Roadmap of EU Office, Myanmar Corn Farmers' Association

ROADMAP OF MYANMAR CORN FARMER’S
ASSOCIATION
7 SEPTEMBER 2016
EU OFFICE OF MYANMAR CORN FARMERS’ ASSOCIATION
Friezenstraat 17, 3604AE, Maarssen, The Netherlands
OUR CONTIBUTION TO
FARMERS OF MYANMAR

Roadmap, a contribution to farmers of Myanmar
1
CONTENTS
1. Background Information...................................................................................................................................................2
1.1 Myanmar Agriculture Sector...................................................................................................................2
1.2 Myanmar's Farming Systems and agricultural productivity .....................................................3
1.3 Myanmar Farmers, their Profits and Income ...................................................................................4
1.4 Investment and Resources:......................................................................................................................5
1.5 Corn....................................................................................................................................................................6
2. Contract farming...................................................................................................................................................................8
2.1 General Introduction of contract farming.................................................................................................8
2.2 Contract Farming Models ................................................................................................................................9
2.3 Benefits and risks............................................................................................................................................. 10
3. Contract Farming in Myanmar..................................................................................................................................... 11
3.1 Background Information............................................................................................................................... 11
3.2 Lessons learnt from similar countries which are applicable to Myanmar context............... 11
3.3 Challenges and potential challenges of CF in Myanmar13................................................................ 12
4. The Roadmap, a contribution to farmers of Myanmar ...................................................................................... 13
4.1 MCFA Organizational Information............................................................................................................ 13
4.2 Proposed Contract farming system in Myanmar ................................................................................ 14
4.3 Role of Myanmar Corn Farmers Association in Contract Farming in Myanmar.................... 14
4.4 Contract farming Roadmap.......................................................................................................................... 17
5. National Quota-based cultivation and production.............................................................................................. 18
6. Second part of the roadmap........................................................................................................................................199
Agro-ecological Zones_Myanmar..................................................................................................................................... 20
MCFA’s activities gallery..................................................................................................................................................... 21
Supply Change Of Corn/ Maize……………………………………………………………………………………………………24
Theory of Change……………………………………………………………………………………………………………………….25
Conclusion………………………………………………………………………………………………………………………………....26
References…………………………………………………………………………………………………………………………………28

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1. BACKGROUND INFORMATION
1.1 MYANMAR AGRICULTURE SECTOR
Agriculture is a major sector of Myanmar's economy, contributing to 37.8% of country's GDP and
25-30% of total export and employs 70% of labor force in 201515 (61.2% in 2013-14).14 Agro-
industrialization is the key to effectively develop Myanmar economy. Myanmar is rich in land, water
and human resources, however, various challenges such as macroeconomic policy (credit, market
and land policy), technology and infrastructure are obstructing its progress in development.14
Along with political transition and continuous opening up of its economy, Myanmar has great
opportunities for its agricultural sector development which can significantly contribute to reduction
in poverty especially among its 70% of population living in rural area. It has the agriculture land of
about 12 million (Ha) and the Arable land of about 10.6 million Ha. Rice, pulses and beans, sesame,
groundnut, rubber, corn, cotton, sugarcane, chili, oil palm, tomato, onion, potato, cabbage, garlic and
melon are major crops in Myanmar.1 (Table 1)
Table 1. Area and production by different crop groups 2006/7 - 2013/14
Source: Ministry of Agriculture and Irrigation, Myanmar (MOAI)
Ministry of Agriculture and Irrigation (MOAI) set the following agriculture policy objectives:14,15
 To emphasize production and utilization of high-yielding and good quality seeds.

