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ISSN : 1225-8504(Print)
ISSN : 2287-8165(Online)
Journal of the Korean Society of International Agriculture Vol.24 No.2 pp.136-151

미얀마의 농업개발 현황과 한국으로부터의 교훈

김경량, 제말 아바피타
강원대학교 농업생명과학대학 농업자원경제학과
미얀마는 생태적 다양성과 함께 풍부한 수량, 비옥한 토질 등 양질의 농업환경을 갖고 있다. 1960년대 동남아의 최대 쌀 수출국이었던 미얀마가 농업 후진국으로 전락한 것은 농업에 대한 열악한 투자와 자본과 기술의 부족으로 농업의 기계화나 비료 사용이 극히 제한되어 농업생산성이 떨어졌기 때문이다.
이에 본 논문은 미얀마 농업분야의 현 상황을 검토한 후 한국의 발전과정에서 도출한 경험을 바탕으로 미얀마의 농업개발을 위한 제안을 목적으로 한다.
현재 미얀마의 농업과 농촌발전을 저해하는 제약요소들은 다음과 같다.
첫째, 높은 생산비용에 비해 낮은 품질의 농산품, 낮은 생산성, 농업인프라의 부족 등 농업생산분야에서 한계를 보이고 있다. 둘째, 불안정한 수급에 의해 농산물가격의 급격한 변동 및 저장시설부족으로 인한 농산물마케팅에 문제점가 있다. 셋째, 농업 연구 및 지도 관련기관 직원들의 기술 및 지식수준이 매우 낮으며, 낙후된 시설과 장비부족 등으로 농민들에게 제한적인 농업기술 교육 및 훈련을 제공하고 있다. 넷째, 농촌경제의 활성화를 위해 설립한 금융시스템이 설립 당시 역할을 제대로 수행하지 못하고 있으며, 실효성이 매우 떨어진다. 다섯째, 정부내 연구 및 지도기관간의 유기적 협력이 이루어지질 않아 농업연구결과가 현장에 연결되는데 어려움이 나타나고 있다.
미얀마의 농업발전을 위해 한국의 경험을 살펴볼 필요가 있다. 한국의 경우 미얀마의 현재보다 더욱 열악한 환경속에서도 1960년대부터 녹색혁명과 백색혁명 및 새마을운동을 통한 복합적인 농업개발을 통하여 농업분야를 포함한 성공적인 경제발전을 이룩하였다. 한국의 경험으로부터 미얀마의 농업개발을 위해 제시되는 중요한 교훈은 시대환경과 흐름에 맞게 농업정책이 조정되었다는 것이다.
한국의 발전경험을 중심으로 미얀마의 농업발전을 위한 교훈은 다음과 같다
첫째, 농업의 생산성을 제고시켜야 한다. 농업용수 개발 및 관개시설의 개선사업을 통해 생산성을 향상시키고, 전문기관을 신설 또는 조정하여 연구와 농촌지도를 통해 생산현장에 새로운 기술을 전파함으로써 생산성을 증가시킨다.
둘째, 농촌지역을 활력화 시킨다. 농촌인프라를 개선하고, 농촌금융을 선진화하며, 새마을운동을 통한 정신계몽을 추진하는 등 농촌지역을 활력화 시킨다.
셋째, 농산물 도매시장과 농산물의 가공저장시설의 건설 및 유기적인 유통체계를 구축하여 농산물유통체계를 개선한다.

Agricultural Development in Myanmar: Lessons from Korean Experience

Kyung-Ryang Kim, Jemal Abafita
Department of Agricultural and Resource Economics, Kangwon National University Chuncheon-si, Gangwon-do
Received Feb. 29, 2012 /Revised May. 9, 2012 / Accepted Jun. 8, 2012


Myanmar is endowed with vast natural resources. However, its performance in terms of economic development in general and agricultural development in particular has not been satisfactory. This paper reviews the current situation of Myanmar’s agriculture and rural development to draw lessons from the Korean experience and provide policy recommendations for Myanmar’s future direction. Myanmar’s agricultural and rural sector faces a number of constraints that need to be tackled. The major ones include: the unnecessarily high cost of production, unsatisfactory profits due to low productivity and poor quality of products, the increasing population and living costs, inadequate pricing policies both for agricultural inputs and products, low investment in agricultural research and development, inadequate human resource development, weak linkages in agricultural research and extension, inadequate access to agricultural credit, and lack of basic physical infrastructure. Moreover, lack of access to adequate high-quality seed and scarcity of farm infrastructure has been identified as notable impediments to the development of the agricultural sector. Other issues like lack of a well-established system for stabilizing price fluctuations in agricultural products and of marketing information, rural financial markets, coordination and cooperation among line ministries involved in agriculture and rural development activities also deserve a closer look for improvements. It is, therefore, imperative to share the Korean experience of agricultural and rural development. Accordingly, fine-tuning policies to changing economic conditions over time; finding a good mix of policies based on pressing needs and changing circumstances; setting-up appropriate institutions and policy context; empowering local community in rural development activities; and sharing the experience of the New Village Movement (Saemaul Undong) could be key lessons to draw from the Korean experience. Specific recommendations for Myanmar’s agricultural and rural development have also been forwarded based on the Korean experience.

Myanmar is an agricultural country with 70% of the population living in rural areas. It is a resource-rich country, endowed with natural resources like: arable land, forestry, minerals (including gas and oil), freshwater and marine resources. However, despite the abundant natural resources, emergence as a natural gas exporter and potentials for economic growth, Myanmar’s GDP stands at $42.95 billion (ADB and IMF 2010 data), which is one of the lowest in the Greater Mekong Sub-region. 

According to the Asian Development Bank data, the importance of agriculture to the Myanmar economy has increased in recent decades, from approximately 48% of GDP in the 1980s and 1990s to 56% in 2001/02. Industrial production, by contrast, declined to just over 10%. According to data from Myanmar, the agricultural sector accounts for 40% of the GDP, 17.5% of the total export earnings and employs 61.2% of the total labor force in 2009/10 (MMRA, 2011). Hence, agriculture and rural development are top priorities for the nation’s economy (Yim, 2011). In spite of high potentials for agricultural development in Myanmar, however, agricultural production has declined since early 1990s. In addition, agricultural productivity is low, rural income is relatively low, and rural areas are less developed.

Since Myanmar is an agricultural country, agricultural development is recognized by the government as key to economic development. With the current plan for agricultural development set in 2009 for the period 2010 to 2014, it is expected that progress will be made in the agricultural sector. To this end, it would be crucial to share the Korean experience in agricultural development with Myanmar. Therefore, this paper aims to review the current situation of agriculture and the rural sector in Myanmar and draw lessons from the Korean experience in agricultural and rural development to provide appropriate policy recommendations for its future direction. 


