Agriculture

Myanmar has historically been an agrarian society, meaning that agriculture the agriculture sector accounts for the majority of the country’s economic output.  The 2003 Myanmar Agricultural Census showed that there were about 3.46 million farm families, cultivating about 8.7 million hectares of land.¹ The estimated annual income per agricultural worker in Myanmar was US$ 194 in 2012 compared to US$ 6,680 in Malaysia and US$ 706 in Thailand.²

Myanmar’s farming systems are increasingly diversified. Most farms produce paddy rice during the monsoon season, mainly due to high humidity, which is better suited to wet rice production than cultivation of Myanmar’s other main cash crops. These are usually produced the cool and dry seasons, and include , mainly beans and pulses, oilseeds, and maize.³

Rice

Rice is the most important agricultural commodity of Myanmar and produced over 27 million tons in 2013.¹ Monsoon paddy is the main crop for both small and large farms in Myanmar.⁴

Most farms produce paddy during the monsoon season, mainly due to high humidity, which makes it difficult to produce other crops during this time. Myanmar sends 70 percent its rice exports to China, but most of these shipments are not authorized by China’s government.⁵

Chinese border authorities tightened controls over the import of agricultural products from Myanmar in 2016, including rice, maize, sugar and beans, with a great impact on the rice trade between the two countries. Rice exports through the Muse border gate had fallen from 5000 tons a day to under 1000 tons in October 2016.

Exporting paddy, as opposed to processed rice, would require a change in Myanmar regulation, as the government has typically restricted exports to rice.⁶

Other crops

Other main crops include beans, sesame, groundnuts, pulses, sugarcane and lumber. The most widely planted beans and pulses in Myanmar are chickpeas, black gram, and green gram. Myanmar is the world’s second largest exporter of beans and pulses after Canada, and the customers include India, United Arab Emirates, Thailand, Bangladesh, and China. In 2014, the export value of beans and pulses was $835 million, larger than the export value of rice, estimated at roughly $630 million..⁷

Agriculture’s place in a shifting economy

Agriculture composed 37.8 percent of Myanmar’s GDP in 2011, down from 47 percent in 2005/2006. It also declined from 57 percent in 2001 to 36 percent  in 2010.⁸In contrast, the share of GDP accounted for by the industrial sector more than doubled, to 26 percent in the same period, reflecting natural gas, oil, mineral, and gemstone exploitation. Liberalization of the economy and opening up to foreign direct investment (FDI) has contributed to the rapid growth of the industrial sector.⁹

There has also been an observable decline in agricultural output over the course of the last century. Before World War II, Myanmar’s rice exports amounted to 3.177 million tons (1936-40) while in 1961/62, Myanmar exported 1.676 million tons. Rice exports continued to decline from 1.52 million tons in 1962/63 to 0.3 million tons in 1987/88, and then again to 50,000 tons in 1988/89.¹⁰

According to the statistics from the Ministry of Commerce, this trend continues. Rice exports from April to September l2015 were valued at US$168 million, compared to only $122 million during the same period this year (2016).¹¹

Low agricultural productivity is the result of multiple factors, many of which are associated with the undersupply of quality agricultural public goods. A decrease in labor availability can be driven by rising wages in economic sectors outside of agriculture. Changes in the cost of working capital (interest rate) largely reflect macroeconomic developments rather than agriculture sector performance. Land prices fluctuate, responding to the changes in demand from industry or urban development.¹²

These are all examples of conditions which can create pressure on activities in the sector, potentially driving laborers to seek other kinds of work, and putting farm owners out of business.

Another influencing factor has occurred with the influence of foreign direct investment since the opening of Myanmar’s economy to international economic actors. Very little of the influx of foreign capital has contributed to supporting agriculture, with more than 70 percent of foreign investment was directed at the extraction of natural resources such as oil, gas and mining, but only one percent to agricultural enterprises. ¹³

Agricultural activities have attracted some investment from foreign entities, however. In recent years, China, Thailand, South Korea and Japan have invested in agriculture in Myanmar. China has invested in the plantations of sugarcane and fruit, while Thailand has invested in vegetable and fruit plantations throughout the country.¹⁴