Myanmar’s rice volatility keeps many farmers poor: World Bank

Myanmar’s rice volatility is the highest among net rice exporting countries in Asia, preventing rice farmers from earning high profits and keeping many families at or close to the poverty line, according to the World Bank.

The World Bank’s research team focused their study on Manawthukha and Pawsan rice varieties locally consumed from 2004-2013 in Ayeyarwady, Bago, Mandalay, and Sagaing regions, Mr Sergiy Zorya, the Bangkok based senior agricultural economist for the World Bank’s told reporters at a November 24 press conference held at the World Bank’s Yangon office.

“Manawthukha is well-produced and trading well, whereas Pawsan is produced in just a few locations,” Mr Zorya said.

In their report entitled, “Myanmar: Rice Price Volatility and Poverty Reduction” the survey shows that during the 10-year period, the average price volatility in Myanmar was above the level of peer net rice-exporting countries Cambodia, Thailand and Vietnam.

“The volatility was especially high for Pawsan,” the report says.

The average price volatility of both Pawsan and Manawthukha was about 35 percent lower during the 2009-2013 period compared to the average during 2004-2013, but remained relatively high, the report says.

Mr Zorya says in the press release, “Addressing price volatility requires a good assessment of the actual situation because rice production is seasonal and price volatility is inherent in agricultural markets.

“A majority of rural population lives close to the poverty line and spends more than 60 percent of their incomes on food. Even a temporary increase in rice prices reduces real income and households’ spending on health, education or more nutritious food,” Mr Zorya said.

“Rice price volatility, indeed, should concern everyone in Myanmar,” he said.

Myanmar’s agricultural sector suffers from a host of problems. Price volatility in Myanmar is mostly driven by heavy concentration of paddy production in just two months of a marketing year – November and December. Fragmented seed market, poor roads, weak phone coverage, unreliable market information, low export diversification, and high costs for rice mills to maintain rice stocks amplify these price fluctuations even further, according to the survey.

Mr Ulrich Zachau, World Bank country director for Myanmar said in the press release, “Any strategy for stabilizing rice price volatility has to address its structural causes.

“International experience shows that there is a significant trade-off between lowering price volatility with short-term measures and maintaining price competitiveness. Long-term structural issues can be solved only through investments in agriculture and infrastructure, improved business environment, and social safety nets. Open trade policy should be the one and foremost policy goal for Myanmar,” Mr Zachau said.


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