Myanmar’s Agricultural Development

The agricultural sector, including livestock, fishery, and forestry products, has the largest share of GDP in Myanmar, contributing about 40% in 2009/10. This is a significant contribution compared to the service sector, which accounted for only 16.1% of the total GDP during the same period. However, the annual growth rate of agricultural products stood at 4.1%, while that of services was 14.7% in 2009/10. Overall, agricultural production grew by about 28% over the period 2005/06 to 2009/10, while the corresponding rate for the services sector was about 76%. A close observation of the GDP trend since 1980s reveals that the agricultural sector was moving at a very slow pace to lose its relative importance in terms of its contribution (Fujita & Okamoto, 2006; MMRA, 2011).

Agricultural products also constitute the largest share in Myanmar’s export, making up 15.6% of the total exports in 2008/09. In 2010 Myanmar’s total export was $8.586 billion, Thailand being the largest export partner with 38.3% of total share, followed by India with 20.8%, China with 12.9% and Japan with 5.2%. Major export commodities included natural gas, wood products, pulses, beans, fish, rice, clothing, jade and gems. Although Myanmar’s exports were dependent on traditional agricultural products and less diversified initially, there have been improvements in recent decades where the export portfolio diversified initially into a variety of agricultural products and recently into nonagricultural products. 

The main crops cultivated in Myanmar are cereals, pulses, industrial crops (such as cotton, jute, rubber, coffee, mulberry, and oil-palm), kitchen crops (such as chilly, onion, garlic, ginger, turmeric, and potato), and tropical and temperate fruits and vegetables. As displayed in Fig. 1, paddy production leads with 34% in 2010/11. 

Fig. 1. Production of main crops in 2010/2011.

Increased cropping intensity has been carried out alongside expanded use of machineries in agriculture at all stages from land preparation to harvesting. As shown in Table 1, the agricultural production in Myanmar has experienced a great improvement for most of the products since 1995. For instance, rice has increased by about 76%, maize by 353%, and palm oil by 1,365%. This could be due to major policy changes that aimed at increasing grain production for food as well as for commercial purposes or export promotion.

Table 1. Myanmar- production of major crops, 1995-2010 (‘000 MT).

Table 2. Myanmar - sown area by crop group.

Regarding the cropping pattern, sown area under various crops has shown a remarkable increase over the period 1995 to 2010, the highest rise recorded between the period 2000/01 and 2005/06. This significant increase could be due to an agricultural policy geared towards expansion of production through reclamation of arable land. This change could as well be driven by market oriented policy goals aiming at increasing exports.

A major agricultural product in Myanmar, rice covers about 60% of the country's total cultivated land area, and accounts for 97% of total food grain production. Fifty-two modern rice varieties were released in the country, in collaboration with the International Rice Research Institute, with the aim to help increase national rice production to 14 million tons in 1987 and to 19 million tons in 1996. By 1988, modern varieties were planted on half of the country's rice-lands, including 98% of the irrigated areas.1)

1) Myanmar and IRRI, Facts about cooperation, international rice research institute. 2007.


During the period 1995 to 2009 paddy sown area was increased by 31.4 % from 6.14 million ha in 1995 to 8.07 million ha in 2009, while yield increased by 31.8 % from 3.08 MT/ha to 4.06 MT/ha respectively in the same period. The associated growth rate of total paddy production has been a significant increase of 75.9% from 18.6 million MT in 1995 to 32.7 million MT.

From 2000 onwards, Myanmar has experienced an increase in growth in the share of agricultural land,2) which reached 18.3% in 2008. According to the Ministry of Agriculture and Irrigation, Myanmar’s net sown agricultural land ranged from 9.6 million ha in 1988-1989 to a fragmental increase of 10.5 million ha in 2004-2005. However, the size of the agricultural land doubled during the period of 2009-2010 with 22.6 million ha, compared to 2004-2005 figures. This expansion of sown area can be mainly attributed to the intensification of land use, or to a rise in cropping intensity (Fujita and Okamoto 2006). It could as well be attributable to the extensive land development operations carried out by the government. The Irrigation Department and the Agricultural Mechanization Department have been carrying out land reclamation and land clearing activities since 1994/95.

2) The area that is arable under permanent crops and pastures, and also includes temporary crops, temporary meadows for mowing or for pasture, land under market or kitchen gardens, and temporarily fallow land.

About a quarter of Myanmar’s total land area is cultivable land. During the colonial period, government had carried out land expansion aimed at achieving higher earnings from export of agricultural products. After 1988, more emphasis was placed on ensuring a smooth and secured transportation system, institutionalization of the newly introduced marketbased economic system and crop price stabilization, and expansion of crop sown area throughout the country. Fig. 2 below shows the share of land utilization in Myanmar in 2009-2010. The highest share was reserved and other forest with 49.1%, while other land uses, net sown areas, cultivable wastelands and fallow lands accounted for 24.5%, 17.7%, 8.3%, and 0.4% respectively. 

Fig. 2. Land utilization in Myanmar, 2009/2010.

Land consolidation is also being undertaken in the existing agricultural land with proper drainage, irrigation and farm roads. Along with the traditional small-scale crop cultivation, development of large scale modernized agricultural business by the private sector is strongly encouraged. National companies and associations in the private sector were granted rights to develop the new agricultural land areas, for which current productivity is low and the cost of land reclamation is rather high (such as flooded area, deep water area and existing fallow, waste and virgin land). These companies are using these areas for the cultivation of paddy, pulses, oilseeds, industrial crops, rubber, oil palm, etc. It was estimated that there are 214 private companies and organizations with the government grant of 0.79 million hectares for commercial farming (MMRA, 2011). 

Irrigation and Use of Agricultural Inputs

In 2009-10, Myanmar was able to cover about 2 million ha area of the total sown area of 13 million ha. At present, only about 6% of the total water resources of the 352.1 million ha per annum are being used annually. The government has been implementing various measures to improve irrigation system. These included the construction of new reservoirs and dams, the proper management for storage and utilization of run-off water from watershed areas, renovation of existing reservoirs for raising storage capacity and efficient delivery of irrigation water, diversion of water from streams and rivulets during high water levels into adjacent ponds or depressions for storage with sluice gates, lifting of water from rivers and streams through pump irrigation and efficient utilization of ground water (MMRA, 2011). 

Construction of irrigation works for crop production dates back to the days of Myanmar’s King, with various projects implemented after the independence. Since 1988, the government has been consciously allocating large amount of capital investment for constructing dams and reservoirs throughout the country. As a result, total irrigated land area has increased to 1.14 million hectares during the period 1988/89 to present from its 0.54 million-hectare level before 1988/89. Apart from construction of dams and reservoirs, 327 river-pump stations and 8263 tube wells were established in rural areas for water supply and agricultural use. Overall, irrigation coverage in terms of sown area was increased from 12.5% in 1987/88 to 17.1% in 2009/10 (MMRA, 2011). 

