Laos has an emerging forest plantation industry, based on both smallholder and corporate growers. The Lao PDR Forestry Strategy to 2020 envisages a substantial forest plantation estate, with a target of a total of 500 000 hectares of tree plantations. Plantations and planted trees have the capacity to provide significant financial benefits to Lao PDR, and to smallholder growers. The plantation resource could have an annual farm gate value of $197 million at full production and will offer further value through primary and secondary wood processing (Midgley et al 2011). However, there are many challenges, constraints and opportunities which need to be addressed in order to maximize returns to smallholders and support the development of competitive value-added wood industries.

Although the Lao timber industry has grown rapidly over the past three decades, the export value    of finished wood products has been very low compared to that of squared logs or basic sawn wood. Considerable research and development is needed into the value-adding wood processing and manufacturing sector to enable the production of high value wood products such as furniture and flooring.

This project proposal is largely based on the findings of a recent ACIAR Scoping Study (Midgley et al 2011) on the background and potential research needed for Payments for Environmental Services and Planted Log Value Chains in Lao PDR.