Written by Mekong Institute

Kayin State lies in the south-eastern part of Myanmar and is linked to Thailand. The rural people in Kayin State are poor. In rural areas there has been an on-going conflict between Kayin ethnic group and the government for several years. However, Kayin State is richly endowed with natural resources, including agricultural land for crop production, water resources and minerals (iron, copper, lead, etc.). Farmers grow a variety of crops in fields located on silted-land and on hill-sides. Paddy is the main crop of Kayin State. Most agricultural products are for local consumption. Following the cease fire in that region, border trade to Thailand opened officially six months ago. Myanmar exports agricultural products and others commodities from the interior through the cross-border transit points. Among products from Kayin State, only cash crops, maize and mung bean, are exported to Thailand through Myawaddy and Mae-sot.  

This study identifies the alternative crop selections for cross border value chain study and for economic development. The study also identifies trading constraints in order to evaluate the market chains which involve all actors in agriculture production. The overriding goal is to improve the livelihoods of poor farmers by boosting their incomes. The Team interviewed key informants in government departments and in the private sector who participate in maize production and are included in farmer focal groups.

From the survey, it was apparent that almost all Maize grown in Myawaddy is exported to Thailand as raw materials. This trade passes through small traders and collectors. However, it should be noted the produce is not of high quality, mainly because of the heavy rainfall in the producing area.

Maize has market potential for farmers and there is high demand for the product from animal feed factories in Thailand. In addition to current production, the state government is planning to extend Maize production in Hpa-an, as winter crop, in collaboration with CP-Myanmar Group to produce quality products to command a higher price. In spite of the planning, there are production challenges and exporting policy constraints.

Maize is a suitable crop for cross-border exporting due to the capacity of small and medium participating farmers, market ability, easy market access, price stability and the participation of the private sector as a key element the value chain development. In addition, the Kayin State has a good potential for extending maize area due to land capacity, available irrigation system and favorable climatic conditions.

Summary of findings

Summary of key barriers in Maize value chain

Governance

• Poor physical infrastructure, especially in terms of farm road, as well as lack of drying facilities and weak facilitation of extension services lead to considerable losses of marketable production.
• Poor facilitation to set up applicable regulations in exporting product officially.
• Unstable security in the maize production area.
• Weak information sharing and facilitation in grading, classification and quality standards to differentiate product pricing and to reward farmers for producing a quality product. An important informational gap is the absence of SPS standards.
• Absence of other market quality standards and certification potentially discourages production of high quality maize.
• Weak association among farmers results in their failure to minimize the high input costs and gives them low bargaining power.
• Insufficient government facilitation in cross-border market transactions

Market Constraints

• Absence of efficient market distribution channel for accessing agricultural inputs, particularly seeds and agro-chemicals needed to minimize production cost.
• High cost of hired labor and absence of labor saving devices.
• High input cost and total dependency on imports from Thailand. Agricultural inputs are not available at the local market.
• Absence of a transparent market transaction mechanisms for farmers to trade maize.
• Uncertain Thai government policy to import maize from Myanmar.
• High cost of transporting.
• Trading season is only 2 months per year.
• Monopsony market (single market).
• In Hpa-an, the market is at embryonic stage. There is no local collector/local dealer/ investors yet.
• All maize cross-border trade is done through informal channel which is difficult for government to provide the services and support to the informal value chain nodal players.

Institutional

• Weak extension services, particularly for rural farming communities
• High use of chemical herbicides and fertilizers may have adverse affect on environment and workers. The use of these inputs will also violate SPS regulations and may prohibit imports from Myanmar in order to protect Thai growers.
• Absence of low cost facilities to help farmers measure moisture content of maize.
• Lack of know-how regarding post-harvest handling and storage techniques, resulting in low prices.
• Weak farmers associations and producing poor quality products to help pool resources and to organize community or attract investors.
• In Myawaddy, local input supplier is not present at local market. Therefore, the market information could not share effectively to small-holder farmers

Human Resources

• Poor on-farm storage facilities and post-harvest handling
• Lack of information about both input and output prices
• Shortage of seasonal labor
• Weak facilitation of department service providers
• Lack of experience of local traders in managing contract farming, processing and value adding activity