agricultural Entrepreneurs in Laos. Sustainability. 2023; 15(5):4219. https://doi.org/10.3390/su15054219

Chicago/Turabian Style

Thephavanh, Manithaythip, Joshua Neil Monty Philp, Ian Nuberg, Matthew Denton, and Silva Larson. 2023. "Perceptions of the Institutional and Support Environment amongst Young Agricultural Entrepreneurs in Laos" Sustainability 15, no. 5: 4219. https://doi.org/10.3390/su15054219

APA Style

Thephavanh, M., Philp, J. N. M., Nuberg, I., Denton, M., & Larson, S. (2023). Perceptions of the Institutional and Support Environment amongst Young Agricultural Entrepreneurs in Laos. Sustainability, 15(5), 4219. https://doi.org/10.3390/su15054219

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