CGIAR Research Program on Policies, Institutions, and Markets Workshop on Rural Transformation in the 21st Century (Vancouver, BC – 28 July 2018, 30th International Conference of Agricultural Economists). Presentation by Nilar Aung, Duncan Boughton, Ben Belton, Mateusz Filipski and Ellen Payongayong.
Myanmar’s Rural Economy: A Case Study in Delayed Transformation
1. Myanmar’s Rural Economy:
A Case Study in Delayed
Transformation
Nilar Aung, Duncan Boughton, Ben Belton,
Mateusz Filipski and Ellen Payongayong
Workshop on Rural Transformation in the 21st Century
Vancouver, BC
July 28, 2018
2. Introduction
• Political & economic reforms from 2011
• Agricultural sector contributes to 38 % of GDP
• Population: 51.5 million
• 70% of total population live in rural areas
• Poverty rate: 32%
• World Bank (2016) reports low rural wages, surplus
agricultural labor, poor rural infrastructure, lack of
access to long-term capital by farmers, low levels of
agricultural mechanization.
• BUT situation changing very rapidly
3. Framework for analysis
1. Enabling conditions
2. Markets for factors and services
3. Changes in agriculture
4. Changes in the rural non-farm economy
5. Rural income composition
4. Dry Zone
Delta
Rural Economy
and Agriculture
Dry Zone Survey,
2017 (1600 HH)+
300 communities
Myanmar Aquaculture-
Agriculture Survey, 2016
(1100HH)+74 communities
Sources of Data
12. Gross margins by crops (Dry Zone)
-500
0
500
1000
Monsoon paddy
Median $187/ha -400
-200
0
200
400
600
800
1000
Dry season paddy
Median $249/ha
-600
-400
-200
0
200
400
600
Groundnut
Median $75/ha
-600
-400
-200
0
200
400
600
800
1000
Seasame
Median $25/ha
-1000
-500
0
500
1000
1500
Green gram
Median $1/ha
13. Rural non-farm economy growing rapidly
+233%
+50%
+44%
+67%
0
5
10
15
20
25
Motor
transport
Retail Personal
services
Food
services
MEANNo.ENTERPRISES/VILLAGE
Delta
2011 2016
+200%
+57%
+33%
+56%
0
5
10
15
20
25
Motor
transport
Retail Personal
services
Food
services
Dry Zone
2011 2017
Mean numbers of non-farm enterprise per village by type, 2011 & 2016/17
(MAAS & READZ)
14. Share of villages with credit access by source, 2011 & 2016 (MAAS)
0
10
20
30
40
50
60
70
80
%ofvillageswithaccess 2011 2016
Sources of credit diversifying
15. 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
Monthlyinterestrate(%)
2012 2017
Monthly interest rates from informal lenders and microcredit providers, 2012 & 2017
(READZ)
16. Household Income Components (HHs with ag land)
52%
1%
7%
11%
6%
2%
4%
10%
7%
Delta
Crops Livestock Fishing/aquaculture
Ag wages Non-ag wages Salaried employment
Resource extraction Non-farm business Remittances
$373
Median total
income per capita
48%
7%
17%
3%
5%
1%
8%
12%
Dry Zone
$287
17. Household Income Components (landless HHs)
2% 2%
44%
17%
5%
7%
16%
8%
Delta
Crops Livestock Fishing/aquaculture
Ag wages Non-ag wages Salaried employment
Resource extraction Non-farm business Remittances
Median total
income per capita
$259
2% 3%
45%
13%5%
1%
18%
13%
Dry Zone
$280
18. Conclusions
• Big increase in investment in infrastructure, but from very
low base
• High levels of rural-urban migration & rising real rural
wages
• High rates of agricultural mechanization (scale neutral due
to rental service provision)
• Growth of some parts of rural non-farm economy, but few
jobs created apart from self-employment
• Access to formal finance improving and borrowing
becoming cheaper
• Slight increases in chemical input use and improved
varieties in farming, but little yield response, low returns
19. Implications for Policy
• Need investments in ‘soft’ infrastructure (e.g. well
trained teachers and health professionals) to
complement hard infrastructure.
• Support & training needed to make migration safer,
less risky, higher quality.
• Expand rural financial services ,insurance and
business management skills for productive rural
non-farm enterprises and non-farm job growth.
• Improve pulse, oilseed and paddy varieties, and
strategies to multiply and distribute improved seed.