However, the expansion of irrigation system in Myanmar faces a number of constraints. These include insufficient funding, insufficient access of heavy machinery and spare parts, limited private sector involvement in construction works, delayed downstream development, top-down approach in downstream planning and development, limited technical capacity, inadequate financial capacity of farmers and water users to pay for increased water charges and fees, and absence of a favorable environment to form strong water user associations among others.

Seed production system is had also improved in Myanmar. The Ministry of Agriculture and Irrigation has been responsible for facilitating the breeding and upgrading of seed varieties. Hybrid varieties are also being produced through bilateral and commercial cooperation. New improved varieties are also imported from abroad and distributed to upgrade the quality and yield of existing field crops, fruits and vegetables. High quality seeds produced by new improved varieties have been provided to farmers every three years for rejuvenating purpose so that they can obtain quality seed regularly for each crop. However, even though the seed production system is now well established, participation of the private sector in the production and distribution of high quality seed is not satisfactory. The government should encourage private investors to set up industry and take over the majority of seed production. 

The use of fertilizers and pesticides in Myanmar has been one of the lowest in the region. The total sum of pesticide and fertilizer use does not meet the actual requirement, mainly due to budget and foreign exchange constraints. As a result, the utilization of pesticides and fertilizers is very low compared to neighboring countries. In fact, of the 23 countries in the Asia-Pacific region, Myanmar is among the 10 countries which have the lowest fertilizer consumption in terms of nutrients.

Moreover, Myanmar faces the challenge of increasing productivity and reducing post-harvest losses. Currently, the post harvest loss in rice production in Myanmar stands at 10-20%. The government has made development of agriculture through mechanization and application of modern agrotechnologies as its priority in the overall national economic development. However, the capacity of the government's Agricultural Mechanization Department (AMD) is limited; while the role of Myanmar's burgeoning private sector that produces agricultural machinery needs exposure to the latest technological developments. Enhancing the capacity of both will assist Myanmar in achieving its targets to mechanize the agricultural sector. 

R&D and Extension Services

The linkage between research and extension is one of the key factors to ensure improvements in productivity. In this regard, Myanmar has a large network of research and extension institutions and physical facilities strategically located in all agro-ecological regions of the country, with considerable land areas available in the form of research, seed or extension farms. The research and extension system is relatively well staffed. Furthermore, the Agricultural University (YAU) is well located and has not only qualified and experienced teaching staffs but also a research farm with access to irrigation. 

Another important input to boost production and productivity is agricultural extension. In this regard, Myanmar has been undertaking transfer of technology to farmers through agricultural extension services regarding crop cultivation practices, appropriate cropping patterns, provision and proper utilization of agricultural inputs and systematic plant protection to improve production and productivity. Largescale demonstration plots and block-wise crop production zones were also launched at the entrance and exit of each township mainly to utilize appropriate agro-techniques, organic and bio-fertilizer application techniques, etc. Farmers are invited prior to harvesting periods to get practical training on these plots. 

Despite these strong features, however, Myanmar had consistently lower yields than neighboring countries or the regional average across almost all crops. Only in two main crop categories – rice (89% of the regional average) and beans/pulses (65-150% of regional average) do national yields approach regional averages, and the beans/pulses group is among those least influenced by traditional research and extension programs.

Myanmar’s Agricultural Policy

With 70% of the population residing in rural areas engaged in agricultural and animal husbandry activities, the agriculture sector forms the backbone of the national economy of Myanmar. The role of agriculture in the national economy of Myanmar remains extensive, thus it has a direct bearing on all other socio-economic aspects of the country. As the vehicle for overall development, agriculture has received a considerable attention from the central government. The government has been implementing various national development plans and policies that aim at attaining self-sufficiency in national food requirements, adequate production of raw materials for local agro-based industries, and the generation of a substantial trade surplus (or net export surplus). 

The economic policy of Myanmar during the socialist period (1962-1988), especially up to the early 1970s, was essentially a policy of agricultural exploitation, with heavy emphasis on rice production (Thien 2004, Fujita and Okamoto 2006). Agriculture was adversely affected by the 1982-1987 policy framework under which the centrally planned economic system laid down the types and areas of crops to be grown and the inputs to be used by individual farmers, with public sector agencies procuring crops at fixed, low prices. Farmers responded quickly to the relaxation of controls in 1987-1988 with the result that cropping was expanded and diversified. As a result, exports have been increased during the last two decades. The liberalization of external trade, coupled with decontrol of domestic trade for all major crops, has resulted in a noticeable improvement in terms of trade for agriculture as well as changes in crop prices. With farmers now free to grow crops of their choice, there has been a shift away from staple food crops to highvalue cash crops such as beans, pulses and oilseeds.

The state of Myanmar established twelve political, economic and social objectives, of which one of the major economic objectives is “the development of agriculture as a base and all-round development of other sectors of the economy”. 3) Since 1992-93, integrated development strategy has been applied to agricultural development by the Ministry of Agriculture and Irrigation (MOAI), with specific sector objectives and policies, as follows: 

3) Myanmar agriculture in brief (2011), department of agricultural planning, ministry of agriculture and irrigation.

Policies, Objectives and Strategies

The policies in Myanmar included strategies to allow freedom of choice in agricultural production, expand agricultural land and safeguard the rights of farmers, encourage the participation of private sector in the commercial production of seasonal and perennial crops, distribution of farm machineries and other inputs, encouraging research and development activities for improving the quality and increasing the production of agricultural crops.

Objectives of Agricultural Development Sector

The objectives of the agricultural policies of Myanmar are primarily to fulfill the needs of local consumption, export of the surplus of agricultural products to increase earnings from foreign countries and ensure rural development through agricultural development. The implementation of the agricultural policies is mainly the responsibility of Ministry of Agriculture and Irrigation (MOAI). The main objective of MOAI is to increase crop production in the country. Efforts are made to increase the income of farmers by increasing crop production.

Policy Changes Related to Crop Production

Some agricultural policies related to the important industrial crops were already changed to achieve a better performance of producers and development of local market activities. Key examples include removal of state procurement policy on cotton, sugarcane and rubber, freedom in the production and trading activities of cotton, sugarcane and rubber, encouragement of area expansion of rubber, oil palm and other potential crops for export, pricing at market rate to purchase raw cotton, sugarcane and rubber for the consumption of state-owned factories and mills, permission to the producers and exporters to export surplus rubber after tax payment and permission to state-owned factories and mills to expand area of cotton, sugarcane and rubber to meet the needs of annual requirement. 

Strategies for Agricultural Development

The strategies for Myanmar’s agricultural development included development of new agricultural land, provision of sufficient irrigation water, provision and support for agricultural mechanization, application of modern agro-technologies, and development and utilization of modern varieties. 

Under the former centrally planned socialist economy, a 20-year long-term plan and a series of four-year short-term plans were implemented,4) during which various economic policies restricted investment in infrastructure and production, and resulted in low productivity and income, poor technology, inadequate management and chronic foreign exchange difficulties. The economy achieved a little more than maintaining self-sufficiency in food. Manufacturing, mainly to substitute for inputs, was limited in scope and low in productivity, and the service sector developed very slowly. 

