Myanmar Agriculture Sector at
a Glance and its Evolution:
Opportunities and Challenges
San Thein
Freelance Consultant
Paper presented to “Investing in Sustainable Agriculture in Myanmar” Yangon, July 20th 2014
email:usanthein@gmail.com
Planning Process
• This presentation is part of the Agriculture Master
Plan formulation. As a preliminary exercise before
the formulation of Myanmar Comprehensive
Development Vision (MCDV) for Agriculture Sector,
our team has constructed “Overall Framework of
Setting Vision, Goals, Policies, Strategies and
Measures”.
• The previous policy objectives will first be reviewed
briefly before going into the policy planning process
of the present paper.
Review of previous visions, mission,
and objectives and of adopted
strategies of agriculture sector in
Myanmar
• Agriculture was and is still considered as
major GDP earner for the country by the
successive regimes.
• It is the most intervened sector by the
authorities in various hierarchal order from
the top to the village tract over the country.
Policy Objectives, Carried over about 50 Years
• Development of agriculture was prioritized as the base and all
round development of other sectors of the economy as well.
• Rice self- sufficiency is over-emphasized at each local level of
the country. The government had driven maximization of crop
output without regard to maximization of farmers’ income.
• The following main objectives of the agriculture sector were
pursued during the period from 1990s to 2010 by the previous
ministers of MOAI;
• To provide surplus paddy for domestic food security and for
promotion of exports,
• To achieve self-sufficiency in edible oils, and
• To expand production of beans and pulses, and industrial crops
for export.
Strategy package
Following five strategies were officially spelled out
by the previous Government as:
• Development of land resources;
• Increased provision of irrigation;
• Expansion of small scale agricultural
mechanization;
• Transfer and application of new and
improved technologies;
• Increase supply of agricultural inputs
including quality seeds.
Recent reform measures in new
democratic government
• MOAI has pushed the crop productivity with the
following ministrial objectives:
• Use of high yielding seeds
• Application of good agricultural practices
• Balanced uses of farm inputs, agro-chemicals and
biofertilizers
• Minimize the production costs and transaction costs
in each supply chains
• Maintain a sustainable market to ensure benefit and
profitability
•
Naypyitaw -based Measures for
Agriculture Development
• The present Minister of MOAI has been pushing and
implementing the following measures ( particularly
the first three)to achieve his set objectives;
• Hybridization (focus on hybrid rice)
• Mechanization (focus on land improvement to
permit mechanization and large scale farming)
• Irrigation
• Training and education
• Privatization
Institutional Transformation over Years
• From the post independent years to mid-socialist
period, agriculture sector was under the policy
guidance and jurisdiction of the Ministry of
Agriculture and Forest. It included livestock and
fishery components also. The Ministry had pursued
the integrated and coordinated objectives of the
complimentary nature of the agriculture sector.
• The Institutional Structure was disintegrated into
three different separate ministries during the period
of the State Law and Order Restoration Council
(SLORC).
Complementary Nature of Agricultural
Components
Crops
Husbandry
Forests
Fishery and
Aquaculture
Animal
Husbandry
Disintegration and Separate Administration in
each Sector of Agriculture
MOAI
MoECaF
MLFR
Ministry of
Agriculture
and Irrigation
(MOAI)
Ministry of
Environmental
Conservation
and Forestry
(MoECaF)
Ministry of
Livestock, Fishery
and Rural
Development
(MLFR)
Comparison of Structure and Authority
JAPAN
MYANMAR
Minister
MAFF
Minister
MOAI
Ministry of Agriculture,
Fishery and Forestry
(MAFF)
Ministry of Agriculture
and Irrigation (MOAI)
JAPAN
• Decision making process is not
solely vested in the Minister. His
power could be restricted by the
strong bureaucratic body and
permanent secretary in the
Ministry. Professional staffs are
strong in the Ministry.
• There are several farm legislations
and the Minister may not have indepth understanding and he may
be in trouble to handle these laws
without consulting relevant
competent officers.
• His authority is limited to recruit
to his personnel assistant, but not
new DG or MD easily.
