South East Asia

A joint forum was held in November 2006, supported by the Australia-Thailand Institute, to re-examine the broader agricultural research relationship. Eight themes were identified:

• R&D to support common interests in natural resource management and sustainable agriculture
• research to build onto joint endeavours to reduce and eliminate international agricultural protection and subsidisation
• enhanced scientific and policy exchanges on biosecurity research and implementation
• added attention to value-chain research and agribusiness development
• sharing of experiences and systems knowledge in the application of biotechnology sciences and regulatory services
• continued engagement on agricultural research capacity building and education
• consideration of bioenergy prospects and scope for improved partnerships in a bilateral or wider context
• collaboration in the dissemination of research outputs, evaluation and assessments.

Based on these themes, subsequent discussions with Thailand partners were completed and four new areas for ACIAR cooperation with Thailand were developed in 2007-08. These are:

• plant biosecurity, including molecular identification of quarantine pests
• development of fish passage technology
• livestock biosecurity, with an emphasis on improving vaccine quality and disease management systems
• working with poor communities to improve rice production on poor soils in north-eastern Thailand (NGO collaboration).

ACIAR funding on bilateral projects with Thailand will not change significantly in line with the increasing ability of Thai partners to co-invest in projects of mutual importance. Overall funding increased moderately to accommodate joint funding of regional and trans-boundary projects with third countries.

Vietnam has undergone significant economic growth in recent years and is expected to achieve 'middle income' country status in 2009-10. Much of the significant economic growth in agriculture (and the rest of the economy) is due to market competitiveness and demand for exports. Foreign direct investment is also growing rapidly. However, the income figure is biased by comparative wealth in Ho Chi Minh City and Hanoi and there has been little trickle-down to the rural areas, with many farmers remaining on incomes of under $1-2 a day. There has also been little mobilisation of foreign direct investment or of urban savings into the agriculture sector.

Unlike other South-East Asian countries with similar populations, Vietnam will continue to have a comparatively high percentage of rural population over the next decade, and so issues of rural poverty and structural adjustment remain at the top of the policy agenda. Productivity on a land or labour basis is still very low, and the small scale of production on individual farms, fragmented land holdings and increases in input costs are significant problems. Ethnic minority groups and groups in remote regions are particularly being left behind, and the Vietnamese Government is providing greater focus on programs to assist these groups.

Increased economic integration arising from both bilateral and multilateral trade agreements poses both threats and opportunities. There is a move from a focus on increasing production volumes of agricultural products for export to a greater emphasis on quality and marketing for both domestic and export destinations.

ACIAR's involvement in Vietnam commenced in 1993 and a significant program in forestry, land and water resources, animal sciences, crop sciences, fisheries and postharvest technology has been developed. While training remains very important, the program has evolved from a predominant emphasis on capacity building to one of practical farmer and rural development impact. Some successes include improvements to rice-shrimp farming, integration of mangrove forestry and shrimp production, improvements to inland pond and small reservoir culture fisheries, introduction and dissemination of improved pig breeds, non-chemical rodent control in rice crops, fastgrowing acacias, introduction of improved acacia forest germplasm, better irrigation management, improved soil fertility management and better control of citrus pests. Some of the technologies arising from these projects were applied and capacity developed in R&D and extension through the AusAID Capacity Building for Agriculture and Rural Development (CARD) program.

A number of ACIAR projects in Vietnam concluded during 2007-08. This enabled the program to undergo redesign for greater strategic (including geographic) focus. During 2008, reshaping of the program to address a limited number of major areas where Australia has expertise will continue. New programs addressing management of soil and water constraints for improved incomes in south-central coastal Vietnam and development of high-value agricultural products from mountainous north-western Vietnam will be developed, to address socioeconomic and marketing issues as well as specific technical constraints. Working in southcentral coastal Vietnam enables mobilisation of Australian technical expertise in managing constraints of poor soil fertility and limited water, while Australian expertise in temperate agriculture (including horticultural and livestock production) will be valuable in north-western Vietnam.

