The deterioration of profitability of summer paddy cultivation is not merely the outcome of sluggish
rice prices. Price hikes of inputs such as chemical fertilizer, diesel oil and agricultural machinery
also had a serious negative effect. The problem was that farmers had no alternative but to depend on
these inputs which are mostly imported on a purely commercial basis. It is here relevant to note that
foreign assistance was not provided after 1988,14 and at the same time the government has also been
obliged to abolish subsidies on these inputs.
Figure 3 shows the changes in the supply of chemical fertilizers including both imported and
domestically produced fertilizer. The supply of domestic fertilizer declined because of the
degradation of producing factories and the difficulty of obtaining raw materials for the fertilizer
factories.15 This fall in supply had to be made good by imports. Consequently, the dependence on
imports increased after 1993/94.
The figures for imports are the sum of imports by the government (Ministry of Agriculture and
Irrigation and Ministry of Commerce) and by private enterprises. Despite government attempts to
boost private imports by providing import duty exemption, private imports failed to increase, and the
government continued to be the main importer (Takahashi 2000, p.39-40). Fluctuations in import
volume after 1993/94 may possibly be the result of the insufficient allocation of foreign exchange to
government agencies for importing fertilizer.
The government has been distributing chemical fertilizers to farmers through Myanmar
Agriculture Service (MAS) which has a broad network of agencies in rural areas. Among all crops of
Myanmar, rice has a dominant share so far as the receipt of fertilizer is concerned, and even after the
1990s accounted for over 80% of the total volume of fertilizer made available for cultivation