Agricultural Development in Myanmar: with Special Reference to Irrigation

Myanmar is an agriculture country and agriculture sector is the mainstay of its economy.

Myanmar is richly endowed with land and water resources and favorable climates. Seventy

percent of the total population of 58.37 million (2008) resides in rural areas and their livelihoods

depend on agriculture. Agriculture sector contributes 34% (2008-2009) of GDP. Agriculture

sector accounts for 15.4% of total export earnings and employs 61.2% of the labour force.

Therefore, the government has placed the emphasis on developing Agriculture sector in order to

improve the living standard and socio-economic condition of rural people.

Myanmar’s economic policy during the socialist period (1962-1988) was defined by many

analysts as a policy of agriculture exploitation, with heavy emphasis on rice production. Since

the introduction of market-oriented economy in late 1988, the government has tried to improve

agricultural policies. Since then, some positive results have been witnessed. But, agriculture

sector has not yet achieved its objectives and goals. There are many constraints in terms of

policy and implementation of the objectives laid down by the government.

Myanmar has shifted its economy from socialist economy system during the period of 1962-

1988 to market-oriented economy in 1988. Since 1992-93, the Economic Development Year,

integrated development strategy has been applied for agriculture development, with specific

sectoral objectives and policies.

The structure of the paper will be made as follows:

(I) Introduction

(II) Causes of low production of agriculture sector

(III) Measures to increase the production

(IV) Irrigation sector development and its impacts on production

(V) Conclusions

Under section II, I will discuss the government’s conventional way of land distribution that

resulted in the existence of landless households and landless laborers. Government’s weak

marketing policy, limitation of rice export, barriers in rice export, infrastructure weakness such

as using of decades old rice mills that resulted low quality of rice and electricity inefficiency for

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operation of rice mils, burdens of high-cost agricultural inputs such as chemical fertilizer,

machinery and diesel, will be focused in the discussion.

Under section III, I will discuss the government’s endeavors to increase agricultural production

and productivity aiming to develop the agriculture sector since the inception of market-oriented

economy in 1988. These will include expansion of new agricultural land, agricultural

mechanization scheme, application of modern technology, utilization of high-yielding varieties

and promotion of agriculture inputs such as agricultural loans.

In section IV, I will highlight different measures for irrigation development and its positive

impacts on the agricultural production and productivity.

I will draw my conclusion with recommendations for agricultural policy improvement and future

prospect of agriculture sector.

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Agricultural Marketing Policy

Since Myanmar obtained its independence in 1948, the government has created a rice marketing

system as one of the central policy issues aiming to serve the national interest. During the

socialist period from 1962-1988, farmers were not allow to sell their produce freely because

Myanma Agricultural Produce Trading (MAPT) and some state owned enterprises (SOEs)

procured them at fixed (and low) prices. The government pointed out many subsidies and free

services given to farmers like subsidized sales of chemical fertilizers, free provision of extension

services, and so on. But, the government fulfilled subsidized inputs, especially chemical

fertilizers, only about 20% of the farmers need. The farmers had to rely on the free market for the

remaining parts of their needs. This made the cost of production up and lowering their profit

margins. The motivation to increase yields and output level after reaching a certain limit was also

hampered by the need to increase one’s quota arising from increase in output. The system

therefore created distortion of prices and market instability. Therefore, many analysts severely

criticized the policy as irrational, inefficient and ineffective.

Foreign exchange earning and maintaining food security or political stability were the major

reasons for the government’s procurement system. The state monopoly on rice marketing

resulted to a disincentive for farmers to increase production or to improve quality since any

potential surplus was procured by the government at fixed (and low) prices. Under the socialist

government, a rice rationing system for public servants was introduced. Under the system, the

farmers had obligation of compulsory delivery at a low price to support the rationing system. The

MAPT and a handful of SOEs had monopolized the export and domestic trade of the restricted

crop including rice and farm inputs like chemical fertilizer. In doing so, the role of private sector

had been deliberately restricted (Tin Soe 2004).

