Saturday, August 19, 2017

Myanmar needs to modernise small farms to rev up sluggish sector

MYANMAR needs to focus on the modernisation of small-farm production in order to boost the agriculture sector, which contributes an estimated 38 percent of the country’s gross national product (GDP), an international think-tank said.

Introducing mechanisation is key to developing the nation’s agriculture. Aung Htay Hlaing/ The Myanmar TimesIntroducing mechanisation is key to developing the nation’s agriculture. Aung Htay Hlaing/ The Myanmar Times

The London-based Oxford Business Group (OBG) said the modernisation of the small farm production “will require investment, policy reform and harmonisation between the government, the private sector and the civil society.”

The think-tank also underscored the need to focus more in educating the farmers as well as in research and development.

“According to the Ministry of Agriculture and Irrigation, education and research and development have received 1 percent and 0.1pc of the agricultural budget, respectively, in recent years,” the OBG said in its 2017 country report on Myanmar.

“The agriculture sector is already gaining ground from relaxed trade policies,” it said. “Future, potential, however, depends on the ease of transition from a supply-led industry to one determined by demand.”

The report said that although the expansion of the economy since 2011 has seen “urban wages rise significantly…investment in agriculture lags behind other industries, and as such, rural incomes are among the lowest in South-East Asia.”

The OBG report said the sector is also in need of major structural and policy reform, including laws governing the land, which remains one of the most contentious issues.

The parliament is currently discussing amendments to the 2012 Farmland Law and the 2012 Vacant, Virgin and Fallow Lands Management Law, aimed at addressing the land problem in the country.

“While progress has been made concerning land ownership, tenure security remains an issue due to a lack of information or even conflicting documentation,” the OBG report said.

The think-tank cited the passing of the Myanmar Investment Law in 2016 – which combines the Myanmar Foreign Investment Law and the Myanmar Citizens’ Investment Law into one overarching legislation – as another initiative that could boost foreign investment in the agricultural sector.

“It will encourage the entrance of previously hesitant investors by placing them on the same playing field as local ventures,” It said.

The OBG report said that the ongoing improvements in soft and hard infrastructure will reduce logistical costs and promote efficiency in the value chain.

“All these factors, combined with modernisation of cultivation techniques, will strengthen the sector and stimulate livelihoods of the local people,” it said, noting that the agriculture sector employs over 60pc of the country’s workforce.