Investment Opportunities in Agriculture Sector of Myanmar Aung

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 Neighbors Border (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: Population: Export: Import: Main Exports: 676, 577 sq. km. 59. 78 million US$ 9. 135 billion* US$ 9. 035 billion* 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: Waste Land: Forest Land Other Land Total Source: MOAI 2011 -12 12. 3 mil. ha. (18%) 5. 4 mil. ha. (8%) 33. 5 mil. ha. (50%) 16. 5 mil. ha. (24%) 67. 7 mil. ha. (100%)

Land Utilization in Myanmar Other Land 16. 5 mil ha (24%) Net Sown 12. 3 10. 8 mil ha Net Sown ha (16%) (18%) Fallow 10. 8 Waste Land 5. 4 mil ha (8%) Forest Land 33. 5 mil ha (50%) Source: MOAI

Recommended Crops for the Regions Sr. States/Regions Hectare (000) Major Types of Activity 1 Kachin 1, 456 2 Kayah 16 Seasonal, Plantation Crops 3 Kayin 45 Orchards, Plantation Crops 4 Chin 1, 209 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 14 Ayeyarwady Total Source: MOAI 2011 -12 1, 943 30 5, 398 Orchards, Seasonal, Plantation Crops, Fruits Orchards, Sericulture, Tea, Fruits Orchard, Tea, Coffee, Seasonal, Plantation Crop Orchard, Paddy, Seasonal Crops

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, 035, 701 401. 810 1 Rice and Rice Products 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 2, 538, 620 1, 442. 527 Total 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 Export R&D + Extension + MIS Retail & Wholesale Outlets Fertilizer & Pesticides Irrigation Technology Producers (Farmers) Machinery Industry Milling and Byproducts Industry Middlemen, Buffer Other Clusters Transport & Logistics Source: MIS, DAP, MOAI Cooperative Finance & Insurance Quality Institutions Supermarkets Hotels & Restaurants Institutional Buyers Food Industries Consumer Society

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 ACMECS GMS China Nepal India Bhutan Bangladesh Vietnam Laos Cambodia MYANMAR Thailand Sri Lanka BIMSTEC Japan Korea Brunei Malaysia Singapore Indonesia BIMSTEC: Bay of Bangal Initiative for Multi-sectoral Technical and Economic Cooperation GMS: Greater Mekong Sub-region ACMECS: Ayeyarwady-Chao Phraya-Mekong Economic Cooperation Strategy Philippines ASEAN+3

Balance Sheet for Investment in Agricultural Sector of Myanmar Opportunities Constraints 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 • 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 agriculturalbased 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! aunghlaing 7855@gmail. com