The government has made some significant reforms to cope up with the transition to the new

market-oriented economy initiated in 1988/1989. The liberalization of agricultural marketing

was introduced at the same time starting with domestic agricultural market. The role of private

sector has been expended in domestic agricultural production and trade as an initiative of

liberalizing agriculture sector. Many of the restrictions on production adopted in socialist era had

been removed since the inception of reforms in 1988 except the state ownership of land and

export of rice. In 1988, the ban on the private export of agricultural produce was lifted, and

thereafter the marketing of some crops like pulses and beans enjoyed full liberalization. Rice 3

marketing, however, which was originally the main target of agricultural reform, remained under

state control and rice exporting to be a government monopoly (Ikuko Okamoto, 2007).

The government released new rice trading policy in April, 2003. According to the new rice

trading policy, the government would buy paddy directly from traders rather than from farmers

to ensure the free trade of the crop in the interest of the entire peasantry and helping develop the

market-oriented economy. But that policy was never actually implemented. Instead, the

government announced a new policy in December in 2003 involving complete liberalization of

the domestic market for rice. The private sector was allowed to export rice under license. But,

exports of rice have been limited to under one million tons in an attempt to secure sufficient

supplies of rice for the domestic market. Under this liberalization policy, the rice rationing

system for public servants and the paddy procurement system were abolished. According to

Okamoto, the rationale of the two liberalizations was not found in improving efficiency of the

rice marketing sector.

In an initiative of reducing the pressure on farmers, the government decreased the procurement

quota to 10-12 baskets per acre (1 basket of paddy equals 20.9kg) from 30-40 baskets per acre of

the socialist period. Despite the government had initiated to ease the burden of paddy

procurement system on farmers, there still remained various problems in the procurement

process (Ikuko Okamoto 2007). The procurement policy caused to deteriorate quality of

procured rice because the farmers naturally prefer to deliver low quality rice. The procurement

system has therefore been detrimental to the government’s effort to achieve food security and to

increase agricultural exports in the long-run since it does not provide adequate financial

incentives to farmers to increase crop yields and production (Tin Soe 2004).

Even though the government has released many of the restrictions of socialist era, there are still

some constraints on cultivation, marketing and export of rice. Even after 1988, the government

monopoly on rice exporting was utilized as a measure to control the rice price for the general

consumer. The government wanted to maintain a stable and low rice price for general consumers

as a major concern for political stability. The government’s monopoly over rice exporting has

resulted division of domestic and international market which has led to a huge disparity between

the domestic and international price of rice. The domestic rice price was far much lower than

international market price. In some years it even fell to less than half of the international price.

The disparity has continued to be the main factor hampering the development of rice sector. 4

The government justifies the limitation or total prohibition of exports of a number of agricultural

commodities based on that there is insufficient production of these crops to meet domestic needs.

Exports permitted only when domestic demand has been filled. The motivation of such export

controls has been to limit prices on the domestic as no alternative markets can be accessed.

Although this may bring short-term benefits to urban consumers, it is damaging for both

producers and consumers in the long term. Due to depressed returns on domestic markets,

producers reduce input usage and cropping intensity, resulting in stagnant yields and low uptake

of new technologies. In addition, the cultivators would often tend to shift to alternative crops,

reducing supplies further. As a result, supplies will be declining and prices will be increasing in

the long term even when exports are prohibited. As a result of a shift in production from higher

value oilseeds, the strong growth in relatively low value pulses has occurred as export markets

for the oilseeds have been limited. ( FAO, Agricultural Sector Review and Investment Strategy

Vol.2, p.g.65)

As far as constraints in rice marketing are concerned, it has been learned that high unofficial fees

and tolls imposed on internal shipments of agricultural products which further depress farm-gate

prices. Government imposed large costs on rice exporters. Application of rice exporting license

is very costly and 10 percent tax on exports of agricultural commodities is further combined.

