Abstract
Agriculture (including livestock, forestry and fisheries) in Myanmar in 2011 still produced 45 % of the GDP and absorbed roughly 60 % of the labour force (CSO 2010). It is common in the modern world that the share of the agricultural sector in the national economy decreases in the process of economic development, in which nonagricultural sectors such as manufacturing and services grow rapidly, dramatically raising the living standard of the population. Hence, industrialization has been regarded as vital for developing countries that suffer from low income and poverty.
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Notes
- 1.
It is known as the ‘Ricardian trap’. See Hayami (1997).
- 2.
Note, however, that the success was not achieved only by the reorganization in the agricultural production system. It should be emphasized that both in China and Vietnam, rural infrastructure such as irrigation, drainage and rural road networks were dramatically improved by utilizing a cheap labour force under the collectivization regime, which contributed more decisively to long-term agricultural development, once economic incentives for farmers to work hard recovered under the family farm system.
- 3.
In the prewar period, by the late 1930s, Myanmar had become the largest rice exporter in the world. Rice exports reached more than 3 million tons at its peak.
- 4.
It was called SLORC (State Law and Order Restoration Council) until 1997 when a reorganization was undertaken and it was renamed SPDC.
- 5.
It should be noted that the military regime itself was ‘democratized’ in 1974 when the BSPP (Burma Socialist Program Party) governed the country under a unique party system. But Ne Win continued to control the nation until the late 1980s, which was a de facto military government.
- 6.
See Chap. 3 of this volume by Fumiharu Mieno and Koji Kubo.
- 7.
They occurred in 1967, 1974 and 1988. See Okamoto (2008a) for detail.
- 8.
For a more comprehensive analysis on Myanmar agriculture since 1988, see Fujita and Okamoto (2009).
- 9.
See Adas (1974) for comprehensive descriptions on the reclamation and development process of the Ayeyarwady Delta.
- 10.
Also see Chap. 2 by Asuka Mizuno of this volume.
- 11.
See Chap. 2 by Asuka Mizuno of this volume.
- 12.
It should be noted here, however, that unlike India, this has been basically the economic class, not the social class.
- 13.
The ceiling area per household was stipulated depending on type of land. In the case of paddy field, for example, it was 50 acres.
- 14.
Da doun htun in Myanmar means land area that can be cultivated by a pair of bullocks and sufficient for a household to make a living (Takahashi 1992: 73).
- 15.
The net sown area of rice started to increase again after 1992/1993 when the ‘Summer Paddy Program ’ was introduced. But the program mainly encouraged double cropping of rice in the existing land and not outward expansion of the rice area.
- 16.
It is well known that Bangladesh and West Bengal of India achieved rice double cropping by tapping groundwater resources by tubewells . However, the quick survey conducted by the author in February 2014 shows that under the current economic environments (mainly due to the need of high frequency of irrigation according to land conditions, which results in too much costs incurred), there is no major room for large-scale groundwater irrigation development in Ayeyarwady Delta at present.
- 17.
Edible oil is another indispensable food in the diet of Myanmar people. For a long period, the major oil crops had been sesame and groundnut, although more diversification occurred in the 1990s by adding mustard, sunflower, niger, etc. But the major problem for Myanmar is that the country has virtually no international comparative advantage in producing these oilseed crops (except for sesame, which is exported) and that after 1988, a lot of edible oil (mainly palm oil) started to be imported and Myanmar has been obliged to spend a lot of precious foreign exchange. See Fujita and Okamoto (2009).
- 18.
Basket is a unit of capacity. One basket is equivalent to 20.9 kg of paddy.
- 19.
The descriptions below are mainly from Okamoto (2009).
- 20.
When the system was abolished, the salaries of the government staff were raised to compensate. After the abolishment of the system, MAPT was not dissolved but reorganized into a new organization with drastically reduced staff.
- 21.
See Fujita and Okamoto (2009). Compared to the consumer price index (=100), rice prices surged especially in 1989 (177) and 1993 (175).
- 22.
The real wages of the agricultural daily labourer (male) in terms of ‘rice wage’ (rice which can be purchased with the daily wage), for instance, declined sharply from 9 kg in the late 1970s to 4–5 kg in the late 1990s and the early 2000s (Fujita 2009a).
- 23.
