Agriculture and Rural Transformation in Myanmar Implications for Development Strategy with a Spotlight on Shan State
By Ben Belton, Isabel Lambrecht, Duncan Boughton
1 Outline • What do we mean by agricultural and rural transformation (A/RT)? • Why does it matter for USAID programming in Myanmar? • How do we generate evidence on A/RT? • What is the evidence on drivers, trends and constraints to A/RT? • Overview of findings from the Delta and Dry Zone • Spotlight on Shan State: similarities and contrasts to Delta and Dry Zone • Implications for development strategy • Q&A / Discussion
2 Agricultural and Rural transformation (A/RT) defined • A/RT refers to the process of expansion and diversification of the rural economy in response to market opportunities and productivity growth • Look at agricultural and rural economy transformation jointly because of strong linkages (multiplier effects) between farm and non-farm activities • Drivers of A/RT typically include urbanization, trade, infrastructure, migration, technology, financial services • Geography and agro-ecology shape farmer and agri- business response to these drivers as well as outcomes.
3 Relevance to USAID programming
• Outcomes of A/RT processes are of direct relevance to a wide range of USAID objectives: inclusive development, poverty reduction, food and nutrition security, gender equity, and resilience • A/RT processes can be shaped by USAID engagement and programming to improve positive outcomes and avoid/mitigate negative ones • Example of rate of outmigration from rural areas that can have positive and negative outcomes
4 FSPP Survey Locations
• 2015: Mon State Survey
• 2016: Delta Region Survey (with aquaculture VC)
• 2017: Dry Zone Survey (with pulses and oilseed VCs)
• 2018: Dry Zone Variety Adoption and Seed Demand
• 2018: Southern Shan State (with maize and pigeonpea VCs)
5 Survey Topics Household Livelihoods Off-farm value chain stages • Land access • Aquaculture • Farm enterprises and profitability • Pulses • Farm technology & mechanization • Oilseeds • Credit access • Maize • Farm and non-farm employment • Rubber • Migration • Gender • Household income shares 6 Summary of A/RT in the Delta and Dry Zone 1) Agriculture is the largest source of rural employment and, with growing urban demand for high quality and diversified food, a key potential driver of sustained growth in the rural economy. 2) Migration is accelerating, driving up rural wage rates. 3) Remittances received by migrant households are mainly used for day to day expenses, including health and education. 4) Formal sources of credit have expanded, reducing interest rates. 5) Labor scarcity and increasing wage rates, combined with bank finance for machinery rental services, is driving extremely rapid mechanization.
7 Spatial growth in machinery supply businesses during the past 25 years
Number of agricultural machinery supply businesses by township, 1994-2018 (Delta & Dry Zone Enterprise surveys) 8 Summary of A/RT in the Delta and Dry Zone (2)
6) Access to a wide range of goods and services, especially transport and communications, has improved rapidly in rural areas. 7) Agriculture is under-performing relative to potential due to: • poor water control (irrigation and drainage) • Limited access to improved varieties / quality seed • inefficient use of fertilizer and pesticides • limited diversification into high value farm enterprises (aquaculture, livestock, fruit and vegetables) • Instability in output prices, especially for products heavily traded with India and China
9 Shan Agriculture and Rural Economy Survey (SHARES)
• Focus: Agriculture and the rural economy in South Shan, with particular emphasis on maize & pigeon pea value chains
• Household survey: 1562 HH in 99 villages in 9 townships
• Representing all village tracts where maize or pigeon pea grown
• Community survey: in 323 villages in 12 townships
10 COMMUNITY SURVEY
11 Ethnic diversity & Access
Ethnically diverse • Villages contain 1 – 12 different ethnic groups (average 2, total 19) • Pa’O, Shan and Burmese + Danu, Taungyoe, Kayan, Innthar, Lahu, Palaung, Kayin, Li Sue … • One third of communities have households with mixed ethnicities
Administration # villages % of villages General Administration Department (GAD) 211 65.3 Pa'O Self-Administered Zone 74 22.9 Danu Self-administered Zone 33 10.2 Shan State Army 2 0.6 Other 3 0.9 Obtaining permission to work in areas outside of direct government control is difficult... 12 History of conflict
14 Half of all villages (53%) ever experienced 12 armed conflict
10 • 25% experienced conflict in the last 25 years 8
6 Consequence for households in these 4
Share of Share villages villages: 2 • Forced to work as laborers or porters: 0 87% Livestock killed / stolen: 28% 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 • Final year of conflict • Forced to relocate : 19%
13 Infrastructure
100 90 80 70 60 50 40
Share of of villages Share 30 20 10 0
School Post=primary school Health infrastructure Electricity Mobile internet Paved road
14 Mobility
5y ago, wet season 101 Increasing mobility and reduced travel times, now, wet season 60 but infrastructure lags behind Dry Zone
5y ago, dry season 86 - 54% access to paved road -> Dry Zone: 75% now, dry season 51 - 24% access to public electricity 0 50 100 -> Dry Zone: 35% Time to nearest city (minutes)
15 Access to finance
51 Agri-produce traders 4 44 Friends/relatives 80 22 Informal Private moneylenders 8 5 Gold shop/pawn shop 20 41 Microfinance /ngo 35 33 MADB 97 0 Private bank 1 Cooperatives 29 Formal / 87 25 semi-formal Mya Sein Yaung 23 Village revolving fund 13 0 20 40 60 80 100 Shan Dry Zone % villages with min. 1 household taking credit from ...
