extremely low level during the socialist period. However, the ratio thereafter increased rapidly,
reaching about 1/3-1/4 by the end of the socialist period. After 1988 it further increased and reached
its peak (0.7) in 1989/90. Thereafter, it fell to 0.25 in 1991/92, before again rising to 0.6 in 1993/94.
From then on, with wide fluctuations, it averaged around 0.6, meaning that the domestic price was
40% lower than the international price.
To summarize, despite the government’s intention and efforts, the rice market in Myanmar
could not be protected from internationalization. Though the price disparity has been largely
corrected compared to the socialist period or to the early 1990s, the gap still remains large, and the
disparity continues to be the main factor hampering the development of the rice sector in Myanmar.
Furthermore, what made the situation even worse for Myanmar rice farmers was the fact that
they could not receive the already low domestic market price fully, because of the existence of the
government paddy procurement system.
The paddy procurement system was abolished in 1987 but re-introduced, after only one year, in
1988. However, a lowering of the quota to the level of 10-12 baskets per acre (1 basket of paddy
equals 20.9 kg) reduced the farmers’ burden to a large extent. This improvement was possible
because of the reduction in the scale of the rice rationing system; rice came to be provided only to
targeted groups including civil servants. In addition, summer paddy was exempted from the
procurement obligation in order to provide an incentive to farmers to expand summer paddy
cultivation.
Despite the scaling down of the system, however, the paddy procurement system has been a
heavy drag for rice farmers. First, the procurement price has been far below the (domestic) market
price, and the price disparity can be as large as 50-60% (Okamoto 2005). Second, it is possible that
the burden borne by the farmers is even heavier than hinted at by the official statistics. If the yield
per acre is about 60 baskets as is claimed in the official statistics, the burden on farmers will be less
than 20% of total production. But there is a possibility that the official figures are over-reported.7 If
this is the case and the actual yield is only 40-45 baskets per acre, the farmers’ burden would be
more onerous, by as much as 25-30% of production
extremely low level during the socialist period. However, the ratio thereafter increased rapidly,reaching about 1/3-1/4 by the end of the socialist period. After 1988 it further increased and reachedits peak (0.7) in 1989/90. Thereafter, it fell to 0.25 in 1991/92, before again rising to 0.6 in 1993/94.From then on, with wide fluctuations, it averaged around 0.6, meaning that the domestic price was40% lower than the international price.To summarize, despite the government’s intention and efforts, the rice market in Myanmarcould not be protected from internationalization. Though the price disparity has been largelycorrected compared to the socialist period or to the early 1990s, the gap still remains large, and thedisparity continues to be the main factor hampering the development of the rice sector in Myanmar.Furthermore, what made the situation even worse for Myanmar rice farmers was the fact thatthey could not receive the already low domestic market price fully, because of the existence of thegovernment paddy procurement system.The paddy procurement system was abolished in 1987 but re-introduced, after only one year, in1988. However, a lowering of the quota to the level of 10-12 baskets per acre (1 basket of paddyequals 20.9 kg) reduced the farmers’ burden to a large extent. This improvement was possiblebecause of the reduction in the scale of the rice rationing system; rice came to be provided only totargeted groups including civil servants. In addition, summer paddy was exempted from theprocurement obligation in order to provide an incentive to farmers to expand summer paddycultivation.Despite the scaling down of the system, however, the paddy procurement system has been aheavy drag for rice farmers. First, the procurement price has been far below the (domestic) marketprice, and the price disparity can be as large as 50-60% (Okamoto 2005). Second, it is possible thatthe burden borne by the farmers is even heavier than hinted at by the official statistics. If the yieldper acre is about 60 baskets as is claimed in the official statistics, the burden on farmers will be lessthan 20% of total production. But there is a possibility that the official figures are over-reported.7 Ifthis is the case and the actual yield is only 40-45 baskets per acre, the farmers’ burden would bemore onerous, by as much as 25-30% of production
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