Introduction In the Lao People’s Democratic Republic (Lao PDR), agriculture employs over 60% of the labor force but has a shrinking contribution to the gross domestic product, down to just 21% in 2024 from 51% in 2000. As government policy prioritized export-led growth and foreign direct investments, crops like coffee expanded rapidly, with the area under cultivation increasing 67% between 2009 and 2019. While this has linked farmers in the Lao PDR to markets in the People’s Republic of China, Thailand, and Viet Nam, much of the production remains in low-value, using sun-grown systems that cause deforestation, soil degradation, and biodiversity loss. The short-term income gains to farmers are threatened by long-term viability due to rising input costs and ecological damage. Agro-processing is limited and most enterprises are micro-scale. Sustainable models can enhance the livelihoods of coffee farmers, while protecting the natural capital they depend on. Slow, a portfolio company supported by the Asian Development Bank Frontier Seed Facility (ADB Frontier), offers a regenerative alternative that integrates biodiversity restoration, income stability, and climate mitigation through shade-grown agroforestry. Decarbonizing the Agriculture Sector Traditional agricultural methods impose considerable external costs on the environment. Coffee monocultures, in particular, are associated with deforestation, soil degradation, and high carbon emissions from chemical inputs and land-use change. A system that integrates agroforestry and regenerative practices helps address this challenge. During its pilot operations in 2023–2024, the ADB Frontier extended assistance to the Lao PDR’s Slow Forest, which promotes shade-grown agroforestry. The facility provided working capital to expand farmer outreach and establish aggregation hubs; technical assistance to support Science Based Targets Initiative (SBTi) tracking and targets; and advisory support to attract follow-on investors and enable cross-border market expansion. Located on the fertile Bolaven Plateau in Champasak Province, Slow’s plantations cultivate coffee under up to 400 shade trees per hectare—a canopy layer home to at least 20 different species, doubling the threshold required by institutions. This practice enhances carbon sequestration and ecological resilience, while simultaneously improving soil fertility through water retention and microclimate regulation. In 2023, the company confirmed that it removed more carbon that it released across Scopes 1, 2, and 3 and land use, agriculture, and forestry sectors. Under SBTi, it also committed to reduce greenhouse gas emissions by 90% in 2021–2030 and aims to achieve net-zero emissions by 2030. Biodiversity and Ecosystem Services as Economic Assets Generating ecosystem services can be accompanied by profitable commodity production, as demonstrated by Slow. As tree diversity provides habitats for pollinators, insect predators, and seed dispersers, it directly reduces the need for external agricultural inputs and reduces cost over time. Biodiversity further provides additional revenue streams through non-timber forest products, such as nuts and fruit, generated within the farm system. This has enabled the coffee company to increase land productivity in both monetary and ecological terms, an important consideration in land-constrained and forest-sensitive regions. Income Diversification and Stability for Smallholders Rural households in the Lao PDR are highly vulnerable to agricultural income volatility due to climate shocks, market fluctuations, and limited access to finance. This highlights the need for a system to cushion the impact of extreme weather events and erratic price movements. Slow addresses this through an income stabilization mechanism that includes (i) fair pricing across all coffee grades, including organic certification premiums; (ii) advance payment of 20%–40% of harvest revenue, providing pre-season liquidity; and (iii) diversified income portfolios, integrating nuts, fruit, and agroforestry products. These methods reduce the incidence of negative coping strategies such as asset sales or informal borrowing. Also, households become less reliant on volatile single-crop earnings, improving their creditworthiness and investment capacity over time. At present, the program engages approximately 500 smallholder farmers across Lao PDR and Viet Nam. It also involves 30 agronomic and value chain experts, who ensure technical assistance and extension support. Long-term collaboration that rewards compliance with environmental and traceability standards encourages farmer-level adoption of sustainable practices. Traceability and Market Access In global specialty coffee markets, traceability and sustainability have become clear differentiators beyond price and quality—driving customer acquisition, strengthening loyalty, and shaping long-term growth. Unlike the conventional coffee sector, where 15–20 intermediaries typically separate the farmer from the consumer, Slow’s fully integrated value chain ensures complete transparency from crop to cup. This direct structure not only reduces complexity but also provides buyers with reliable data and verified documentation at every step. As customers increasingly demand