Myanmar Farmers Crushed by Rising Input Prices and Junta Attacks

By The Irrawaddy 16 February 2023

Agriculture, the backbone of Myanmar’s economy, has been in steep decline since the 2021 coup.

During a meeting in Naypyitaw last August, junta chief Min Aung Hlaing claimed Myanmar had 15 million acres of paddy under cultivation during the rainy season and 3 million acres of paddy during the hot season. Rice merchants, however, said only 12 million acres of paddy were growing during the rainy season and the productivity would decline by 3-5 million tonnes.

The US Department of Agriculture has estimated that global rice production this year will decline to 503 million tonnes from 515 million tonnes in 2022. Myanmar’s rice production was estimated at 12.5 million tonnes.

Fighting in Sagaing and Magwe regions and Chin and Kayah states is blamed because they are largely rural.

Increased prices of agricultural inputs, rising production costs and labor shortages are contributing factors.

Junta troops have been torching villages and stored grains and seeds, disrupting agriculture in the areas. Many young people have abandoned their farms either to fight the regime or seek better prospects in other countries, leading to labor shortages.

Rice is also grown in Ayeyarwady, Bago and Yangon regions, where there are fewer clashes. But farmers have suffered from increasing prices for fertilizer.

One farmer from Ayeyarwady Region said: “We cultivated fewer acres [in last year’s monsoon] because of the high costs of input and the yields have declined because we could not apply enough fertilizer. The monsoon paddy harvest was poor.

“The regime supplied two sacks of fertilizer per acre to grow paddy. But it came late.”

Paddy cultivation usually starts in November in Ayeyarwady Region but the regime only supplied the fertilizer in January, he said. Farmers will have to pay for fertilizer after the harvest as the regime will take the output equivalent to fertilizer prices, calculated at the market price at the time of harvest.

The price of Paw Hsan rice grown in Ayeyarwady Region has hit 1.8 million kyats per approximately 3,300kg, up from 1.6 million during the early days of the harvest.

One farmer from Magwe Region told The Irrawaddy: “We have not yet suffered serious impacts as the fighting is not yet intense. But like other farmers we have suffered from price hikes, increased costs and declining prices of agricultural produce. So we cannot grow as we did before. We have left land fallow because we couldn’t afford fertilizers.”

While farmers had to spend more to cultivate fewer acres, prices have remained low, meaning the acreage of cultivated land has halved.

Min Aung Hlaing told civil servants and independent business owners in Ayeyarwady Region on February 7 to reintroduce co-operatives, a system endorsed and implemented by successive dictatorships.

Min Aung Hlaing preached the merits of cooperative syndicates while his troops torch numerous villages in Myanmar’s agricultural heartland.

The price of Paw Hsan rice grown in Shwebo Township, Sagaing Region, and surrounding areas has more than doubled from 50,000 kyats per sack before the coup to 120,000 kyats.

The sown acreage of Shwebo Paw Hsan declined this year to 330,000 acres from the previous annual average of 380,000 acres.

A rice merchant from Sagaing Region said companies are not buying rice themselves but using agents because the regime might issue orders affecting the rice business.

“Companies are secretly buying through agents and dealers. The prices have increased slightly. Some villages do not sell their rice while others hoard it to sell at higher prices due to the low sown acreage and low yield last year,” said the merchant.

Rice prices have steadily increased by around 7,000 kyats per sack since late January. It previously took about three months for rice prices to increase by 10,000 kyats per sack. But price increases have been common since the 2021 coup, according to rice merchants.

Rice prices increased partly due to other traders entering the rice trade. As the regime controls the exchange rate, as well as imports to cut foreign currency spending, the business environment has become increasingly harsh for traders and some have moved into rice sales, said rice merchant U Myint, who has been in the trade for more than two decades.

“The supply is already low in the market but the demand has risen. So prices have increased. Traditional rice merchants only buy good-quality rice but the newcomers buy almost regardless of the quality. “Production was low this year so they know rice prices will increase and they, therefore, join the business to reap profits,” he said.

As the regime has imposed restrictions on imports of cooking oil, fuel and so on, importers of those products have switched to rice trading, he said.

“There are many traders with money to invest but they face many junta restrictions. So they have started to choose commodities that are not restricted. They saw potential profits in rice and have entered the business,” he said.

The decline in agricultural production is taking the heaviest toll on low- and middle-income families in Myanmar.