High-cost burden and bureaucratic procedures for export licenses have failed to create fair

competition among the capable business people.

On the contrary, pulses and beans sector has benefitted from the agricultural marketing reforms

implemented in the late 1980s. The major feature of the reform was a reduction of the

government’s intervention of in the marketing of major agricultural commodities. The most

positive response to the reform can be found in the area of pulses and beans. A government

agency introduced cultivation of pulse around 1984 as a means to test production by some

farmers. However, it did not develop well at the time due to the lack of market. By contract,

since the early 1990s, the sown acreage has increased dramatically following the agricultural

marketing reforms.

The prime reason for farmers’ great interest in cultivation of pulse was obviously the good return

in the mid and long term. The net revenue for pulse is 1.4 times higher than paddy and 1.9 times

higher in terms of cash income. It, therefore, became more profitable crop for farmers as it earns

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additional income without effecting cultivation of paddy. As pulse became profitable crop, the

marketing agents have actively entered into pulse trading after the reform.

The factors behind the success of pulse cultivation were; firstly the existence of export market as

an initial condition, secondly, the existence of a big market (India) that pushed pulse production

forward and thirdly, direct access to the export market that improved the terms of trade of pulses

for the farmers, as the price of alternative main crop, rice, has been kept low under the private

export prohibition.

Among the favorable conditions for the pulse production, the establishment of marketing centers

was worth noting. The establishment helped accumulation and dissemination of marketing

information including on prices. Rural marketing intermediaries could make use of marketing

information from these centers for their daily business, contributing to the smooth formation of

the rural marketing system.

Most importantly, it was observed that the success of the reform in this specific pulse production

seemed not because of the presence of good policy but because of the absence of inefficient

policy during the process of reform. As a consequence, the reform process for pulses has

proceeded successfully under the free market.

Two policy implications were drawn from the success story of the pulse production under the

agricultural marketing reforms. Firstly, the private sector in Myanmar has potential to generate

virtuous cycles once appropriate policy environment is provided. Secondly, the absence of

inefficient policies can result in development of the private sector ( Ikuko Okamoto, 2004).

Agricultural Land Use Policy

The British colonists, after annexing Lower Myanmar in 1852, had declared the state ownership

of all lands, but granted landholding rights to any cultivator who paid land tax and cultivated the

land continuously for 12 years. This landholding right embodied other rights and benefits such as

the free choice of crops to grow, the right to sell and mortgage the land, and the right of the

landholder’s family to inherit the rights over the land. In the postwar period up until 1963, the

land holding rights and all other related rights/ benefits mentioned above had persisted.

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During the socialist era (1962-1988), most of the rights connected to land holding were removed,

except the rights to till the land and inherit the rights over the land. The cultivator who has been

granted the tilling right was not allowed to divide, sell, mortgage, and transfer the land (except

for inheritance purpose). The cultivated land areas were officially categorized broadly into two

types: the “planned area” and “non-planned area”, and, accordingly, the crops grown into

“planned crops” and “non-planned crops”. Measures to ensure that only planned crops were

cultivated in the planned areas were strictly implemented.

Though new market-oriented economy was introduced in 1988 and agricultural policy reforms

were initiated, most of the land policies pursued during the socialist era have continued to

prevail. However, there is no more division of land into the “planned and non-planned areas”,

and the crops into the “planned crops and non-planned crops.” Under a new system called the

“Pillar Crops” policy, ‘pillar crops’ were identified for growing in specific areas. The land policy

in Myanmar is observed to be rigid, and the land use system is oftentimes irrational and

inefficient. These two factors, instead of serving as incentives, actually served as disincentive to

undertake land improvement activities. Consequently, negative developments such as land

fragmentation and degradation, and deteriorating land productivity have taken place (Tin Soe,

2004).

