DuPont, the Delaware-based chemical company, will start providing agricultural assistance to Myanmar in the fourth quarter after it opens its first office in the country.
Rajeev Vaidya, DuPont’s president for Asean and South Asia, said once the office is set up, products can be distributed to farmers right away such as crop protection chemicals and better seeds.
The company also wants to invest in sustainable energy, as Myanmar plans to build more power plants.
DuPont’s net sales totalled US$34.8 billion last year, of which 34% came from emerging markets.
Agriculture contributes the greatest share of company revenue, $10.4 billion last year, up from $9.17 billion in 2011.
Half the company’s agricultural sales are outside the US.
Despite ongoing problems in Myanmar’s farm sector, particularly in terms of access to funding, Mr Vaidya said he is optimistic about the country’s future, as he believes the government is capable of solving its problems.
“Asean in general is a big opportunity. We are confident and will continue to invest in the region,” Mr Vaidya told theBangkok Post on the sidelines of last week’s World Economic Forum on East Asia.
More than 10 billion farmers in Asean and South Asia benefit from scientific methods in terms of product yield and agribusiness improvements, said Mr Vaidya.
But that is still less than 10% of farmers in the region, providing opportunities for DuPont.
Mr Vaidya said farming must be made a more attractive and technology-savvy business to attract young people.
“Today the average age of rice farmers is over 60, and this is not sustainable. If we can get the science and technology and make it an exciting business, that’s the future of farming in Southeast Asia.
DuPont believes science can address how to grow more using less and how to feed 9 billion people [the projected world population in 2050] with shrinking resources,” said Mr Vaidya.
However, Debbie Taylor, a social entrepreneur and co-founder of Proximity Designs, said most Myanmar farmers have been trapped by very high costs due to the lack of infrastructure, while internal transport costs are five times higher than in Thailand and 20 times higher than in China.
“We have a credit famine, with decades of very little credit available for farmers. Four million households of paddy farmers resort to informal sources of lending and pay typically 10% interest per month [to loan sharks],” she said.
As much as 40% of Myanmar’s gross domestic product still comes from agriculture, while 80% of the population lives in rural areas and earns a living by farming an average of two hectares of land.
“Six decades of severe neglect and disinvestment for the farm sector have resulted in farmers having little credit, very little infrastructure and no support. They’ve had more bad than good years,” said Ms Taylor.
She said because the sector has been so unprofitable, migration from countryside to cities continues today, resulting in labour shortages in rural areas.
Meanwhile, major land issues remain unresolved, with farmers losing land without compensation, said Ms Taylor, adding that clear legal mechanisms are needed and land laws must be improved.
Estrella Penunia, secretary-general of the Asian Farmers’ Association for Sustainable Rural Development, said farmers should have a share in the decision-making process, business ownership and governance.
Franky Oesman Widjaja, the chairman and chief executive of Sinar Mas Agribusiness and Food, said Myanmar should adopt a policy in which large corporations guarantee loans and provide technical assistance to smallholder partners.
Source: Bangkok Post