Rice is grown mainly in Ayeyarwaddy Region in Myanmar. Pathein District, Ayeyarwady Region is one of the rice bowls which grows different rice varieties with a different type of marketing along the whole value chain with relative price and quality of products. Therefore, this research aims to conduct the rice value chain structure and the situation of production and marketing process and the constraints through the whole rice value chain of different stakeholders in Pathein District. Simple random sampling was used to collect a total of 36 sample respondents from three villages with a structured questionnaire. In the rice value chain structure, there are five major stakeholders who include farmers, paddy collectors, paddy wholesalers, millers and rice retailers along the rice value chain. In this District, Manawthukha, Pawsanyin, Theehtetyin, Shwewartun and Sinthwelatt were mostly grown by the sample farmers. About half of the sample farmers were willing to attend the training for proper use of agro-chemicals and purity seed production. The Department of Agriculture was the main source for extension service in the study area. The majority of farmers tackled different production and marketing constraints such as low prices of products, lack of market information, getting a loan with inappropriate interest and pest problems. Among the major varieties grown by farmers, Pawsan variety was the main potential rice variety in terms of the average price and marketed amount when compared to the others by different stakeholders. Manawthukha rice variety was the most marketed variety which received the lowest average price by the collectors and paddy wholesalers. Yezin Lonethwe variety had been marketed by more than half of sample paddy wholesalers who marketed the rice varieties. For retailing, Ngakyaut variety was marketed by half of the sample retailers. The average cost for processing and marketing of the millers was higher than the other sample stakeholders. The majority of the sample paddy wholesalers and millers didn’t have much experience in primary collectors. Most of the sample stakeholders attempted to solve a major problem as price fluctuation. In a nutshell, farmers must enhance their awareness of the advantages of using certified seeds and market demanding varieties so that they could get higher income and economic profit by producing high-quality rice in the study area. Continuously, it is still needed to improve the quality and efficiency in rice mills, promote better organization between rice millers/traders and farm machinery services and input credit, to establish value chain development funds to promote farmer- enterprises and partnerships.
Keywords: rice value chain structure, production and marketing, activities and condition of different stakeholders
Rice is a major commodity for the economy of Myanmar and the largest share of production comes from the Delta Region. Lowland rain fed rice is primarily grown in the Ayeyarwady delta region which is creating a more sustainable business environment. According to the news (LIFT, 2017), the situation of the rice value chain in Pathein District was increasingly competitive for higher quality and better yield and post-harvest management. The World Bank Report of 2019 showed that paddy yields slightly rose between 2013-2014 and 2017-2018, although the paddy yields have improved modestly in Myanmar. Major varieties of monsoon paddy were Manawthukha, Sinn Thu Kha, Ayeyarmin, Meddone, Pawsanyin, Shwewartun, JnannKar, Ngasein and Sinthwelatt. Among these major rice varieties, Manawthukha and Sinn Thu Kha grew more than 0.8 million ha in Myanmar (MOALI, 2019).
Besides, the operational efficiency and quality management in the rice value chain are inadequate for many value chain functions (World Bank, 2019). The constraints in the value chain include low yields and low quality, high transportation costs, the absence of a regional center for seed testing and certification, owing to unfit drying and other factors, very small and antiquated mills, and the absence of contract connection between different stakeholders as millers, traders and farmers in the whole rice value chain. Factors contributing to low paddy yield in Myanmar include the comparatively less use of the improved and better quality seed, ineffective fertilizer use, and low access to irrigation and advisory services. Moreover, one positive development of the whole rice value chain is the significant increase in labor productivity and mechanization at the production level. In the milling segment, the vast bulk of rice mills have insufficient storage at the factory when most of the farmers supply wet paddy at the same time with the unstable price. In the meantime, competitive trucking services locally are not widely available which constrain the efficiency and quality of exported rice. Therefore, in the study of the rice value chain analysis, the paper discusses the connection of different stakeholders in the rice value chain of Pathein District, the production and marketing process by each stakeholder and constraints along the whole value chain in the study areas.
The specific objectives are as follows:
- To develop the mapping of rice value chain in Pathein District, Ayeyarwaddy Region
- To identify the production and marketing processes and constraints along the rice value chain of all the stakeholders in the study area
In this study, three villages in Pathein District were included. For the sampling, the respondents such as farmers, paddy collectors, paddy wholesalers, millers, rice wholesalers, retailers and exporters were designated as the main stakeholders from the Pathein District. Primary data were collected for determining the rice value chain in the Nga Putaw, Pathein and Kyaunggon Townships in the Ayeyarwaddy Region. A stratified random sampling method was used for primary data collection to conduct the total sample of 36 respondents. To fulfill the specific objectives, a field survey of primary data collection was undertaken in October 2019.