ACIAR will also continue to seek greater involvement of the private sector and NGOs in projects, linkages with other R&D activities and donors, and development of closer linkages between central Vietnamese research organisations and province-based research and extension capacity. Our program aligns with the Vietnam Government's 2006-10 Five-Year Agricultural and Rural Development Plan, particularly the first strategy (improvements of agricultural productivity, product quality and marketing) and second strategy (development of processing for agricultural and forest products).

ACIAR also aligns with the Paris Declaration and Hanoi Core Statement by integrating its work closely with Government of Vietnam programs and other donors wherever possible.

Distinguishing features of this landlocked country are low population density, high ethnic diversity, poor infrastructure and geographical dispersion of people. Agriculture employs over 80% of the population and forms 53% of GDP, but at least one-third of the population remain below the poverty line. There has been a reasonably good economic recovery since 1999, with major exports of garments, timber and wood products, gold re-exports, hydroelectric power and coffee. Despite overall national self-sufficiency, seasonal rice (and food) shortages occur regularly in many provinces and districts. Food security is still central to agricultural development in Laos.

Rainfed rice farming in Laos is impacted by the effects of seasonal climate variability and, in the long term, of climate change. Flows along the Mekong River and its tributaries will also be affected by climate change and by impacts of planned dam construction. It is anticipated that Laos will be one of four partner countries involved in a new ACIAR climate change adaptation initiative designed for implementation during 2008-09.

As the Thai economy develops, Laos is starting to exploit opportunities in specialist agricultural products required by Thailand, and to use the comparative advantage of low labour costs in Laos.

Laos has tended to develop two agricultural economies in recent years-the lowland areas along the Mekong River, where access to markets in Thailand has stimulated agricultural development; and the uplands, where many farmers still practice 'slash-and-burn' shifting cultivation. The Lao PDR Government is expanding irrigation in lowland areas and working to find alternatives to slash-and-burn cultivation in the uplands. With increasing population pressures in the uplands, fallow periods have become unsustainably short. In both upland and lowland areas, diversification of production and greater integration of both agricultural systems with markets remain priorities. However, in the areas of comparative advantage, market opportunities and research needs, the two economies generally differ.

Lowland agriculture is remarkably rice-centric-nationally about 2.3 million tonnes (t) are produced, compared with 120,000 t of maize, 150,000 t of sweet potato and much smaller amounts of legume crops. Fish accounts for 40% of dietary protein intake.

Upland systems are often more diverse than lowland ones but are poorly connected to markets, with rice being produced mainly for household consumption. Some simple approaches can be successful in reducing slash-and-burn agriculture in these regions. Examples include the introduction of better cut-and-carry forage production systems and the use of income-generating livestock, forestry and agroforestry. Forestry provided up to one-third of export revenue in the 1990s, but the government has since moved to limit harvesting of natural forests, leading to falls in income from log extraction. Laos remains a heavily forested country by Asian standards and long-term conservation of this natural resource is critical. More so than other Asian countries, the harvesting of non-timber forest products for food, fibre and medicine forms an important income and livelihood source for many rural households in Laos.

Smallholder livestock are important in the Lao economy, on average providing half the annual household income of smallholders. ACIAR research will assist in the control of infectious disease across and within countries (transboundary diseases) in partnership with regional disease control initiatives such as the OIE South-East Asian Foot-and-Mouth Disease Control Program. Important priorities will be improvement to risk assessment of disease transmission that occurs with trading and movement of livestock, improvement to disease surveillance systems, and application of any advances to disease control programs. Projects may include cooperation with neighbouring countries that are involved in trade. There are opportunities to improve village-based and small-scale commercial enterprises by limiting important constraints, one of which is disease.