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 To conduct training and education for farmers and extension staff on advanced agricultural
techniques.
 To implement research and development activities for sustainable agricultural development.
 To protect farmers rights and benefits.
 To assist farmers to get fair price on their produce.
 To assist in lowering production costs, increasing high quality crop production, developing
and strengthening of markets.
 To encourage transformation from conventional to mechanized agriculture, production of
crops appropriate with climate and extension of irrigated area.
 To undertake renovation and maintenance works on old irrigation, pumping and
underground water systems.
 To support rural development and poverty reduction activities through development of
agriculture sector.
 To encourage local and international investment in agriculture sector for the development
of advanced agricultural technology and commercial agricultural production.
 To justify and amend existing agricultural laws and regulations in line with current
economic situation.
1.2 MYANMAR'S FARMING SYSTEMS AND AGRICULTURAL PRODUCTIVITY
Reliable and sufficient data is not properly available, however, some literatures show that
Myanmar's farming system is highly diverse and productivity is very low and so, not contributing
enough for poverty reduction and shared prosperity.1,2
Discussions with the farmers groups pointed out that the choice of crops to produce does not depend
on the domestic and/or international market demand. All these factors lead to unbalanced needs and
excess for country food consumption and no international market as well as highly unstable prices
and market.19
A study to assess potentials for growth and development of vegetable, fruit and flower sub-sectors in
Myanmar conducted by the Dutch government in 2015 found the followings: 23
1. Lack of technical capacity: individual and institutional
2. Limited technical knowledge transfer to the farmers: Farmers/growers receive trainings from
the Department of Agriculture but frequency is low and trainings do not always include up-
to-date knowledge or comprehensive. They also get advice from retailers and most growers
completely relied on these brief advices without proper knowledge. In addition, most growers
are not used to reading instructions.
3. Pesticide management: problems of illegal and fake pesticides, loose implementation and
control of the national Pesticide law and the committed international convention obligations
(Stockholm Convention on Persistent Organic Pollutants, Montreal Protocol on Substances
that deplete the Ozone Layer). Use of Personal Protection equipment (PPE) is very poor and
there is no management system for empty containers. Most insecticides in use are highly toxic
and are harmful for the environment.
4. Integrated Crop Management (ICM) and alternative management strategies practices are
limited to only a few farmers. ICM is a 'whole farm approach' which is site specific and
includes e.g. the use of crop rotations, appropriate cultivation techniques, careful choice of
seed varieties, minimum reliance on artificial inputs such as fertilisers, pesticides and fossil
fuels, maintenance of the landscape and the enhancement of wildlife habitats.

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5. Phytosanitary issues: inadequate knowledge, data and surveillance, lack of adequate facilities
and resources.
Low productivity is the result of multiple factors including1,2,3:
 inadequate research and use of poor quality seeds: highly insufficient public supply of good
seeds and unfavorable situation for private sector to import
 farmers' poor knowledge, primitive farming practices and inappropriate usage of fertilizers
and chemicals,
 relatively low coverage of pubic irrigation system (15% of crop area)
 low labor productivity and land productivity
 Farm Practices in Myanmar is still highly labor-intensive while labor availability and use of
technology are low.
1.3 MYANMAR FARMERS, THEIR PROFITS AND INCOME
An estimate of over 50% of the farmers in Myanmar are landless and are among the poorest, who
are working as farm workers.9 [Small land holders who possess less than 1-5 acres of land represent
56% of Myanmar's farming population (FSWG 2011)]. 13 In general, profit from producing crops are
low (mostly) to average (some) while that of paddy is lower. A small holder farmer who owns one
hectare of farmland and producing two crops a year cannot rely on agricultural income to pull all
members of their households out of poverty.2 (Table 2)There even is a perception among farmers
that agriculture is not profitable.9
Table 2: Agricultural income is insufficient to pull small farms out of poverty

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Low labor productivity and land productivity, losses during harvesting and limited access to credit
and high financial costs (high interest rate for working capital) are common causes of low income
among Myanmar farmers.1,2,3 Labor productivity in Myanmar is at only about $1,300 per
worker/year compared to about $2500 in Thailand and Indonesia.24 (Figure 1) As the daily wages
are very low and insufficient for the living, farmers chose to migrate (to urban or abroad) for better-
paying jobs, leading to decrease in labor availability.1,2,3 Policy measures such as training and
investment in human capital, technology and productivity-enhancing capital facilities will boost
labor productivity in Myanmar.24
Figure 1. Labor Cost and Labor Productivity24
According to field discussions, farmers mentioned that they have to buy the seeds, fertilizers and
other farming materials using borrowed money with very high interest rate credited by brokers and
crop dealers. Seeds and fertilizers are sold through various brokers with much higher price. At the
time they have to sell their products, highly unstable market prices and manipulation by brokers
resulted in very low profit or no profit or even loss of income for these farmers. Illegal market through
brokers also affects the government by losing tax money.19
Near term interventions are recommended to be better irrigation, diversification of crops, use of
improved seeds and access to adequate financing. For longer-term, smaller-scale farming of high-
value crops such as flowers, vegetables, tea, etc, is recommended in combination with large-scale
farming to reduce the cost and generate profits.9
1.4 INVESTMENT AND RESOURCES:
Foreign investment in agriculture sector is only 0.44% of total, accounting at the lowest share
(2013/14). Myanmar government has been inviting investments for agricultural input, production
and processing, wholesale market and service industries.14 Human resource is the big constraint in
agriculture in Myanmar. Several international UN, INGOs and private sector have high interest and
some have already established their presence in the country. There has been some progress in
agricultural education transformation and international support for raising capacity. However, it