Data collection and data analysis
Totally 36 sample respondents were included as 18 farmers, 3 primary collectors, 3 paddy wholesalers, 10 millers, 2 retailers for primary data collection by personal interview (Table 1). Well-structured questionnaires for the rice value chain were prepared to get the information related to socio-demographic characteristics, agricultural support, access to finance, numbers and amount of different varieties produced and marketed by different stakeholders, paddy yields received by farmers, prices of different varieties received by other stakeholders, costs of production, processing and marketing, constraints faced by all along the rice value chain. Moreover, the data were analyzed through Microsoft Excel to generate the average values.
RESULTS AND DISCUSSION
Rice Value Chain Mapping in Pathein District
The overview of different steps of rice value chain in the study area is presented in Figure 1. There were five stages of rice value chin with different major stakeholders who included farmers, paddy collectors, paddy wholesalers, rice millers and retailers.
In the production stage, rice is normally cultivated by farmers. Generally, they grow rice in two seasons as monsoon rice and summer rice in the study area by the availability of irrigating water. The activities of the farmers include land preparation for nursery and field, sowing the seeds, transplanting the plants, weeding, fertilizer application, pesticide application, harvesting, threshing, drying, winnowing, storage and selling the surplus. Input suppliers and service providers commonly sell the agricultural inputs and services such as seeds, agrochemicals, and machinery, credit and extension services. In the second step, farmers sell the surplus of paddy to the paddy collectors in the village at farm gate price. Some amount of paddy is milled in huller mills for family consumption. The village paddy collector is a central feature of the rice marketing system. The primary collectors mostly live in the villages and some large farmers perform also as primary collectors. The stakeholder in the third step of the rice value chain is paddy wholesalers. Some paddy wholesalers are doing two roles such as paddy wholesalers and millers at the same time. Paddy wholesalers buy the required amount of paddy for their mills and sell the paddy to other rice mills. In the fourth stage, the rice millers undertake three activities which are buying, processing and selling. It can be categorized into two types of millers: small rice mill owners and commercial large rice mill owners. The millers usually buy the required amount of paddy for their mills from the paddy collectors or paddy wholesalers. The millers categorize the quality of milled rice according to their market demand. Millers sell mostly the milled rice to retailers and regional wholesalers. In the fifth chain, retailers in local and regional areas buy the rice from the local millers and regional wholesalers and then they distribute normally rice to local consumers.
Stakeholders along the rice value chain in Pathein district
- Socio-demographic characteristics
The demographic characteristics of selected farmer household heads in the study area are presented in Table 2. The average age of the selected farmer household heads was 58 years old and all were male. The average schooling year of the household head was 7 years ranging from 4 to 15 years; it showed that most of the respondent farmers had secondary education level. The average farming experience of the household head was 32 years ranging from 5 years to 50 years which is the important factor for decision making of input use and yield improvement of the rice production (Table 2). All of the sample farmers worked on-farm jobs and mainly grew monsoon rice annually. On average, the majority of farmers owned 9.31 ha with a range of 4.05 ha and 40.49 ha. In this region, there were no farmers who rent land from other farmers.
- Rice varieties grown by sample farmers
Regarding the rice varieties grown by the selected farmers, Manawthukha, Pawsanyin, Theehtetyin, Sinthwelatt and Shwewartun were prioritized among the various types of rice varieties in the study areas. According to Figure 2, about 68.75% of the sample farmers grew Manawthukha variety and half of the farmers (50.00%) selected Pawsanyin. The third most grown varieties in the study area were Theehtetyin (38.88%) and the fourth one found Sinthwelatt variety (33.33%). About 16.07% of sample farmers selected Shwewartun which was found the least cultivated variety in the study area. In addition, the average production cost of monsoon rice in the study area was US$ 322/ha.
Then, the maximum production cost per hectare of monsoon rice was US$ 402/ha and the minimum production cost was US$ 321/ha in the surveyed townships. Among different rice varieties in monsoon season, about 38.88% of sample farmers grew two types of rice varieties and around 16.66% of sample farmers cultivated three types of rice varieties per season.