According to the current rule on land use, ownership of rural land is vested in the State and the

right of cultivation can only be provided by village level land committee as per approval of

higher level land committees. Under normal circumstances, land cannot be used as collateral to

access rural finance such as agricultural loans from the government. There is no legal basis for

transfer of land ownership from one person to another. However, field findings show that rural

land transactions are common all over Myanmar particularly, in more densely populated areas

like Ayeyarwaddy Division. It is common to informally mortgage land with the moneylenders or

even to sell the land to meet immediate cash needs or repay high interest loans obtained by the

households. There is a consistent pattern that indebtedness is driving a rising level of

landlessness in many parts of the country.

When the government shifted the country’s economic system from centrally –planned socialist

economy to market-oriented economy in 1988, a number of changes in agricultural policy were

made. However, under the economic reforms adopted by the current government, the system of

state ownership of land established during the socialist period remained more or less unchanged, 7

though unofficial transfers of tillage rights were frequent. To retain their tillage right for paddy

fields, farmers were obliged to grow paddy crops and supply a designated amount of paddy to

the government procurement system, regardless of the profitability of paddy crop. The

procurement quota for paddy was set as a fixed quantity per acre of land designated as paddy

field.

Another important characteristic of Myanmar's rural economy is the existence of a large pool of

landless, non-farm households consisting of families that were not allocated any farmland in the

land reforms of the 1950s because they did not own means of production such as bullocks. The

unequal land distribution was institutionalized during the socialist era. Only those households

that were given tillage rights were officially registered as farm households. The share of landless,

non-farm households in villages typically ranges from 20 to 50%. The majority of landless

households depend on income earned as agricultural wages and their wealth level tends to be

lower than that of landed households.

All land is formally state-owned and available on lease to farmers as long as they cultivate it.

However there is no legal title to land or lease which excludes its use as loan collateral. Private

land leases and transfers are not allowed although they occur informally. The inflexibility of land

transfers hinders efficient land use. The policy of allocating large tracts of wasteland to

commercial farming enterprises often does not adequately take into account previous use of the

land by marginal farmers and the landless. In doing so, no sufficient compensation to such users

is apparently offered when land is diverted from former users. In developing the land, the

commercial enterprises benefit from facilities such as imports of machinery, fertilizer and fuel at

preferential rates, that are not accessible to most small farmers.

The current land use policy of the government is viewed as inefficient and ineffective. It has

been suggested that necessary changes should be done to improve its competitive power (Tin Soe

2004).

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Access Problems to Chemical Fertilizers

Of many constraints to agricultural inputs that cause agricultural production low, the farmers’

poor access to chemical fertilizers is one of the major concerns. This section will discuss key

constraints to the chemical fertilizer production, import and distribution.

Production

The domestic fertilizer industry in Myanmar mostly produces urea fertilizer with the abundant

sources of natural gas in the country. Smaller amounts of compound fertilizer, bio-fertilizer and

foliar fertilizers are produced by both state owned enterprises and private companies from

imported materials. In terms of private production of compound fertilizers, there are relatively

few enterprises who are involved in production, as opposed to simply importing compound

fertilizer. In the state owned sector there are three urea plants run by Myanmar Petrochemical

Enterprise (MPE), producing around 160,000 tons per year. These three plants have a total

capacity of 425,000 tons per year. Since the demand for fertilizer exceeds domestic production,

large quantities of fertilizer are imported.

Domestic production capacity for chemical fertilizer is limited to three government owned urea

plants, and small amounts of triple super phosphate, rock phosphate and gypsum. Apart from the

urea plants, domestic production of the other chemical fertilizers is limited, and of low quality.

The three urea plants were built in the 1970s and are obsolete. Production of urea is stagnant,

even though there is excess capacity in these plants. The urea plants rely on supplies of natural

gas as their key input, and natural gas production is under the control of the MOGE. The MOGE

prefers to export natural gas in order to obtain much needed foreign exchange, and thus supplies

of gas to the urea plants have been decreasing. The primary constraint to the low production is a

lack of raw material and an absence of production decisions made on the basis of market demand

conditions.