16 Agricultural wages
No significant changes in real agricultural wages over 4500 4305 3923 time 4000 3915 3779 3436 3440 -> Dry Zone: ± 40% increase 3500 from 2012-2016 3000 2500 Gender gap is smaller than 2000 other regions of the 1500 country: women earn on
Real wage (2017 MMK) (2017 wage Real 1000 average 12% less than men 500 in the monsoon season 0 -> Dry Zone: 20% gender 2012 2015 2017 wage gap Men: monsoon Women: monsoon
17 Growth of non-farm enterprises
Shan Dry Zone **
4 Teashop 0% 7 5 Betel nut stall 17 17% 7 Prepared food stall 20 81% 6 Restaurant/bar 10 45%
0 20 40 2007 2012 2017 % of villages with min. 1
18 Development assistance projects
Government projects (66% of villages) Non-government projects (57% of villages) Agriculture Other 3% 8% Water Other Health 25% 17% Water 6% 31% Agricultur e Electricity 10% 12%
Health 7%
Education Roads Electricity Education Roads 20% 26% 2% 19% 14%
19 Farmer associations
Very few farmer groups, the existing ones are small and recent.
% of villages with… association Year established # members Any farmer organizations in this village 7.1 2015 29 NGO farmer group 3.4 2015 31 Central Cooperative Society 0.6 2015 37 Myanmar Farmers' Association 0.3 2013 5 Other 3.1 2015 30
20 HOUSEHOLD SURVEY
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21 High levels of access to agricultural land
15% Landed Farm Households 8% Landless Farm Households
77% Non-Farm Households
85% of HH have access to land (60% in DZ; 40% in Delta)
22 Small landholdings
9% • Average Land Owned by Landed Tercile 1 Farm Households 24% • All – 3.5 acres (DZ 5, Delta 10) Tercile 2 • T1 – 1.5 acres 67% • T2 – 4.3 acres Tercile 3 • T3 – 10 acres
(Smaller on average but more evenly distributed than DZ & Delta) 23 Limited land titling
60 49 50 25% 40 30 30 Percentage 75% 20 14 10 3 2 0.5 Agri: Parcels with Land Document 0 Agri: Parcels without Land DocumetDocument Form 7 Form 105 Contract Tax AIN Other Receipt Grant (87% of DZ parcels have Form 7/Form 105)
• Most land tenure insecure (untitled land defined as ‘wasteland’); • Cannot be used access formal credit (e.g. MADB)
• Land titles overwhelmingly in name of male HH head 24 Livelihoods in Shan dominated by farming, Agricultural labor & non-farm income < Dry Zone
Income source Landless Tercile 1 Tercile 2 Tercile 3 All Dry Zone
Own farm income 19 41 65 76 58 28
Agricultural labor income 10 12 8 3 7 19
Non-farm income 71 47 27 21 36 52
Share of income, by source and landownership status (% of total) 25 High diversity of crops grown (mean 9.7 per HH)
85%
59% 58% 57% 46% 45% 44%
30% 26% 15% 7% 6%
Share of households growing crop type 26 Many high value crops, but mostly grown on small area
3,500,000
3,000,000 3,100,176
2,500,000
2,000,000 1,670,545 1,560,315 1,511,688 1,500,000 1,242,004 1,014,582 1,000,000 742,424 690,000 621,119 613,906 539,863 496,362 410,991 405,000 365,882 342,139 500,000 335,814 310,789 305,805 287,537 275,751 254,993 238,217 216,460 187,788 171,190 163,398 143,314 141,570 141,154 128,232 123,257 111,233 109,488 107,921 69,338 67,353 56,000 50,000 46,667 42,105 39,399 27,769 0
-500,000 Tea Okra 28,000 Niger Garlic Citrus - Maize Onion Coffee Ginger Potato Wheat Flower Mango Chillies Roselle Banana Sesame Tomato Cheroot Tumeric Tobacco Bamboo Avocado Eggplant Pumpkin Sorghum Soy Bean Soy Betel leaf Chick Pea Chick Sunflower Sugarcane Other tree Sweetcorn Groundnut Pigeon Pea Pigeon Black Gram Black Green Gram Green Watermelon Lab Lab bean Cabbage/Cauli. Irrigated paddy Irrigated Other vegetable Other Monsoon Paddy Monsoon Pineapple/ Straw Pineapple/
Mean crop gross margins (MMK/acre) 27 High level of subsistence consumption, but value of crops sold far outweighs value of crops consumed
4,000,000 Own consumption 3,500,000 Sales income 3,000,000
2,500,000
2,000,000 83%
1,500,000
1,000,000 80% 500,000 64% 75% 17% 25% 20% 0 36% . 1 2 3 Landless Tercile 1 Tercile 2 Tercile 3
