What Burma (Myanmar) needs to fill its rice bowl

In Burma (Myanmar), once the world's leading rice exporter, indebted farmers are losing their land or cannot afford quality seeds. More aid and credit are available these days, but not nearly enough, say development experts.

Under a stormy sky, the emerald fields of Burma’s rice bowl seem to glow with vitality. Farmers stoop to replant seedlings in waterlogged fields, part of the annual cycle of rural life in the Irrawaddy Delta.

But the vital signs of Burma’s rice industry are less healthy. Declining yields, indebted farms, and falling incomes have sown desperation among farmers and stunted economic growth in the countryside, where 70 percent of people live and work. The misery was compounded by a May 2008 cyclone that killed more than 130,000 people and laid waste to the delta.

The cyclone opened the door to more humanitarian aid for Burma (Myanmar), the poorest country in Southeast Asia. It also led to a rare debate between its military rulers and foreign donors over how to tackle poverty among farmers and fishermen left at the mercy of natural disasters.

The result has been tentative efforts to reform the dismal rice sector and channel more assistance to rural communities. Development experts say much more outside help is needed, including commercial bank loans, to boost productivity and reverse a longtime trend of rice farmers falling into debt and losing their land.

The end goal, say these experts and independent economists, should be a vibrant rice industry that can underpin broader economic growth, as it has in Thailand and Vietnam, the world’s largest rice exporters, a title that Burma last held in the 1930s. By contrast, few buyers snap up Burmese rice, which is grown from low-quality seeds and milled in rusted factories.

“If you want to revitalize the country, you must look at the rural economy,” says Noleen Heyzer, United Nations undersecretary general and head of its Asia headquarters in Bangkok.

Farmers chained to debt

At the tumbledown house of Kyaw Myint, the prospects look bleak. He owns 20 acres of rice paddy along the riverbank and has set aside the seeds from his last crop. But he will only plant some of his fields this year because he can’t afford fertilizer, pesticides, or quality seeds. A rice merchant who used to give him credit stopped after the cyclone, and the government agricultural bank will only lend $20 per acre, much less than the $100 or so that a farmer typically spends to produce a crop.

Even if Kyaw Myint, not his real name, did get a loan, he worries that he won’t make enough from his harvest in November, leaving him in hock to creditors. “We’re running in circles,” he says.

All of the adults in his extended family of 12 work in the fields. Burma’s largest city, Rangoon (Yangon), lies six hours away by road, but has few factories to absorb unskilled labor. Low wages and high costs in cities make it hard to make ends meets, let alone save money. “For the masses of unemployed rural people, there are no jobs to migrate to,” says an aid agency official who asked to speak anonymously to avoid publicly criticizing the government.

In one respect, Kyaw Myint has an advantage over many poor Burmese: he owns land. A 2009 study by Harvard Kennedy School found that between 50 percent and 70 percent of families in the Irrawaddy Delta are landless, usually due to foreclosure on unpaid loans. These families rely on jobs on farms and fishing fleets, both of which took a huge hit from the 2008 cyclone.

“Farmers are employing fewer people and paying lower wages to those they do hire. There’s not enough work to go around,” says Andrew Kirkwood, country director of Save the Children, a British charity that works in the delta.

Glimpses of growth

One sign of change is a new rice industry association set up last year. It represents farmers, traders, millers, and agriculture companies, who can band together to lobby the government. In a break from Burma’s autocratic style, it elects its local officials in secret ballots, though its chairman is a government appointee.

Traders are keen to unlock Burma’s potential to export more rice after decades of erratic restrictions that deterred buyers, says Tin Maung Thann, an adviser to the association. He said some millers are already investing in new equipment in anticipation of a more market-based system. “If you can integrate our rice economy into the world economy, then I don’t worry (about the industry),” he says.

Some farmers also have access to new lines of credit. Up to 30 newly formed agricultural lending companies have begun extending loans to farmers at interest rates of around 2 percent a month, much less than that of loan sharks or rice merchants. Experts say that this private lending is still small, only applies to farmers with 10 acres or more, and isn’t a substitute for an overhaul of the undercapitalized government agriculture bank.

International aid officials say a turnaround in the delta’s rice industry must be matched with attention to other rural areas, where poverty and malnutrition is, if anything, even more acute. On average, 1 in 10 children in Burma die before they reach five, the fourth worst child mortality in the world, according to the UN.

Vulnerable areas include war-torn ethnic border regions and the dry zone in central Burma where farmers rely on cash crops such as beans, garlic, and peas. As aid workers get more access to these areas, the extent of the crisis has become clearer, says Chris Kaye, head of the World Food Program in Burma.

“It’s a chronic slow burn,” he says. “The fundamental problems in the rural economy, the lack of access to credit and inputs, and the erosion of livelihoods, are really coming home to roost.”

[Editor's note: Correspondent's name withheld for security reasons]

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