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Today if you look into Myanmar rice industry there are 3
distinct unsolved issues; ie: financial support or working capital to farmers,
pricing and national rice policy.
Credit or working capital :
Annually, under the increase of production cost, rice
farmers have been encountering difficulty in obtaining sufficient credit from
official sources that they have to more or less partially depend on informal
sources. In fact they are accessed to government loans from MADB but not sufficient for the whole
process of rice production therefore, they have to depend on informal credit
with various interest rates. Presently, there is only one government bank MADB
and has been providing loans to farmers operating under more than 200 outlets
in more than 300 townships throughout the country. In 2013, the amount
has been increased to 100000 MMK. Recent unconfirmed news, revealed that MADB
will go public. In Harvard Kennedy School paper, it also pointed out that
functions of MRDB should also be strengthened and upgraded to commercially
oriented financial institution. It also suggested that to build a robust and
diversified credit system.
It is suggested that credit extended by the " Leading
Companies" should not be treated as normal provision of credit sources. It
should be treated as under the process of
' contract farming ' especially for niche quality rice for exclusive
markets internally or externally.
Moreover,
foreign donors are also interested in micro financing for rural people. We need
to look for possibilities to create a vibrant credit system with external
foreign loans to start the initial stage and once it is fully and successfully
operational we can pay back the loans.
Therefore, in the context of the rice stock policy, a
portion of how financial support can be extended to rice farmers in long term
should be prioritized. Actually this area has been neglected and less
prioritized in the past and now it is the time to get new approach of credit
system to rice farmers.
Pricing :
There has been a controversial issue between authority and
stakeholders that if guaranteed procurement price has been set for a particular
year, and if the price goes down beyond guaranteed price, government will have
to oblige to procure paddy if farmers want to sell their production. On the
other hand, setting up of rice
guaranteed price in particular year does not necessarily mean that government
has to buy with guaranteed price. Because since 2009, (actually MAPT ceased
buying paddy since 2003) government has no involvement in operations of rice
procurement and marketing and therefore setting the guaranteed price is not
correlated with obligation to buy but it is set for the purpose of stabilization
of price. In that case who's going to buy with guaranteed price ?
National Rice policy
Who will look after the rice stock ? This is a serious
question. Someone would say of course MRF should focus on national rice stock. Cos there is no governmental institution to look after the rice after post harvest. In that case, what
is the role of government institutions? Should the private sector bear all the
responsibility on their shoulders ? In fact, government institutions are
gradually losing the control on rice, the major food commodity. Why do they
have less focus on rice? Because
there is no concrete policy on rice. Are we go for hybrid rice? I think in most of the rice growing countries only 15-20% of the total production is hybrid rice. In China alone because of its immense population its about 60%. Are our Myanmar farmers really thinking positive in growing hybrid rice ? Propaganda to grow hybrid rice, seasonal credit is limited, land is limited; you can see the conflict. How dare you organize to farmers you all must put the hybrid rice in your farms ?Where are the
roles of traditional rice varieties such as Special Emata, Zeeya, Paw Sann
Hmwe, Khut Cho etc:? Why Myamar rice has problems with quality whenever it is
exported? Previously, it is believed that private sector had capacity to
undertake processing of quality rice, but it is obvious that even in low grade
rice( 25% ) some exporters encountered complaints from international buyers.
All these are rooted from lagging of proper rice policy in the country.
When look into other rice producing countries OR rice
importing countries even in the ASEAN, almost all the major players are all
government institutions. NFA (Philippines), BULOG (Indonesia),
BERNAS(Malaysia), FCI( India),
VINA FOOD I n II (Vietnam) and Warehousing Corporation(Thailand) etc: they all
are government agencies representing the respective countries. Rice stock is
solely handled by these government agencies or in some cases the private.
In order to handle the rice stock properly and
systematically we should think about forming a Commission or Board or Authority
with new objectives in line with the Rice Stock Policy. Such Institution should
be constituted under the Ministry of Agriculture and Irrigation or Ministry of
Commerce or formed with President's decree of Board of National Rice Stock or National Rice Stock Commission. The
institution will not carry out the actual operations but with the strength of
its staff who are oriented in operational research and analysis would able to
carry out the research and laid down some principles on supervising and control
of national rice stock in line
with the rice stock policy. It is strongly supported the establishment of new
agency or institution to manage the national rice stock properly.
The following
are the outlines on some of the issues and areas of focus to be considered when
drafting National Rice Policy .
(a) financial
support (robust credit system)
(b) setting
up of guaranteed price
(c) right
to pledge land only to banks for credits
(d) right
to confiscate farmer's land by banks if they defaulted
(e) contract
farming ( niche products only with leading companies)
(f) input
subsidies
(g) mechanization
support
(h) climate
risks (possibility of insurance)
(i) stock
availability and demand
(j) market
infrastructure
(k) investment
(l) quality
seeds production
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