- Yield and price of rice per kg for each variety
Little difference was found between the average yield and price reported by the sample farmer in the study areas. The average yield and price of rice varieties in the study area was described in (Table 3). Among different types of rice varieties, the sample farmers in that area mentioned that the average rice yield of Sinthwelatt yield around 4,021 kg/ha and Theehtetyin produced 3,350 kg/ha. Meanwhile, the average yield of Manawthukha, Ayeyarwaddy Pawsan were generally the same amount of production approximately 3,240 kg/ha. The average yield of Pawsanyin and Pawsangyi was 3,007 kg/ha and 3,093 kg/ha, respectively. The minority of sample farmers grew glutinous rice with an average yield (2,577 kg/ha).
According to the result of average price of major grown rice varieties, the highest average price of the Pawsangyi and Ayeyarwaddy Pawsan varieties was US$ 0.38/kg and US$ 0.34/kg. At the same time, the lowest average price was found in Manawthukha, Sinthwelatt and Shwewartun with US$ 0.19/kg. The average price of Theehtetyin was about US$ 0.20/kg. The average price of Yezin Lonethwe variety was US$ 0.32/kg. Therefore, it can be concluded that the farmers who grow three or four type of rice varieties in that area benefited with different farm gate price for each variety.
For grading and quality control system of rice, about 61% of the farmers mentioned using the traditional method for grading of paddy before selling. They use the traditional method of seeing and touching the paddy for differentiating good or bad quality, rice kernel composition and moisture level.
- Access to agricultural support and finance
Farmers receive many kinds of agricultural support from the Department of Agriculture (DOA), input suppliers and private companies (pesticides companies, fertilizer companies), NGOs/INGOs, cooperatives and others. About 72% of the sample farmers responded that they received agricultural training. Among the different types of agricultural support from the DOA, around 50% of the sample farmers received purity and high yield rice varieties from the DOA and one-third of the sample farmers received extension education services that included fertilizers and pesticide services. The minority of the sample farmers in the study area obtained research demonstration (16.66%) and price information (5.55%) in this study area. From the support of private companies, about 38% of the sample farmers received about chemical and fertilizer application management training. About 20% of the sample farmers obtained training for pesticides and chemical management and agricultural price and marketing services from private companies. From the support of NGOs, the minority of the sample farmers received good quality and high yield varieties, pesticides and fertilizer support in the study area. Most of the sample farmers in the study area didn’t get to experience contract farming. In this region, about 83% of the sample farmers were willing to access the combined harvester and modernized mill among other agro-based processing facilities in that area. Regarding accessing the rental services for the agricultural machinery, the majority of the sample farmers responded that the rental services accessed the services for land preparation (33%) and harvesting (72%).
Regarding farmers’ needs in training on agricultural technologies, pest and disease management training was the highest requirement to control the outbreaks of diseases and pests in that area especially for rice crop production that mentioned by the farmers (83.33%) in the study area. About 72% of the sample farmers responded that they would like to learn and apply the good agricultural practices for rice production in that area. About half of the sample farmers answered the training on proper use of agro-chemicals and purify and high yield rice variety production. In addition, most of sample farmers in the study area rent the seasonal loans only from Myanmar Agricultural Development Bank (MADB) with an interest rate of 0.0067. The average amount of loan taken by the sample farmers was US$ 241/ha and received loan two sowing times per year from MADB. Therefore, the result mentioned that most of farmers have chance to take the investment from only one source in the study area.
- Constraints of farmers in rice production
Constraints to rice production in the study are tightly linked to the awareness and management practices which impact to loss due to different issues. The majority of farmers reported that lack of market information (61%) and low crop price (67%) were the highest constraints among various constraints in rice production in the study area. One third of sample farmers responded that they had some struggle like getting loans with inappropriate interest and pest and disease control method in crop production. Half of the sample farmers responded that they faced irrigation problems. Then, the minority of sample farmers (22%) faced soil and labor problems.
- Socio-demographic characteristics
The demographic characteristics of sample paddy collectors in the study area are described in Table 4. In total, all of sample paddy collectors in the study area were male and the average value of sample paddy collectors’ age was 53 years with the range of a minimum of 46 years to a maximum of 63 years. The average schooling year of the sample paddy collectors was 8 years (high school) with a range of 4 years (primary school) and 15 years (university level). On the other hand, the average farming experience of the total sample paddy collectors in the study area was 21.66 years, ranging from a minimum of 10 to a maximum of 30 years.