Imports

The supply of domestic fertilizer declined due to the degradation of producing factories and the

difficulty of obtaining raw materials for the fertilizer. This fall in supply should have encouraged

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increase of imports. Consequently, the dependence on imports increased after 1993/94. The

figures for imports are the sum of imports by the government (Ministry of Agriculture and

Irrigation and Ministry of Commerce) and by private enterprises. Despite government attempts

to boost private imports by providing import duty exemption, private imports failed to increase,

and the government continued to be the main importer. Fluctuations in import volume after

1993/94 may possibly be the result of the insufficient allocation of foreign exchange to

government agencies for importing fertilizer.

Myanmar Oil and Gas Enterprise (MOGE) not only produces but also imports urea fertilizer. In

addition to MOGE, Ministry of Agriculture and Irrigation (MOAI) imports fertilizer through its

various departments. These enterprises import fertilizer for their own crop production

programmes. In addition to MOGE and MOAI, there are several other ministries and enterprises

importing fertilizer. The Ministry of Defense is also involved in fertilizer imports through

Myanmar Economic Holdings imports fertilizer for its military farms, and the Cooperative

Department.

Before 1993-1994 fertilizer prices were heavily subsidized by the government. Since then the

government has removed the subsidies on all. Subsequently, the market prices have risen to

international levels and the government has also allowed the private sector to import and

distribute fertilizer. Despite the increases in prices, few private sector companies are willing to

import and distribute fertilizers due to government restrictions on imports through the trade

policy. While open market prices reflect world prices, the government departments and other

government agencies are still providing fertilizer to selected farmers at subsidized rates.

Distribution

Myanmar Agriculture Service (MAS) is the largest procurer of fertilizer under MOAI. The

Procurement and Distribution Division of the Myanmar Agriculture Service (PDD-MAS) is

responsible for providing fertilizers and pesticides to farmers for subsidized crop production. The

main functions of the PDD includes the purchase of local and foreign agricultural inputs, the

timely distribution of farm inputs to farmers, and the prevention of damage to farm inputs during

their transportation.

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The amount of fertilizer distributed by PDD fluctuates from year to year depending on their

budget allocations for local and imported fertilizer. The amount of fertilizer distributed to

farmers by MAS peaked at 349,000 tons in 1994-95 and then declined to 219,000 tons in 2000-

2001. The amount of fertilizer distributed by MAS is less than the total amount utilized. Farmers

are able to procure fertilizers on the open market from private traders.

Constraints

The deterioration of profitability of summer paddy cultivation is not merely the outcome of

sluggish rice prices. Price hikes of inputs such as chemical fertilizer, diesel oil and agricultural

machinery also had a serious negative effect. The problem was that farmers had no alternative

but to depend on these inputs which are mostly imported on a purely commercial basis. It is

therefore relevant to note that foreign assistance was not provided after 1988, and at the same

time the government has also been obliged to abolish subsidies on these inputs.

Despite a lack of competition in the fertilizer market, most enterprises are finding it difficult to

achieve profitability. For the fertilizer industry the major constraints differ depending on whether

the firms are SOEs or private enterprises. For both types of enterprises the major constraints are

the lack of reliable supplies of electricity and the lack of demand for their relatively expensive

products.

For state owned enterprises, the chronic underutilization of existing capacity is a function of the

difficulties in purchasing raw material inputs, not only of fertilizer precursors but of spare parts

and consumables. The main cause of this is the lack of foreign exchange to purchase imported

inputs, and the lack of local currency to purchase domestically sourced inputs as well as to

convert to foreign exchange. This is a direct consequence of the low prices set for SOE products,

as well as an obvious lack of demand despite the lower prices. For private enterprises, the main

constraints other than those mentioned above are the difficulties in importing raw material

inputs. Unlike SOEs which have difficulty in obtaining the foreign exchange, private enterprises

have difficulty with the regulations governing imports and exports. Those companies who wish

to import must have another business dealing with exports.