evidence of impact from their suppliers, this depth of traceability becomes a competitive advantage. The company offers measurable impact across climate, nature, and livelihoods; robust data for Environmental, Social, and Governance and compliance reporting; and compelling storytelling through video, images, and text directly from the farms. By linking transparency, impact, and storytelling, the company not only provides access to high-value export markets but also fosters long-term buyer relationships. This positions producers to capture greater value within global supply chains traditionally dominated by traders and importers. A Scalable Model for Inclusive Green Growth The Slow initiative offers a replicable model for rural transformation by integrating environmental objectives, livelihood resilience, and market competitiveness. It aligns with multiple Sustainable Development Goals (SDGs), including SDG 13 (climate action), SDG 15 (life on land), and SDG 8 (decent work and economic growth). It also directly contributes to the ambitions of the Lao PDR’s Green Growth Strategy and Biodiversity Action Plan. In a global context where agriculture is simultaneously a driver of emissions and a potential carbon sink, and where rural inequality continues to pose developmental risks, models like Slow are not only desirable but also necessary. With the right financial instruments and enabling policies, such models can be scaled across geographies and commodities, unlocking value that is both green and inclusive. Note: ADB Frontier is a seed facility providing catalytic risk capital to early-stage and innovative businesses in Cambodia, the Lao PDR, Fiji, and the Pacific. They finance businesses creating jobs, gender, and climate impact, and test new financial products with the aim of supporting capital market development to unlock growth and help build the industry leaders of tomorrow. References Food and Agriculture Organization (FAO). 2022. Exploring Coffee Futures: Building Coffee Climate Resilient Pathways in Lao People's Democratic Republic. FAO, European Union, and CIRAD. 2022. Food Systems Profile – The Lao People's Democratic Republic. Catalysing the Sustainable and Inclusive Transformation of Food Systems. Rome, Brussels, and Montpellier. Slow. 2024. Regenerative Growth. Impact Report. World Wildlife Fund. Sustainable Participatory Water Use in the Coffee Industry in Southern Lao [People's Democratic Republic]. Ask the Experts Dominic Patrick Mellor Principal Investment Specialist, Private Sector Operations Department, Asian Development Bank Established a strong track record of turning ideas into tangible results. Experienced in formulating and executing strategic plans, creating ventures and investment vehicles, raising funds, and building teams. Played a key role in launching several flagship initiatives, including ADB Frontier, ADB Ventures, and the Mekong Business Initiative. Has extensive experience working in emerging and frontier markets across Southeast Asia, the Pacific, the Middle East, and Africa. Holds an MSc in Economics from Oxford University and a BSc in Mathematics from Warwick University. Matthew Viner Consultant, Southeast Asia Department, Asian Development Bank Matt Viner helps lead operations, strategy, and investment processes for ADB Frontier. He focuses on innovative finance, including revenue-based financing and fund design, and has over a decade of experience in impact investing and private sector development across frontier markets in Asia and the Pacific. Soulinthone Leuangkhamsing Principal Economics Officer, Lao PDR Resident Mission, Asian Development Bank Soulinthone Leuangkhamsing contributes to the Lao PDR chapter of the Asian Development Outlook and the country partnership strategy. He has supported the processing and implementation of ADB-supported public sector management projects. Before joining ADB in 2008, he served as an economist at the Lao PDR Resident Representative Office of the International Monetary Fund. He holds a master’s degree in business administration from the School of Management at the Asian Institute of Technology in Thailand, and a bachelor’s degree in economics from Flinders University in South Australia. Kavita Iyengar Senior Country Economist, Southeast Asia Department, Asian Development Bank Kavita Iyengar is a senior country economist at the Southeast Asia Department. Previously, she was country economist at ADB’s Timor-Leste Resident Mission and focal for regional cooperation and knowledge management at the India Resident Mission. Her varied work experience includes teaching, environment consulting, and publishing. She has a PhD from Clark University in the United States. Asian Development Bank (ADB) The Asian Development Bank is a leading multilateral development bank supporting sustainable, inclusive, and resilient growth across Asia and the Pacific. Working with its members and partners to solve complex challenges together, ADB harnesses innovative financial tools and strategic partnerships to transform lives, build quality infrastructure, and safeguard our planet. Founded in 1966, ADB is owned by 69 members—49 from the region. Follow Asian Development Bank (ADB) on Leave your question or comment in the section below: View the discussion thread.