1.
Rural farmers and engines in Myanmar

2.
Table of Contents.
Research Challenge 3
Sample Area 6
Methodology 7
01.Current Landscape 10
02.The Market 12
03.Usage 16
04.Purchasing Behavior 21
05.Choice of engine 24
06.Impact and Ambitions 28
07.Where can Proximity add value? 32
08.Next Steps 39
Appendix. Trends 42
Contents

3.
3
What does the engine market looks like at present?
What are the marketing and design
opportunities that will allow us to fill unmet
needs in the market?
Explore the engine market keeping a human centered approach
in order to provide ideal, affordable, high quality solutions that
tackle rural farmers’ needs.
Research Challenge

4.
4
demos
village mechanics
fuel shops
China trade expo
village dealer shops
competition showrooms
farmersYangon main
wholesalers market
village agents/advisors
makers/2nd hand market
We’ve talked to...

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5
With a special focus on
their needs and ambitions...

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6
Sample Area
Delta: Kungyangon, Hinthada, Danuphyo
Dry Zone: Meiktila, Pyawbwe, Myttha
Yangon: South Dagon, Bayinnaung
Sample Area

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7
Methodology

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Asking, calling,visiting, observing...
. Polled 80+ demos
. Deep interviews with 10 demos
. Surveys with 20+ dealer shops + local visits
. Visited the 2 wholesalers market in Yangon
. Interviewed 3 second hand repairers in Yangon and 2 outside (Delta
and Dry Zone)
. Researched about agricultural mechanization in India and Kenya -
Meeting with Nat Robinson
. Interviewed 4 local mechanics and two agents (private company/
competition)
. Visited Yee Shin showroom (competition) and an agent from Good
Brother
. Visited China trade expo
. Visits and interviews to local makers (thresher makers)
. In depth interviews with 25 farmers (extreme users, regular
transitional users, non engine users - men and women).

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9
Methods
Quantitative Surveys
Phone interviews
In depth individual and group
interviews with flashcards as support
Photography
Unstructured interviews
Surprise visits
On site observation/witnessing/
shadowing

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10
01.Current Landscape

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Labor migration
People in villages are looking for work opportunities abroad or
in Yangon. Labor is becoming scarce and its cost is increasing
dramatically.
Access to fuel
Big new private petrol stations in the main towns and plenty of small
informal shops selling fuel in a bottle.
Efficient Transport
Very affordable motorcycles in the rural areas and increased use of
trawlargyis.
Use of Technology
TVs, EVDs, dynamos, mobile phones! Everything happening all of
the sudden.
Bridges and roads
New infrastructure is facilitating an easier and faster access to main
towns even from remote villages.
Town mechanics
Available knowledge on repairing, rebuilding and maintenance of
engines in local villages. Spare parts availability.
A fast transition

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02.The Market

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Engines are widely available in the market
Yangon and Mandalay has the best prices for engines in the market.
However, even small towns and villages have dealer shops that sell
gasoline and diesel engines of a diverse range of brands and prices.
There are also local second hand and repair shops where farmers can
purchase engines at lower cost (around half the market price).
Popular and preferred brands
Gasoline: Kenbo, Corolla, Robin
Diesel: Mercedes, Three Rings, JD, JN, Daiwa, Yong Chai, YMG,
AMC, Kubota
Main importers and distributors (Competition)
Yee Shin, Good Brother, Tharaphu U Soe Myint, Win Shwe War,
Aharthit
Most of the engines in the market are manufactured in China, Thailand
and India.
No need to go to Yangon...
DELTA VS. DRY ZONE
In the Delta there is a higher amount of dealer shops and therefore
prices are very competitive. The Dry Zone tends to have one or two
dealer shops located mostly in the main towns.

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Price ranges:
Diesel
7HP: 1.5-1.8 lakh
12-13 HP: 2.8 - 3.5 lakh
Gasoline:
5.5-6.5 HP: 75000 kyats-1.2 lakh
2nd hand market prices:
Around half the price of the brand new
engines
Warranty:
Currently there is no warranty or after
sales service on most of the engines
sales in the market.
Financing:
There is no financing or payment plan
available for less than 5 lakhs.
Some of the banks providing finance
for machinery over 5 lakhs are: MCB
in partnership with Good Brother. Also
KBZ and AGD.

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Fuel
Big private petrol stations are present
in areas closer to the main towns. In
remote villages, small roadside kiosks
supply fuel at an increased cost.
Although there are some rare cases
of farmers buying fuel in bulks with
a payment plan, most of the fuel is
purchased cash down. The payment
plans seem to exist only if there is
friendship between the dealer and the
farmer.
Prices
1 gallon: 4000 kyats
1 bottle: 1000 kyats
Roadside kiosks in remote villages
might increase the price by 200 or
300 kyats per bottle and 500-600 per
gallon.
Bulk fuel for movies?
Some farmers might purchase fuel
together in order to watch films but it’s
a rare behavior for farm use.