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takes time and still in much need of more intensive and locally appropriate means to achieve the
competency of Myanmar staffs and actors.4,5
1.5 CORN
An agricultural commodity which can be used as food for humans, livestock feed and bio-fuel, corn
is the third largest planted crop after wheat and rice and is a globally prioritized industrial flex crop.
The forecast of global corn production for 2016 is 1027 million tons, which is 2.1% higher than
previous year. Global utilization is also increasing: 3.4% in feed use of corn which is 588 million
tonnes.20 According to a study, in 2020, 852 million MT of corn will be required globally, 72% of
which will be by developing countries. 69% of corn will be used for feed, 15% for food and 16% for
non-food/feed industrial uses. While only 5% of corn will be used for food purposes in industrial
countries, it will be 22% in developing countries.22 Global annual maize supply was less than the
demand for livestock feed, with Asia's demand reaching 100million tons by 2009.7
While growing in importance, corn is still a minor crop in Myanmar, with cultivation area of 10%
compared to beans/pulses and 6% of paddy.2 About 90% is cultivated in the northwest and eastern
parts of the country.17 (54% in southern interior and 46% in northern interior ecoregions of Shan
State.)2 So far, Myanmar government does not have any subsidy program for corn production.
Farmers primarily use high-yield hybrid seeds (90%)2,17 and the productivity rate is 60.15tin/acre.
Currently, 70-80% share of Myannmar's hybrid corn seed market is taken by CP Group and about
8% by MOAI.17,18
According to USDA report, Myanmar corn production is growing for domestic consumption and
international export. Domestic corn consumption is expected to grow in recent years according to
growth of Myanmar's livestock industries, especially poultry and swine and most of corn supplies
are delivered to feed mills in Yangon, Mandalay and Shan State. In recent years, there was strong
demand from China. Corn production is expected to reach 2MMT and its export is expected to
increase in 2016/17. For corn export, there are no trade restrictions. 17
Government and trade sources mentioned that 95-97% of Myanmar's corn exports are taking place
along Myanmar-China border.17 However, recent discussions with the corn farmers and traders
revealed that the China border transport route has been almost closed and the farmers are facing
great difficulty.19 Corn export in 2013-14 was 933600 MT, with the value of 285.8 million Kyats.
(Table 3) According to November 2016 data from MOAI, the total cultivation area of corn is
1069190 acre, production is 54979154 tin (about 1.34 million MT) with productivity rate of 60.15
tin (1.624 MT)/acre.18 (Average yield of maize was 3.95 tons/ha.)2

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Table 3. Export of major agricultural commodities
Figure 2: Snapshot of the trade sector24

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2. CONTRACT FARMING8
2.1 GENERAL INTRODUCTION OF CONTRACT FARMING
1. "Agricultural production under contract between producers and their buyers has long been
practiced for many agricultural commodities, in most countries around the world. Through contract
farming, food processors, traders, distributors and other purchasers of agricultural products organize
their procurement systems in accordance with their specific needs for quantity, quality and timing of
delivery, among other supply chain management requirements. Contracts may also specify the
desired processes for agricultural crop production or livestock rearing, often to comply with domestic
and international quality and safety standards for food and agricultural production and trade."8 (FAO,
2015)
2. "Contract farming is a well-known mechanism to coordinate agricultural production and trade, and
its use has increased noticeably in recent years. The growing interest in contract farming is associated
with recent transformations in food and agricultural systems which make it increasingly difficult to
meet consumer demands under more traditional, open market-based procurement strategies.
Demographic changes (in rapidly urbanizing areas for example) and rising living standards have
required increased food quantities. This increase in demand has led to scientific and technological
developments, which in turn have significantly contributed to changes in market demand, the
operation of supply chains and the production of raw commodities. The use of contract farming is
expanding in developing countries. It opens important opportunities for economic and social
development by providing local producers with access to markets and support in the form of
technology transfer and credit facilities. Furthermore, contract farming is seen as a potential tool to
reduce poverty, contribute to rural development and employment, and increase food security."8 (FAO,
2015)
3. "Under a broad economic approach, “contract farming” generally refers to “a particular form of
supply chain governance adopted by firms to secure access to agricultural products, raw materials
and supplies meeting desired quality, quantity, location and timing specifications. Contracting is an
intermediate mode of coordination, whereby the conditions of exchange are specifically set among
transaction partners by some form of legally enforceable, binding agreement. The specifications can
be more or less detailed, covering provisions regarding production technology, price discovery, risk
sharing and other product and transaction attributes”."8 (FAO, 2015)
4. "This definition of contract farming focuses on the coordination between the different parts of a
supply chain, involving various participants and contract modalities. However, contract farming is
different from direct sales between producers and buyers through open market spot transactions
where the product is delivered immediately against a price. Indeed, contract farming relies on
agreements that are made either during production or, more often, before it begins, thus providing
certainty for the future delivery and supply of the product. Various contract patterns serve this
function in practice. While some contract patterns rely upon traditional relationships, either based
on the future sale of the produce or entitlement to the produce arising from granted use of land or

