Investment Opportunities in Agriculture Sector of Myanmar

Aung Hlaing

Deputy Director-General

Department of Agricultural Planning

Ministry of Agriculture and Irrigation

Contents

• Country Profile

• Current Status of Agri-Business and Investment in Myanmar

• Opportunities for Investment in Agriculture Sector

• Balance Sheet

• Conclusion

Country Profile

NeighborsBorder

(km)Population

(mil)*

Border Trading Posts

Bangladesh 272 154 2

India 1,453 1,148 2

China 2,227 1,330 4

Laos 235 7 -

Thailand 2,099 65 4

Total 6,285 2,704 12

*Encarta 2009

Nay Pyi Taw .

Basic Country Data

• Land Area: 676,577 sq. km.• Population: 59.78 million• Export: US$ 9.135 billion*

• Import: US$ 9.035 billion*

• Main Exports: Agriculture, livestock and forestry products, natural gas

• Main Imports: Machinery, transportation & construction material, industrial

raw materials, consumer goods

*2011-12

Role of Agricultural Sector

• 36% of GDP (including crops (27%), livestock & fisheries (8%) and forestry (1%))

• 61% of Labor Force• 28.1% of Export Earnings

(crops (16.6%), livestock & fisheries (4.9%) and forestry (6.8%))

Source: Ministry of Agriculture and Irrigation (MOAI) 2012

Land Utilization in Myanmar

• Net Sown Land: 12.3 mil. ha. (18%)

• Waste Land: 5.4 mil. ha. (8%)

• Forest Land 33.5 mil. ha. (50%)

• Other Land 16.5 mil. ha. (24%)

• Total 67.7 mil. ha. (100%)

Source: MOAI 2011-12

Land Utilization in Myanmar

Net Sown 10.8 mil ha (16%)

Fallow10.8

Net Sown Land

Waste Land

Forest Land

Other Land

Net Sown 12.3 mil ha (18%)

Waste Land5.4 mil ha (8%)

Forest Land 33.5 mil ha (50%)

Other Land 16.5 mil ha (24%)

Source: MOAI

Recommended Crops for the Regions

Sr. States/RegionsHectare

(000)Major Types of Activity

1 Kachin 1,456 Orchards, Seasonal, Plantation Crops, Fruits

2 Kayah 16 Seasonal, Plantation Crops

3 Kayin 45 Orchards, Plantation Crops

4 Chin 1,209 Orchards, Sericulture, Tea, Fruits

5 Sagaing 136 Orchards, Seasonal Crops

6 Tanintharyi 263 Orchards, Rubber, Oil Palm, Other Plantation

7 Bago 92 Orchards, Rubber, Seasonal, Plantation Crops

8 Magwe 60 Orchards, Seasonal Crops

9 Mandalay 32 Orchards, Seasonal Crops, Fruits

10 Mon 6 Rubber, Oil Palm, Orchards, Plantation, Fruits

11 Rakhine 107 Orchard, Rubber, Plantation Crops

12 Yangon 3 Rubber, Orchard, Seasonal Crops

13 Shan 1,943 Orchard, Tea, Coffee, Seasonal, Plantation Crop

14 Ayeyarwady 30 Orchard, Paddy, Seasonal Crops

Total 5,398

Source: MOAI 2011-12

Current Status of Agri-business and Investment in Agriculture Sector

Agricultural Trade Policy

• Domestic Agricultural Marketing

– Released all government controls on all crops including quota purchase on rice, sugarcane, cotton and rubber

– Farmers can trade their produce freely in domestic markets

Agricultural Trade Policy (contd.)