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03.Usage

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Irrigation prevails as the main need for
engine purchase as well as its main
use.
Multipurpose
engine 28%
Combined engine
water pump 72%
Irrigation
32%
Trawlargyi
20%
Machinery
17%
Boat
14%
Lighting
17%
Type of engine
Usage
*Data from demos survey

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Electricity/light Transport: boats,trawlargyi
Custom purposes

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With a trend moving towards usage for machinery such as: threshers, cultivators, powertillers.

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Irrigation prevails as the preferred use of farmers for engines in
Myanmar. This result is coherent in both the survey results and the
field exploration. However the majority of engines observed in the
field were not combined (engine connected to pump) but independent
engine + pump.
There is an increasing interest and awareness of the use of engines
for other purposes, especially related to agricultural machinery and
transport.
The use of engines for lighting seems to be decreasing as solar
panels are getting popular and affordable.
Delta Dry Zone
Multipurpose use of engines Single use or multiple engine owner-
ship
Willing to take risks/early adopters Risk adverse
Majority of paddy farmers Diverse crop farmers/harder conditions
DELTA VS. DRY ZONE
In the Delta, there is much more interest and creativity in the multi-
purpose use of engines. In the Dry Zone most of the engines were
used for irrigation.
This can be related to the water scarcity of the Dry Zone, where
engines are used and needed almost all year round. In the Delta the
need is seasonal and therefore engines tend to fill other purposes.

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04.Purchasing Behaviour

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Mechanic shop between Meiktila and Pyawbwe
“If you don’t own an engine you cannot be
a farmer anymore”
Farmer in Pyawbwe
“Engines and machinery is the new
mindset, is the new era”
Agent in Myyitha
“No other reason but cash money is
stopping me from buying an engine”
Farmer in Hinthada
How do farmers choose their engines?
Trust: Farmers trust other farmers. Before
purchasing they ask their neighbors what kind of
engine they are using and choose the same one.
In some cases, they will pay the local mechanic
to go with them to the shop and help them
through the process. The mechanic charges
5000 kyats plus a meal and he offers to set the
engine for the farmer.

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Engine knowledge
Farmers do not seem to do research before purchasing an engine. In
some cases they didn’t even know their engine brand.
Payment
Farmers are purchasing engines cash-down. They tend to purchase
them after a good harvest, some of them expressed they saved
money during a period of year.
Neighbor/friend loans
Some of the farmers are getting loans from other farmers or family in
order to purchase an engine. These loans tend to have high interest
rates.
Bank financing
Only available for purchases over 5 lakhs.
These behaviors are consistent in both the Dry Zone and the Delta.
DELTA VS. DRY ZONE
In the Dry Zone farmers without engines were renting from other
farmers at high daily rates:
6000 kyats/day for diesel 7HP (without fuel)
5000 kyats/day for gasoline 5-6 HP (without fuel)
Small farmers not only face high rates but also complicated renting
time availability. No renting service in the Delta.

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05.Choice of engine

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Why do farmers choose diesel engines?
Fuel choice
Why do farmers choose gasoline engines?
The demos say...

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Advantages of gasoline engines
Lower cost
Easy to operate (women and men can start the engine
without high physical effort)
Less intimidating as a first purchase of a mechanized
tool
Small size
Portable
Disadvantages of gasoline engines
Less potential to adapt for multipurpose use
Less availability of spare parts and repair knowledge
Bad and weak reputation on the field
Not available in the second hand market
Higher fuel consumption
Advantages of diesel engines
Suited for multipurpose use
Robust and long life cycle
Better performance for long hours use
Availability of spare parts and repair knowledge
Popularity amongst farmers
Second hand market availability
More fuel efficient
Disadvantages of diesel engines
Higher prices
Physical strength required for the start system
Big and heavy - hard to carry
Diesel vs. Gasoline
DELTA VS. DRY ZONE
In both areas farmers interest and fuel choice is
diesel. Gasoline engine users were hard to find. The
main reasons for their choice were: mobility and
easier ignition.
Farmers describe gasoline engines as “less robust
and less reliable”.

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Horse Power
6.5- 8 HP: Very popular amongst paddy farmers.
Works with threshers, pumps, harvesters,
landboats, cultivators, and dynamos.
11-13 HP: Also works with diverse agricultural
machinery. Fits the suction requirements of the
dry zone water table and long hours of usage.
18 HP: Commonly used for trawlargyis.
DELTA VS. DRY ZONE
In the Delta the majority of the farmers use 6.5-8 HP
and in the Dry Zone 11-13 HP. This is related to the
need for higher suction and longer periods of use.

