Burma looks to increased rice exports to combat poverty

Monday, 11 January 2010 13:11 Moe Thu

Rangoon (Mizzima) - In order to tackle poverty among farmers, it is of the utmost importance for Burma’s rice industry to again become a major exporter worldwide, according to an economist in Rangoon.

During a press conference held Saturday in Rangoon on the heels of last month’s meeting between junta officials and Nobel Laureate economist Joseph Stiglitz in Naypyitaw, Dr. U Myint quoted Stiglitz as affirming Burma needs to make reforms in the agricultural sector to keep rural areas free of poverty.

“Rice is the mainstay of the agricultural economy and provides livelihood for the majority of farm families,” Dr. U Myint, a reputable economist, expanded.

With a total area of 676,500 square kilometres, Burma had been the world's largest exporter of rice as recently as the 1930s, but rice exports fell by two thirds in the 1940s, with the country never again reclaiming its dominant status in the internatinal rice trade. Thailand and Vietnam now lead the world in rice exports.

For fiscal year 1938/39, rice accounted for nearly 47 percent of Burma’s export receipts. However, by 2007/08 the corresponding figure had sunk to less than two percent, with earnings totalling a mere 1.2 percent of the global sum. Furthermore, the value of Burmese rice exports is even lower in comparison with competing states, as Burma tends to export a low quality of rice.

Meanwhile, though annual paddy production in Burma and neighboring Thailand, according to official statistics, is statistically level at approximately 35 million metric tons, the latter is able to export between an estimated eight to ten times more than Burma.

The discrepancy is at least thought to partially stem from the difference in average household economies. Whereas an average Burmese household can be expected to spend 72 percent of its total consumption expenditure on food, according to the Central Statistical Organization of the Ministry of National Planning and Economic Development, the same figure drops to 32 percent for Thailand. Even other least developed countries see corresponding food consumption numbers less than that of Burma, with Bangladesh recording a figure of 52 percent, Cambodia 57 percent and Laos 61 percent. The United States, as a developed country, sees on average only 14 percent of household consumption expenditure directed toward daily foodstuffs.

Dr. U Myint, accordingly, said the reintegration of the rice industry into the world market would provide incentives to increase both the quantity and quality of rice and thereby lead to higher incomes and employment opportunities for the rural population, who constitute 65 percent of the population of 58 million. An estimated 31 million acres of land is cultivated in Burma, of which more than 16 million acres are devoted to rice.

During the meeting with Burmese authorities, the visiting scholar highlighted restoring Burma as a major world rice exporter, a view subsequently accorded high priority and support from Burmese officials.

U Myint acknowledged that liberalizing the rice industry and reintegrating Burma’s rice industry into the world market would result in increasing international competition for local participants in the industry.

However, he said experienced rice dealers would survive while those enjoying special privileges will suffer, as liberalizing the market will level the playing field in the industry.

Presently, Burma produces some 18 million tons of rice a year, with about one fifth being exported, according to a local rice exporter.

“Higher productivity, output, incomes and employment in the rice farming sector will contribute to alleviating rural poverty and providing greater food security at home as well,” said U Myint, adding that the rice industry is unlike the oil and gas industry, the revenue of which mainly goes to the military government.

He further encouraged the fighting of corruption and unnecessary procedures that encourage bribery and diminish transparency. Transitional costs due to red tape and corruption are said to mean farmers earn less than they should, keeping the rural population in a vicious circle of poverty.

Meanwhile, he lashed out at criticism that Stiglitz’s visit would fail to bring any fruit and result in no new ideas for the country.

“This [the meeting and visit] seems to bother some people. It does not bother me, because I believe that we should have no difficulty or reservation in repeating a useful idea that is good for the country regardless of who may have said it before,” U Myint argued. “It has to do with inadequacies in our society regarding conflict resolution and our inability to satisfactorily deal with those who hold views and ideas and who recommend courses of action that we disagree with.”

Reflecting the controversial standing of the current military leadership, U Myint said there are two groups in the military, hardliners and softliners, and that it is not an easy job to bring about change in the mindset of the leaders.

“But I can assure you that there are many in the establishment, including some holding responsible positions, that share our concern to focus on the betterment of the country,” he expounded.