See Takahashi (2000). The widened income disparity can be attributed not only to the decline of agricultural wages but also (1) to the increase of farmers’ income due to the export boom of pulses and beans and the increase of vegetables and fruit production for the domestic market and (2) to the profit earned by farmers who invested their increased agricultural surplus in various nonagricultural business activities.
- 24.
Since private traders visited several overseas buyers for negotiations to prepare for export, they were hugely disappointed when they heard of the suspension.
- 25.
Based on private communications with Mr. Koji Kubo, Institute of Developing Economies, Chiba, Japan.
- 26.
When the government made the decision was not clear, but it was at the latest by February 2012 when we interviewed the Minister of Commerce.
- 27.
See also Chap. 3 of this volume.
- 28.
At first they purchased paddy directly from farmers, but faced lots of logistic problems; therefore, later, they purchased rice from rice millers and finally from Yangon and Mandalay wholesale markets. The procurement prices were decided based on a production cost survey conducted by MRF.
- 29.
The total budget was only 14.53 billion kyat (10 billion from the government, 3.53 billion from MRF and 1 billion from cooperatives).
- 30.
How the rice buffer stock issue is related to the enactment of the ‘Protecting Rights and Enhancing Economic Welfare of Farmers Law’ is unknown, but if the government purchases rice from farmers, the price should not be too high compared to the production cost. More sophisticated and scientific concepts and methodology need to be introduced in the survey of production costs.
- 31.
The compulsory cropping system had also been applied to industrial crops such as sugarcane, cotton, jute and rubber until the mid-2000s. The state-owned enterprises had procured the crops (at low prices) for processing. Besides, the system has been applied occasionally to other crops such as sunflower, mustard and niger.
- 32.
The compulsory cropping of summer paddy has been applied not only in the irrigated area by government canals or pumping systems but also in the irrigable land by private pumping systems mainly in the Ayeyarwady Delta.
- 33.
As members of the Agriculture and Rural Development Working Group of the Myanmar Economic Structural Adjustment Program of JICA (Japan International Cooperation Agency) during 2001–2002, we participated in the village surveys selected from different agro-ecological zones of Myanmar. In 2000, the rice price remained at a very low level even in the preharvest season of the monsoon paddy and farmers incurred a loss. The extreme low rice price persisted thereafter also and farmers were reluctant to grow summer paddy, because they had to irrigate land with their private pumps using imported (and so expensive) diesel oil and chemical fertilizers. However, they were forced to grow summer paddy under the compulsory cropping system. In June 2001, we conducted a survey in Myaungmya, one of the major rice-producing areas in the Ayeyarwady Delta, and found that farmers had to borrow money for summer paddy cultivation from informal sources, including pawn shops, at high interest rates. We found in a storehouse of a pawn shop a lot of pawned items such as diesel engines (for pump irrigation), bullock carts (only wheels were deposited due to the shortage of space), bicycles, etc. See Kurita et al. (2004).
- 34.
In 2001, we visited various parts of Myanmar and observed in the Central Dry Zone and mountainous areas that many government staff (in the Ministry of Agriculture and Irrigation) made a desperate effort to expand rice cultivation to lands unsuitable for rice.
- 35.
See also Chap. 6 by Masahiko Matsuda in this volume, which explains a case in Shan State where the government encouraged rice cultivation by constructing rice terraces, although the local farmers had historically developed a refined system of irrigated upland farming, suitable to local ecological conditions.
- 36.
For instance, we encountered several such cases when we toured a wide rural area in Kyaukse Township in 2001 for selecting study villages.
- 37.
See Tin Htut Oo (2012) for more systematic diagnosis on fundamental problems included in the Myanmar’s agricultural policy.
- 38.
The overreporting of agricultural production statistics became more serious after the mid-2000s, including non-rice crops.
- 39.
2 KR (Kennedy Round) means a type of ODA by the Japanese government for increasing food production through providing inputs such as chemical fertilizers and agricultural machinery.
- 40.
In Bangladesh (located in the Bengal Delta), for example, rice sector development typically followed such a path (Fujita 2010).
- 41.
See Fujita and Okamoto (2000), a case study of a village that experienced rice double cropping in this period.
- 42.
The disappearance of suitable areas for the double cropping of rice was the other major reason.
- 43.