A major emphasis of past ACIAR work has been the establishment in Vientiane of an animal diseases laboratory to service Laos. Other successes include the introduction and selection of cold- and drought-tolerant rice varieties, identification of the major rodent pests affecting rice farming, capacity building in forestry research and agricultural extension approaches, management of indigenous fisheries and provision of training, including scientific data analysis and scientific writing in English. In 2006, in collaboration with the National Agricultural and Forestry Research Institute, ACIAR implemented a small grants scheme to enable Lao researchers to develop skills in the design and management of agricultural research projects.

ACIAR's program in the Philippines has been active since 1983. Initially the program had several projects dedicated to research on soil management issues: nutrient management, erosion control, rice cropping systems, biological nitrogen fixation and tree establishment on degraded land. Research on postharvest storage of grain and giant clam culture was also important. During the 1990s research cooperation moved towards livestock management and biotechnology. A shift to emphasise the poorer areas of Mindanao and the Visayas, while maintaining strong links to research and development expertise in Manila and Los Baos, will continue.

Improving uptake of research in the Philippines is a major priority. In collaboration with Philippine partners, ACIAR has increased its emphasis on better understanding extension processes and involving farmer and community groups in projects. There has been encouraging success with the adaptation of the landcare approach in Mindanao, management of catchments in the Visayas island of Bohol, and uptake of methods for successful tree establishment. New research projects are underpinned by design processes that involve the end users of the research and address their needs. Project design also accommodates additional challenges that have arisen from the devolution of management and governance of extension responsibilities to local government units, and the comparatively weak research-extension linkages that frequently exist.

Two major horticultural initiatives were designed involving researchers, government, NGOs and industry partners, commencing in 2007-08 with an investment from ACIAR of approximately $7 m. Both initiatives focus on the southern Philippines, specifically regions 8 (Leyte), 10 (northern Mindanao/Cagayan de Oro), and 11 (southern Mindanao/Davao). These are described below. Taken together, the initiatives address most of the agreed priorities in subprograms 1A, 1B and 1C. It is not anticipated that additional funding for horticultural projects will be available during 2008-09.

During 2006 a new initiative, the Community Agricultural Technology Program, commenced which aimed to link ACIAR-generated technologies and Philippines research providers with non-government and community-based organisations. This is ongoing in 2008-09.

One major international agricultural research organisation, the International Rice Research Institute (IRRI), is headquartered in Los Baos, Philippines. ACIAR provides core funding to IRRI and also supports additional initiatives aimed at maintaining rice productivity. The regional office of the International Network for the Improvement of Banana and Plantain (INIBAP), a bioversity network, is also headquartered in the Philippines.

Relationship to the Australia-Philippines Development Assistance Strategy 2007-2011

Australia's objective under the new Australia-Philippines Development Assistance Strategy (2007-2011) is to 'make a contribution to improving the prospects for economic growth, poverty reduction and national stability in the Philippines'. The strategy will focus on three pillars: economic growth, basic education, and national stability and human security.

ACIAR will contribute to the strategy particularly through the first (and largest) pillar, which includes engagement with the Philippine Government on policy issues and support for 'local economic development in poor areas so that the rural population shares in the benefits of a stronger national economy'. Linkages between the biophysical, economic and market development research support by ACIAR will be made with the new AusAID Rural and Private Sector Development Program, as well as between ACIAR projects and the AusAID-funded Philippines-Australia Community Assistance Program.

After exploratory visits in 2002 to determine the feasibility of collaborative research activities, ACIAR developed a small program with Burma with the first projects commencing in 2003. In light of the current international situation, development of new projects is on hold. There have been limited opportunities for new activities to be pursued through multilateral organisations, and currently there is one ICRISAT-led project on improving productivity of legumes.

Although there has been rather limited international development cooperation in agriculture with Burma since 1988, several trained researchers and basic facilities are present to allow effective cooperation. Burma has already benefited through FAO from the spillover of other ACIAR projects in the region, most notably vaccines against Newcastle disease in chickens, and improved legume varieties and their inoculation with nitrogen-fixing bacteria.

