USAID Burma Food Security Policy Project: Supporting ... · Mandalay 16 Magway 2 Bago 7 Ayeyarwady 5 Mon Kayin Kayah Kachin Yangon 29 Tanintharyi 2 Shan 1 Rakhine 1 Chin; Sagaing
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USAID Burma Food Security Policy Project:Supporting Agricultural Transformation
in Myanmar
USAID Burma, Yangon, July 25, 2018
Outline• What is FSPP and what does it do?• MOALI’s Agricultural Development Strategy• Summary findings on ag and rural transformation• Evidence on ag and rural transformation
• Migration and wages• Mechanization• Agriculture and non-farm economy
• Final year workplan• Discussion
What is FSPP and what does it do
• MSU and IFPRI with local partner CESD• 4 international staff and 11 national graduate researchers• September 2014 – 2019; jointly funded with LIFT
• Objectives and activities• Empirical evidence on agriculture and rural economy: ag production systems,
value chains, non-farm economy and rural livelihoods in different regions• Support agricultural policy change and capacity: policy analysis, advising and
capacity building
• Outputs and Outcomes• Research reports and briefs, dissemination through wide range of fora• Agricultural Development Strategy, specific reform processes, capacity within
MOALI and Yezin Agricultural University (YAU)
MOALI’s Aspiration: Agricultural Development Strategy
P 1
P 2
P 3
MOALI Vision Statement: “An inclusive, competitive, food and nutrition secure and sustainable agricultural system contributing to the socioeconomic wellbeing of farmers and rural people and further development of the national economy”
Ag and rural transformation summary (1)
1) Agriculture is the largest source of rural employment and, with growing urban demand for high quality and diversified food, a key potential driver of sustained growth in the rural economy.
2) Migration out of rural areas is accelerating, driving up rural wage rates and injecting liquidity into migrant households in the form of remittances.
3) Increasing wage rates, combined with bank finance for machinery rental services, is driving extremely rapid mechanization.
4) Access to a wide range of goods and services, especially transport and communications, has improved rapidly in rural areas.
Ag and rural transformation summary (2)5) Agriculture is under-performing relative to potential due to:
• poor water control (irrigation and drainage)• inefficient use of modern technology (improved varieties, fertilizer,
pesticide)• lack of diversification into high value farm enterprises
(aquaculture, livestock, fruit and vegetables)6) Increased provision of public goods (research, extension,
irrigation management, food safety) is needed to enable farmers to respond to emerging market opportunities.
7) Agricultural Development Strategy provides the framework for public sector reform but MOALI faces major organizational and human capacity constraints.
Evidence of agricultural and rural transformation
Survey Locations• 2015: Mon State Survey
• 2016: Delta Region Survey (with aquaculture VC)
• 2017: Dry Zone Survey (with pulses and oilseed VCs)
• 2018: Dry Zone Variety Adoption and Seed Demand
• 2018: Southern Shan State (with maize and pigeonpea VCs)
Survey Components
Mon Delta Dry Zone ShanScoping 1 week 3 months
(fish VC)1 month (mostly government)+ 1 month (enterprises)
1 month (farmers; government; enterprises)
Household Survey
1600 HH 1100 HH 1600 HHSeed 1400 HH
1600 HH
Community Survey
137 villages 73 villages 300 villages 425 villages
Non-farm surveys
0 Machine & spare parts suppliers (49)
Machinery Dealerships (60)Service providers (123)Oil Mills (182)Traders (376)Total = 742
50 DealershipsTBD Service providers350 Traders
Accelerating migration, rising wages
Accelerating migration in Delta…
0
10
20
30
40
50
60
70
80
90
100
Urban Rural
Cumulative share of all migrants by year first migrated (%), 1995-2015
• 90% rural-urban• 92% domestic• 1 in 6 HH have migrants• Average migrant age 21• 55:45 male/female split• 70% employed in
manufacturing
… and Dry Zone
• 86% domestic• 1 in 5 HH have long
term migrants• Average migrant age 24• 56:44 male/female split• 26% employed in
manufacturing• 55% low-skilled
informal jobs
Cumulative share of all migrants by year first migrated (%), 1995-2016
0
10
20
30
40
50
60
70
80
90
10019
9519
9619
9719
9819
9920
0020
0120
0220
0320
0420
0520