4) These include annual plans from 1988-1989 to 1991-1992, First four year short term plan from 1992-1993 to 1995-1996, Second four year short term plan from 1996-1997 to 2000-2001, Third four year short term plan from 2001-2002 to 2005-2006, Fourth four year short term plan from 2006-2007 to 2010-2011 and the Fifth four year short term plan from 2011-2012 to 2015-2016

When the State Law and Order Restoration Council (SLORC) took over governing the country, it announced the adoption of a free market economy in 1988 and has since taken further steps to pursue liberalization including: enacting a new foreign investment law (November 1988), which gave greater incentives and guarantees to foreign investors; the legalization of border trade (late 1988) to encourage trade with neighboring countries; a clearer definition (March 1988) of the role of the State economic enterprises and the restriction of the number of activities to which they had exclusive rights; and the introduction in 1988 of new trading mechanisms to allow the private sector to enter the export sector and retain foreign exchange earnings.

The agricultural policies of the Myanmar government include: 

(A) The right to till land: Since the State is the ultimate owner of land, under the present land policy a farmer is given the right to till the land so long as he and his family utilize it and it remains inheritable. However, the land user cannot sell or sublet the land to tenants. This policy protects a farm family from becoming landless. Also, by giving the right to till the land to the actual tiller, the number of farmers with large holdings has been substantially decreased, while the number of farmers working on smaller holdings has increased correspondingly.

(B) The freedom of farmers to choose crops, fix price and arrange marketing: With the adoption of an open market economy, farmers are free to choose any crop and area they like, transport and store the produce, and sell to anybody at any price they choose. This policy was welcomed by the farmers and there was an abrupt increase in the volume of cash crop production, mainly peas and beans. For the national economy, the government should provide a guided control over the farmers to a certain degree as practiced even in some developed countries. The impracticability of overzealous and abrupt increases in areas sown with various crops on the same land and during the same season should be reconsidered. 

 (C) The right to cultivate or utilize land: With notification No. 44/91 of November 13th 1991, the government prescribed the duties and rights of the Central Committee for the Management of Cultivable Land, Fallow Land and Waste Land. The Committee has the authority to grant the right to cultivate Land, the right of State-owned organizations, joint ventures, other organizations and private individuals to utilize commercially viable land, fallow land and wasteland for the purpose of carrying out agriculture, livestock breeding, aqua-cultural enterprises or other affiliated economic development enterprises. In accordance with the existing land laws, the Committee has the right to grant 5,000 acres of such land for a maximum period of 30 years, with the possibility of extension. Many national and international investors approached the government for permission to expand the area and the extension of the grant period. The government eventually agreed to expand the grant area up to 50,000 acres but it retained the 30-year period. 

(D) Land-use planning and management: The government would like to develop the present 9,510,000 ha of fallow land and cultivable wasteland into cultivable land through forest clearing, reclamation etc. Initially, such types of land should be identified; for example, priority areas should be analyzed and maps prepared using satellite imagery, geographical information systems and field surveys. An educational program should be carried out to foster understanding and responsibility for the use and conservation of land. Land-use plans would be developed with the participation of line ministries. 

Myanmar’s Rural Development

Myanmar’s rural development suffers from many problems. About 30% of rural households are landless and another 37% have small or marginal cultivable land. In addition to lack of access to adequate land, farmers in remote areas lack technical skills and knowhow, working capital and sustainable income opportunities. 

Another problem relates to the issue of rural infrastructure. Rural infrastructure including roads, storage, electricity, processing facilities, and markets are important for enabling poor households to produce goods, add values and sale at appropriate time and at a fair price. However, these facilities are in most cases underdeveloped, insufficient or at best unsatisfactory to cope with the demand for them. Lack of basic physical infrastructures in rural areas was also mentioned as a serious constraint by the Myanmar delegation. Inadequate rural credit facilities and weaknesses in the linkage between agricultural research and extension services are additional problems observed within the context of rural development policy in Myanmar.

The current rural policy setting in Myanmar has set out major economic, political and social objectives in a bid to ensure rural development and to alleviate poverty. Building on the major rural development tasks set by the previous government (education, health, transport, safe water supply and agricultural development), consultations were made with key stakeholders to devise ways to achieve rural development and poverty alleviation. The extensive consultation held with this prime objective came up with eight selected tasks to be implemented under the guiding framework of bottom-up initiative to attain rural development and poverty alleviation goals. These include the development of agricultural production sector (enhancing agricultural production), development of rural productivity and cottage industries, development of micro saving and credit enterprises, improvement of rural cooperatives, development of rural socio-economic conditions, development of rural energy, and environmental conservation or protection. 

The country is already committed to reduce poverty levels to 16% as part of the target set by the MDG goa1 by 2015. However, the current poverty rate stands at 26% from its 32% in the year 1990, which implies that there still remains a huge task to reach the target in this regard in the remaining time. Hence the new policy directions are aimed at supple menting these tasks ahead.5)

5) The new light of Myanmar, Vol. XIX, No. 61, 21 June 2011 issue (News paper).

For the implementation of these tasks, various Union level central committees are established. The Union level central committee is established with the major task of adopting and supervising the policies. Union level work committee, composed of Union ministries, is charged with tasks of supporting the region and state level rural development and poverty alleviation work committees. The Region and state level rural development and poverty alleviation work committees are tasked with the actual practical measures of implementing the policy. The later committees will go down to 330 townships and 82 sub-towns to accomplish the tasks mentioned in cooperation with the rural people who are empowered to work in their best interests. The action plan to be drawn for the rural development and poverty alleviation is scheduled to be implemented during July 1st 2011 to December 31st 2015.

Formation of associations lies at the center of the whole process. Associations will be formed in townships and villages for mutual interest among congenial people, which will be reconstituted into village cooperative societies upon winning public trust. The cooperative societies to be formed will be with a bottom up initiative than really top down policy. Private cooperative credit societies will be established to lend to members loans of up to three times of their savings. Private companies, NGOs, INGOs and social organizations will have to cooperate with the government in a bid to ensure the rural development and poverty alleviation efforts. Farmers should get secondary income in addition to their primary income. 

With regard to rural finance, Myanmar has pursued a well-intentioned policy of providing subsidized institutional credit to farmers through the state-owned Myanmar Agricultural Development Bank (MADB). However, as has been seen in other countries that have followed similar policies, implementation of this policy has yielded results that are quite different from what was intended. MADB’s outreach is limited, loan sizes are inadequate, MADB drains scarce resources from the government budget, and other formal sector financial intermediaries are discouraged or prohibited from filling the financial gap in rural areas. In a few townships, microfinance projects supported by international donors partially fill the gap. Overall, however, outreach of the formal financial sector remains limited, and the rural population relies mostly on informal sources of finance, especially moneylenders, traders, and input suppliers, which are mostly prohibitively expensive and in most cases charging exploitative interest rates (MYANMAR 2004). 

