Home MMBIZ News A Roadmap to Building Myanmar into The Food Basket of Asia

A Roadmap to Building Myanmar into The Food Basket of Asia

Ambitious plans by the Myanmar Central Government to catapult the country’s agriculture industry into becoming the Foodbasket of Asia within the 21st century will require tenacity and a steady flow of investments to upgrade machinery, seed stock, fertiliser input, and crop handling methods.

A roadmap to rebuild the former foodbasket of Asia was offered during this year’s 2014 Myanmar Agribusiness Investment Summit (MAIS) in Yangon, organised by Confexhub.

Agribusiness has emerged at the forefront of recent government development policies as a key driver for socio-economic development of the country. MAIS 2014 was specially designed to support the current government’s policy to accelerate rural and national development by engaging both government and private sectors of Myanmar’s agribusinesses to cooperate and collaborate with foreign investors.

To succeed in Myanmar’s agribusinesses environment we need to have crystal clear understanding of the market potentials and investment opportunities, land availability, licence and standard policies, legal and tax issues, financing and facilities availability. Foreign companies interested to invest in Myanmar’s agribusinesses must understand the rules and regulations set forth by the Myanmar government under the Foreign Direct Investment (FDI) Law of the country which was unveiled in October 2012.

Key needs to modernise Myanmar’s agriculture industry

Realising that the current government is committed to agribusiness development models as a way to achieve rapid and sustainable economic growth countrywide, let us fill you in on what was discussed at the MAIS 2014 conference and where are the opportunities.

Key Points: Introduction and production of hybrid seeds, mechanisation of farming communities and improvements in handling and storage of crops and distribution and marketing of agro-products. Myanmar is ready and welcomes investment in these particular key areas which should have the greatest impact in the shortest possible time.

Ways forward through agribusiness foreign investment

Myanmar’s farmers can add more than 30 percent to their yield just by employing better drying and storage techniques of seeds. These same farmers re-use 20 percent of their harvest as seed to replant for the next season, but poor storage techniques and high humidity lower quality and yield in the following year’s planting. This is where hybrid and high yielding seeds are needed, along with efficient land preparation, selection of seeds and improved cultivation practices.

A great majority of Myanmar agriculture comprises small and medium family farmers owning ten acres or less and with the guidance of the Agricultural Mechanization Department (AMD), plans are underway to move to bigger acreage of cultivation system allowing wider and more economic use of machineries and equipment.

With modern equipment, farmers can reduce losses in harvesting by use of combines, threshers, dryers that are all easy to operate and maintain. There are currently huge losses because of poor handling and processing.

One drawback in mechanisation is that machines run on fuel and rural villages generally cannot afford the fuel. To really penetrate the countryside we need to introduce human/hand powered farm processing devices.

Another way to overcome this drawback is to encourage farm equipment rental services for downstream processing of raw materials such as portable oil expellers, threshers and combines that can be brought to the villages. Rural villagers are migrating to places like Yangon and Mandalay in search of work so that gradually there will be less people living in farming communities. It is becoming more difficult to find labour, so an alternative is to use portable/ mobile mechanisation, thereby removing the need to transport crops to the city for processing hence reduce production cost.

Currently 80 percent of Myanmar’s water canals are earthen which equates to high losses in delivery to the fields. The government plans to introduce concrete walled canals countrywide and investors can include this in their farm project planning. Approval is needed under Sustainable Development of Irrigation. Also on the checklist to be granted water usage rights; all dam projects must be “multi-purpose use” in order to be considered.

Energy requirement

Downstream processing, warehousing, and supporting cold room facilities need to be supported by energy (electricity) such as bio-energy, solar energy and mini-hydro (there are over 300 irrigation dams, which could be used to produce electricity).

Bio-energy

Energy for rural development and downstream value adding of agribusiness must meet 3 criteria, the 3A’s: availability, accessibility and affordability.

The best source for rural energy is bio-energy. Availability of Biomass, e.g. rice husk, straw, Jatropha and giant grass (Bosakaing) are plentiful sources. To develop bio-energy in Myanmar algae is another good option and potential source for rural energy.

Bio-village

One good approach is to create bio-villages which will provide an inclusive approach to cater for the energy needs of each village through a centralised facility, since there is readily available biomass to support such a facility.

For the Bio-village to succeed it must have the following requirements.

• The village must have significant acreages of land under crop or animal production for food and/or biofuels.

• The area must be characterised as having low income and productivity.

• Active participation by farmers/villagers is a pre-requisite.

• Technical (including training) and financial support must be effective and sustainable during the pilot period.

• The model must have a “multiplier effect” for subsequent similar development in other villages.

• The proposed project must be cost-effective and capable of promoting self-reliance among the farming community in the pilot village or subsequent villages.

Algae

One good source for bio-energy and rural development is algae production. Algae has multiple functions and uses i.e. foods, animal and fish feeds, pharmaceutical as well as energy. It is easy to establish as it requires small land usage and the returns are high. A centralised 40 acre facility can provide villagers with job skills and create high value products.

Poverty alleviation, rural development and farmers’ organisations

The word “Poverty” has now surfaced in Myanmar’s national policy and debates in parliament on poverty alleviation and rural development and has drawn attention to address these issues in national planning.

In this regard, the Myanmar government has strongly advocated a recent policy on “poverty alleviation and rural development”.

The attack and alleviation of rural poverty must begin with agriculture development, based in agri-business development as the majority of Myanmar’s population is agrarian with over 70 percent of the total population relying/dependent on agriculture for economic survival.

It is important to recognise that the attack on rural poverty must begin with a dynamic realistic and inclusive approach to agri-business development program based on increasing agricultural productivity and income.

This brings us to the need to direct our attention and focus on the “Target Group” which are the farmers.

Support programs for farmer’s multi-dimensional needs first have to be recognised and mechanisms to drive the support program must equally be recognised. Observation of the farmers share in the rice production chain is only 28 percent, with the rest enjoyed by traders, middlemen, suppliers of inputs etc. This gap has to be narrowed so that farmer’s shares of the “rural productivity cake” can be increased.

Individual farmers on their own are poorly equipped and vulnerable to the monopolist exploration of traders (middlemen) as they do not possess collective or countervailing power to secure/bargain for a better economic return for their produce at the farm gate. More often than not they are at mercy of the traders/middlemen and their logistics chain.

From the viewpoint of rural development-the purpose for the development of agribusiness should be to strongly link rural small-scale farming communities with well developed supply chains in a sustainable manner. In this regard a Multi-Purpose Farmers Organization (MPFO) becomes the imperative link.

Myanmar’s grand agri-vision

Myanmar is a country blessed with an abundance of natural resources such as land, water and people. In addition to her geopolitical position between two mega countries China and India, the nation offers immense opportunities and potential in agri-business development, for food production and food security.

President U Thein Sein in a speech on 20th May 2011 has announced that the government’s priority is the alleviation of rural poverty and enhancing rural and national productivity income based on agri-business development in Myanmar.

This article highlights the various important sectors throughout the agri-business industry in Myanmar for rapid development. Important areas such as high yielding seed varieties, use of fertilizers, mechanization, improved land use and management as well as human resource capacity building for the agri-business industry of Myanmar is emphasised for both foreign and local investors. Individuals and firms engaged in agri-business could never find a better place than this golden land with a multitude of opportunities.

You are neither too late nor too early but just on time.

David DuByne’s company Oilseedcrops.org offers advice on entering Myanmar’s agricultural sector.

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