- Marketed rice varieties and cost by sample collectors
According to the information in the study, the two major marketed rice varieties were Pawsan and Manawthukha variety. The maximum average marketed rice variety in the study area was Manawthukha (208,600 kg per season) and the second one was Pawsan (112,526 kg per season). The average price of the Pawsan (US$ 0.35/kg) was quite higher than the average price of Manawthukha (US$ 0.15/kg) in the study area because Pawsan rice variety is one of the existing export marketed rice varieties in Myanmar. Therefore, the average farm gate price of Pawsan rice variety by the sample collectors received generally high price than other type of rice varieties in the study area. According to the findings, all sample collectors incurred US$ 0.01/kg as the marketing cost based on the result of the study. Half of the sample collectors tested by using the traditional method of seeing and touching for grading on the appearance such as good or bad quality, rice kernel composition, moisture level in the study area.
- Constraints and risks of collectors in rice marketing
Among the different constraints faced by the sample collectors, half of the sample collectors responded that they did not receive loans with an appropriate interest rate and unstable price and supply of paddy and rice which cannot adjust the relevance price and quantity of products per season for collectors. In the result, price fluctuation was found as the major issue for different stakeholders.
- Socio-demographic characteristics
In the study area, demographic characteristics of paddy wholesalers are presented in Table 5. In total, the gender ratio of sample millers in the study area was 44 male: 66 female and the average value of sample paddy wholesalers’ age was 50 years with the range of a minimum of 42 years to a maximum of 66 years. The average schooling year of the sample paddy wholesalers was 10.66 years (high school) with a range of 8 years (high school) and 15 years (university level). Based on the results, the average farming experience of the total sample paddy wholesalers in the study area was 19 years, ranging from a minimum of 7 to a maximum of 30 years.
- Marketed rice varieties and costs by sample paddy wholesalers
By studying the marketed rice varieties and cost by sample paddy wholesalers, there were four marketed rice varieties by the sample paddy wholesalers in that area. According to the results, Pawsan and Manawthukha varieties were marketed by all of the sample paddy wholesalers. In addition, Yezin Lonethwe (66.66%) and Glutinous rice (33%) were the second highest marketed rice varieties in the study area. The highest average amount of Manawthukha variety was 85,526 kg per season with the range of 31,290 kg and 187,740 kg among other marketed varieties. The average marketed amount of Pawsan and Yezin Lonethwe varieties was about 62,580 kg per season. The glutinous rice was the least marketed variety accounting for 625 kg per season. The average price of Pawsan was normally the highest price with US$ 0.62 per kg. The average marketing cost mentioned by sample wholesalers was about US$0.01 per kg which included transportation, labor and material costs. It was found that the majority of the sample paddy wholesalers used the traditional method for grading by seeing and touching the moisture and purity level.
- Constraints of wholesalers in rice marketing
According to the result, price fluctuation in the marketing of rice was the crucial problem identified by the majority of sample paddy wholesalers in the study area.
- Socio-demographic characteristics of sample millers
In the study area, demographic characteristics of sample millers are presented in Table 6. In total, the gender ratio of sample millers in the study area was 90 male: 10 female and the average value of sample millers’ age was 53 years with the range of a minimum of 36 years to a maximum of 69 years. The average schooling year of the sample millers was 8.8 years (high school) with a range of 4 years (primary level) and 15 years (university level). According to the results, the average farming experience of the total sample millers in the study area was 26.3 years, ranging from a minimum of 11 to a maximum of 40 years.
- Marketed Rice Varieties and Cost by Sample Millers
Table 7 depicts the three main marketed paddy varieties by the sample millers in the study area. In that area, all of sample millers sold Pawsan with the amount of 534,683 kg per season while 80% sold Manawthukha variety with the average amount of 127,367 kg per season. The minority of sample respondents (10%) sold Zeeyar with the average marketed amount of 136,040 kg per season in the study area.
The amount of milled rice per season for specific of sample millers is described in Table 8. According to the responses, Pawsan was the highest marketed milled rice and the amount was 271,841 kg per season with the range of a minimum of 1,020 kg to a maximum of 782,230 kg per season. In addition, the average marketed amount of Manawthukha variety was 69,074 kg per season which was found the second one of the marketed milled rice varieties in the study area. Meanwhile, Zeeyar variety was the third one of marketed milled rice variety with the average amount of 68,020 kg per season.
According to the result of the survey, the average price of the Pawsan variety and Zeeyar sold by the sample millers was the same of US$ 0.21/kg to cover the maketing cost. Then, Manawthukha variety was sold at the average price of US$ 0.11/kg which was lower than that of Pawsan variety and Zeeyar. The average marketing cost of sample millers responded was US$ 0.01/kg with the range of a minimum US$ 0.005/kg to a maximum US$ 0.02/kg which included milling cost, transportation cost, labor cost and material costs. Half of the sample millers used the machine by tube test by measuring the moisture content of the paddy and winnowing for the purity of paddy with tube test.
