A New Vision for Myanmar s Agricultural Development: From Rice Bowl to Food Basket

Transcription

1 A New Vision for Myanmar s Agricultural Development: From Rice Bowl to Food Basket Prepared by the Agriculture Policy Working Group, led by U Tin Htut Oo and including Myanmar and international researchers, with support from USAID. 1

2 Introduction New government and parliament taking form Myanmar people ready for positive change 7 of 10 live in rural areas, where poor majority resides Over half employed in agriculture Many work for wages, for rural non-farm enterprises Others migrate in search of work to cities and abroad Myanmar sits in most economically dynamic region in the world Yet has among the highest rates of malnourished people Our Asian neighbors have shown that policy reform, investments in infrastructure and institutional reform can unleash a virtuous circle of growth among farmers, food processors and service providers This helped raise millions of rural people out of poverty Source: LIFT Timeline Photos 2

3 Outline of Rest of Presentation The Opportunity for Market-led Transformation Lessons from the Rest of Asia s Success in Modernizing Agriculture Three Pillars of Agricultural Transformation: Pillar One: Modernization of Small-Farm Production Pillar Two: Modernization of Agricultural Input Markets Pillar Three: Modernization of Output Markets and Agrifood Supply Chains Myanmar s Agricultural and Food Sector Today New Vision for Modernizing Myanmar s Agricultural and Food Sector Objectives, Strategic Themes, & Implementing Principles Setting Priorities and Sequencing Reforms Infrastructure, Policy, and Institutional Recommendations 3

4 The Opportunity for Market-led Transformation Fifty years ago, Asia s diet was mainly rice and most were still poor and hungry. Today, rest-of-asia s food demand picture is quite different Calories consumed have increased, and basic caloric hunger has been sharply reduced. Diversity of diets has greatly increased; only one-quarter to one-third of food spending is on rice, even by rural consumers. Majority is spent on a diversified food basket of fish, dairy, fruits, vegetables, meats, and edible oils. Urbanization has shifted demand (less rice per capita); cities now represent main markets for farmers (and some exports). Most food, even in rural areas, is now purchased from markets, and farms earn over 40% of incomes from rural nonfarm employment. These changes are beginning to occur in Myanmar! 4

5 In Response to Demand Rest-of-Asia small farmers supply responses Invested heavily in on-farm productivity; installing irrigation; buying fertilizers, seeds, and machines. Rapidly and voluntarily adopted new cultivation practices. Diversified cropping beyond rice, often earning 5-10 times more per hectare producing vegetables, fish, meat, eggs compared to producing basic grains Greatly increased their output of maize for use in feed for fish, chicken, hogs, and cattle; animal protein rapidly increasing in rest-of-asian diets. In turn, tens of thousands of SMEs all along the agribusiness supply chains have moved production from farms to cities (and some to export markets). In the process, the incomes of farmers and rural SMEs have greatly increased. Source: LIFT Timeline Photos 5

6 Observing Myanmar s Agrifood Sector Today Urban market is already half or more of the national food market. Dietary diversification has started, but calorie & micro-nutrient deficits persist. Rural livelihood diversification is underway, via rural non-farm employment, local farm wage employment, and migration. Agricultural diversification is moving farms into non-rice food and industrial crops, as well as into aquaculture and livestock production. Rural labor shortages are increasing throughout the country, raising rural wages; mechanization and other labor-saving approaches are occurring (e.g., use of combine harvesters) on many farms. Access to agricultural land is constrained by a long-outdated and overly complex land-use registration system. 6

7 Myanmar s Agrifood Sector Today (2) Though some agricultural intensification is observed, much of Myanmar agriculture is still producing only one crop per year; farmers are facing declining profitability and need irrigation and productivity investments. Current irrigation water management does not provide farmers with incentives to conserve water use. ICT revolution is rapidly bringing affordable cell phones to many in rural areas, but poor access to (and understanding of) the internet limits the impact of ICT breakthroughs on agriculture productivity. Cross-border trade is cumbersome; trade in some products is completely forbidden. The Quiet Revolution of supply chain growth is beginning to emerge and the Modern Revolution of food processing and modern retailing is in evidence as well. 7

8 Three Core Proposals for a New Vision for Agricultural Development 1. In the past, Myanmar s agricultural sector was driven by supply requirements. In the future, farmers and agribusiness supply chains will be driven by the market. 2. In the past, Myanmar s agricultural supply requirements were defined by the government. In the future, the agribusiness supply chains will be led by small farmers and SMEs spurred by larger domestic and foreign firms. 3. In the past, policy governing Myanmar s agricultural sector was narrowly focused on the production of crops. In the future, the agribusiness supply chain will be shaped by a three-pillar strategy that embraces: a) Open decision-making by small farmers, producing a wide range of agrifood products based on market demands; b) Supported by responsive input suppliers, productive technology, access to financial services, and knowledge and information service providers; and c) Driven by reliable, efficient access to output markets and value chains. 8

