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“Patterns of Access to Land by Chinese Agricultural Investors and Their Impacts on Rural Households in Mandalay Region, Myanmar”

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“Patterns of Access to Land by Chinese Agricultural Investors and Their Impacts on Rural Households in Mandalay Region, Myanmar” Institute of Agricultural Policy and Markets (420) Department of Agricultural and Food Policy (420a) First Supervisor: Prof. Dr. Harald Grethe Second Supervisor: Prof. Dr. Regina Birner “Patterns of access to land by Chinese agricultural investors and their impacts on rural households in Mandalay Region, Myanmar” Master Thesis Submitted by: Miriam Esmaragda Romero Antonio Stuttgart-Hohenheim March, 2015 This work was financially supported by the Heinrich Böll Foundation and Foundation Fiat Panis Abstract After more than fifty years of socialist regime, Myanmar opened up their land market with the modifications to their Land Laws and Foreign Investment Law in 2011. Since then, large land concessions have increased dramatically. These land concessions are undertaken with no consultation or compensation and are characterized by natural resource exploitation. In the uplands of Central Myanmar rural farmers who still rely on cattle to plough their lands and on rainfall to irrigate their fields, are pressured to decide between receiving a fixed income by renting their farmland to Chinese investors or, preventing their land from being used for unsustainable cultivation practices driven by these investors. This study presents an analysis of the impacts that short-term land leases to Chinese agricultural investors has on farmers’ livelihoods in Chuang Kwa tract of Mandalay Region in Myanmar. This research sought to understand: a) Chinese investor’s strategies to access farmers’ land, b) estimate effects on farmers’ income and food security c) implications on land-user rights and d) implications on land and water use. This study follows the Institutional Analysis and Development (AID) Framework, applying a convergent methodology. Average effects of these land deals on total income and food security are estimated through the Propensity Score Matching (PSM); effects on household food diversity and food quality are explored through the Food Consumption Score (FCS) from the World Food Program. Results indicate that farmers leasing land have increased their total income and have improved their food consumption. However, externalities such as soil impoverishment and groundwater depletion were recorded. Moreover although these land deals do not lead to formal land dispossession or people displacement, a dispossession of user rights was manifested. Findings suggest that renting land may not bring significant improvements in the long- term. Farmers’ income increase might not continue and farmers’ food production might be under threat due to resource depletion. It is recommended that a legal agreement should be established between farmers and tenants to define the terms of land use, emphasizing sustainable land management. i Acknowledgements I would like to express my wholeheartedly gratitude to Prof. Dr. Harald Grethe and Dr. Christine Chemnitz for the opportunity to carry out this study in Myanmar, for their trust, support and insightful advices throughout this thesis. I also want to thank Prof. Dr. Regina Birner for her assistance in the role of second supervisor. Furthermore, this study was possible by the financial support from the Heinrich Böll Foundation and Foundation Fiat Panis, to whom I am very grateful. For providing me with valuable inputs, guidance and teaching me the art of research, I thank Dr. Ulrike Müller and Dr. Bamlak Alamirew. Also, I am truly thankful to Dr. Tim Loos, for his valuable guidance on the implementation of the PSM. Furthermore, I am especially grateful to U San Thein, for introducing to me the case study, for the insightful discussions on land tenure issues in Myanmar and for sharing his network. For my stay in Myanmar, my thanks go to: Tin Koo, Naing Min and Nyunt Lin, for your unconditional support with the organization and completion of this field work. For data collection and translation I received support from: Neichi Minn, Nila Aung, Htet Htike, Saung Hnynn, Rhi Zan and Nay Myo Aung. To International Mandalay Church for being like a family to me during these months in Myanmar. To the farmers in Chuang Kwa tract, I am deeply grateful, for their time and willingness to response the questionnaire. I would like to express my appreciation for those who contribute with this study, for your time, patience and proofreading. Katja Searles and Sahrah Fisher, thank you for the everyday discussions and continuous support! Thank you, Traute Pott, for the final insightful inputs and comments on this work! Finally, I thank my beloved family, without whom this master program, neither this thesis would have been possible. “Be strong and courageous. Do not be afraid; do not be discouraged, for the LORD your God will be with you wherever you go” Joshua 1:9 ii Contents Abstract ......................................................................................................................................... i Acknowledgements ................................................................................................................. ii Contents ...................................................................................................................................... iii List of tables .............................................................................................................................. vi List of figures ........................................................................................................................... vii List of abbreviations ............................................................................................................ viii Chapter 1 – Introduction ....................................................................................................... 1 1.1 Research objectives .................................................................................................................................................. 2 1.2 Problem statement ................................................................................................................................................... 2 Chapter 2 – Literature review ............................................................................................. 4 2.1 A global view on foreign direct investments on land ................................................................................. 4 2.2 Opportunities and threads of large-scale land acquisitions .................................................................... 6 2.3 Alternative solution to large-scale land acquisitions: contract farming ............................................ 7 2.4 Large-scale land investments in Myanmar ..................................................................................................... 8 2.4.1 Myanmar: socio-economic and food security indications ................................................ 8 2.4.2 Current state of foreign investment in land ..................................................................... 11 2.4.3 Case study: short-term international land lease .............................................................. 13 Chapter 3 - Conceptual framework ................................................................................. 15 3.1 Applying the institutional analysis and development framework .................................................... 16 3.2 Theoretical perspective ....................................................................................................................................... 18 Chapter 4 - Methodology – data collection ................................................................... 21 4.1 Research area........................................................................................................................................................... 21 4.2 Sampling selection ................................................................................................................................................. 23 4.3 Survey process ........................................................................................................................................................ 25 4.4 Methods for quantitative analysis ................................................................................................................... 26 iii 4.4.1 Measurement for food security ......................................................................................... 26 4.4.2 Propensity score matching ................................................................................................ 28 4.5 Methods for qualitative analysis ...................................................................................................................... 32 4.5.1 In-depth interviews and focus group ............................................................................... 32 4.5.2 Net - map tool ..................................................................................................................... 33 Chapter 5 - Results ................................................................................................................. 34 5.1 Biophysical conditions – descriptive statistics .......................................................................................... 34 5.2 Community attributes - determinants to rent farmland ........................................................................ 36 5.3 Rules-in- association with property rights .................................................................................................. 38 5.4 Action arena- consultation
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