• Export Marketing

– Exports of rice is being allowed to private companies based on the assurance of surplus rice

– Other crops (e.g. pulses, oilseeds such as sesame, groundnut etc. and industrial crops such as jute, kenaf, rubber etc. and fruits and vegetables) have no restriction to export

– New commodities for value-added agricultural commodities are also being encouraged to export

Agricultural Exports (FY 2012)

Sr. Item Volume (metric ton) Value (US$ Mil)

1 Rice and Rice Products 1,035,701 401.810

2 Pluses 901,758 573.867

3 Cereals 250,996 80.389

4 Oilseeds 108,556 173.121

5 Industrial Crops 51,530 144.671

6 Fruits and Vegetables 163,734 47.823

7 Culinary 26,345 20.846

Total 2,538,620 1,442.527

Source: Ministry of Commerce, Myanmar

Legal Framework for Investment

• Liberalized domestic and export markets in agriculture sector since 1988

• Foreign Investment Law (2012)

• State Economic Enterprises Law (1989)

• Private Industrial Enterprise Law (1990)

• Promotion of Cottage Industrial Law (1991)

• Myanmar Citizens Investment Law (1994)

• Burma (Myanmar) Company Act

Source: Myanmar Investment Commission

Types of Foreign Investment

• 100 percent foreign own

• Joint venture with private sector

• Joint venture with public sector

Source: Myanmar Investment Commission

Land Tenure System

• All the lands are owned by the State– Land Nationalization Act (1953)

– Land Tenure Law and Rules (1963)

• Farm Land Law (2012)

• Vacant, Fallow and Virgin Land Management Law (2012)

Opportunities and Limitations

Rice Industry Supply Chain in Myanmar

Ministry of Agriculture & Irrigation, Ministry of Commerce, UMFCCI(Legal and Regulatory Bodies)

Seed Industry

Fertilizer & Pesticides

Machinery Industry

Irrigation Technology

Other Clusters

Transport & Logistics

CooperativeFinance & Insurance

Quality Institutions

Consumer Society

R&D + Extension + MIS

Milling and Byproducts

Industry

Middlemen, Buffer

Export

Retail & Wholesale Outlets

Supermarkets

Hotels & Restaurants

Institutional Buyers

Food Industries

Source: MIS, DAP, MOAI

Opportunities for Investment in Agricultural Supply Chain

• Input Industries– Seed Industry– Agro-Chemical Industry

• Fertilizer Industry• Pesticide Industry

– Agricultural Machinery Industry• small-scale agricultural machines at low cost, large-scale

machines for bigger farmers and rental services

– Irrigation Technology Industry• Dams and reservoirs, ground waters, hydro-powers• Technologies for water harvesting and water saving

Opportunities for Investment in Agricultural Supply Chain (Contd.)

• Production and Processing Industries– Plantation Industry

• On- and off-season food crops, oilseed crops, bio-fuel crops, fruits and vegetables, industrial crops and perennial crops

– Processing Industry• post-harvest and value-added processing industries that

include quality milling, storage and packaging technology industries

– R&D Industry• production, processing, value-addition and marketing in all

aspects of commodity value chains

Opportunities for Investment in Agricultural Supply Chain (Contd.)

• Wholesales Market Industry

• Competitive Drivers– Transport and Logistics– Agricultural Cooperatives– Credit and Insurance Industries – Quality and Food Safety Institutions – Consumer Institutions

Myanmar’s Regional Economic Integrations

MYANMAR

Thailand

Laos

Cambodia

Vietnam

MalaysiaSingapore

Indonesia

Brunei

Philippines

BangladeshIndia

Sri Lanka

BhutanNepal

China

Korea

Japan

ACMECS

ASEAN+3

GMS

BIMSTEC

BIMSTEC: Bay of Bangal Initiative for Multi-sectoral Technical and Economic CooperationGMS: Greater Mekong Sub-regionACMECS: Ayeyarwady-Chao Phraya-Mekong Economic Cooperation Strategy

Balance Sheet for Investment in Agricultural Sector of Myanmar

Opportunities

• Strategic location

• Favorable agro-eco zones

• Uncultivated land (5.4 m ha)

• Resource endowment

• Democratic new government

• Domestic supermarket chains

• Favorable environment to go specialty food market

Constraints

• R&D• HRD• Weak supply chain

management and industrial clusters

• Poor cooperative culture• Lack of market

infrastructures• Poor export market access• Lack of financial and

legislative framework• Trade and FDI policy

Conclusion

• Myanmar will remain an agricultural-based country for a foreseeable future

• Present environment leads the country to agri-business development

• Myanmar will become an major food supplier of the region in the near future

Thank you for your kind attention!aunghlaing7855@gmail.com