Agriculture accounts for about 30-40% of the Cambodian GDP-only 3% of exports but about 70% of employment. The Cambodian agricultural production environment is, in general, harsher than the fertile lowlands of other South-East Asian countries. Soils are generally poor, often becoming waterlogged during the wet season, and three-quarters of the agriculture is rainfed. The predominance of rice-based farming systems on infertile, poorly structured soils means that Cambodia has rather low agricultural productivity on the basis of both labour and land area.

Water management for dryland and irrigated cropping is a particular challenge, as the flatness of many prime rice cropping areas means that it is both difficult to both control flooding through drainage management and impound water for later use in irrigation. Many farmers are able to produce only a single crop per year. Combined with the problems of low productivity, volatile yields and strong seasonality, has contributed to poor market linkages, with lack of investment in plantations and in contract farming and other arrangements. Average rice yields are only just over 2 tonnes per ha (in comparison with a national average of 5 tonnes per ha for Vietnam). Cambodia's predominantly rainfed farming systems are also highly prone to the effects of seasonal climate variability and, in the long term, impacts of climate change. It is anticipated that Cambodia will be one of four partner countries involved in a new ACIAR climate change adaptation initiative designed for implementation during 2008-09.

The overwhelming driver for most Cambodian smallholder farmers is to secure their household food production (which essentially means rice security) to avoid annual hungry periods. Before diversification strategies can be investigated and implemented, such security is critical. To improve overall labour productivity, there have been slow but significant moves to mechanisation, with introduction of small-scale equipment and the use of direct seeding for rice. For this reason, the ACIAR research program has pursued the twin objectives of assisting with rice security (managing constraints and threats to rice production) and supporting research to foster agricultural diversification. There is significant year-to-year variation in production, highlighting the dependence of Cambodian farming on rainfed systems.

The suite of current, proposed and completed projects targets research to improve rice productivity by assessing land suitability for a second rice crop, and also to develop options for the production and marketing of non-rice crops. The latter includes production and marketing systems for other field crops such as maize and legumes in upland and lowland situations, and for production and marketing options for vegetables in areas with good access to markets. Cambodia's low population density, particularly in the uplands, should provide potential for increasing ruminant livestock production. However, challenges remain in the supply of low-cost animal feed and the maintenance of product quality. Smallholder livestock are important in the Cambodian agricultural economy, and ACIAR will support research to assist control of trans-boundary diseases and increases in animal production, particularly of ruminants.

ACIAR also provided additional funding for the sixth round of the Cambodian Agricultural Research Fund (CARF) project, commencing in 2008. CARF, established in 2002 with AusAID and ACIAR funding, provides Cambodian scientists with opportunities to identify research priorities and design demand-driven agricultural research projects, and then compete for agricultural research funds and lead the selected projects. Since 2002 CARF has funded over 50 projects involving the Cambodian Agricultural R&D Institute (CARDI), Ministries, universities and nongovernment organisations.

Over the last few years ACIAR has diversified its R&D provider base in Cambodia. CARDI is expected to continue as a key research provider in the rice-based farming systems area. However, in studies of horticulture, livestock, fisheries and economics, and in assessments of community impacts from research, additional partners will be important. Considerable progress has been made in developing the scientific expertise of a number of Australian-trained Cambodian researchers who are poised to contribute significantly to the development of Cambodian agriculture. ACIAR will also maintain an emphasis on short-course training in areas such as R&D priority-setting and management, enhancing research- extension linkages, scientific proposal and report writing in English, and experimental design and analysis. This also includes training and technical assistance with production of the Cambodian Journal of Agriculture.

