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8 - Agricultureallocation processes. 137 Also problematic are attempts to reclassify forest land, especially the endowingof protected status, which overrules the traditional land use rights of forest residents, forcing them tomove elsewhere to make their living and increasing land-use intensity in the areas in which they endup. 1385.3 Agricultural market issuesOne of the biggest challenges for agricultural development in the LMB is the development ofefficient and responsive markets and market infrastructures for agricultural inputs and produce.Unless farmers know what crops to grow and are able to market their surpluses, they have littleincentive to produce them and unless they produce surpluses, they are likely to remain poor.Some would suggest, therefore, that improving the efficiency of agricultural marketing a keyfactor in rural poverty alleviation.Key components of efficient agricultural markets include: affordable and accessible rural credit;high quality agricultural inputs such as seeds, fertilisers, pesticides, machines, and relatedtechnology; effective marketing and market information for farmers; rural transportation systems;national distribution networks; and international trade polices and relationships.Rural credit is most necessary for the purchase of inputs for livestock and dry season crops and isthus an important requirement in moving from low value-added rice production to more lucrativeagricultural pursuits. Of the four LMB countries, only Thailand has an extensive formal ruralcredit system, the Bank of Agriculture and Agricultural Co-operatives. 139 However, rates of creditutilisation have been relatively low, with only a minority of farmers in debt, and most of thesebeing wealthier farmers who could afford to take the risks inherent in borrowing money. 140 InCambodia, NGOs and international donors have been attempting to build rural credit networks.While they have had some degree of success, the system covers only a limited portion of thecountry and is criticised for charging interest rates as high as 60 percent per annum. 141 In VietNam, rural credit is provided predominantly by the Viet Nam Bank for Agriculture. However,loan procedural difficulties and limited government funds have resulted in difficulties in meetingthe demand for credit, and the interest rates offered by private lenders are often extremely high.There is also a lack of medium and long-term credit facilities. Similar problems can be seen inLao PDR. National savings are low (only 4 percent of GDP, the lowest for the ASEAN group)and there is no viable nation-wide rural financial system. 142 Informal lending predominates, withvillage revolving funds and household-to-household loans being common. Such arrangementsare often in kind, rather than moneterised, especially in the remoter sloping land areas. There area few formal credit organisations operating in the Mekong Corridor area, and the Lao PDRgovernment intends to support thedevelopment and extension of this sectorby allowing the market to set interest ratesabove inflation rates and establishing acorps of Mobile Credit Officers to “bringthe banks to the farmers.” 143Throughout the basin, livestock are becoming anincreasingly important part of agricultural productionIn terms of marketing and marketinformation, the most important factorsinclude “identification of potentialmarkets, knowledge about potential cropsfor those markets, suitable crop productionplans, availability of pre- and post-harvesttechnologies, and marketing mechanisms175