Despite the many transformations taking place in Myanmar, its agricultural sector is lagging. A high proportion of rural households remain poor and food insecure as a result. This article examines the underlying causes of poor agricultural performance through a combination of literature and secondary data review combined with extensive field interviews with a broad range of key informants in the main agricultural zones of the country. We identify key structural changes that are needed to unleash smallholder-led agricultural transformation and broad-based rural economic growth. (1)
Despite enormous potential, Myanmar's agriculture has underperformed over the past fifty years. Today, per capita earnings in agriculture average roughly USD $200 a year, one-half to one-third the levels achieved by its regional peers. Given that two-thirds of the population work primarily in agriculture, low farm productivity translates into high rates of poverty and food insecurity. Currently, about one-quarter of the population falls below the national poverty line. As a result, in spite of national rice self-sufficiency, food security for many households and individuals remains elusive. Poor households spend over 70 percent of their income on food. In addition, fully one-third of rural households borrow at some point during the year in order to purchase food. Up to one-half of rural households report having to navigate two months each year without adequate food supplies, leaving one-third of the country's children stunted.
Why has Myanmar's agricultural sector performed so poorly? What actions will be most effective in stimulating rapid, broad-based increases in agricultural productivity and profitability? In order to address these two core questions, this paper summarizes the results of a detailed diagnostic assessment study prepared by a team of six Myanmar Development Resources Institute (MDRI) staff, and seven international agricultural specialists. (3)
The discussion below begins with a brief overview of the data and methods employed, followed by a synopsis of the current structure and performance of the agricultural sector. The remaining sections of the paper address the paper's two core questions concerning reasons for Myanmar's poor performance and potential remedies.
DATA AND METHODS
This assessment builds on a wealth of existing background studies and survey work, including a recent agricultural sector review commissioned by the United Nations Development Programme (UNDP) and conducted by the Food and Agriculture Organization (FAO); an Integrated Household and Living Conditions Survey; a country economic assessment conducted by the Asian Development Bank (ADB); an important baseline study and early evaluation reports by the Livelihoods and Food Security Trust Fund (LIFT); a collection of highly informative subject-matter reports and studies by the Land Core Group of the Food Security Working Group, FAO, Okamoto, and the Australian Center for International Agricultural Research (ACIAR); and a series of four reports prepared by the Ash Center at Harvard University and commissioned by Proximity Design. (4) Private-sector trade associations representing the rice industry, and poultry, livestock, horticulture, and pulse traders supplied the team with similarly useful market data and, in some cases, survey results commissioned by their associations. (5)
In order to see farm production, marketing, food security conditions, and livelihood options firsthand, the team conducted three weeks of field interviews in the Delta, Dry Zone, and in Shan State during two waves of visits running from early October through the end of November 2012. The team also attempted to visit Chin, Mon, and Kachin States, but was unable to arrange the necessary travel logistics and permissions. Team members recognize the limitations this places on the geographic scope of their understanding, particularly given that conditions vary widely over time and across geographic space in the ethnic and border areas they were unable to visit. In all, the team visited roughly three dozen villages and two dozen markets in towns across these three zones, enough to provide context but clearly insufficient to produce statistically reliable data.
During the field visits, team members consulted broadly with government officials, farmers, traders, agribusiness operators, and non-government stakeholders in the NGO community and in civil society using rapid rural appraisal techniques, and both key informant and group interviews. In each location, we specifically sought out women participants in order to ensure gender balance in the input we received. Following the field visits, the team conducted debriefing meetings with the private-sector Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) and agricultural-sector donors (LIFT consortium), which proved helpful as a sounding board for initial findings and for clarifying inconsistencies and issues requiring further investigation. In a second round of consultations in 2013, the team benefited from detailed comments on the draft report during two day-long workshops: the first, held in Yangon on June 21 with representatives from the private sector, NGOs, donors, researchers, various political parties, and the media, and the second held in Nay Pyi Taw on June 24 with the Ministry of Agriculture and Irrigation.
Data inconsistencies posed consistent challenges throughout the team's investigations. Our efforts to reconcile basic empirical inconsistencies brought back memories of Wolfgang Stolper's famous book, Planning Without Facts, which describes his efforts in helping to prepare Nigeria's first national development plan at a time and in an environment where reliable data were in chronically short supply. His labors resemble those of current policymakers and potential investors in Myanmar, where reliable data remain similarly elusive even today. Virtually all of the stakeholders with whom we spoke, in both the public and private sector, emphasized the frailties of existing agricultural and socio-economic databases in Myanmar. Even production estimates for paddy--the single most important agricultural commodity produced in Myanmar--differ by 50 to 100 percent across sources (Table 1). These uncertainties over basic facts pose vexing problems, not only for assessment teams such as ours, but also for government policymakers and private-sector investors. (6)
CURRENT STRUCTURE AND PERFORMANCE OF MYANMAR'S AGRICULTURAL SECTOR
As in neighboring countries, smallholder paddy production dominates Myanmar's agricultural economy. (7) Paddy production accounts for roughly half of all cropped area, while pulses and oilseeds account for a further 20 percent each, with horticulture crops, roots, and other cereals accounting for the remainder. (8) Farmers generally grow lower-value crops such as paddy, pulses, and oilseeds on relatively large surfaces, while high-value horticulture and fruit crops are grown on much smaller plots. Paddy, pulse, and oilseed farmers cultivate an average of four to five acres per holding. In contrast, onions, garlic, and potato fields average about 1.5 acres each, while vegetables and cut flowers are grown on plots ranging between 0.6 and 0.7 acres in size. (9) High-value crops enable even small landholders to earn high returns from small holdings.
Horticulture products--including fresh fruits, vegetables, and flowers--provide earnings for about 15 percent of rural households in Myanmar. (10) Grown widely throughout the country, horticultural products assume particular prominence in the hilly zones of Shan State and other border regions. Livestock and fisheries account for about 20 percent of total agricultural incomes in Myanmar, though these estimates may understate the economic and nutritional importance of these non-crop sectors. (11) As with high-value horticulture products, small stock and poultry attract considerable interest among landless and near-landless households because of their high value and low-land requirements. (12)
Over the past decade, the Government of Myanmar has allocated nearly two million acres of land in large concessions to local agribusiness companies and, since 2010, to foreign investors. (13) While some of the large concessions have proven commercially successful as farming businesses, other concessionaires appear to have limited interest in farming and instead gain land rights in order to enable mineral extraction, lumbering, or land rental to smallholder sharecroppers. For some categories of commercial agriculture and agribusiness, large concessions offer a viable model for meeting the stringent quantity, timing, and quality demands of high-value products and niche-export markets. These large holdings, however, do not offer a feasible exit for the vast majority of Myanmar's landless poor, given common tendencies to mechanize large-scale operations. (14) In practice, overly rapid mechanization on large farms risks displacing labor and thereby depressing rural wage rates, thus further constraining the short-term survival strategies of the rural landless. Under most crops and agro-ecological conditions in Myanmar, smallholder farmers offer significant potential for productivity growth, increased...