MYANMAR
• The Minister’s policy may be the
policy of the Ministry.
• Up to the end of the Military
Regime, there is no law or
legislations in the Ministry
except for the Pesticide law and
the old laws promulgated during
the colonial period. The Minister
rules the Ministry with his
instruction. Most ministers are
allergy to the policy or law.
• The Minister could recruit officers
such as new MD or DG of his
former loyalty to follow his new
office of MOAI.
• There is often not pressure group
out side his Ministry.
Changing Trend to Large Scale Farming under
ABCs.
• Since the time of SPDC rule, large scale land concession to the private
agricultural business companies (ABCs) was carried out throughout the
country.
• Virgin and Waste Land Instruction was reinforced by promulgating the
Virgin, Fallow and Vacant Land (VFVL) Law for promoting the large scale
farming by ABCs.
• Up to March 2013, a total of 377 national companies and about 18000
small and medium farmers (SMF) were allocated 1.5 million ha of VFV and
deep water land and 0.36 million ha of forest lands for a total of 1.89
million ha.
• The new Farmland Law was passed in 2012 allowing the sale, transfer,
mortgage and rent the land among users. The law promotes the private
investment but does not provide legal provisions for the protection of
small farmers for the land tenure security.
• Land grubbing by the military camps, government projects and
encroaching companies had led to eviction of small farmers with weak
land tenure security.
Need for Redesigning Agricultural
Development: Vision, Strategies and Business
Models
• Myanmar Comprehensive Development Vision (MCDV) has
been envisaged by the Japanese economic development team
from ERIA (Economic Research Institute for ASEAN and East
Asia).
• Before MCDV was approved, the Ministry of National Planning
and Economic Development attempts to design National
Comprehensive Development Plan (NCDV).
• Both are known to be not finalized yet.
• Under the MCDV program, our team conceived the inclusive
growth -oriented agricultural business models within the
scope of the new vision and strategies.
Overall Framework of Setting Vision, Goals,
Policies, Strategies and Measures
Develop Visions (Agriculture Sector)
Review and assessment of previous and
existing national policies, measures and
practices of agricultural development
Development Issues
Priority Setting
Setting Goals
Setting Goals
Goal # 1: Improved food security
Goal # 2: Pro-poor and inclusive growth
Goal # 3: Investment-based development
Goal # 4: Green-growth and sustainable
development
Development of objectives and
strategies
(for Goal 1, 2, 3, etc.)
Key measures
Sector-based approach
Area-based approach
Commodity-based approach
Vision
• Agriculture sector, not only being capable to
maintain, reaffirm and strengthen the role of
achieving food security, food safety and the
nutritional well- being of the nation and its growing
people in an inclusive and sustainable ways
• but also could emerge as globally linked competitive
agro-industries and outstanding Myanmar brand of
global supplier of foods and processed agricultural
commodities and
• thereby increases the export earning and stimulates
the economic growth and prosperity of the country.
Mission
• To ensure sustainable food security, food safety and nutritional well
being of the nation
• To enhance the structural transformation of agriculture proper into
the agri- business structure by increasing the industrial scale
process of value –adding to primary agricultural commodities and
thereby will act as an interface between agriculture and industry
and foster the industry development and economic growth
• To foster the shared –growth oriented business models which
maintain economically well- being of small farm holders through
voluntary integration to contract production or to corporate
organization through vertical coordination of the agribusiness
process of assembly of outputs, transfer, transform and value added
processing of agricultural commodities.
Vision Development
At least three dimensions will be based
Social
Sustainable
Environment
Viable
Economics +
(Economic
Integration)
Based on the holistic concept of long-term sustainable development, including economic,
Social and ecological dimensions
Policy Planning Framework
National Political &
Economic Reform
National
Economic Goals
Area of Intervention
Master Plan
Agri. Development Vision, Goals, Objectives,
Strategies
Regional, Sectoral, Area-based Plans
Agroecological zone-based programmes
Technology, Investment, Markets, Trade, Production Factors,
Supply chains management, Land Laws & Land Use Planning, Crop Planning,
Rural Financing, Industrial Restructure, Food Safety, Agri-business structures, Climate
change resilient measures, natural resources management, Pro-poor strategies
Increasing Detail
Integration to
Regional Economic Corridors
A Case Study: Cane & Sugar Industry
• This case study will help explain how inclusive growth
could be attained in a sustainable way in one aspect of
agriculture sector, i.e. sugar industry.
