Shan Agriculture and Rural Economy Survey: Selected Highlights

Ben Belton, Khin Zin Win, Aye Myintzu, Zin Wai Aung, Hnin Ei Win, Zaw Min Naing, Soe Thu Lin, Khaing Wah Soe, Sithu Kyaw, Eaindra Thein Thein Thu,

Khun Moe Thun, Peixun Fang

Presentation to LIFT Fund Board, Sedona Hotel, Yangon

December 11, 2018

SHARES Rationale• Generate overview of South Shan rural economy and

agriculture, and nature of recent changes• Focus on maize and pigeon pea value chains – two major

commercial crops produced for export• Developed hypotheses based on review of literature,

‘conventional wisdom’, and field observations and interviews during scoping

• Special attention to arguments made in “CP maize contract farming in Shan State, Myanmar” (Woods, 2015)

• Set out to test hypotheses empirically, using household survey• This presentation: Selected findings on Land, Off-farm

employment, Migration, Mechanization, Maize & Pigeon Pea2

LAND

3

High levels of access to agricultural land

77%

8%

15%Landed Farm Households

Landless Farm Households

Non-Farm Households

85% of HH have access to land (60% in DZ; 20% in Delta)

Small landholdings

9%

24%

67%

Tercile 1

Tercile 2

Tercile 3

• Average Land Owned by Landed Farm Households

• All – 3.5 acres• T1 – 1.5 acres• T2 – 4.3 acres• T3 – 10 acres

(Smaller on average but more evenly distributed than DZ & Delta)

5

The land frontier has closedReasons of Stopped Shifting Cultivation

% of Households

Not possible to access more forest land

41

Hard to reach area 21

Sedentary cultivation moreprofitable/easier

13

Insufficient labor 12

Unable to control weeds 6

Prevented from doing byauthorities

4

Insufficient rainfall to grow crops 2

7791

2372

0

10

20

30

40

50

60

70

80

90

100

Parents' Household Current Household

Shar

e of

HH

(%)

Never Practised Ever Practised Still Practising

Share of HH in present and parents’ generation practicing shifting cultivation 6

Limited land titling

49

30

14

2 3 0.50

10

20

30

40

50

60

Form 7 Form 105 Contract TaxReceipt

AINGrant

Other

Perc

enta

ge25%

75%

Agri: Parcels with Land DocumentAgri: Parcels without Land Documet

Most land tenure insecure (untitled land defined as ‘wasteland’); Cannot be used access formal credit (e.g. MADB) 7

Land titles overwhelmingly in name of male HH head

79%

11%

2%5%

3%Male Household's Head/ Male Spouse

Female Household's Head/ Female Spouse

Couple

Other Household Member

None of These

8

OFF-FARM

9

Type of EmploymentLand Ownership

All Landless Tercile 1 Tercile 2 Tercile 3

Off-farm employment 76 95 80 74 59

- Casual Labor 61 75 66 63 43

- Non-Farm Enterprise 24 31 20 25 20

- Salaried Worker 7 17 6 3 4

- Natural Resource Extraction 5 8 6 4 3

10

Off-farm employment is important, irrespective of landholding

HH engagement in off-farm employment, by landholding group (%)

11

Gendered employment characteristics

3,949

6,811

3,424

4,487

0

1000

2000

3000

4000

5000

6000

7000

8000

Agriculturalcasual labor

Non-agriculturalcasual labor

Wag

e (M

MK/

day)

Men Women

-13%

-34% 157,188 158,472180,965

94,702

020,00040,00060,00080,000

100,000120,000140,000160,000180,000200,000

Government Private

Wag

e (M

MK/

mon

th)

Men Women

-33%

+13%

Casual work Salaried employment

Rates of workforce participation by gender similar, but different occupation types and rates of pay

0%

5%

10%

15%

20%

25%

30%

Shar

e of

NFE

Mixed Men Women

Gendered differences in NFE

12

38%33%

64%

54%

39%

21%

8%

28%

16%

0%

10%

20%

30%

40%

50%

60%

70%

tercile 1 tercile 2 tercile 3

Mai

n pe

rson

resp

onsi

ble

men only women only mixed

Main person responsible for operating NFE, by enterprise type

Main person responsible for operating NFE, by enterprise size

Agriculture35%

Off-farm employment

32%

Informal loan 13%

Migration2%

Sale of assets2%

Other2% No start-up

capital14%

Sources of start-up capital for NFE 13

Agriculture and off-farm employment are main sources of startup capital for NFE

14

MIGRATION

Moderate levels of migration; mix of international and domestic

• 14% of HH have a migrant at present; 7% of individuals of working age are migrating (c.f. DZ 30% HH; Mon 49% HH)

• Migrants are young: 84% aged 15-29 at time of migration • Roughly even gender split – Men 53%; Women 47%• More current international migrants than domestic (65:35),

but domestic increasing rapidly• International: 88% Thailand• Domestic: 79% urban; 63% within Shan

15

Timing of Migration: Number of People Migrated by Year of First Migration (by Destination)

0.010.020.030.040.050.060.070.080.090.0

100.0

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

no. o

f peo

ple

mig

rate

d

Year of 1st Time migration

Started Year of migration internati Started Year of migration domestic

16

Domestic migration growing faster than international

Migration driven by mix of push and pull factors

Main reason for migrationMigration destination

International (%) Domestic (%)For higher income 33 28Income low 20 17Insufficient Land 31 10Adventure/to gain new skill 9 9Not willing to work agriculture 6 18For professional work 0 17Social pressure 1 3

17

• Average migration is short: 78% domestic & 49% international = 1 year or less

• Most return migrants have no intention to migrate again (72%)

18

Occupations before, during and after migration (international migrants)

