Write-up taken from the IRRI's Rice Almanac (2013):
Recent developments in the rice sector
Myanmar is the world’s sixth-largest rice-producing country. Rice is the country’s most important crop and is grown on over 8 million ha, or more than half of its arable land. The country’s rice production increased from around 18 million t of milled rice in 1995 to over 22 million t in 2010. Some area expansion and yield increase accounted for the improved rice production. However, it will be some years before the country can regain its former position as one of the world’s largest rice exporters. Myanmar’s rice exports dropped from about 0.4 million t in 1995 to 0.12 million t in 2010. The country has been importing about 0.02 million t annually in recent years.
In spite of a decreasing use of fertilizer, rice production grew at 3% per year in 2005-10. Modern varieties are cultivated extensively but, because lower amounts of inputs (e.g., fertilizer and herbicide) are applied, farmers are not achieving the yield potential of these modern varieties. Rice yield rose to 4.1 t/ha in 2010 from about 3 t/ha in 1995 and yield growth was 1.9% per year in 2005-10. Rice yield reached 4 t/ha in 2008 and the stagnation since then could be due to the lower amount of fertilizer applied by rice farmers.
Rice remains the staple food in Myanmar. The country’s annual per capita rice consumption declined slightly from 170 kg in 1995 to 141 kg in 2009, but total rice consumption increased by more than 60% in the same period, due to the surge in population size. Parallel to the small drop in per capita rice consumption, caloric intake per person from rice declined from 68.4% (1,451 kcal) per day in 1995 to 48.3% (1,204 kcal) in 2009, while the share from other crops increased from 23.7% per day to 34.3% per day in the same period; daily protein intake per capita from rice fell sharply from 63.6% to 34.5%.
In January 2010, there was a major reorganization in Myanmar’s domestic rice industry. The Myanmar Rice Industry Association (MRIA) was established by the country’s leading rice producers, traders, and exporters from three separate organizations3 that joined forces to make Myanmar’s rice industry more competitive with rival countries such as Thailand and Vietnam.
To further enhance production, the government provides credit programs for low-income farmers in the Mandalay region. Similarly, the government encourages private companies to provide microfinance to rice farmers to buy rice seeds and other agricultural inputs.
The rice ecosystems of Myanmar include irrigated lowland, rainfed lowland (including late-sown and Mayin area), deepwater, and upland. Late-sown rainfed lowland is the area sown during the monsoon period; Mayin rice can be transplanted only after the monsoon when floodwater recedes.
Rainfed lowland (the largest of the ecosystems) and deepwater rice are confined to the delta region and coastal strip of Rakhine State. Nearly 60% of the delta region, including the Ayeyarwady, Bago, and Yangon region of Lower Myanmar, is cultivated with rainfed rice. Because of rainfall and hydrologic patterns, irrigation is critical in Myanmar’s central dry zone, whereas, in the delta, there is more concern about drainage and flood protection. The country’s upland area is mostly in Mandalay, Sagaing, and Shan states. Some upland area in Shan State occupies sloping land, which becomes cold in the northern winter.
Fertilizer use in Myanmar is decreasing and notably very low. On average, farmers applied only 5 kg NPK per ha of arable land in 2009, which was about a quarter of the amount applied in 1995. This indicates a much lower level for rice.
Rice production constraints
Insufficient capital due to limited access to formal sources of credit forces farmers to apply less farm inputs, particularly fertilizer, which makes their rice crop less productive.
Inadequate infrastructure (e.g., irrigation, farm-to-market roads) and postproduction facilities (e.g., mills, storage) hinder growth in rice production. The lack of better farm-to- market roads causes rice farmers to incur higher transportation costs for their produce. Products have to cross the Thai border and pass along the Ayeyarwady River. The railroads are very old, with very few repairs made since construction in the 1800s. Most highways are unpaved except in major cities. Grain quality is affected by he country’s simple storage facilities and antiquated mills. As a result, rice farmers in Myanmar are getting only 30% of the export price of rice received by their counterparts in other Southeast Asian countries such as Vietnam for their better quality rice.
Rice production opportunities
Rice yield can be further improved with the use of more inputs, especially fertilizer. A provision of credit facilities would enable farmers to buy the inputs needed to achieve higher yield/production. Adequate irrigation facilities are required for a steady supply of water, rather than depending solely on erratic rainfall in the central plain or dry areas. Better rice mills, storage facilities, and farm-to-market roads would ensure high-quality milled rice for export, a premium price, and lower transportation costs for farmers’ produce. These would result in improved income for farmers, giving them incentives to continue rice farming.
The following set of interventions would improve the country’s agricultural economy: (1) increase access to credit for farmers, traders, and millers; (2) increase the farm-gate price of paddy in order to encourage farmers to produce more paddy; and (3) provide finance for small-scale village infrastructure projects to increase demand for wage labor for the rural poor.
Sources: FAO’s FAOSTAT database online and AQUASTAT database online, as of September 2012.