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06.Impact and Ambitions

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“ I want to be able to expand my plot ”
This is the most common desire amongst farmers.
They want to buy more land, grow more crops,
diversify their produce. Some of them want to buy a
bigger house, a solar panel, a powertiller.. Some want
to pay out their debts.
“ All the farmers are getting one”
As the country changes rapidly, it is possible to
identify a desire to move forward and adopt “new”
technologies. A feeling of ‘peer pressure’ was common
to identify among the farmers that didn’t own engines.
“ I am afraid that soon I am not going to
be able to afford hiring labor anymore ”
Another common preoccupation amongst farmers, as
agricultural labor costs are increasing from 2000 kyats
towards 5000 kyats per day.
Drivers for engine adquisition

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Engine and fuel vs. labour
= 3000 =
=
=
+ +
+
To irrigate a 1.7 acres plot of flowers in the dry zone a farmer needs:
But if he doesn’t use an engine he needs:
1.5 hours
every 3 days
1 day
A total expense of 500K every day.
The costs saving per day are: 5500K, which means
they could pay back an 1.5 lakh engine in 27 days.
*This is a real example chosen out of various consistent stories we heard in the field. However, there are other factors that can influence
this calculation such as labour cost in the area, fuel cost, weather changes, type of crop, water table, and additional income for farmers as a
consequence of time savings. We recommend this should be explored further in partnership with the finance team.
A total expense of 6000K every day.
1500K
1500

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Benefits according to farmers
Potential of expansion: While they spend less
hours irrigating the plots some farmers have
explained that they have been able to take care
of other tasks and even grow multiple crops at
the same time.
Time and effort savings: Some farmers
transition from watering cans others from treadle
pumps both methods imply high physical effort
and time consumption.
Financial savings: As labor becomes less and
less affordable the investment in fuel allows them
to save money every month.
DELTA VS. DRY ZONE
In the Dry zone the need of engines seemed more
urgent. Farmers are paying higher prices not only for
labour and engine rental services but for cows rental
as well. In both areas farmers have little awareness
of their expenses and savings.

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07.Where can Proximity add value?

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What we think...
Mobility: Diesel engines are heavy and big. Could we add wheels and a frame to make it easier for them?
By exploring this we realized that the big majority of farmers do not have the need or interest to transport
their engines. If they don’t live next to their plots they leave them at the plot or in some few cases they will
carry them for longer distances in carts or trishaws. Wheels won’t save the problem and farmers didn’t seem
motivated in investing a bit more money for this. Regardless,we should look for a light and compact engine
after we fulfill more critical requirements.
b). Needs focused design
Mobility Less physically demanding ignition
system
Safety
Some of the needs identified in the field were:

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Less physically demanding ignition system: The
ignition system of diesel engines is tricky. However it
seems that the number of cases of farmers that have
this problem is very low, not big enough to justify
the investment of designing an added battery start
system.
Safety: Engines are big investments for farmers and
they are perceived as ‘luxury items’. We explored
the need to provide a secure system to prevent theft,
thinking that this could also reduce the need for
mobility. However this was not a big problem in the
field.
No room for innovation?
Engines have been extensively used and explored in
other countries and they have evolved through years
and years of testing. Although they are new for the
Myanmar market, it was hard to identify big needs that
could improve the engines that are currently being
imported in order to match the local farmers and to
justify the cost of design and manufacturing.
Level of potential value: Low

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Import to
Warehouse
Trishaws
Trucks
In order to sell engines and pumps, Proximity’s distribution channel will have to be modified in order to fit with
the size and weight of the product.
What we think...
Our distribution channel will be an added bonus for farmers that are considering to purchase an engine. It
might accelerate the purchasing process for the farmer by having local demos available to provide guidance
and advice. However it seems that engines are available and accessible even in remote villages. By
delivering to their doorstep we would be able to provide a better service to farmers but we would not fill a
pressing need. Without a better distribution channel, farmers will still be able to purchase engines.
Demos
Agents
Dealers
Motorbikes Individual
Households
Ship to Transport via Sell to
a). Distribution Channel
Level of potential value: Medium

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d). Yetagon approved label
Yetagon approved label:
The idea is to provide farmers with a label that implies
that the engine being sold to them has been quality
tested and approved by our product brand.
What we think...
Some farmers are scared of purchasing low quality
‘Chinese products’ and most of the engines in the
market don’t offer any kind of quality label or warranty.
We found some farmers trust their neighbors and
the local mechanics without even knowing the brand
of the engine. However, others, especially Yetagon
customers, have good relationships with demos and
trust their buying advice.
We think that by letting the farmers know that we have
tested and approved the quality of the engine this can
reduce the anxiety of the investment. A label represents
a good opportunity to take advantage of our brand
awareness.
Level of potential value: Medium