0620
0720
0820
0920
1020
1120
1220
1320
1420
1520
16
Domestic International
Migration is driving large rural wage increases
+20%+15%
0500
10001500200025003000350040004500
2012 2014 2016
+8%
+32%
0500
10001500200025003000350040004500
2011 2013 2016
Real
dai
ly w
ages
(MM
K)Delta Dry Zone
Change in real daily wages for male casual workers
Agriculture mechanizing rapidly
Geographical spread of machine supply businesses 2010 2013 2016
Sagaing1
Mandalay16
Magway2 Bago
7
Ayeyarwady5
Mon
Kayin
Kayah
Kachin
Yangon
29
Tanintharyi
2
Shan1
Rakhine1
Chin
Sagaing3
Mon
1
Mandalay16
Magway5 Bago
9
Ayeyarwady9
Kayin
Kayah
Kachin
Yangon
36
Tanintharyi
2
Shan1
Rakhine1
Chin
Sagaing5
Mon
2
Mandalay
20
Magway10 Bago
9
Ayeyarwady15
Kayin
Kayah
Kachin
Yangon
38
Tanintharyi
3
Shan4
Rakhine1
Chin
Improving access to formal financial services for machine purchases
• Hire purchase agreements with commercial banks began in 2013
• Reduced capital constraints for machine suppliers, cost of credit to buyers35
6877
17
5248
27 22
2WT 4WT CombineHarvester
Shar
e of
sale
s (%
)
Bank
Dealer
Customer
Source of finance for machinery purchases, 2016 (MAAS)
Access to formal credit is improving
Share of villages with credit access by source, 2011 & 2016 (MAAS)
0
10
20
30
40
50
60
70
80
% o
f vill
ages
with
acc
ess
2011 2016
Sources of credit diversifying
Credit becoming much cheaper as sources diversify
-0.1% -0.4%
-1.3%
-1.3%
-1.7%
-3%
-5.2%
0
2
4
6
8
10
12
Mon
thly
inte
rest
rate
(%)
2012 2017
Monthly interest rates from informal lenders and microcredit providers, 2012 & 2017 (READZ)
Rural non-farm economy growing rapidly
Numbers of non-farm businesses growing quickly
+233
%
+50%
+44%
+67%
0
5
10
15
20
25
Motortransport
Retail Personalservices
Foodservices
MEA
N N
o. E
NTE
RPRI
SES/
VILL
AGE
Delta
2011 2016
+200
% +57%
+33%
+56%
0
5
10
15
20
25
Motortransport
Retail Personalservices
Foodservices
Dry Zone
2011 2017
Mean numbers of non-farm enterprise per village by type, 2011 & 2016/17 (MAAS & READZ)
Agriculture provides >70% of primary employment, plus indirect non-farm employment in value chains
Agricultural labor is 80% of off-farm employment in Dry Zone
BUT: Agriculture still the main source of primary employment
Own farm 42%
Agri-labor 29%
Non-farm occupations
29%
Share of individual primary employment, by type (MAAS)
Gender wage gap smaller for non-farm work
0.98
0.790.69
0
1000
2000
3000
4000
5000
6000
7000
Salaried work Non-farm casual labor Farm casual labor
Men Women
Average daily incomes for men and women worker, by type of work, 2017 (READZ)
Agricultural performance lagging
Only (post-monsoon) rice yields are improving
55.5
28.9
8.7 12
.2
58.4
28.0
8.2 9.6
62.2
27.3
7.7 8.4
Rice Groundnut Sesame Greengram
10 years ago 5 years ago 2016-2017
Reported average yields for selected crops (baskets/acre) in 2016, 2011, 2007(READZ)
Yields very strongly affected by climatic conditions
262
1440
1939
547
432
414
331
166
1088
1521
371
281
261
215
45
538
998
159
112
121
83
0
500
1000
1500
2000
2500
Aver
age
crop
yie
ld (k
g/ac
re) Good year
Average year
Bad year
Average crop yields (kg/acre) in years with “good”, “average” and “poor” climatic conditions (READZ)
Use of Improved Varieties
Agricultural productivity and profitability remain low
Monsoon Paddy
Green gram
Median = $200/acre
Median agricultural land = 5.5 acres; Typical annual agricultural income = $1650/HH, or $330/capita
-350
-250
-150
-50
50
150
250
350
1 7 13 19 25 31 37 43 49 55 61 67 73 79 85 91 97 103
109
115
121
127
133
139
145
151
157
163
169
175
181
187
193
199
205
211
217
223
229
235
241
Gro
ss M
argi
n/ac
re (U
SD) Median = $100/acre
-400
-200
0
200
400
600
800
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79
Gro
ss m
argi
n/ac
re (U
SD)
Initial thoughts on final year workplan• Completion of analysis and reports for Dry Zone and Shan State
research findings• Follow up qualitative research where needed, including trade
dimension of key value chains• Dissemination of findings to a broad range of stakeholders• All data sets in the public domain with a workshop for YAU faculty and
graduate students to ensure further use• Support to establishment of an ADS policy process• Support to ADS reform processes in support of productivity (ag
research, extension and seed supply)
Thanks to our CESD research team
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