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animals, contract farming is among the new forms that have developed to meet the changing needs of
the economic environment."8 (FAO, 2015)
5. "While acknowledging that the concept of contract farming can be very broad and focuses on a
particular modality of agricultural production based on an agreement between a producer and
another party – typically an agribusiness company. Under this agreement, which is designated as an
“agricultural production contract”, the producer undertakes to produce and deliver agricultural
commodities in accordance with the contractor’s specifications. The contractor, in turn, undertakes
to acquire the product for a price and generally has some degree of involvement in production
activities through, for example, the supply of inputs and provision of technical advice."8 (FAO, 2015)
2.2 CONTRACT FARMING MODELS: 8,16
Different models of CF are used for different context and commodity:
1. Centralized model: The centralized contractor buying from a large number of small producers
typically with strict quota allocation and tight quality control. The level of involvement of the
contract may vary and this model might be used for crops such as Tobacco, cotton, barley,
sugar cane, banana, coffee, tea, cocoa and rubber.8,16
2. Nucleus estate model: Although similar to the centralized model, under the nucleus estate
model, the contractor also manages a central estate or plantation which is used to guarantee
downstream customer commitments in the case of shortfalls from producers, or to ensure a
certain level of minimum throughput for processing plants. This can also be used for research,
extension or breeding purposes. Mainly used for tree crops but can also be used for, e.g., fresh
vegetables and fruits for export.8,16
3. Multipartite model: can involve several partners including government and non-
governmental bodies or private companies (including those responsible for credit provision,
quality management, processing and marketing, potentially all jointly participating in
contracts with producers). It is common in China and governments of Mexico, Kenya and West
Africa also invested actively.8,16
4. Informal model: describes the case where individual entrepreneurs or small companies make
simple, verbal agreements with producers on a seasonal basis, perhaps benefiting from
government sponsored extension services to support producers. This model has high risk of
loss and is usually used for crops which require only a minimal amount of processing or
packaging for resale to the retail trade or local markets (vegetables, watermelons, fruits). 8,16
5. Intermediary model: represents a variation on the aforementioned models where a collector
(or other intermediary such as a NGO) is used for dealing between the producer and
contractor. Sponsors agreed with intermediaries such as collectors, farmer groups, NGOs with
a formal subcontract of production and the intermediaries have their own informal
arrangements with farmers. It is common in South East Asia (Thailand, Indonesia). 8,16
Important points to note for CF
 Compliance with safety requirements
 Fast and efficient coordination with the marketing stage
 Keeping the quality high and the product safe
 Compliance with the standardized protocols

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 Need for application of control and intervention procedures under the hygiene and food
safety regulations of destination markets (follow the good agricultural practices)
 Need of skills on the producer’s part and strict compliance with quality conformity and
traceability obligations.
 Intense level of support by the contractor to provide specialized inputs, technical assistance
and supervision.
 Large capital investment in facilities and other fixed assets such as equipments for production
and post-harvest operations
2.3 BENEFITS AND RISKS13
Even though the relationship is not completely equal, through contract farming, benefit is shared as
well as the risk.13
Benefits:
 Potential to sustain and develop the production sector by contributing to capital formation,
technology transfer, increased agricultural production and yields, economic and social
development and environmental sustainability
 Final customers, as well as all participants in the supply chain, may also draw substantial
benefits from varied and stable sources of raw material supply and efficient processing and
marketing systems.
 Agricultural development
 Increase private sector investment and public-private partnership
 Farmers: exposed to modern/improved agro-technology which will increase productivity,
guaranteed and fixed pricing structure, access to reliable markets, access to some form of
credit to finance production inputs, regular crop monitoring, access to technical advice, access
to capacity development opportunities
Problems/Risks:
Farmers Sponsors
 to balance the prospect of higher
returns with the possibility of greater
risk
 introduction of new crop might cause
disruption to the existing farming
system
 introduction of sophisticated
machines may result in a loss of local
employment and overcapitalization
of the contracted farmer
 contractors may manipulate quality
standards in order to reduce
purchases
 staff exploitation
 monopolistic tendency
 danger of the investment money in cases
of farmer-landlord disputes
 when management chooses farmers
who are unable to comply with strict
timetables and regulations because of
social obligations.
 risk of farmers withdrawing from
projects
 sale of products by farmers to a third
party, outside the conditions of a
contract, can be a major problem
 use of supplied inputs for purposed
other than conditions stated in the
contract