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For the farmers there are fewer incentives for them to apply more fertilizer in order to boost

yields since the ratio of fertilizer prices to crop is high. Coupled with the low quality of

agricultural products grown in Myanmar, the prices on the domestic and international market act

as a disincentive for producers to increase production by applying more fertilizer. This is

illustrated by the low quality of Myanmar rice and the consequent low price it receives on the

international market compared with pulses which receive a high price on the international market

and consequently farmers are more willing to apply higher levels of fertilizer.

Fertilizer utilization is obviously dependent on price in an open market. With the significant

increases in fertilizer prices over time it is probable that the demand for fertilizer has decreased

significantly. Farmers’ purchasing power for inputs has been eroded by increasing costs of

production while output prices have remained stagnant. For those crops not on the priority list

(for example high valued pulses, fruits and vegetables and culinary crops) unofficial evidence

suggests that fertilizer use has increased dramatically, along with yields.

Perversely, the change in the rice procurement scheme for the 2003-04 crop year has meant that

farmers are applying less fertilizer than under the restrictive quota system that previously

prevailed. The main reason for this is that under the previous scheme farmers were paid in

advance for some of their quota deliveries, enabling them to purchase fertilizer. Under the

present scheme farmers do not get access to this money and so do not have enough spare cash to

purchase fertilizer.

Among all crops of Myanmar, rice has a dominant share so far as the receipt of fertilizer is

concerned, and even after the 1990s accounted for over 80% of the total volume of fertilizer

made available for cultivation. The volume of chemical fertilizer used for paddy, assuming that

80% of total supply was allocated for paddy cultivation. The fertilizer applied reached 75 kg per

hectare in the peak year (1985/86) and went down to 30 kg in the early 1990s, and has been

fluctuating widely in the range of between 30 and 60 kg. It is clear from these figures that

fertilizer application per hectare is low in Myanmar in comparison with the international average.

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Overall, the key constraints are institutional and policy orientated, rather than technical. With the

exception of urea, Myanmar does not have enough supplies of raw materials to produce chemical

fertilizer and thus is dependent on imports. The regulatory regime applying to imports acts as a

clear disincentive to private enterprises wishing to enter into the fertilizer industry. Conversely,

the state clearly does not have enough financial resources to provide enough fertilizer to meet

domestic demand. With the removal of the compulsory rice procurement scheme (and its

replacement with compulsory procurement from traders and millers), there is even less

justification for state involvement in controlling crop production and fertilizer inputs. Fertilizer

inputs should be seen from the perspective of being essential for improved crop production, and

thus regulations which restrict its free movement should be dismantled.

Agricultural Loans

The State-owned Myanmar Agricultural Development Bank (MADB), established in 1953 is the

only source of institutional credit for crop cultivation. The Bank has 16 regional offices and 205

branches, one each in 205 of Myanmar’s 325 townships. Although MADB is given a mandate to

provide financial services to a broad spectrum of rural borrowers, in practice it provides loans

only to farmers for agricultural production. The total seasonal loans disbursed by the MADB in

2008/09 reached Kyat 68,970 million ($6.89 million). The rice farmers have been given top

priority and the amount was Kyat 57,917 million ($5.79 million) to the rice farmers alone.

(MADB, Ministry of Agriculture and Irrigation of Myanmar, 2009)

Seasonal loans make up the bulk of MADB’s lending and are granted for growing paddy,

groundnuts, pulses, sesame, cotton, jute, mustard, maize, and sugarcane. Seasonal loans are

given without collateral, but are guaranteed by joint liability groups of 5 to 10 members. In

principle, loan size is to be determined according to the borrower’s demand and capacity to

repay, and is targeted to be approximately 30% of production costs. In practice, because of

MADB’s limited funds, loan size is much smaller. In 2003/04, loan rates for growing rice were

Kyat 2,000 ($2) to 8,000 ($8) per acre, while production costs were Kyat 50,000 ($50) to 61,000

($61) per acre. The farmers prefer larger loans at 36% interest to small loans at 15% interest.

