No loans for farmers with debts: minister

Farmers who owe debts to the Myanmar Agricultural Development Bank or specialist rice companies will be ineligible for long-term loans the government plans to make available, the Minister for Agriculture and Irrigation said last month.

Minister for Agriculture and Irrigation U Myint Hlaing said farmers with unpaid debts cannot register for the loans, which might not have to be repaid for 15 years and will carry low interest rates. The ministry’s Settlement and Land Records Department commenced a land survey to determine tenures on January 1 ahead of the distribution of loans, he said.


The ministry will conduct the land registration survey until March, with the intention of making long-term loans available to farmers equal to 30 percent of the value of the land. He said interest on the loans would be charged at a low rate.

“[But] I will not support farmers who still owe money to specialist rice companies or Myanmar Agricultural Development Bank,” U Myint Hlaing said on January 27. “We are pursuing this project for the benefit of our farmers. Seasonal loans are not enough for farmers.

“After the land registration project is complete, we will recognise the value of farm land. If your land is valued at K100,000 an acre you will be able to borrow up to K30,000 or 30pc of its value. Farmers will not need to pay back the loan after one harvest,” he said.

U Myint Hlaing said farmers are regularly forced to borrow money from private lenders, who charge from 5-20pc interest a month, which leaves them stuck in a debt cycle. “I would like to help all of our farmers but existing debts must be cleared,” he added.

“If farmers register their land they are sure to get high prices. For instance, the average value of 1 acre in Nay Pyi Taw is K10 million,” he said.

The government is carrying out land registrations under the Farmland Law, which was enacted by parliament in March 2012, with rules for the law enacted in August.

U Ye Min Aung, general secretary of the Myanmar Rice Federation, told The Myanmar Times that the registration process is confusing for farmers.

“It is not a transparent or inclusive process. The registration process should be made known to the farmers’ network, civil society and private associations as well as consulting agencies,” he said.

If farmers are provided adequate credit they will be able to invest more in their crops, likely leading to larger and higher quality yields. They will also be able to hold onto stock until paddy prices increase.

An International Rice Research Institute (IRRI) spokesperson told The Myanmar Times by email that Myanmar’s rice crop could “easily” be boosted.

“If rice farmers in the 2 million hectares of rice-producing areas in Myanmar’s Ayeyarwady delta used better management practices and appropriate rice varieties, they could easily boost Myanmar’s domestic and export rice capacities,” the spokesperson said.

“By using data from satellites and remote-sensing technology, IRRI and its partners will determine those specific areas in Myanmar that are prone to floods, salty soils, and drought. Through high-resolution imagery, these areas will be better identified and targeted for intervention,” the spokesperson added.

However, farmers in Ayeyarwady Region’s Danubyu township say they face a number of major challenges – chiefly unstable paddy prices and the scarcity of affordable credit. As a result, many are unable to repay Myanmar Agriculture and Development Bank or the specialist rice company that operates in the area , Gold Delta.

Gold Delta is the sole private, official lender operating in Danubyu township. A company spokesperson said farmers owe K1.5 billion in loans that date back to 2009.

But U Thant Zin, who owns 30 acres in Ngapyin Chaung village in Danuphyu township, said providing more credit would not necessarily solve farmers’ problems.

“Our main challenge is unstable paddy prices, which mean that as harvest time nears the price drops. But when the paddy is in the hands of traders it rises, so we never see the fruits of our labour,” he said.

“If we could earn K350,000 for 100 baskets (5200 pounds or 2358 kilograms), we would make a decent profit and repay our loans on time,” he said.

“We will take money if they [state and private lenders] give it to us. This is the way they press us with debt. But if they can help us to buy machinery, clear old loans, buy quality fertiliser and help us to solve transportation problems that would address all of our needs,” U Thant Zin said.

But U Myint Hlaing said: “It is not difficult to stabilise paddy prices if we can export at good prices. We have already allowed exports directly from Pathein port. But to improve exports, we must improve quality rice, which means we need to get better seeds.

“Farmers should think about using higher quality seeds, which will enable them to get better prices for their crops,” he said.

Floods have affected western Danubyu in each of the past five years.

U Sein Win, a farmer in Pantanaw township, said: “The Settlement and Land Records Department recorded our lands in three categories before land registration project started: R1, R2 and R3.”

“R1 is land where you can grow two crops a year and pulses also. R2 is only one crop a year and in some years you can’t grow pulses. R3 is only one crop a year, and subject to regular floods.

“The department is surveying paddy fields but they are not revealing what the value of those fields will be and I don’t know how they will make that decision,” he said.

“But I can say that immediately after the department left, the asking price for land increased from K1.4 to K2 million an acre.”

source: The Myanmar Times
http://www.mmtimes.com/index.php/business/4068-no-loans-for-farmers-with-debts-minister.html