Note here that, however, sales of the users’ rights have commonly been observed in Myanmar by transferring the name in land registrars with informal consent among the seller, buyer, Village Tract chairman and SLRD field staff. Because of this, if we asked for the ‘land price’ in villages, we could get the answer immediately. By contrast, lease (tenancy) or mortgage of the users’ rights could rarely be observed except in a few cases among close relatives.
- 44.
An example was the agricultural research/education district in Yezin. It was built by expropriating a large land area, and many farmers became landless in the process (although some people got a job in the agricultural university or research institutes). The construction of the new capital, Nay Pyi Taw, was another major case.
- 45.
In the case of perennial crops, for example, not more than 5,000 acres at a time and whenever cultivation is completed on 75 % of the permitted acreage, an additional area of not more than 5,000 acres at a time up to a total of 50,000 acres shall be permitted. (However, in the case of farmers and families that want to run manageable farms, they shall be allowed to use an area not exceeding 50 acres with the permission of one of the respective local organizations.) Actual cultivable land of more than 5,000 acres at a time shall be permitted for the state interest with the agreement of the Cabinet of the Union Government. The duration for rights to use the land cannot exceed 30 years from the year of the grant.
- 46.
The major problems to be raised are as follows: (1) there is no restriction written in the law on the ceiling of land area a person or an organization can hold (thereby accumulation of land in the hands of a few private companies may become a serious social problem in the future) and (2) compulsory cropping, hitherto only informally enforced, is clearly stipulated in the new Farmland Law, which is very problematic.
- 47.
- 48.
It is well known that in traditional agriculture, family labour-based small-scale farming is more efficient and productive in terms of land productivity. The major reason is the higher expenditure for supervising labourers for hired labour-based large-scale farms, whereas there is no advantage in large-scale farms as the ‘economies of scale’ do not work in traditional agriculture. See Fujita (2009b), for example, in the case of Bangladesh agriculture.
- 49.
It is usually argued that the rental market for draft animals is difficult to function, since owners of animals cannot prevent borrowers from misusing the animals (Ohno 1988). Note, however, that Fujita (2009) observed in rural Bangladesh the development of such markets, albeit insufficiently.
- 50.
Given the fact that there are many large landowners in Myanmar with more than several hundred or even several thousand acres, the Myanmar government should examine the possibility of a radical land reform program to redistribute farmland to needy people.
- 51.
According to a survey by the author in a branch office of MSLE at Waw Township, Bago, on September 21 2001, MSLE had its head office in Yangon, with 9 regional offices and 178 township offices. The outstanding lending amount in 2000/2001 for the Waw Township branch office was 11.7 million kyat (to a total of 1,201 customers). They borrowed money from the Mynma Economic Bank at an annual interest rate of 11 %, which is lent by keeping gold as collateral, at a rate of 42,000 kyat per one tickle of gold (which was valued at more than 100,000 kyat at that time) with a monthly interest rate of 3 % for a period of 5 months. The number of staff of the branch office was seven, including a branch manager. According to them, there was one authorized private pawn shop and roughly 50 unauthorized ones in the township. Compared with the MSLE, the interest rate charged by the private pawn shops was lower but with a shorter lending period. When customers cannot repay the loan from the MSLE, they usually borrow money from others (mainly private pawn shops) and repay with that. Therefore, the cases in which pawn agreements are taken up by the MSLE are rare.
- 52.
A branch office of MADB is usually located in a major town in each township. As of 2013, the total number of MADB branch offices was 206. Therefore, the major problem for farmers when depositing money in MADB is the long distance from villages to the branch office, resulting in a very high transaction cost for depositors. In order to solve this problem, the reintroduction of the village banking system, which worked very well until 1993, can be considered.
- 53.
The Myanmar government’s expectations of microfinance for poverty alleviation seem large. Note here also that, with fund aid from the United Nations Development Program (UNDP) , a microfinance project has been conducted for many years in the three areas of the Ayeyarwady Delta, Central Dry Zone and Shan Plateau by PACT (Kubo et al. 2009).
- 54.
The development of accurate and detailed statistics is very important in this sense.
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Fujita, K. (2016). Agriculture and Rural Development Strategy in Myanmar: With a Focus on the Rice Sector. In: Odaka, K. (eds) The Myanmar Economy. Springer, Tokyo. https://doi.org/10.1007/978-4-431-55735-7_5
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