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So far, MADB loans seem to serve as a relief for the farmers rather than solve their

financial problems. According to the MADB’s terms and conditions, the seasonal loans must be

repaid within one cropping season, and the loan size is kept small to ensure that farmers can

repay MADB without any problem. It also requires that farmers borrow money in small groups

of 5 to 10 members through joint liability.

MADB has limited fund resources. It receives capital fund of Kyat 1000 million

($ 1 million) from the Central Bank of Myanmar at an interest rate of 10% per annum. According

to Myanmar Agricultural and Rural Development Bank Law (1990), MADB is liable to allocate

25% of its net profits to its Reserve Fund at the end of each financial year, and transfer the

balance of net profit to the Central Bank of Myanmar. Hence, capital and reserves are limited by

law. In principle, farmers are encouraged to save with an interest rate of 12% per annum

(considerably below inflation) by being allowed to borrow an investment loan equal to five times

of their savings. But, in practice, MADB’s limited loan fund severely restrict implementation of

this incentive scheme. MADB further adopted a policy in March 2003 of not allowing customers

to withdraw any deposit expect in exceptional circumstances. The customers are allowed to

withdraw their savings only if they agree to leave MADB and forfeit all borrowing privileges.

Hence, savings are not a service, but rather a requirement to maintain borrowing privileges, and

thus customers maintain only the minimum required amount. As a result of this policy, MADB’s

funding source is restricted, which in turn limits its lending.

MADB faces many policy constraints. Foremost is the limit on interest rates. A landing

rate of 15% in an environment of high inflation makes MADB decapitalize and net losses to the

government budget. Similarly, in an inflationary environment, the deposit rate ceiling rate of

12% will continue to hinder MADB’s ability to mobilize deposits. With budgetary resources

scarce, MADB’s outreach and loan size will remain small. Another constraint is the capacity of

staff. Lack of strong banking skills of many of its staff makes MADB weak in its performance.

Due to MADB’s limited mandate, there has not been a strong emphasis on recruiting either

experienced bankers at senior levels, or business and accounting majors at entry levels. There is

no formal training programme for staff either. A further constraint to lending is inability to

accept agricultural land as collateral. Reforms that allow agriculture land to be used as collateral

will therefore increase access to credit.

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The role of other banks dealing with financial services for agriculture and rural economy

is limited and indirect. MADB is officially recognized as the only source of institutional credit

for agricultural production in Myanmar. Other formal banks are thus prohibited form providing

credit for agricultural production. None of the other 3 state-owned banks namely Myanmar

Economic Bank (MEB), Livestock and Fisheries Development Bank (LFDB), and

DISCUSSION PAPER No. 63, Koichi FUJITA, Ikuko OKAMOTO, June 2006Agricultural Policies and Development of Myanmar’s Agricultural Sector ( p.g. 12,13)

MYANMAR AGRICULTURAL SECTOR REVIEW AND INVESTMENT STRATEGY FORMULATION, UNDP/FAO - MYA/01/008, WORKING PAPER No. 6Agro-industry and the Transformation of Agricultural Products in Myanmar(2004, Jan.)

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Aung Kyaw Moe201050014Graduate School of International and Area Studies Hankuk University of Foreign Studies2011/01/27

Agricultural Development in Myanmar: with Special Reference to Irrigation

(I) Introduction

(II) Causes of Low Production of Agriculture Sector

(a) Agricultural Marketing Policy

(b)Agricultural Land Use Policy

(c) Access Problem to Chemical Fertilizers

(d)Agricultural Loans

(III) Measures to Increase the Production

(a) Expansion of New Agricultural Land

(b)Agricultural Mechanization Scheme

(c) Application of Modern Technology

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(IV) Irrigation Sector Development and Its impacts on Production

(V) Conclusions

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