Myanmar takes first steps to ramp up rice exports

Due to the region’s warm climate, double cropping or even triple cropping is possible in some areas. Not surprisingly, this helped make Myanmar one of the world’s top exporters, a position it held from the 1920s through the early 1960s

But the military-led socialist regime that took the reins of power in 1962 tightened state control of agriculture, banning private-sector rice exports. As a result, investment in the agricultural sector dwindled, while the quality and productivity of rice farming in the country declined. By 2015, Myanmar’s rice exports were only the sixth largest in the world.

High-tech rice mills are crucial for the country’s efforts to become a leading rice exporter again.

In Myanmar, some 30-40% of rice grains are crushed in the milling process, compared with less than 10% in Japan. MAPCO is investing heavily in new rice mills equipped with advanced milling technology to boost the quality of rice for greater competitiveness in the international market.

Chit Khine, a prominent business mogul in the country, has been leading the Eden group of companies, a conglomerate comprising mainly real estate development and tourism businesses.

After serving as the chief of Myanmar Rice Federation, the nation’s largest agricultural organization, Chit Khine founded MAPCO in 2012 with the help of the military junta, which ruled the country at the time. MAPCO was designed to serve as the main promoter for the modernization of agriculture in the country.

Over the years, Chit Khine has built personal relations with various political forces. In the 1980s, he was a member of the National League for Democracy, the now ruling pro-democracy party led by Aung San Suu Kyi. He has such close ties with Suu Kyi that he was even regarded as a potential candidate for the minister of agriculture and irrigation in the NLD-led government.

MAPCO has acquired 150,000 sq. meters of land at Thilawa Port, located to the southeast of Yangon, the nation’s largest city, with plans to spend some $70 million to construct a new port for exports as early as 2017.

The company is also planning to build a new railway line dedicated to rice transport in Naypyitaw. Chit Khine is confident about receiving financial support from the government for the project.

Also vital for Myanmar’s resurgence as a major rice exporter is raising the international competitiveness of the country’s rice farming.

Chit Khine points to the need to increase the availability of financing through such measures as extending low-interest loans to farmers. In Myanmar, interest rates on loans by general financial institutions are high, hovering around 13%. This makes it difficult for most farmers in the country to buy agricultural machines and fertilizers.

In response to the situation, MAPCO is supporting rice farmers. Last year, it opened an Agribusiness Service Center in Naypyitaw, which loans about 10 types of farming machines for fees of 10,000-45,000 kyat ($8.5-$38) per acre per month. The Agribusiness Service Center’s mission is to help small farmers improve their productivity, according to an official of the center.

To extend its reach, MAPCO is working to open some 20 centers across the nation, where 70% of its 50 million people live in farming villages.

 

Source: Nikkei Asian Review

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