Myanmar’s Rural Development Policy

Myanmar has implemented various rural development programs. Some of these programs include strengthening and developing agriculture, livestock, and fishery production; provision of proper social services; provision of water for crops and people; improvement of communication, roads and bridges; and development of rural industries among others. 

The government has been taking various measures to boost the rural economy. Some of these measures included provision of quality seeds, fertilizers, improved production technology, disbursing agriculture and livestock breeding loans, setting up integrated farming system in cooperation with local entrepreneurs, provision of pedigree stocks for livestock breeding, introduction of fish-farming, development of one-village one-product system, implementation of micro-credit scheme by cooperatives, NGOs and INGOs. 

As mentioned earlier, the government is taking major steps to devise ways to achieve rural development and poverty alleviation through the collaboration with relevant stakeholders and the rural community at large. A series of extensive consultation has been held with this prime objective to come up with eight selected tasks to be implemented under the guiding framework of bottom-up initiative for attaining rural development and poverty alleviation goals. 

Constraints of Myanmar’s Agricultural and Rural Development

Agricultural Production Related Constraints

The agricultural sector of Myanmar has been facing a number of constraints. Production costs are still unnecessarily high, profits remain unsatisfactory due to low productivity and poor quality of products, the growing population and living costs, inadequate pricing policies both for agricultural inputs and products, lower investment in agricultural research and development, inadequate human resource development in both R&D and agricultural extension, weak linkages in agricultural research and extension, inadequate agricultural credit, lack of basic physical infrastructure, weakness in strengthening information networks, and needs to enhance technology capability. 

While Myanmar has a relatively good research and development (R&D) system, it has consistently poor agronomic performance compared to neighboring countries. Even though there are many factors underlying this poor performance, it is likely that a number these factors are directly or indirectly related to the research and extension process. Key among these factors include: the lack of access for many  farmers to adequate high quality seed that would provide higher yields to make it worthwhile using significant quantities of purchased inputs; the extensive use of research, seed and extension farms for commercial production in order to augment limited budgets, or return funds to headquarters, as well as the scarcity of farm infrastructure (tractors, storage, irrigation), which limit the availability of land for research and experimental sites; and limited mobility of research staff, particularly extension staff, because of the poor motivation as a result of low salaries and benefits, and competing demands to undertake unrelated tasks, all limit the efficiency of personnel.

Moreover, limited knowledge concerning (a) response to different levels of input usage with improved varieties; (b) how genetic material and cultural practices should be modified under different agro-ecological conditions; (c) access to supplemental water and time of planting; (d) the relationship between expected output prices at harvest and the extent to which purchased inputs (or intensive labor use) are justified, and: (e) the interrelationships between different crops (and animals) within a farm rotation, and the influence of planting date and input decisions of one crop on the performance and requirements of others. 

Resolving these constraints will require considerable investment in both financial and institutional terms, as they will require not only an improvement in the capacity of research and extension personnel to undertake effective programs, but also an extensive restructuring of the way in which research needs are identified and prioritized, conducted and disseminated. It will also require considerable improvements in linkages between different research bodies and between researchers and extension services and their staffs. 

Research programs are, for the most part, commodity based and production-oriented. Most projects are “stand alone” in the sense that they do not form building blocks of a program targeted to reach a well-defined objective. Projects normally do not take into account farmers’ needs and constraints, production cost, profitability, marketing, and insertion of the researched technology into the prevailing cropping system. Similar activities are repeated year after year without a clear objective. In part, this occurs because projects and programs are usually centrally planned at headquarters for implementation on research farms. Those who are planning do not have the in-depth experience and knowledge of the local agro-ecological and socio-economic conditions, and those who implement in practice do not understand the technical design of the projects. In addition, priorities are usually set at headquarters without having effective participation of research field staff, extension agents, and farmers. 

Similarly, most extension messages are centrally designed by managers and mechanically implemented by field staff over a diverse range of agro-ecological and socio-economic conditions, without properly considering farmers’ needs and limitations, or market requirements. The consequence of this approach is a low adoption rate for technical recommendations.

Most institutions lack systematic mechanisms for coordination and cooperation with other research agencies or with extension services. Rationalization of research facilities and programs should be considered in order to keep only strategic units that represent major agro-ecological regions and host high priority programs that have potential for significant socio-economic impact. These facilities should have modern and updated equipment to provide proper working conditions to research experts. The current initiative of the MOAI to consolidate research organization at the Department level is an important initial step in the right direction that needs to be supported. 

Marketing Related Constraints

Agricultural marketing should also be improved as well in Myanmar. One of the typical problems in agricultural marketing is instability of price due to the inherent nature of fluctuation in the demand and supply of agricultural products. Moreover, conflicting policy objectives of expansion of production on one hand and of enhancing producer’s income and hence profitability of producers on the other has distorted the market and destabilized prices (Soe 2004). As a consequence, it is necessary to stabilize agricultural prices and ensure better coordination in the implementation of policies.

In addition, the collection and distribution systems of marketing information need to be well-established for market participants so that market information needs could be circulated well. It was indicated that market information service for the benefit of producers, traders, consumers and farmers is currently not so well developed that it has become Myanmar’s policy focus for agricultural development. Further, there is a need to create awareness for the proper use and optimization of the already available marketing information data by various government organizations. 

Importance of Education and Training

As mentioned earlier, farmers in rural Myanmar lack technical skills. There is a need to enhance the technological capability of the farmers for better adoption of technology to enhance production and productivity. A closely related issue concerns the education and training system in Myanmar, particularly related to agriculture. The main agricultural university (YAU) has strategic importance in preparing skilled scientists for strengthening the research and extension systems. But, skills and knowledge of teaching staff are outdated; the institution lacks modern facilities and equipment, and has an outdated curriculum. MOAI should consider a major review of YAU (and also of the other training centers), followed by an investment program to upgrade these institutions to a level capable of producing high quality graduates for research and extension (MYANMAR 2004).

Specialized training programs based on farmers’ needs nd constraints, agro-ecological and socio-economic conditions, and realities of research and extension organizations, virtually do not exist. Training at post-graduate level at YAU is not specifically tailored to address priority constraints of research and extension. The institution’s curriculum is biased towards theory with less attention to practical skills. Moreover, the very low levels of salaries and incentives to the teaching staff are also worth revisiting.

A further problem faced by extension staff is that those operating in the field are generally required to perform a number of other activities such as promotion of area expansion, distribution of inputs, and procurement of production, which conflict with their responsibility to disseminate improved technologies. In addition, insufficient transport prevents extension workers from visiting production areas for demonstrations and training. 

Operational cooperation between research institutions and among research, extension, and training organizations within MOAI are very weak. There are many institutions that conduct research in a variety of crops, and topics, without any systematic mechanism of coordination, exposing the process of technology generation to duplications and overlaps, which results in low efficiency of utilization of limited financial and human resources. Moreover, the exchange of scientific information between research organizations, and among research, extension and training institutions is very limited. Libraries of research, extension, and training institutions are outdated and don’t hold most important agricultural scientific literature. 

