Rice farmers are struggling to pay debts and invest in future crops as Burma’s military government sets artificially low paddy prices, say farmers and traders in Pegu Division.
According to a female farmer in Pegu, the government recently set the price for one hundred baskets of unhusked rice at 250,000 kyat. A trader in Pegu confirmed this price, and said that it is down slightly from 300,000 kyat, the price set by the government after last year’s rainy season.
One hundred baskets of paddy in Mon State currently fetches 500,000 kyat, a trader from Mudon Township told IMNA. This price is down from 600,000 kyat prior to harvest, which began in October. The small post-harvest drop in prices is due to basic supply and demand, explained the trader, who said simply, “the price of rice always goes down after a new harvest.”
The drastic difference between paddy prices in Mon State and Pegu Division, which share a border, is not, however, explained by economics. It is instead explained by intervention into the market by the State Peace and Development Council, Burma’s military government.
Sale of paddy by farmers and traders in Pegu is heavily restricted by the SPDC. Paddy can only be sold within Pegu and to government purchasers; sale to places like nearby Rangoon Division and Mon State is prohibited, although some do manage to trade on the market, a male farmer from Pegu told IMNA.
Paddy prices and sales are controlled in Pegu every year, another trader in the area told IMNA. Every year, the trader added, paddy in Pegu is valued 200,000 to 250,000 kyat less than Mon State, where paddy can be sold to any trader at any price.
This year’s price is lower than the same time last year, and lower still than last year’s pre-harvest price of 400,000 to 500,000 kyat. It is not clear exactly why the government has set a lower price, although the male farmer from Pegu surmised that it is related to Cyclone Nargis.
Cyclone Nargis, which hit Burma’s Irrawaddy Delta region in May, destroyed at least 20% of the country’s rice paddy land. The SPDC is purchasing more than the usual amount of rice from Pegu, the farmer said, although he was not sure by how much.
Whatever the reason, the artificially low paddy price is causing serious difficulties for farmers. The government is likely to relax its price controls in a few months, but this offers little solace to farmers who must profit from the harvest immediately.
Many farmers incur debts to reap each harvest. And even those who managed to get through the 2008 rainy season without debt must earn enough from the paddy harvest to pay for investment in the next crop.
“In the harvest time, farmers are facing problems. Most of the farmers after they harvest, they have to plant another crop of vegetables. But the price of paddy is too low to invest in new crops. Farmers planting the last paddy crop spent all their money on fertilizer and labor costs,” said the male farm owner. After the rainy season paddy harvest, most harvest plant another crop, typically beans or groundnut.
Burma, once known as the “rice bowl” of Asia and one of the region’s most promising economies, has struggled for decades under the weight of consistent government mismanagement. The country’s economy plummeted after its new military government, installed via a coup, embarked upon its so-called “Burmese Way to Socialism” in 1962, which combined heavy-handed government economic planning and the nationalization of nearly every sector of the economy.
