VIENTIANE, March 23 (Xinhua) -- The Lao Ministry of Agriculture and Forestry, in cooperation with China's Hunan Jinye Zhongwang Technology Co., Ltd and Xuanye (Lao) Co., Ltd, will establish a model organic and bio-fertilizer processing factory for clean agriculture (CA) development in Laos, local daily Vientiane Times reported on Friday.

A Memorandum of Understanding (MOU) was signed here on Wednesday by Director-General of the Agriculture Department of Lao Ministry of Agriculture and Forestry Vilaysouk Khennavong, Hunan Jinye Zhongwang Vice President Huang Jian and Xuanye (Lao) President Xu Guowu.

The ceremony was attended by Lao Deputy Minister of Agriculture and Forestry Bounkhouang Khambounheuang and Economic and Commercial Counsellor of Chinese Embassy to Laos Wang Qihui along with the government officials from relevant sectors and representatives of the companies.

"The ministry through the Department of Agriculture is currently encouraging Lao farmers to produce CA in two standards, organic agriculture (OA) and good agriculture practice (GAP) to supply food safety in the domestic market," Vilaysouk said.

"CA is also to promote quality crop production for exports such as rice, vegetables, tea and coffee," he noted.

However, the country still lacks organic fertilizer and bio-fertilizer standards to supply farmers' production as most fertilizers are imported from neighboring countries.

"The issue has caused the cost of production to be high and the ability to compete in overseas markets is still low," Vilaysouk said.

He believed the cooperation project between the ministry and the firms would help develop CA in Laos and improve more organic and good agricultural production for export to regional and international markets.

The main object of the project is investigating the potential of plant waste from vegetables, cassava, sugar cane and the use of wetland soil in processing quality organic fertiliser and bio-fertilizer.