 Issues of profitability, production cost, marketing, environmental constraints, and socio-economic conditions of farmers are seldom considered in the planning and design stage of research projects and extension programs. The planning process is mostly top-down, due to lack of skilled personnel at local level and rigid organizational structure that discourages creative thinking.

Although research allocations of departments, institutes and enterprises, seem to cover most of current expenditures, they are, nonetheless, a very small percentage of the total budgets of the institutions. If research and extension activities are to increase significantly from the present low levels, these allocations would represent a major constraint. 

Rural Credit and Rural Economy

Credit is an important agricultural input as a source of capital required for agricultural purposes. Provision of various crop loans for different cultivation seasons (i.e., premonsoon, monsoon and winter seasons) has been made by the Myanmar Agricultural Development Bank (MADB). Medium and long-term loans for agricultural programs were also made available by the bank. 

One of the major problems faced by farmers is lack of sufficient and reasonably affordable rural financial services. The demand for rural finance in Myanmar is high, including both credit and secure savings facilities. Over 70% of the workforce is engaged in agriculture, which generates 57% of the gross domestic product; however, only 1-3% of formal bank loan volume is extended to the agriculture sector. With the exception of small amounts (8,000 kyat per acre) available from the Myanmar Agriculture Development Bank (MADB), farmers reported that credit was inadequate at any price. Development of a sustainable, market-oriented rural finance system could therefore have a significant impact on economic growth and poverty reduction. Myanmar’s financial system consists of 4 state-owned banks with specific mandates, private banks, 18 representative offices of foreign banks, Cooperative credit societies established under the Ministry of Cooperatives, State-owned and private pawnshops, Microfinance projects established by international donors and local associations, and Informal lenders, such as moneylenders, traders, and input suppliers.

As mentioned above, with only 1-3% of the formal loans going to the agriculture sector, access to credit and hence capital in rural areas is very limited. Despite Myanmar’s policy effort to provide subsidized institutional credit to farmers through the state-owned Myanmar Agricultural Development Bank (MADB), the implementation of the policy has not been quite successful. MADB’s outreach is quite low reaching only little portion of the rural community and loan sizes are inadequate. Moreover, other formal sector financial intermediaries are discouraged or prohibited from filling the financial gap in rural areas. Microfinance projects supported by international donors have attempted to partially fill the gap, however, their operations are limited to only few townships. Overall, however, outreach of the formal financial sector remains limited, and the rural population relies mostly on informal sources of finance, especially moneylenders, traders, and input suppliers (MYANMAR 2004).

 Even within the formal rural credit system, there are a number of constraints. For instance a notable constraint faced by MADB is the capacity of staff, both a cause and an effect of MADB’s weak performance is the lack of strong banking skills of many of its staff. Because of MADB’s mandate, there has not been a strong emphasis on recruiting either experienced bankers at senior levels, or business and accounting majors at entry levels. Staffs at the key assistant manager level is not recruited by MADB, but instead are recruited by the Public Service Selection and Training Board, which is appointed by the Government. Nor is there a formal training program for staff. Skills for credit assessment, risk management, accounting and auditing, asset valuation, business planning, and marketing integral to function on a market-basis must be built over time (MYANMAR 2004, David et al., 2009).

The fact that agricultural land is not accepted as collateral is a further constraint to lend to farmers. Land is the most important asset that farmers have, but is also the one asset that is not allowed as collateral. Reforms that allow agriculture land to be used as collateral will therefore increase access to credit. 

Constraints Related to Institutions and Capacity Building

Close coordination and cooperation between line ministries, government organizations, and other relevant bodies are crucial to ensure the agricultural and rural development endeavor of the country. Currently, eight ministries are directly or indirectly involved in agriculture and rural development of Myanmar. While at the top level, the government organization is adequate covering all areas required for the implementation of agriculture and rural development, the same may not hold down the line to the grassroots level. For instance, at the community level there is no agency to support the development of village roads, bridges, etc. Usually villagers take part in or contribute to the construction of essential infrastructure (Soe, 2004; MYANMAR, 2004).

Moreover, within the context of a commitment to support community level development at the policy level, the capacity of officials of relevant line departments (e.g. Irrigation, Ministry of Livestock, MLBF, Forestry) should be trained (or educated) so that they can carry out participatory decentralized planning at the local level, as well as adapt line department activities to address the basic needs for community development. 

The importance of extension service and research in achieving agriculture sector programs, objectives and targets cannot be overemphasized. However, the link between research and extension in Myanmar is weak. Extension and research efforts should be rationalized in accordance with priorities of the agriculture sector. The links between extension and research should be strengthened to ensure that positive results are effectively transmitted to farmers in order to increase productivity and improve the application of modern technology for increased agricultural production. The extension service should be modernized and its sources should be diversified, to ensure the immediate and effective communication of new ideas, techniques and results to farmers. 


Implications of the Korean Experience for Myanmar

The Korean experience of agricultural and rural development implies that there is a significant role for the agricultural and rural sector to bring about a meaningful and allencompassing development of a nation. Despite the declining role of agriculture in the national economy, it has greatly contributed to the country’s overall development. 

An important lesson from the Korean experience is the need to adapt to changing conditions of the time. Korea’s agricultural policy has been changing over time to suit to the specific situation on the ground and the changing economic conditions. In the 1960s, when there was food shortage, ensuring food self-sufficiency was the policy priority. The strategies employed were increasing agricultural production and productivity, using more agricultural inputs and highyield seed varieties, improvement of irrigation schemes, etc. In the aftermath of the economic recession in early 1980s, that followed the rapid growth in the previous two decades, policy objectives shifted from growth to stabilization. Improving production base, increasing the production of economic crops, developing livestock sector, improving agricultural marketing and rural infrastructure were some of the policies and strategies implemented during this period. Therefore, finding a good mix of policies based on pressing needs and changing roles of the time becomes critical.

The need to put in place appropriate institutions and policy settings is also important for the successful accomplishment of policies. For instance, the role of the establishment of the Rural Development Administration in 1961 is a case worth mentioning in terms of realizing the policy goals of that time, specifically in relation to the releasing of the high yield rice seed variety called Tong-il, which played the major role in terms of ensuring self-sufficiency in rice production. Moreover, Korea’s New Village Movement has contributed to a rapid transformation of farming from traditional to commercial farming, thereby increasing farm income in rural areas and raising farmers’ confidence for “better-living” that would ultimately contribute towards alleviation of poverty. The expansion of the movement to a higher and broader level has accelerated the modernization of rural community and society.

A related point is the need to empower local community in rural development activities. Community participation and ownership is the key for the success and sustainability  of any development project. In this regard, the Saemaul Undong approach in which ‘self-help’ and ‘diligence/selfreliance’ are the key underlying factors at the center of the movement is noteworthy for replication elsewhere with some modification to fit the existing cultural and societal values of the recipient community. To this end, Myanmar’s rural development endeavors can benefit greatly from the experience of this unique village movement.