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 over-reliance on advance money
3. CONTRACT FARMING IN MYANMAR
3.1 BACKGROUND INFORMATION
In 1991, a national scheme to increase large scale commercial entrepreneurial activity was
introduced in Myanmar and has attracted some investors from its neighboring countries.13 Since
2005, Myanmar Government encouraged investments for contract farms from China, Thailand,
Bangladesh and Kuwait and high-end private businesses. However, only the Thais were believed to
have formal agreement to farm 120,000 acres along the Thai-Burma border. Bangladesh and India
also expressed interest. In 2008, Bangladesh was reported to have been awarded 50,000 acres of
land for the cultivation of soybeans, paddy, onions, maize, tea and sugar cane. 12,13
Local small to moderate scale contract farming arrangements has been happening in Myanmar.
Currently, Myanmar government, several global firms, development and finance agencies and local
private agribusinesses estates are showing their interest and commitment to it.7
Charoen Pokphand Group of Thailand (CP Group) implemented a contract farming scheme for
poppy farmers in upland rural Shan State, northern Myanmar in early 1990s, targeting China's
domestic chicken-feed market.7 Myanmar Agribusiness Public Corporation (MAPCO) has introduced
an innovative contract farming model at Naypyitaw Council Area, Central Myanmar and has
expanded to other parts of Myanmar for paddy farmers.11
So far, there is no specific policy or laws for contract farming in Myanmar. However, one of the
strategies of the Ministry of Agriculture and Irrigation (MOAI) is to promote contract farming.14
Myanmar's ongoing reform of the investment, land and tax laws provide opportunities for
successful adoption of contract farming.10 As such, there is a good possibility that contract farming
in Myanmar could be implemented successfully and help farmers out of poverty especially small
land holders.13
3.2 LESSONS LEARNT FROM SIMILAR COUNTRIES
Positive lessons13
According to the lessons taken from two successful contract farming establishments in Laos and
Cambodia, the following important factors are emerged for intensive consideration for CF for
Myanmar's small land holding population.
 Clear intent between the companies and the farmers: Income generation and technical
training of the farmers are the key part of the companies' goals and used contracts to the
mutual benefit of both parties.
 Agricultural inputs, technical assistance and credit were provided to support small
landholders in developing the crops to the specifications in the contract.

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 Farmers' participation was based on the participant's choice and recommendations of the
participating farmers' trustworthiness and work ethic was obtained from fellow farmers.
 Use of niche crops for a pre-determined market proved a mean of increasing the income of
farmers who would have made less per acre on local or traditional commercial crops.
Consideration for possible niche crops to be grown with small land farmers could be
particularly beneficial given Myanmar's size and climatic range.
 As small land farmers often have less access to information available to farmers with more
wealth, a contracting company makes information about local and international markets, or
the demand for certain crops, available.
 As contracting companies introduced new crops to the area, farmers received a wide range
of inputs and technical support. In areas where credit, technical training, or other extension
service might not be readily available, such as in Myanmar, small land farmers will
particularly benefit.
 In Myanmar, as a target for developing technical skills as well as reducing poverty, a small
farming contract that includes the provision of technical training, credit, and other extension
services, could augment possible shortcomings in the existing extension services available in
Myanmar.
 Farmers association can offer a good model for more independent bodies to negotiate and
organize small land farmers. In Myanmar’s context, the inclusion of an independent
association in a contract relationship could assist a company in a broad range of support
measures; could coordinate farmer, private company, and state concerns; as well as ensure
that farmers’ input is included in the contract operation.
 Laws protecting the rights of parties in a contract and an efficient reliable legal system are
necessary.
3.3 CHALLENGES AND POTENTIAL CHALLENGES OF CF IN MYANMAR13
 no legal framework and credible enforcement mechanism for CF in Myanmar
 since the land holdings are mostly small, the contractor need to contract with a large
number of farmers which can increase cost and complicated in process
 lack of proper crop insurance scheme
 over influence or control of a company in a contract, without clear liability or repercussions
for the company in breaching the contract.
 If a contracting company abuses its power in a contracting relationship, it risks loosing the
crop and credibility with farmers, but farmers risk greater losses to their income, long term
ability to farm, and trust of contracting relationships or an interest in taking risk on new
crops.
 A weak legal system that cannot reliably resolve contract disputes, or ensure some action be
taken in a broken contract, could undermine confidence of companies and farmers in
participating in contract farming.
 The absence or unreliable infrastructure (i.e. out dated or fault irrigation, roads susceptible
to seasonal weather) can negatively impact contracted farmers as well as companies.
 In Myanmar years of economic isolation and socialist economic policies have led to
degradation in the transportation, irrigation, and export infrastructure. Particularly in terms
of shipment from the country’s seaports, and the impacts seasonal weather can have on
roads, contracting companies could risk losses if harvested crops were not delivered or
shipped on time.
What are the basic needs for success of CF in developing countries?6