Australia took a major role in assisting Cambodia on its path to democracy in the early 1990s and, in doing so, pledged to provide significant development assistance over the medium term. A new $45 m, 5-year AusAIDfunded Cambodia Agriculture Value Chain Program will commence in 2008, and ACIAR will endeavour to link several of its research projects to this program. Several other donor programs in Cambodia have an agricultural and rural development focus. A National Agriculture and Water Strategy was recently developed with donor input . Where possible, ACIAR will establish linkages with other donor programs.

Agriculture provides livelihoods for more than 80% of East Timorese. The similarities between the environments of East Timor and northern Australia give Australia a comparative advantage in applying its research, development and extension skills to assist this new country. ACIAR began collaboration with East Timorese institutions in 2000. Current projects aim to help achieve food security, reduce poverty and build local agricultural research capacity. Two ACIAR projects commenced in early 2001:

• the Seeds of Life project, which aims to improve crop production through introduction of planting material of major staple crops, testing to find those that are better adapted to Timorese conditions, and distributing them to farmers
• rehabilitation of the agriculture faculty at the National University of East Timor.

The first phase of the Seeds of Life project has now concluded. A number of improved varieties of staple food crops were identified in field trials in a variety of lowland and highland settings around East Timor. Suitable varieties of sweet potato, maize, rice, peanut and cassava have been identified. Many of these have been tested or are in the process of being tested in farmer participatory research. Some varieties appear well adapted to local conditions, have tolerance or resistance to pests and diseases, and have demonstrated a sufficient level of tolerance to drought and soil stresses.

A major successor program, 'Seeds of Life 2', is being cofunded by AusAID and ACIAR and delivered in close partnership with the East Timor Ministry of Agriculture and Fisheries (MAF). The program, with a budget of almost $8 m over 5 years, commenced in late 2005. It is expected to continue the introduction and evaluation of improved crop varieties while devoting more resources to seed production, identification of improved crop management techniques, farmer participatory extension of identified cropping improvements, and training of MAF and other staff in seed production as well as crop research and extension. Five international CGIAR centres will continue to supply crop materials and expertise, while NGOs will be involved in the extension where possible. By project end, it is expected that many East Timorese farmers will have adopted improved varieties and cropping technologies, and that the MAF will be able to manage field crop research and development activities with its own resources.

Rehabilitation of the Agriculture Faculty at the National University of East Timor has been important in providing facilities for applied agricultural research, and in training East Timorese in agriculture. The project team has developed a new agriculture curriculum that aims to equip students to identify and solve problems in a farming systems context. Laboratory facilities at the Hera Field Station have been restored to provide practical sessions for science and agriculture students. This facility is the only working agricultural laboratory in East Timor, and a number of foreign donors also use the laboratory in their project activities. In 2006 a small R&D project funding and management facility was established to support focused activities addressing high priorities in agriculture.

The country's proximity and strategic importance to Australia, together with concerns for half of its population who live in poverty (on under US$2 a day), mean that Indonesia's prominence in ACIAR's program will continue. Major issues that will be specifically addressed in ACIAR's program include human capacity constraints in adaptive research and extension in a system with strong regional autonomy, challenges of natural resource governance, and the need to link with major domestic and international markets.

A key challenge for ACIAR and its partner agencies in Indonesia is to secure practical outcomes for farming communities from the considerable research investment. Several current projects focus on the extension of results from ACIAR projects, while the Smallholder Agribusiness Development Initiative provides additional avenues for greater market and community input to the planning and use of research results. Another opportunity for cooperation is through AusAID via the Australia-Nusa Tenggara Assistance for Regional Autonomy (ANTARA) program in eastern Indonesia, in line with increased emphasis on regional economic development in Indonesia across the broader Australian aid program.

The ACIAR program has a strong focus on partnership, using Indonesian systems for the delivery of programs and projects. We will work with our Indonesian partners to: involve end users such as extension groups and the private sector during the development of projects; more closely integrate project personnel in project activities at the farming community level; and integrate researchers and policymakers where appropriate. In provinces where ACIAR projects are located, we will involve farmer groups and the private sector in consultations on program priorities. We will increase our emphasis on communicating the outcomes of ACIAR projects and linking with major Indonesian government, donor and industry programs. Formal linkages with two major World Bank programs have been established.