Recommendations on Myanmar’s Agricultural Production

- Agricultural Production and Productivity 

Since Myanmar is an agricultural country, agricultural development is important to contribute to economic development. Irrigation systems are insufficient and farming system for maintaining farmland fertility is less-developed. The use of agricultural inputs such as fertilizer and pesticide is low, and extension service for disseminating new agricultural technology to farmers is not well-established. Therefore, land productivity, expressed in terms of average yield or production per hectare, is lower, far short of its potentials. Thus, it is important to increase agricultural production through improvement of agricultural productivity. If agricultural production increases, agricultural exports including wheat can be increased, and agricultural imports such as fruits and vegetables, and meat and livestock products, can be reduced. Of course, an increase in export and decrease in imports will bring an increase in rural income. 

Although, Myanmar is an exporting country of major agricultural products like, beans, pulses and rice, it still needs to increase production and productivity in more and diversified agricultural products as it imports various kinds of other farm products like vegetable oils, palm oil, etc. That is, it is important to produce more agricultural products, because more production can bring more exports for products that it exports and import substitution for products that it imports. In this sense, Korean experience of production boosting policies including the green and white revolution experience can be a good lesson to Myanmar. 

In Korea, an increase in yield in agricultural production was an important issue, because farmland size was small and limited. Therefore, production policy was based on intensive farming, mainly focusing on an increase in utilization rate of farmland, expansion of irrigation facilities, development of new high-yield variety of seed, increased use of agricultural chemicals such as fertilizer and pesticide, etc (KREI 2010, Kim 2011). Therefore, it is stressed here, from the Korean experience, that expansion of irrigation facilities, development of a new high-yield variety of seed, increased use of agricultural chemicals, and agricultural mechanization are important for an increase in yield and agricultural development in Myanmar. An important consideration with regard to use of chemicals has to be given to environmental and human health concerns.

In addition, despite Myanmar’s relatively abundant agricultural land, farmland expansion cannot be an option to expand agricultural production. That is, expansion of the crop area through the opening of new land cannot be carried out extensively. Therefore, expansion of the area under multiple cropping has to be emphasized as one way of raising total crop production. Efficient use of land along with measures to lower costs of farm inputs, practices of crop diversification, and other improved farm practices would be crucial to enhance farm productivity. Of course development and expansion of new farmland through reclamation should be carefully done alongside the intensification efforts. 

Another important factor is supply of seeds. High-quality and high-yield seed contribute to an increase in agricultural production and improvement of the quality of farm output. Therefore, development and distribution of this kind of seed is a pre-condition for production-boosting policy, and therefore, a basis for agricultural development. 

R&D and Extension

The links between extension and research should be strengthened to ensure that positive results are effectively transmitted to farmers in order to increase productivity and improve the application of modern technology for increased agricultural production. Training of in-service staff and farmers will have to be actively pursued through existing institutions and Agricultural Extension Stations needs to be revitalized. The extension service should be modernized and its sources diversified, to ensure the swift, effective communication of new ideas, techniques and results to farmers.

Irrigation and Rural Infrastructure

Expansion of irrigation facilities can be a good target for increased agricultural production in Myanmar, since it is highly dependent on monsoon rain. A review of the natural environment including rainfall, altitude, geographical conditions, etc., is necessary in order to have a better understanding about irrigation systems in Myanmar. In addition, there is a difference in farming between Korea and Myanmar. These differences must be taken into account while designing irrigation systems and facilities in Myanmar. However, a recommendation can be made on expansion of irrigation facilities, since the expansion can increase agricultural productivity. In this sense, the expansion of irrigation facilities through development of underground water, expansion of reservoirs, etc., is necessary for improvement of agricultural productivity. Use of agricultural water at proper time should also be made a high priority. 

Rural infrastructure, especially in the cultivating areas is crucial for agricultural and rural development. In rural Myanmar, isolation due to poor infrastructure is a severe problem. It prevents access to markets and delivery of social services. Improvement in rural infrastructure, therefore, requires urgent attention and practical measures. Major infrastructural requirements include rural roads, bridges, irrigation facilities, electricity supply, water systems, etc. While exploring new and better types of infrastructure it would be also essential to mention that efforts should be devoted to fully utilizing existing infrastructure. This is because, some of the existing infrastructure is under-utilized or not in an efficient use. Focus should also be given to investment in projects that are likely to boost production rapidly within a short span of time; it would be useful to review and revise such programs that are already in operation. 

Private Sector Participation

Private sector participation should be encouraged at all levels and in all relevant spheres. Especially, the government has to create conducive environment to private sector participation in importing of agricultural inputs, production of agricultural inputs locally, marketing, and agricultural mechanization. Private sector participation in agro-processing should also be encouraged. In particular, the government should encourage establishment of processing industry, especially for perishable commodities, by making financing available to private investors for commercial agro-industrial ventures. Such emphasis should be a major consideration in designing an appropriate agricultural development program. 

Government also has to strengthen the liberalization process started in the late 1980s. In particular, the liberalization of rural finances is critical because state-controlled financial institutions (e.g. MADB) are currently unable to provide farmers and other rural entrepreneurs with access to the financing they need to increase productivity. This lack of financing reduces the use of inputs, limits the adoption of new technologies, constrains the development of unutilized land and encourages low cost/low output production. Furthermore, by forcing rural populations to use much higher cost credit from informal sources would become, without a doubt, a major factor in increasing rural indebtedness and poverty. 

Recommendations on Reforming Myanmar’s Agricultural Marketing System

Despite an overall commitment to move towards free market policies and the important recent moves to liberalize agricultural marketing (rice marketing for instance), a significant number of agricultural commodities face distorted markets, generally due to restrictions on export marketing (either prohibited or only permitted through Government agencies). Furthermore, government’s commitment needs to be stead-fast in terms of realizing the liberalization efforts. However, there are indications that this might not be the case, especially as evidenced in the series of policy changes that occurred with regard to compulsory procurement on rice, which was repeatedly lifted and imposed back in the 2000s. 

Perhaps one key area where the Myanmar agricultural marketing system is poorly developed is that of infrastructure and standards. While the emergence of Central Crop Exchanges has contributed significantly to the efficient functioning of the trading mechanism within the agricultural marketing system, it has not provided similar support to the physical handling and movement of the products. Although this has not been a major drawback for relatively non-perishable products such as oilseeds and pulses, it is a serious problem for culinary crops, horticultural products and other perishable items.

In general, it would be far more satisfactory if traders were able to conduct their negotiations in the vicinity, if not the actual presence, of the commodity in question. This is especially the case with fresh products. Yet Myanmar possesses no wholesale marketing facilities of the sort existing in other countries. Such facilities could not only link more closely the trading and physical transaction elements of the marketing system, but could also provide appropriate storage, washing, grading and other facilities which may not be available at the smaller individual warehouses currently in use. 

