Many bamboo species are well suited for agroforestry as they are more versatile and rapidly renewable than trees. Bamboo is an important income source for rural villagers around the world, especially in tropical developing countries, such as Lao PDR (Lao People’s Democratic Republic). This study applied a value chain approach to compare potential incomes from different bamboo utilization models: (1) existing model of selling semi-processed raw materials (bamboo splits), and (2) new model of producing handcraft products locally. Using a rural village in eastern Lao PDR (Nongboua village in Vientiane Capital province) as a case study, we provided empirical assessments of two bamboo value chains. Based on interviews with the villagers and stakeholders and government statistical data from 2017 to 2019, existing and new bamboo production chains were evaluated. In the existing value chain, the final products, bamboo chopsticks, are worth $6.74/kg. The value chain starts with bamboo harvesting, collection, and management, which are done by villagers in Lao PDR and taxed by the Lao PDR government. Bamboo splits are then transported to Vietnam to make the final products to sell. Local villagers received only 4.9% of the total value. The new bamboo handicraft model could produce 9 bamboo cups and 60 medals from one bamboo stem worth $52.6–61.7 and $343.8. In this value chain, bamboo harvesting, management, and processing to final products are done by villagers. The handcrafts were collected by traders to be sold at souvenir shops. Local villagers could capture 29.4%–42.3% of the total values. Producing bamboo cup and medal could generate 1.12–2.17 and 234.8–244.6 times higher income for villagers per labor hour and per bamboo stem, respectively, and allow them to use more bamboo resource than producing bamboo splits to export to Vietnam. If applied to other rural areas in Lao PDR, the new bamboo product model for handicrafts can be a better income source for local villagers in Lao PDR with sustainable use of bamboo resources than the existing model. However, it requires extensive bamboo handicrafts training over a year. Although alternative uses of bamboo would be different depending on social, economic, and market contexts, the value chain analysis demonstrated in this study can be applied elsewhere to increase local retention of economic values generated from agroforestry.
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