The regional balance of investments is influenced by Australian expertise and alignment with the Australian aid program. Continued collaboration with research and development providers and policymakers in Java and western Sumatra is important. This is especially the case for agricultural policy research, biosecurity collaboration, and horticultural and aquaculture research. Indonesia is in a strategic position for Australia with respect to trans-boundary plant and animal diseases, given its close proximity. Eastern Indonesia also remains a high priority for ACIAR. The program includes activities in Nusa Tenggara Timur, Nusa Tenggara Barat, South Sulawesi and Southeast Sulawesi provinces under both SADI-SMAR and the main ACIAR program. In addition, the design of a program in Papua and West Papua will commence in 2008. In response to the December 2004 tsunami, ACIAR commenced a number of projects in affected communities in Nanggroe Aceh Darussalam. Engagement in Aceh will continue, but will evolve to provide support for increasing farmer incomes from agriculture and fisheries over the medium term.

ACIAR will encourage linkages between the research agencies in agriculture, forestry and fisheries and the policy/ implementation directorate-generals in the same ministries, where appropriate, as well as with other ministries such as the Ministry of Trade. ACIAR will support linkages between the research capacity of institutions in Java and Sumatra and eastern Indonesian adaptive research agencies and planning authorities. In addition, there will be a greater involvement of private sector and other non-government partners in the program.

Animal health projects will value, develop and test surveillance systems that are applicable for all livestock diseases (but with most application to highly infectious viral agents). Assistance in the development of rapid and appropriate responses once diseases are detected will also be a focus. Targeted research will provide the knowledge base to use tools, such as vaccines, most effectively. Increasingly, the impediments to effective disease control are the regulatory and policy environments, particularly development of the cooperation needed to undertake regional initiatives. Opportunities to improve these will be explored. Provincial and central governments will apply the knowledge gained to implement wider control programs. Endemic livestock diseases will also be targeted where there are clear production losses affecting incomes, and a clearly defined pathway to adoption of research results. ACIAR also supports a number of targeted research activities as part of the Australian aid program's commitment to reduce the threat of highly pathogenic avian influenza (HPAI) in Indonesia and elsewhere in the region.

Fisheries projects have had significant impacts, including in the management of shrimp diseases; rehabilitation of degraded or unproductive shrimp ponds on acid sulfate soils; mariculture of high-value fish and crustaceans; restocking of depleted fisheries; management of illegal, unreported and unregulated (IUU) fishing; and monitoring and harmonising management of shared fish stocks. ACIAR will continue to maintain a large fisheries program in Indonesia and seek opportunities for Australia-Indonesia collaboration on efforts to address IUU fishing. In both fisheries and forestry programs there will be an increased emphasis on balancing environmental and employment issues at a regional level.

In forestry, ACIAR will emphasise both community-based agroforestry systems for income generation in eastern Indonesia and improvement of the sustainability and value capture from major plantation species, including acacia and teak. In keeping with the increased emphasis on collaboration on forests and climate change in Indonesia, researchers will build on the previous program that assessed the economic potential of land-use change and forestry for carbon sequestration and poverty reduction, and on policy research to promote sustainable forest management.

Indonesia is an important partner in projects delivered in conjunction with the International Agricultural Research Centres-namely the International Food Policy Research Institute (IFPRI), Centre for International Forestry Research (CIFOR), the World Agroforestry Centre (ICRAF), the International Potato Centre (CIP) and the Asian Vegetable R&D Centre (AVRDC).

ACIAR's participation in the Australia - Indonesia Partnership

The Australian-Indonesian Partnership, comprising $500 million in grants and $500 million in highly concessional loans over five years, was announced in January 2005. Details on the program and ACIAR's involvement are available online.