Most migrants send remittances, and remit significant amounts

Migrant type

Migrants remitting in

past 12 months (%)

Average value of remittances

( MMK/month)All 58 66,791Domestic 39 46,037International 73 76,033Male 58 61,544Female 57 73,981

19

Most remittances used to cover cost of everyday expenses

1st reason (%) 2nd reason (%)Day to day expenses 52 0Farm operating costs 9 21Medical expenses 7 17Repayment of debt 7 1Education costs 6 35Housing 6 8Child care 5 10Savings 3 3Purchase agricultural assets 5 4Donations 2 1

20

21

Reason of return International

(%)Domestic

(%)Prospect of job at home 18 33Poor working conditions 16 17Loss of work/no job opportunity 10 16Poor health 16 6To take care of family members 18 7Achieved goal (saving/new skill) 4 10Marriage/pregnancy 7 5No legal status 5 3Others 7 4

Decision to return driven by push more than pull factors

MECHANIZATION

22

79 82 95

18 22 17

tercile 1 tercile 2 tercile 3

Perc

enta

ge

machine draft animal

Machines have rapidly replaced draft animals, irrespective of farm size

Share of farm HH using machinery or draft animals in maize and pigeon pea production, by landholding tercile

Tercile 1 <2.5 acreTercile 2 >2.5 to 6 acreTercile 3 >6 acre

23

Land preparation and maize threshing highly mechanized, little change in other activities

(e.g. harvesting, sowing)

Share of farm HH using machinery and draft animal for maize and pigeon pea production, by activity

76%

51%

89%

13% 11% 10% 3% 1%

-

20

40

60

80

100

Landpreparation

Planting ThreshingMaize

ThreshingPigeon pea

Perc

enta

ge

machine only

draft only

machine + draft

24

Rental markets facilitate machine access

Share of farming HH using own / rented machines in land preparation and threshing 25

-

20

40

60

80

100

2007 2012 2017 2007 2012 2017 2007 2012 2017

2 WTin land preparation

4 WTin land preparation

Machineryin threshing

% o

f HH

usin

g m

achi

ne

HH using rented machine HH using own machine

26

AGRICULTURE

27

28

29

30

Adoption of hybrid maize growing rapidly, associated with increased use of fertilizer inputs

0

20

40

60

80

100

12019

7519

7819

8119

8319

8519

8719

8919

9119

9319

9519

9719

9920

0120

0320

0520

0720

0920

1120

1320

1520

17

No.

Res

pond

ents

First planted maize

First used compound

31

There is no contract farming of maize

1%

99%

"Have you ever had a contract with CP company to grow maize?"

YesNo

32

The market for maize seed is diverse and competitive

21

18

416

18

7

15 CP 808

CP 888

CP (other var.)

Golden Tiger 029

Other hybrids

Syngenta 621

Local OPV

43%

40%

33

34

Most farmers obtain maize seed by paying cash (not as credit in kind)

Maizetrader

Inputshop

General store

Family/ friend

Own farm

All

Source of seed (%) 49 35 3 7 5 100Seed purchased in cash (%) 64 90 93 86 n/a 76Seed obtained by credit in kind (%) 36 10 7 14 n/a 24

• Among 24% of transactions where maize seed was purchased as in kind credit, 61% were output-tied (only 14% of all transactions)

35

8%

18%

26%

74%

5%

23%28%

72%

5%

29%35%

65%

Cash credit In kind credit Any credit No credit

Tercile 1 Tercile 2 Tercile 3

Share of maize farming HH using trader credit to buy maize seed, by credit type and landholding tercile

Larger farmers are more likely to access trader credit than small farmers

36

Input use and yields vary little by farm size

37

Tercile 1 Tercile 2 Tercile 3Inorganic fertilizer use (% of HH) 84 83 92Inorganic fertilizer application (kg/acre) 86 67 67Maize yield (kg/acre) 1286 1397 1261Price received without credit (MMK/kg) 215 232 238

Price received with credit (MMK/kg) 220 231 249

Likelihood of returning a profit differs little by farm size

50 58 56

2826 28

21 16 15

0%

20%

40%

60%

80%

100%

Tercile 1 Tercile 2 Tercile 3

Profit Break even Loss

Average share of respondents reporting making profit, breaking even, or making loss on maize crops grown during the past 10 years 38

Conclusions• Shan unusual for Myanmar in having high levels of access to farm land• Complementary mix of commercial and subsistence forms of farming• Rapid agricultural mechanization, similar to elsewhere in country, driven

more by convenience and availability than by rising labor costs• Agricultural modernization driven by active private sector, access to

input and output markets, and receptive farmers • No evidence for negative social consequences of maize boom claimed

by Woods• No maize contract farming and no exploitative credit relations with

traders

39

Conclusions

• RNFE and agriculture closely interlinked through labor markets and flows of investment within households

• Off-farm work and business highly gender differentiated in roles and incomes

• Migration increasingly important, links to domestic urban growth• Most migration brief, circular, individuals return to agriculture and

rural labor force – limited impact on rural wages so far.• Remittances significant for receiving HH, but migrant work precarious• Little use of remittances or credit for productive investments apart

from agriculture - Most remittances used for everyday necessities40

Implications for programming• South Shan is highly promising in terms of potential for inclusive

agriculture driven growth. • Look for investments that can leverage additional value from existing

crops (e.g. better varieties, improvements in cold chain, packing and handling for fruits and vegetables), geographical indications, branding, organic.

• Explore introduction of complementary technologies (e.g. greenhouses, small-scale irrigation) and modes of development (e.g. agro-tourism).

• Understand rationale for ways in which households use formal and informal credit, remittances, and farm and non-farm incomes to design and deliver effective financial services.

• Look for ways to reduce the risks and maximize the benefits of migration – language and skills training, loans, awareness of rights

41