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Success of CF is highly dependent on positive support of government and policy makers. Generally
the following conditions are important for successful implementation of CF.
 Geographical conditions: road infrastructure, access to water, soil types, climate, etc.
 Political-economic conditions: land-rights policies, market regulation, trade policies and the
risk to socio-economic shocks,
 Enabling business environment: financial services, conflict resolution systems, investments
subsidies, business development services, brokering services and farmers organizations.
4. THE ROADMAP, A CONTRIBUTION TO FARMERS OF MYANMAR
4.1 MCFA ORGANIZATIONAL INFORMATION
Currently, there are 8 state and division sub-committees with 12980 farmer members. Five more
states and divisions also requested for establishment of sub-committees in their regions and we will
proceed with that once we are ready.
Vision: All Myanmar's farmers earn enough regular income which is sufficient for
their living.
Mission:
1. To build capacity and promote empowerment of Myanmar farmers
2. To advocate for favorable policy change and create enabling environment for
farmers
3. To establish a contract farming system in Myanmar agriculture and livestock
sector
4. To contribute to development of a market-based and quota-based crop
cultivation.
Organizational information
Registration number: inland/ 0279
Address: No. 19 (B), Fifth Floor, Thadipantan Street, Kyotmoung, Termwe Township,
Yangon, Myanmar.
PH: +31612281919. +95 9767014356, +959794364009, +959260901001
email: tunaung@eumya.com, thawbhonemyat20@gmail.com,

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4.2 PROPOSED CONTRACT FARMING SYSTEM IN MYANMAR
Considering Myanmar's current political, economic, legislation situation and farmers' capacity, power
and their working environment situations, as well as lessons and best practices from the developing
countries of similar context, MCFA proposes the use of intermediary model for contract farming in
Myanmar. As MCFA is an actual farmers' organization, organized without any influence from
contractors, government or any other entity, it can properly represent all member farmers for their
own benefit.
Intermediary model is a model where a collector (or other intermediary such as a NGO) is used for
dealing between the producer and contractor. Sponsors agreed with intermediaries such as
collectors, farmer groups, NGOs with a formal subcontract of production and the intermediaries have
their own informal arrangements with farmers.8,16
Government administration, relevant ministries and institutes, input/service companies, in-country
and international contracting farms, United Nations and international non-governmental
organizations, community-based organizations and civil society organizations and banks will involve
in this process. Through this model, MCFA will represent member corn farmers as an intermediary
independent farmers' association in dealing with the stakeholders. In this way the power imbalance
between the contractors and farmers can be reduced the rights of farmers can be achieved.
4.3 ROLE OF MYANMAR CORN FARMERS ASSOCIATION IN CONTRACT FARMING IN
MYANMAR
MCFA will take the leading role as an association representing all member farmers to get their
voices heard, to work towards achieving their rights and to promote their quality of life. We also
realized the positive implications of contract farming in developing countries like Myanmar, such as
inclusion of farmers in the market, food security and poverty reduction. Lessons learnt from
previous CF establishments pointed out the critical issue of power imbalance, capacity and
empowerment of farmers and farmer associations, importance of farmers' voices to be heard by the
policy makers and crucial need of government's support.
Since its establishment in August 2016, MCFA has conducted awareness raising mass meetings with
the farmers from various geographic areas such as Kayah, Sagaing, Mandalay and Shan States. Many
farmers showed their enthusiasm to participate as members. The number of members increased
quickly and many other states and divisions sent their requests for establishment in their regions.
They realized the collective power of the farmers’ association in dealing with government and
agriculture businesses. Most farmers appreciated the contract farming system approach since they
have been struggling for their living under market instability and manipulation by brokers and

15
businesses for such a long time. MOAI is mandated to promote contract farming and current
Myanmar government is putting its efforts on positive reform of the investment, land and tax laws
supportive for CF. As such, we have confidence that CF in Myanmar could be implemented
successfully with the cooperative efforts of government, private businesses, MCFA and other
stakeholders.
Figure 3. Role of MCFA in contract farming
MCFA’s Short and long-term plan
Project list: Short term programs (1 to 2 years)
1. Data collection and analysis (supply & demand)
2. Capacity Building for farmers ( understanding banking system, contract, agreement and farm
management)
3. Advocacy (public awareness, organization and legislation)
Governme
nt
MCFA
representi
ng farmers
Buyer
Contractor
s
Input &
Service
Companie
s
Banks
UN, INGO,
CBOs
Insurance
companie
s
Capacity
building
Advocacy &
capacity
Insura
nce
Contra
Contr
Contract
management
Finance
management
Finance
Management