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c).Plug and Play Model
Plug and Play Model: We explored the idea of finding an engine that could fit different purposes that are
relevant for farmers i.e. a diesel 7HP engine could be used with a pump for irrigation as well as with a
cultivator, a thresher, a dynamo, and a landboat. However, we found that especially in the Delta this is already
happening. We could add value by communicating this to other farmers that don’t know about it. This can
give them confidence in the versatility of their investment, especially in the Dry Zone. This finding is helpful
for Proximity to consider if we choose to source a diesel engine and want to maintain compatibility with other
machinery.
Cultivator
Thresher Transport
Dynamo/lighting
Level of potential value: Medium

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e). Finance Plans
A finance plan for purchasing an engine:
At present, dealer shops or bigger distributors
are not providing any kind of payment plans for
purchases lower than 5 lakhs. This means that
low income farmers have no means of buying an
engine unless they save for a long period of time
or borrow money from private moneylenders at
high interest rates.
What we think...
We consider financing as the biggest competitive
advantage for selling engines to rural farmers.
When we asked non engine users if there were
other reasons except cash-flow stopping them
from buying an engine they couldn’t think of
anything else. This would be a good way of
providing small farmers the opportunity to keep
up with their plots as labor prices become less
and less affordable.
Level of potential value: High

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The biggest value is on...
Finance Plans
Considering the factors described above and the main
findings of this research, the biggest need for the
lowest income farmers that don’t yet own engine relies
on financing.
This area should be explored further with the finance
team and Yetagon credit team. To design and create an
innovative model that suits the current needs of rural
farmers and the desired impact of the service.
The others factors explored in this chapter could be
taken into consideration after defining a financial service
strategy. The plug and play communications effort, the
Yetagon approved label, and a door to door delivery
have the potential to work as added bonuses.

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08.Next Steps

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01. Finance focused research
Proximity finance? Yetagon credit?
Feasibility analysis
Potential of repayment, collateral, and others.
02. Curating the right engines
Product specifications
Testing
03. Distribution model design
Dealer shops partnerships/Imports?
Transportation
04. Communications and demo training
05. Beta launch
Phase 2.

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Potential scenarios
Proximity Finance
Users
Existing dealer
channels
Partnership with specific dealer
shops that carry the engines we
want to finance.
Proximity Sales and Promotions
(communication effort)
Design Team-choosing
the right engines
Scenario 1.

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Pros
Proximity Users
No need for transport Brand choice
No need for additional
storage or staff
HP choice (2 options)
Not dealing with
imports
Widely available
Spare parts available
Time saving
Reduce costs
Cons
Proximity Users
Engines high price High price w/margins
No warranty No warranty
NoYetagon brand
product
Transport
Complicated finances
(multiple stakeholders)
Unnecessary purchas-
es
Unhappy demos
Scenario 1.
Proximity Finance
Users
Existing dealer
channels
Partnership with specific dealer
shops that carry the engines we
want to finance.
Proximity Sales and Promotions
(communication effort)
Design Team-choosing
the right engines
Scenario 1.

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Potential scenarios
Scenario 2.
Design Team and Proximity Finance
Source and import engines
Users
Demos & agents
via trawlargyis and
trishaws
Town drop-offs
Channels Team
Warehouses in strategic areas
Transport
Proximity Sales and Promotions
(communication effort)
Orders delivered to
dealer shops

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Pros
Proximity Users
Provide fair price Fair price
Yetagon brand
approval label
Smaller commute (en-
gines in remote villag-
es)
Proximity with
customers
Proximity services
Customer service Feedback and demo
support
Promotions of other
products w/engine
Happy demos
Cons
Proximity Users
Structural changes
(time and resource
consuming)
No choice of brands
Staff/transport/
warehouse investment
No warranty
Transport
Scenario 2.
Design Team and Proximity Finance
Source and import engines
Users
Demos & agents
via trawlargyis and
trishaws
Town drop-offs
Channels Team
Warehouses in strategic areas
Transport
Proximity Sales and Promotions
(communication effort)
Orders delivered to
dealer shops

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Appendix. Trends

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Big machinery rental services
Threshers, harvesters, tractors..
Examples of rental services costs for big
machinery:
Tillers:
14 000K/acre or 18 000K/acre including fuel
Harvester:
40 000K/acre including fuel
(12 persons needed for 1 day of harvesting per
acre: labour price: 3000. Total cost: 36 000).
1 harvester can do up to 12 acres/day.
Thresher:
27 000K/acre not including fuel.

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Very affordable solar panels
We witnessed a big amount of rural households
using solar panels for lighting and entertainment.
The solar panels seem to become more and
more affordable, i.e. $1 per 2 watts.
In Kungyangon a government initiative donated
solar panels to every household in the village.
Farmers seem to be less and less interested in
the use of engines for this purpose.