9 Three Pillars of Modernization Policy reform, government investments and institutional reform support supply chain-driven responses. Three pillars: Small-Farm Production Input Markets Output Markets & Supply Chains Just like this stool, none of these pillars can stand alone; each depends on the others. 9

10 Rest-of-Asia Public Actions Investments Hard infrastructure (roads, rail, bridges; information and communications; water control infrastructure; and rural electrification), along supply chain. Rural Areas Towns, Intermediate Cities Small & Medium Cities Soft infrastructure (research, extension, phytosanitary services, education). Institutional Reform Strengthening of ministerial capacity to oversee and facilitate the agrifood sector and agribusiness supply chain. Mega Cities Policies Pillar One Promote farmer choice: freeing farmers to chose what the grow, building their capabilities to decide and produce. Pillar Two Increase property rights and ability to rent/sell/buy land. Liberalize agricultural input markets. Create enabling environment for private provision of credit. Move toward establishment of water markets. Integrate diversification, resilience, sustainability environment, and risk management into agrifood systems. Improve business environment for rural SMEs and farms. Pillar Three Withdraw government from food marketing. Liberalize foreign direct investment in the agrifood sector. Improve the business, trade and investment climate: Loosen unneeded regulations; eliminate red tape. Liberalize trade licensing and facilitate imports/exports. Strengthen intellectual property rights; food safety and consumer protection; product quality grading, standards and measurements. 10

11 Implementing Principles for a New Vision Transparency, participation, accountability, and ethics 60-day public comment period for any policy proposals Widespread publication of all laws and regulations Systematic approach to agriculture and agrifood sector Interdependence of the three pillars Food security relies on availability, access, stability, utilization principles Intra-government coordination for policy-making and implementation New institutional structure, capacities, and responsibilities for new Vision Prices matter Monitor the effectiveness of policy implementation and enhance accountability 11

12 Strategic Themes for Modernization This Vision for modernizing Myanmar s agrifood system aims to achieve: Emphasis on smallholders and consumers (domestic and exports) Increased production diversification with freedom of choice by farmers Increased competitiveness of private sector-led supply chains Higher productivity of land and labor in agriculture (mechanization ++) Enhanced human capital (education, training, research, extension) Enabling business, trade and investment environments Need-driven infrastructure and logistics Environmental and social sustainability Government-facilitated, private sector-driven partnerships 12

13 Matrix of Recommendations: Overview (1 of 2) Priorities Actions Pillar One: Modernizing Small-Farm Production POLICIES & REGULATIONS a) Farmers freedom to choose what to produce. b) Investments in physical and social infrastructure. See paper for specific actions c) Promotion of adoption of mechanization. d) Build organizational & human capacity of government agricultural institutions. Pillar Two: Modernizing Input Markets POLICIES & REGULATIONS a) Provide farmers with greater land tenure security. See paper for specific actions b) Liberalize Myanmar s seed, fertilizer, & equipment markets. c) Enable private sector provision of financial services to farms, rural enterprises, and individuals. d) Develop strategies for efficient and sustainable resource use. e) Promote rural non-farm employment & migration. 13

14 Matrix of Recommendations: Overview (2 of 2) Priorities Actions Pillar Three: Modernizing Output Markets & Value Chains a) Invest in supply chain infrastructure. INFRASTRUCTURE INVESTMENTS See paper for specific actions POLICIES & REGULATIONS: PRODUCT MARKETS b) Liberalize meat markets. See paper for specific actions c) Promote sustainable natural resource governance for capture fisheries and forestry. POLICIES & REGULATIONS: BUSINESS-ENABLING ENVIRONMENT d) Improve business environment along the value chain. e) Promote trade and FDI aimed at both domestic and regional/international markets. f) Protect intellectual property rights for agrifood sector. g) Develop strong quality infrastructure for agrifood sector. h) Develop trade & commercial policy to promote competitive domestic and export supply chains. i) Enact SPS and food safety legislation to ensure crop, animal and human health and safety. See paper for specific actions 14

15 Setting Priorities and Sequencing Reforms Will depend on Understanding assignment of responsibilities across new government Fiscal constraints Degree of complexity Some can be tackled immediately Others require longer processes for developing laws, implementing regulations and administrative processes, and for building appropriate institutions and capacities Some decisions need immediate attention, but will take time to unfold Gathering input from government, parliament, private sector, civil society, and states/regions will be crucial to setting priorities and sequencing reforms inclusive input is vital! 15

16 We look forward to further discussion and to learn from your ideas, experiences and recommendations. Thank you. 16