Paddy exports called off
The Ministry of Commerce is planning to spend K15 billion buying paddy directly from farmers, but has cancelled a plan to allow paddy to be exported abroad.
THE Ministry of Commerce has cancelled plans to allow paddy exports as part of measures to address a slump in prices. Instead the government intends to buy paddy directly from farmers, some of whom have criticised the proposed floor price for the government purchase program for being too low.
U Khin Maung Lwin, assistant secretary at the commerce ministry told The Myanmar Times that paddy exports were being abandoned because of the potential impact on the livestock industry.
“Broken rice and paddy husk [which come from harvested paddy] are very useful for the livestock industry [as animal feed],” he said. “And there are a number of rice millers in the country [that rely on paddy for business]. We considered paddy export as a measure but it is not possible at the moment.”
U Myo Tint Htun, deputy secretary at the Ministry of Agriculture, Livestock and Irrigation said the government had banned paddy exports in previous years because it was better to export finished products.
“Selling paddy [abroad] is quite risky and you have to a much larger quantity of paddy than rice to get the same revenue,” he said. “Also testing the quality of paddy for export will be difficult.”
Rather than permit paddy exports, the commerce ministry is asking for K15 billion from the government to buy paddy at a minimum price from farmers in Yangon, Bago and Ayeyarwaddy regions,” said U Khin Maung Lwin.
“The cabinet has approved the decision to give K15 billion to the Ministry of Commerce for purchasing paddy from [those] three regions,” he said. “We are going to start the process in December.”
Paddy purchasing groups will be formed under the temporary Agricultural Product Management Committee (APMC) – as stipulated in the Protecting Rights and Enhancing Economic Welfare of Farmers Law, which was revised in 2013.
The APMC is made up of regional government officials, members of the Union parliament and representatives from rice trading and milling associations, said U Khin Maung Lwin.
“Under the protecting rights of farmers law we have to support [them] or buy the paddy at a certain price if the prices fall [too much],” he said, adding that the price of paddy had fallen to levels that made it hard for farmers to cover production costs. “We are sure this is the best way of getting farmers a higher price.”
But the price at which the commerce ministry intends to buy has sparked complaint from the agricultural industry. The ministry is planning to buy 100 baskets of averagequality paddy for K380,000 said U Khin Maung Lwin. However, farmers report that with better weather drying out soaked paddy and expectations of government action, prices in several areas are already higher than that.
U Thein Aung, president of Freedom of Farmers League, told The Myanmar Times that the price for 100 baskets in Ayeyarwaddy Region was around K400,000.
“We are asking for higher paddy price,” he said. “But when the government plans to buy at a price lower than the current market price, it’s proof that the ministry thinks the market price is fair. I can’t understand why they would offer less than the market value.”
U Khin Maung Lwin said the aim of the program was to help cover farmers’ production costs, “not make them rich”, he said. The cost of production was what was determining the government purchase price, not the market price, he added.
The cost of producing 100 baskets of paddy varies widely with region, farmer and land and paddy quality. Nay Pyi Taw region farmers say the cost of production 100 baskets can range from K280,000 to K410,000.