Interview: U Win Aung, Chairman
What can be done to improve the efficiency of Myanmar’s supply chain of agricultural products?
U WIN AUNG: Around 70% of the population is still directly or indirectly involved in agriculture, meaning that most of the country’s household income comes from the sector. Given its relevance to Myanmar’s economy, agriculture has to be a political and investment priority for the government, local companies and the industrial sector. At the same time, fomenting cooperation among all players along the agriculture value chain is equally important to ensure more products reach an ever-expanding number of consumers.
One of the fundamental steps to boost productivity is to improve the education of local farmers. Besides teaching them about the importance of seed selection, the use of adequate fertilisers, and the introduction of new technology and farming techniques, farmers need to understand the dynamics of the consumer market to which they should respond and adjust production accordingly. A correct understanding of the market would not only generate productivity gains, but push farmers to cultivate higher value crops that would increase their income as well. However, this is not an easy task and the tangible effects of education will only be visible in a few years.
Productivity would also benefit from more investment in infrastructure, particularly in new facilities such as centralised wholesale vegetable and fruit markets, which would make Myanmar’s supply chain of agricultural products more efficient by reducing transaction costs. The creation of better distribution networks will also contribute to reducing the gap between producers and consumers, which is aggravated by the myriad of trading agents and brokers that contribute to the final cost of agriculture products that reach the market.
Myanmar still does not have a supply hub for fruits and vegetables, we need to learn from successful distribution and wholesale models from neighbouring countries such as China or even Europe. Learning from them would allow Myanmar to align its production and distribution system with international standards and food safety rules; a decisive step for the country’s agricultural exports to penetrate more sophisticated markets such as Europe and the US.
How can the diversification of Myanmar ‘s agricultural output benefit the income of local farmers?
WIN AUNG: Myanmar is widely recognised as a rice producing nation and is among the largest exporters of beans and pulses today. However, the country’s agricultural landscape is much more diverse and we should leverage that diversity, potentiated by favourable weather conditions and abundant, fertile land. The problem is that besides beans, pulses and rice, our export volume of fruits and vegetables to the international market is almost negligible. Our incapacity to export more valuable crops is holding back the creation of value in the sector, thus limiting the growth of local farmers’ incomes. In order to improve their income, the sector needs to start cultivating crops with higher market value. A good example of a product with higher market value is the mango. The country produces some of the world’s finest mangos, with most of its production being exported. This shows that some categories of fruits and vegetables present some interesting growth opportunities for the future.
With further diversification and larger production scales we can also expect to see the emergence of a strong agro-processing industry. However, to fully take advantage of these opportunities, producers, trading companies and industrial companies need to work together. Looking forward, Myanmar will need to craft strategies to move up the value chain by adding value to its agricultural production and sharing those economic benefits with its farmers.
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