16
4. Contract farming system establishment
Project list: Long term Programs (2 to 5 years)
1. Improvement of Export Mechanism ( Shipping logistics, Port capacity and Warehousing)
2. Developing the agro-based Industry (Bio-Energy, Edible Oils and Fertilizers production
projects)
3. Livestock farming systematized in contract farming and quota-based production.
For contract farming, MCFA will take the representative intermediary role on behalf of member
corn farmers in most of the dealings with stakeholders of higher power, as mentioned in the figure
3, on the followings:
1. Advocacy and lobbying with the government
 for development of policies/laws regarding contract farming and tax and incentive laws
 push for enforcement of existing agricultural laws and farmers' rights
 also advocate for other support from the government such as
o machinery and infrastructures, seeds, fertilizers
o research for quality seeds,
o participate as one of the contractors for domestic food security,
o protect the farmers and contractors in case of unexpected losses,
o development of agricultural insurance system and
o more intensive and updated capacity building and knowledge/skill sharing
2. Capacity building of farmers
 To be an information source
 To write proposals for practical capacity development projects and mobilize funding
 To negotiate and advocate the government, institutions, UN, INGOs, CBOs and input/service
companies as well as contractors to provide capacity building activities for farmers
3. Exploring, networking and getting collaboration agreements with the buyer contractors and
input/service companies and other associations
4. Contract Management
 Development, negotiation and agreement of terms and conditions for contracts with various
buyer contractors on behalf of farmers
 Development, negotiation and agreement of terms and conditions for contracts with input
and service companies on behalf of farmers
 To provide sufficient information to the farmers
 Ensuring presence in contracting between individual farmers and contractors by performing
contract signing at its field offices.
 Getting support and agreement terms with relevant banks for financial management of
contracts between farmers and buyer/input/service contractors.
 Making sure of smooth implementation of contract farming system.
5. Insurance:
 To educate and encourage farmers and businesses to ensure to be insured.
 To advocate and negotiate with the insurance companies on behalf of farmers.
6. Monitoring and Evaluation
 To monitor both parties follow the terms and conditions of the agreed contracts
 To evaluate the situation of contract farming system in its project areas and revise as
necessary

17
4.4 CONTRACT FARMING ROADMAP
FIGURE 4: ROADMAP FOR CONTRACT FARMING IN MYANMAR
This is the roadmap to protect Myanmar farmers from long-standing unstable market and to
support them get their rights to involve in decision making of production and the market via their
associations and federations.
Figure 4 explained how the contract farming will be operated in Myanmar.
Technically speaking, it is the downstream process of crop cultivation and production. The contract
farming system has been never exercised in Myanmar.
First of all, farmers need to sign contracts with manufactures (contract farming cooperatives) ,
agriculture related technological and other service companies and farm Input suppliers (seed,
fertilizer, pesticides..etc). Contract farming cooperatives will take responsibilities for farmers'
agricultural production expenses and will deposit their investment money into the bank in advance.
Contr
acts
Contr
acts
Contract farming
Cooperatives
CropSaleIncome
Farmers &
MCFA
Bank
Government Tax
Farm Service
Companies
Farm Input
suppliers
Paymentfor
cultivation&Input

18
These cooperatives and farmers will also ensure the fair price of the agricultural products. Farmers
are free to choose the agricultural-related service companies that they would like to enter contract
agreements. However, the advance money provided by the contract farming cooperatives are not
eligible for farmers to use for matters un-related to the crop cultivation.
In addition, farmers can use these advance money only to buy agricultural materials and input
necessary for crop cultivation such as seeds, fertilizers, to pay fees for agricultural-related services
and other agreed activities according to the contract.
When the products are received from the farmers, Contract farming cooperatives will transfer the
excess money to the farmers into their bank account.
It is the responsibilities of geographic-wide farmers associations, crop-specific farmers associations
and government Economic Affairs Ministries to provide utmost support and action to achieve these
objectives. Furthermore, in order to fill the country's food need, the government and the military will
also need to help and provide support by means of direct purchase from the farmers.
Potential impact of agricultural marketing through contract farming
 Direct contracts before the start of crop cultivation between farmers and agricultural-based
national and international companies will ensure the stronger agricultural market.
 All the farmers will get strong and regular income.
5. NATIONAL QUOTA-BASED CROP CULTIVATION AND PRODUCTION
In Myanmar, farming without proper market research has been causing deficit and imbalance for
national consumptions leading to unstable market as well as unstable food consumer prices in the
country. It is necessary to make sure National agricultural consumption needs and demand are met
before consideration for the international agricultural export.
In addition, government should purchase the crops from farmers by direct contracting with them to
reserve for the needs for military and state emergency situations. Now is the time for each state and
divisions to calculate and produce crops in quota system, based on the country's needs and demand.
In this way, agricultural production will be enough for the country consumption and the food prices
will become stable. On excess, crops can be systematically exported internationally. MCFA will
advocate and contribute to quota-based system development and establishment in Myanmar.

