Fruit farmers consider forming public companies

Frustrated with complex procedures, taxes and advantages held by Chinese traders in the border town of Muse, fruit farmers in upper Myanmar have floated the idea of forming companies in the hope of finding strength in numbers.

In May, the government tried to help farmers and small-scale importers and exporters in Northern Shan State, Mandalay and Sagaing regions by raising the five-day individual trading quota to K15 million. Fruit sellers say this has not helped, as business is still constrained by complex procedures and arbitrary taxes.

Mango traders said they are frustrated with a long-standing dispute over duty fees with brokers in Shan State’s Muse, on the border with China.

“Even if we use the individual trading cards we still have to use brokers in Muse to sell our produce and they charge us K180 per box,” said Mandalay Region Mango Association vice chair Ko Kyaw Soe Naing.

Individual Trading Cards were introduced in 2012 to help the government regulate commerce. More than 300 cards were issued at 18 trading points in 2014-15 and 146 cards were distributed last fiscal year.

The government sees them as a solution to the taxation problem; last year commerce ministry director U Zaw Min told farmers in Muse that if they carried an ITC, they would not need to pay fees.

This is not the case, say farmers, who have been trying to solve the problem for several years. A new association formed in May will meet at the end of the mango season at the end of June to discuss solutions, said Ko Kyaw Soe Naing.

“We will discuss forming a company. We are not sure whether it will be a private or a public business – that will depend on what everyone wants.”

As Chinese demand for Myanmar watermelons shows no signs of slowing, local watermelon farmers are also considering forming their own company, said U San Linn, deputy chair of a local association.

ITC cards are good for importing agricultural machinery and for individual direct selling, but not for fruit farmers, he said.

“For us, selling through centres is better than using the ITC. I think the ITC procedures are hard for the farmers,” he said. “Instead of selling individually, we are planning to form a public company.”

Competition from Chinese traders is rising, even within Myanmar. Many are now cutting out the middleman and extending their reach deep into the country to deal directly with fruit farmers, and opening their own fruit shops in Muse.

“Now, Chinese brokers are connecting directly with the farmers, giving them money, equipment and seeds. This is making life hard for small local traders,” Sai Khin Maung, secretary of the Muse fruit retailers association, told The Myanmar Times last year.

“They profit on both sides of the border, buying fruit cheaply in Myanmar and selling it on in China.


Source: Myanmar Times

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