• The problem of sugarcane growing will be considered from the
business aspects of “ How to survive sugar industry by paying
farmers high purchasing cane price and by selling sugar to
consumers at globally competitive price. Present factory sizes
are ranging from 1500 to 2000 tons cane crushing capacity
(TCD) which are to small to be economical. The size should be
at least 4,000-5,000 TCD in a cane supplying area of 30,00040,000 acres. If investment is afforded, factories should be
scaled up to 15,000 TCD as in the case of Thailand and other
global sugar producers.
Percent cane growers’ share in sugar industry in
different years (In Thailand, growers’ share is 70%).
Year
Cane
Purchase
price, K/MT
Tone cane
crushed to
get 1 MT of
sugar
Sugar selling Sugar price
price, K/MT after Tax,
K/MT
Cane
growers’
share, %
20062007
13500
11.76
520540 463281
34
20072008
13500
11.76
428680 381525
42
20122013
30000
8.33
58300
48
518870
Myanmar cane procurement is approaching ceiling
limit
$45.00
Cane purchasing price MT of sugarcane
$40.00
$35.00
$30.00
Myanmar
$25.00
Thailand
$20.00
India
$15.00
$10.00
$5.00
$0.00
2001
2010
Year/Country Myanmar
2001
2010
2011-12
7.3 USD
Ks. 2,500
2011-12
Thailand
India
12.3 USD 12.8 USD
Baht 491 Rupee 48.8
13.5 USD
26 USD
N/A
Ks. 13,500
N/A
N/A
41.2 USD 33.2 USD
37 USD
Ks. 30,000 Baht 1,000 Rupee 2000
Compositions of sugarcane farmers with respect to
farm holding sizes
80
70
No of Farmers
60
50
40
30
20
10
0
< 5 acres
5-10 acres
Above 10-20 acresAbove 20-30 acres
Farm holding size
(Acre)
< 5 acres
5-10 acres
Above 10-20 acres
Above 20-30 acres
>30 acres
% Number of
Farmers
69
23
6
1.5
0.5
>30 acres
Farmers with Upstream and Downstream Backup for
Inclusive Growth in Sustainable Development of Sugar
Industry
Bank
Sugar Factory
Payment
transfer
upon cane
delivery
from
farmers
Financing
Farm Machinery Companies
Contract
Farming
Cane
supply
Sell in
Install payment
Small and Medium
Farmers
Cane Growers’
Association
1. Negotiation for cane contract
2. Strengthen can price
Technolog
y
Factory
Capacity
Building
3. Lobbying government
4. Ensure farmers for regular
can supply and product
Govt.
Extension
International
NGO
INGO
INGO
International
NGOs
1. Financial Management
2. Conflict Management
3. Conservation Agriculture
traceability
Integration of different layers in resource allocation
and utilizing cycles
Policy Umbrella
Asian Development
Bank
The World
Bank
Loan
 Sugar Policy
Repaymen
t
 Investment Policy
 Monetary Policy
Tax
 Infrastructures and services
Governme
nt
link
Policy Regulation
Government Departments
Sugarcane and Sugar Council
(Government + Private)
 Establishment of large-scale
sugar mill
Sugarcane Growers Association
 Expansion of sugarcane
growing areas
Private Investors
 Production of sugar and
downstream commodities
• Technology and Agriculture
Services
• Market competitiveness
• Establishment of sustainable
sugar industry
• Sugarcane Growers
• Agro-based Industry Banks
All Stakeholders from Sugar
Industry
Conclusion
• There is a pathway for sustainable agriculture
development with inclusive growth.
• It requires the comprehensive improvement
of all sectors and stakeholders involved in the
development process.
• Development opportunities in sugar industry
case study has shedding light on the potential
business model of other agricultural
commodities and services.
•THANK YOU