The establishment of centralized wholesale facilities for major cities would also facilitate progress in the area of establishing national standards for weights and measures used in agricultural marketing. Efforts should be made to establish a single set of measures that would be used throughout the marketing chain, and which can be checked at wholesale market level through the use of weighbridges for trucks and inspected scales for smaller volumes.

Recommendations on Myanmar’s Rural Development

-Reforming the Rural Community: The Saemaul Undong Experience 

In addition to the agricultural production and marketing policies, it is necessary to reform the mind-setting of the agricultural and rural society for agricultural and rural development in Myanmar. In other words, reform of mind-setting may be a pre-condition for agricultural and rural development. With regard to this, the “New Village Movement” in Korea can provide a good lesson to the rural community development in Myanmar.

The Saemaul Undong program comprises a comprehensive rural community development movement which has been proven to be an effective way for transforming the rural livelihood in Korea with a notable contribution to the overall economy. As a result, urban-rural income disparity was significantly reduced and the social standard of rural living improved in Korea. The Movement also did much to improve infrastructure in rural Korea, bringing modernized facilities such as water systems, bridges and roads to rural communities. It also significantly contributed to not only narrowing the urban-rural income disparity quickly, but also reversing the situation at least initially (Kim 2011, Park 1998). 

The Movement, which started at the village level, was expanded to higher levels, rural community and society. That is, the word “village” was extended to organization and/or society. In other words, the term “New Village” was interpreted as “reforming organization, community and society”. One of the results of the expansion of the Movement to a higher and broader level was that a spirit of cooperation at the village level was extended to rural community and the modernization of rural community and society was accelerated. In addition, a “can-do-spirit” was instilled widely in rural areas, and played an important role in agricultural and rural development (Park, 1998). 

Farmers in Myanmar suffer from relative poverty, and want “better-living”. In this sense, the three pillars of the “New Village Movement”, “diligence, self-reliance, and cooperation”, are important for Myanmar farmers in order to escape from the poverty. It is also true that enhancing diligence and cooperation is important for a better-environment of rural villages. That is, the “New Village Movement” can be helpful for agricultural and rural development in Myanmar. 

In addition, the movement can be extended to agricultural society in Myanmar, because cooperation between/among individuals and organizations is important to achieve a certain goal(s). However, it seems that cooperation between/among individuals and organization was lacking. In this sense, Myanmar’s version of the New Village Movement will be helpful for agricultural society to promote cooperation among each other in achieving their goal(s) and target(s).

Agricultural Finance System

One of the most important measures proposed to boost Myanmar’s rural economy was the implementation of micro-credits by cooperatives, NGOs and INGOs. In this regard, the experience of Korea’s National Agricultural Cooperatives Federation (NACF) would be useful. The NACF business model which integrates the financing and marketing businesses can serve as a basis for designing a suitable model for ensuring provision of capital to farmers as well as other support schemes like marketing and supply businesses (KREI, 2010).

As mentioned in the previous section, access to rural credit is very limited in Myanmar. MADB’s outreach is limited and loan sizes are inadequate. Moreover, MADB drains scarce resources from the Government budget, and other formal sector financial intermediaries are discouraged or prohibited from filling the financial gap in rural areas. In a few townships, microfinance projects supported by international donors partially fill the gap. Overall, however, outreach of the formal financial sector remains limited, and the rural population relies mostly on informal sources of finance, especially moneylenders, traders, and input suppliers. 

Based on key constraints of the formal financial sector, measures such as opening up of the market to the private sector, encouraging involvement of NGOs and INGOs in provision of credits, resolving key structural and operational constraints faced by MADB, like staff capacity building, outreach expansion, etc should be taken by the government of Myanmar. Moreover, the policy of non-acceptance of agricultural land as collateral should be carefully reviewed and reformed accordingly in favor of increased access to credit by the rural farming households. 

Provision of microfinance should also be expanded. Currently, very few microfinance projects are run by some NGOs. The government should encourage more microfinance operators within the rural areas and also encourage private sectors to take part in the rural credit provision.

Enhancement of Off-Farm Income

Farm households are affected by the relatively high cost of production in Myanmar. This coupled with the low productivity and poor quality of the products has been negatively affecting their profitability. On the other hand the growing population on the one hand and soaring living costs on the other are worsening the living standard of the rural population. The government of Myanmar has already set rural development as its top priority and is committed to boost the socio-economic conditions of the people in rural areas. In this regard, it would be imperative to learn from Korea’s experience. As was mentioned earlier, increasing farm household income was Korea’s top priority in the 1970s (KREI, 2008). In 1980s commercial agriculture greatly expanded and policies to improve farm management were implemented based on the analysis of achievements in terms of commodities or farm enterprises. A reduction in farm household income became a major concern in the late 1980s  leading to farm household debt relief measures in 1989. In the 1990s, various farming organizations were created andthe emergence of agri-business began in the 2000s.

Myanmar can adapt these policies to suit its situation on the ground on a need based and selective approach. A number of measures need to be taken to enhance off-farm income and improve the livelihood of the farming community. These include price support schemes (especially of paddy rice production), provision of affordable/cheap credit, affordable input prices, expansion of rural industries, judicious selection of economically remunerative crop, needbased educational training on improved farming practices, efficient utilization of capital, transfer of technology, etc.

Institutions and Capacity Building

Ensuring that the organization and coordination of activities among institutions/ministries involved in various activities of agricultural and rural development is crucial. Especially duplication of mandates should be avoided while making sure that all functions are well covered in the existing structure/organizations. In this regard the experience of Korea can be helpful. In particular, Myanmar can learn a lot from the successes of the RDA, NACF and KRC.

There is also a need to establish policy research institutes. Such institutes are responsible to carry out research and policy analysis in relevant areas like land policy, rural financial policy, etc. In Korea, research institutes like the Korean Rural Economic Institute (KREI) and Training Institute for Food, Agriculture and Fisheries under the Ministry for Food, Agriculture, Forestry and Fisheries (MIFAFF) have been playing vital role in the agricultural and rural development sector. Another important issue in relation to institutional capacity building is capacity of staffs. Especially the capacity of staffs like extension agents, credit officers, etc, should be upgraded through continuous trainings and capacity building efforts. 

Capacity building is should also focus on agricultural officers, experts and farmers. To this end, partnership between Korean and Myanmar for carrying out joint research, experience sharing, educational and training programs would be helpful. Experts from Myanmar may come to Korea for training at RDA and/or at KREI. Deployment of Korean experts as advisors to Myanmar government in matters relevant to agricultural and rural development is also very helpful in this regard. Current higher officials at the level of DG or retired Korean officials are ideal candidates for this purpose. 


This article is based on the Knowledge Sharing Program (KSP) project commissioned by the Korea Development Institute (KDI) in 2011/2012 and supported by Ministry of Strategy and Finance (MOSF), Republic of Korea.


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