Mean value of self-consumed and marketed crops, by land ownership tercile (MMK) 28 Maize is dominant crop in terms of planted area
Tercile 1 Tercile 2 Tercile 3 All HH growing maize (%) 35 54 77 46 Maize % of total cultivated area - 67 60 61 62 maize growers (%) Maize % of total cultivated area - 30 40 53 41 all HH (%)
29 Big increase in maize cultivation in past decade, accompanied by rising input use
900
800 First planted maize 700 First used compound 600 First used pesticide 500 First used herbicide 400
300
Number Activity Number ofHH Starting 200
100
0 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017
Number of HH starting activity, by year first started 30 Machines have rapidly replaced draft animals, irrespective of farm size
machine draft animal 95 79 82
Percentage 22 18 17
tercile 1 tercile 2 tercile 3
Share of farm HH using machinery or draft animals in maize and pigeon pea production, by landholding tercile 31 Rental markets facilitate machine access
HH using rented machine HH using own machine 100
80
60
40
20 % of HH using machine using HH of % - 2007 2012 2017 2007 2012 2017 2007 2012 2017 2 WT 4 WT Machinery in land preparation in land preparation in threshing
Share of farming HH using own / rented machines in land preparation and threshing 32 Moderate levels of migration; mix of international and domestic
• 14% of HH have a migrant at present; 7% of individuals of working age are migrating (c.f. DZ 30% HH; Mon 49% HH) • Migrants are young: 84% aged 15-29 at time of migration • Roughly even gender split – Men 53%; Women 47% • More current international migrants than domestic (65:35), but domestic increasing rapidly • International: 88% Thailand • Domestic: 79% urban; 63% within Shan
33 Most migrants send remittances, remit significant amounts
Migrants remitting in Average value of past 12 months remittances Migrant type (%) ( MMK/month) All 58 66,791 Domestic 39 46,037 International 73 76,033 Male 58 61,544 Female 57 73,981
34 Most remittances used to cover cost of everyday expenses
1st reason (%) 2nd reason (%) Day to day expenses 52 0 Farm operating costs 9 21 Medical expenses 7 17 Repayment of debt 7 1 Education costs 6 35 Housing 6 8 Child care 5 10 Savings 3 3 Purchase agricultural assets 5 4 Donations 2 1
35 Opportunities in Shan State
• South Shan is promising in terms of potential for inclusive agriculture driven growth of the rural economy, including agro-tourism. • Investments to leverage additional value from existing crop supply chains (e.g. better varieties, greenhouse and small-scale irrigation, improvements in cold chain, packing and handling for fruits and vegetables, geographical indications, branding, organic certification). • Livestock production system development. • Improved financial services (tailored to ways in which households use formal and informal credit, remittances, and farm and non-farm incomes). • Formalization of trade with China and diversification of markets
37 Broad Implications for A/RT programming
• Regional conditions are very important for A/RT programming • Improve market responsiveness through agricultural diversification and value addition, requiring finance and quality assurance, is key to sustained rural economic growth • Improve trade regimes and market diversification for price stability • Increase productivity through effective private and public research and extension systems • Improve understanding of causes of poor nutrition indicators in highland areas and urban areas for targeted interventions • Look for ways to reduce the risks and maximize the benefits of migration – language and skills training, loans, awareness of rights • Track impacts of recent changes in land law on smallholders with insecure tenure 38 Thanks and time for Q&A….
Detailed reports can be found at: www.canr.msu.edu/fsp/countries/myanmar
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