Department of Agricultural, Food, and Resource Economics Food Security Group

IDWP 139. Than Tun, Adam Kennedy, and Ulrike Nischan. 2015. Promoting Agricultural Growth in Myanmar: A Review of Policies and an Assessment of Knowledge Gaps

INTRODUCTION:
Across Southeast Asia, agricultural growth has historically been a major driver of overall
economic growth and poverty reduction (Christiaensen, Demery, and Kuhl 2011).2
Indonesia, Malaysia,Thailand and Vietnam all enjoyed rapid agricultural growth as part of their successful development over
the past several decades. Given broad similarities in the economic structures of these countries in the
1970s, 1980s and 1990s in comparison with Myanmar today, the historical evidence suggests that rapid
agricultural growth in Myanmar has the potential to be the engine for broad-based economic growth
and poverty reduction. Moreover, the current democratic reforms in Myanmar create opportunities for
development of agricultural and economic policies for greater food security and poverty reduction.

Official statistics indicate that agriculture is the largest economic sector in the country,
accounting for nearly 43 percent of GDP and providing the main source of livelihood for nearly 70
percent of the population (Haggblade et al 2013). Agricultural productivity in Myanmar is low compared
with most of Southeast Asia, which partially explains the disparity in relative incomes across the
countries. Raising Myanmar’s productivity to the level of its agro-ecologically similar neighbors, and
thereby spurring rapid agricultural growth, could significantly raise rural incomes and reduce overall
poverty.

The majority of Myanmar’s farmers are engaged in the production of rice, which occupies nearly
50 percent of total sown area (USDA 2014). At the same time, a large percentage of the rural population
remains landless, with estimates ranging from 25% to 50% depending on the region (Haggblade et al.
2013). While increasing productivity in the rice sector would improve the livelihoods of Myanmar’s
numerous paddy farmers, a long-term solution must be to also introduce greater diversification in the
agriculture sector and to develop value chains that offer employment opportunities for the numerous
landless (Byerlee et al 2014). The potential to do so certainly exists with urbanization and rising incomes
driving consumption patterns toward more high-value products which require greater processing and
logistics (Reardon et al. 2012). The shared border with more developed economies and the ASEAN
agreement facilitating freer trade also offer opportunities for growth in exports of high-value
commodities and processed products. The challenge remains on how to support such diversification
which will require large amounts of investment by government and private agro-enterprises of all sizes.
Government policies will likewise have an important part to play in creating an enabling environment for
private sector growth.

This paper reviews the agricultural policy environment in Myanmar up until 2014 with an eye
towards identifying policies that can help to accelerate productivity and profitability in the agricultural
sector. We draw heavily on the Framework for Economic and Social Reform (FESR) (2012) which provides
the policy intents of the government both overall and at a sectoral level. Although limited, in some
instances we rely on government data which is publically available only up until 2010. This paper
primarily examines the evolution of input policies and their measures of implementation, i.e. those
focused on farm inputs (land management; finance; water management; research, education and
extension services; rural electrification; seeds; fertilizer and mechanization). We also provide a brief
overview of policies which affect farm diversification (including rice productivity and crop diversification)
and output policies including policies related to post-farmgate processing; logistics and transport;
wholesale markets; and broad macro-economic and trade policy.