Myanmar Govt Backs Minimum Price for Rice Amid Weak Market

By Salai Thant Zin 16 October 2019

PATHEIN, Irrawaddy Region—The Myanmar government has fixed the minimum price for rice at 500,000 kyats for 100 baskets of paddy (US$327.30 for about 2.09 tons) in a bid to establish a fair market and fair prices for paddy farmers.

The government’s Leading Committee for the Protection and Promotion of the Rights and Interests of Farmers, led by Vice President Henry Van Thio, met last month to discuss setting the floor price for paddy grains. Paddy rice refers to unprocessed rice harvested from a field, rather than hulled rice.

The government has agreed to pay any farmer the floor price, but only for paddy that meets quality standards: the grains, once processed, must have a moisture content of 14 percent and can’t have any dust, sand or gravel, according to an announcement released by the committee on Tuesday.

According to the statement, if the market rate is higher than the floor price, rice is to be bought according to the market rate, but if the market rate is lower than the floor price, it is to be bought at floor price.

Currently in Ayeyarwady Region, often called the rice bowl of Myanmar, the price of low-grade Sin Thuka rice is between 450,000 kyats and 500,000 kyats for 100 baskets. Rice merchants in Ayeyarwady Region who purchased and stored paddy from the summer harvest in April and May are reporting financial losses as they attempt to sell on a weak market.

“We welcome the fixing of floor prices but 500,000 kyats is not a good price considering the cost of agricultural input,” said Ayeyarwady Region farmers union chairman U Myo Chit. “It will still provide a cushion for the farmers. It is important that the government buys immediately once the price falls below 500,000 kyats.”

The floor price will be applied for this year’s monsoon paddy season and next year’s summer paddy season. Farmers facing difficulties selling their harvest at the floor price can contact the township representatives of the Myanmar Rice Federation.

“The leading committee has formed rice procurement committees in regions and states which will buy paddy from farmers when the market rate falls below the floor price,” federation General Secretary U Lu Maw Myint Maung told The Irrawaddy. “But as the region and state governments are not yet ready to do this procurement, warehousing and management of rice, the Myanmar Rice Federation will assist them in those aspects.”

The Leading Committee for the Protection and Promotion of the Rights and Interests of Farmers was formed under U Thein Sein’s administration and led by Vice President U Nyan Tun.

Since 2010, Myanmar has seen an increase in rice exports, with around half of its rice exports going to China. Myanmar exported 3.58 million tons of rice in the 2017-18 fiscal year, the largest volume in 70 years, according to the Ministry of Commerce.

Though the Myanmar government allows official rice exports to China, Chinese authorities consider most rice imports from Myanmar to be illegal but still allow rice merchants to bring rice across the border. After Chinese authorities launched a crackdown on illegal rice imports from Myanmar in 2018, Myanmar’s rice exports to its neighbor declined significantly, dropping by around 1 million tons.

Translated from Burmese by Thet Ko Ko