19
6. SECOND PART OF THE ROADMAP
After its start-up phase, MCFA will continue implementation with its second part of the roadmap:
1. Improvement of Export Mechanism ( Shipping logistics, Port capacity, Warehousing and
Storage Silo)
2. Developing the agro-based Industry (Bio-Energy, Edible Oils and Fertilizers production
projects)
3. Livestock farming systematized in contract farming and quota-based production.
VALUE ADDED- AGRICULTURE AND AGRICULTURAL VALUE CHAIN
Value added-agriculture and agricultural value chain are the important parts of the Roadmap too. For
example, food processing is viewed as the value added-agriculture.
The key-players of the food processing are the agriproduct-based manufacturers and entrepreneurs
with modern technology, research and development. Education and Technology will add the value of
the crop higher than before too.
The livestock farming is a best way to maintain the stability of the farmer’s income. One kilo of maize
can be fed to chicken or one ton of corn silage is enough for a year to feed two or three cows for milk
. Farmer can earn more money from selling the chicken and milk value of which are clearly higher
than maize and corn silage. Eventually, his income is stable that leads his life in stability.
National planning and commercial thoughts and activities will complete the mission.
The driving force is money: money drives the farmers to do the livestock farming for getting money
more and more.
All output and input of the farms in Myanmar should be systematized in contract farming and national
quota-based crop cultivation and production.

20
FIGURE 5. AGRO-ECOLOGICAL ZONES_MYANMAR

21
7. MCFA’S ACTIVITIES GALLERY
MCFA field committees organization meetings
Community farmers awareness raising on association and contract farming

22
Networking and discussion with stakeholders

23
Field visit to Europe

24
Supply chain of corn/ maize
Corn
Farmers
drying screening
Brokers and
Dealers
Animal feeds
(20%)
Liquor & snack
(10%)
Profit-
oriented
wholesalors
Export
(5%)
Border Trade
(65%)

25
Empowere
d and
active
advocates
& CSOs
Increased
QOL of
farmers
More
powerful
& louder
voice
Effective,
influential &
wider scope
impact of
advocacy
Positive
change -
policies,
accountability
Advocacy &
Lobbying
Activities -
increased, more
focused, higher
quality
Advocacy
Strategy
Development
Advocacy
Department
Establishment
Project-
Strengthened
capacities
Existing
Capacities
Capacity
building of
other SHGs
& local
CSOs
Experience
sharing &
motivation
More
Coalition
More
Linkages Capacity
development
Recognition
& Sympathy
Raised
awareness- gov. &
non-gov. actors
Supportive
and enabling
environment
Empowered
& engaged

26
Conclusion
 Myanmar, where China and India meet, given the diverse agro climatic zones, can be a
competitive producer of a large number of crops, and a potential supplier for two of the most
populated countries in the world.
 There is a Need to convert our factor price advantage into sustainable competitive advantage.
 Contract farming offers one possible solution.
Welcome to your cooperation
Thank you
Edited by Dr. Shwe Shwe Aye and Mr. Tun Aung
EU Office of Myanmar Corn Farmers’ Association
Friezenstraat 17, 3604AE, Maarssen, The Netherlands
Tel: +31 61228 1919
E-mail: tunaung@eumya.com
Website: www.eumya.com

27
References_MCRA roadmap
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2. World Bank (WB). 2016. Economic and Sector Work Report No. 100066 - MM. Myanmar:
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highlights/contract-farming, on 5 December 2016.

28
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myanmar/myanmar/en/. on 07.12.2016.
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2015. Contract Farming: Conceptual Framework and Indian Panorama. Journal of Economics
and Business Research, ISSN: 2068 - 3537, E – ISSN (online) 2069 – 9476, ISSN – L = 2068 –
3537 Year XXI, No. 1, 2015, pp. 25-42
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Global Agricultural Information Network. 2016 Annual Report.
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email.
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26. Kevin Woods. May 2015. Land grabbing, conflict and agrarian-environmental
transformations: perspectives from East and Southeast Asia. CP maize contract farming in

29
Shan State, Myanmar: A regional case of a place-based corporate agro-feed system.
Conference Paper No. 35. An international academic conference, Chiang Mai University.
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sector in the Republic of the Union of Myanmar. Final Report, Sanyu Consultants INC.
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2015. Contract Farming: Conceptual Framework and Indian Panorama. Journal of
Economics and Business Research, ISSN: 2068 - 3537, E – ISSN (online) 2069 – 9476, ISSN –
L = 2068 – 3537 Year XXI, No. 1, 2015, pp. 25-42.
30. Department for International Development (DFID). 2015. DFID's Conceptual Framework on
Agriculture. November 2015.

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