Rice sector faces long struggle

Whatever steps the incoming government may be contemplating to spur investment, agricultural experts see little improvement in the short term for rice cultivation. Even long-term development will be a drawn-out struggle, said Myanmar Rice Federation general secretary U Ye Aung.

In a recent interview with The Myanmar Times, U Ye Aung said barriers to raising production were preventing farmers from taking advantage of increasing overseas demand.

“The incoming government will have to handle the agricultural sector with great care. We can rule out development this year. It will need a huge effort even to generate a 3-4 percent annual increase,” he said.

The National Planning Law enacted last April 9 projected a 2.3pc increase in the agricultural sector for 2015-16.

Farmers say they face difficulties in increasing production in rice, beans and other crops. The sector is still grappling with the after-effects of widespread illegal land-grabs, drought in the dry season and flooding in the wet season. Inadequate capital, a failure to apply technology, weaknesses in transportation capacity and the limited availability of crop strains also hinder progress.

“There has been more development than in the past, but not as much as there should be. Government action is essential to attract investment, produce grain seeds and help farmers get grains to the market,” said rice exporter U Myo Htwe.

He added that heavy flooding, caused by a range of factors including climate change, had a particularly devastating effect on rice production, since 70pc of annual harvesting took place in the rainy season. The 2014 Law of Protection of Farmers’ Rights and Enhancement of Their Benefits, enacted to help protect growers against climate shifts, is seen as just a first step toward mitigating these effects.

The current export price is US$400 per metric tonne of 25-mark rice and $460 per tonne of 5-mark rice. For sea route trading, rice is priced at $340 per tonne of 25-mark and $460 per tonne of 5-mark rice. Traders say that though these prices are slightly higher than the last two years, production is decreasing.

Agriculture is at eighth position in a list of 11 sectors open to foreign investment, according to data from the Directorate of Investment and Company Administration.

“It takes a long time to make a profit from agricultural investment, and there are weaknesses in the relevant laws,” said DICA director general U Aung Naing Oo.

From 1988 to 2015, Myanmar received a total of $47.89 billion in foreign investment, of which a mere $214 million was devoted to the agricultural sector.

Source: Myanmar Times

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