Department of Agricultural, Food, and Resource Economics Feed the Future Innovation Lab for Food Security Policy

Ame Cho, Ben Belton and Duncan Boughton, 2017. Crop Production and Profitability in Ayeyarwady and Yangon. Feed the Future Innovation Lab for Food Security Policy Research Paper 66. East Lansing: Michigan State University.

EXECUTIVE SUMMARY
Agriculture is central to Myanmar’s rural economy, and Ayeyarwady and Yangon regions are considered to be the country’s ‘rice bowl’. Yet few detailed data are available on the characteristics of agriculture in this important area. The Myanmar Aquaculture-Agriculture Survey (MAAS) addressed this knowledge gap through a statistically representative survey of 329 agricultural households in Maubin, Nyaungdon, Twantay and Kayan townships in Ayeyarwady and Yangon regions, as part of a larger survey of 1,102 rural households. The following key results stand out: 
1. Levels of landlessness are high: 56% of households have no agricultural land. 
2. Most farms are small, and land is unequally distributed. Forty-nine percent of farming households have less than 5 acres of land. The third of households with the smallest landholdings own just 3% of all crop land. 
3. Paddy dominates agriculture in monsoon (when virtually all farmers produce it), but green gram and dry season paddy are the two most important crops in terms of income. 
4. The smallest farms are the most diversified, earning proportionally more of their incomes from vegetables, livestock and other crops than large farms, whereas large farms derive most of their farm income from dry season paddy. 
5. Access to irrigation in the dry season is limited, with the smallest farms having least access. 
6. Average paddy yields are low in comparison to most other Asian countries, at 3.3 t/ha. 
7. Average profits from the main field crops are low: the most widely grown crop, monsoon paddy, generates a gross margin of $217/ha (105,615 MMK/acre). Dry season paddy generates a higher return at $355/ha (172,700 MMK/acre) but also has high production costs. Green gram generates the highest average gross margins, at $ 638/ha (309,765 MMK/acre), and has intermediate production costs. 
8. Casual labor, fertilizers and agricultural machinery account for the majority of production costs in both paddy and green gram cultivation 
9. Farms that use combine harvesters to harvest paddy use less than half as much labor as farms that harvest paddy manually. 
10. Farms of all sizes are very strongly commercially oriented: farms producing monsoon paddy (including the smallest) sell three quarters of the paddy they produce, while an even higher percentage of dry season paddy and green gram is sold. 
11. The share of households using herbicides and improved varieties of seed for dry season paddy cultivation increased significantly between 2006 and 2016, but from a low base. Dry season paddy yields also increased, from 3.4 to 3.82 tons/ha (66 to 74 baskets per acre) over this period, but there was little change in input use or yields for monsoon paddy. 
12. Seeds for monsoon and dry season paddy and green gram are overwhelmingly sourced from farmers’ own reserves, or from other farmers, with little seed purchased from specialized input traders, government or other sources.

Based on these results, the following recommendations are advanced:

(a) undertake benefit-cost analysis of improved drainage to allow increased paddy cultivation in low lying areas in the monsoon season; 
(b) increase access to irrigation for dry season crops cultivation; 
(c) enhance access to improved varieties for all major crops; 
(d) identify pulses varieties that allow mechanized harvesting; 
(e) encourage crop and livestock diversification; and 
(f) improve the productivity and profitability of green gram production (varieties, irrigation access, integrated pest management).