- Constraints of millers in rice marketing
In the study area, the majority of sample millers reported that lack of market information (70%) and unstable supply (60%) were the highest constraints in milling process. The minority of sample millers responded that they had some struggle in getting loans with inappropriate interest rate and price fluctuation for expanding their business. In milling process, most of sample millers faced the poor quality of rice by using the outdated rice milling machines in the study area. About 10% of the sample millers described about the poor networking between different stakeholders of selling and buying paddy and rice in the study area.
- Socio-demographic characteristics
The demographic characteristics of sample retailers in the study area are described in Table 9. In total, all of the sample retailers in the study area were female and the average value of sample retailers’ age was 40 years with the range of a minimum of 25 years to a maximum of 55 years. The average schooling year of the sample retailers was 8.85 years (high school) with a range of 7 years (high school) and 10 years (high school). According to the results, the average farming experience of the total sample retailers in the study area was 4.5 years, ranging from a minimum of 2 to a maximum of 7 years.
- Marketed rice varieties and cost by sample paddy retailers
Table 10 represents the two main marketed rice varieties by the sample retailers in the study area. In that area, Pawsan and Ngakyaut varieties were marketed by all sample paddy retailers. According to the result, the average amount of Pawsan variety sold was about 312 kg per season with the range of a minimum of 292 kg to a maximum of 333 kg per season. The average amount of Ngakyaut sold by the sample retailers was about 292 kg per season in the study area.
According to the result, the average price of the Pawsan variety described by the sample retailers was about US$ 0.99/kg while the average price of Ngakyaut sold was US$ 0.37/kg in the study area. The average marketing cost of sample retailers responded was US$ 0.01/kg which included transportation cost, labor cost and material costs. Most of the sample retailers did not test by tube test for the purity of rice which described that the sample retailers decided with the price and types of rice varieties based on the consumer preference in the study area.
- Constraints of retailers in rice marketing
According to the result, price fluctuation and unstable demand by consumers was the crucial problem for the sample retailers in the study area.
CONCLUSION AND RECOMMENDATION
This study was an attempt to determine the rice value chain structure, the situation of production and marketing process and the constraints through the whole rice value chain of different stakeholders in Pathein District. The result findings were analyzed based on the average values. The result findings of the rice value chain structure in Pathein District reveals that the rice value chain includes many stakeholders such as farmers, paddy collectors, paddy wholesalers, millers and rice retailers. According to the surveyed results, Manawthukha, Pawsanyin, Theehtetyin, Shwewartun and Sinthwelatt were mostly grown by the farmers. The average prices of glutinous rice, Pawsangyi and Ayeyarwaddy Pawsan varieties were found to have the highest prices among all varieties in the study area. The average yield of Yezin Lonethwe, Sinthwelatt, Theehtetyin were higher than that of the other varieties grown by the farmers in that area. The average cost of monsoon rice responded by the sample farmers was about US$ 322/ha. As the agricultural support to farmers, the Department of Agriculture was the main source of agricultural extension services in the study area while the private companies supported training of use of pesticides and fertilizers. From the result of the willingness of farmers in the study area, about half of the sample farmers would like to join the training for proper use of agro-chemicals and purity of seed production. For the credit access in the study area, Myanmar Agricultural Development Bank was the main source of credit with a low-interest rate to the farmers. The constraints faced by the farmers were found to be low prices of products, lack of market information, getting a loan with inappropriate interest and pest problem. Among the constraints, pest problem was the major problem encountered by the farmers in the study area. For all the stakeholders, the average price and amount of Pawsan variety marketed by the sample farmers was the highest in the study area. Then, Pawsan and Manawthukha were the mostly marketed by collectors and paddy wholesalers. Yezin Lonethwe variety was found to have the highest marketed amount by the sample paddy wholesalers. In addition, the average prices of glutinous rice and Kyarpyan were the second highest followed by Pawsan variety, especially for wholesalers. Meanwhile, Manawthukha variety was the second most marketed variety in the study area which had the lowest average price than other varieties. When compared with above-mentioned marketed rice varieties, Ngakyaut variety was marketed by the sample retailers. For the average cost for processing and marketing, sample millers expended higher cost of marketing than other sample stakeholders. According to the results, the majority of the paddy wholesalers and millers practiced the grading by tube test (modern testing), whereas the primary collectors didn’t have much experience in the grading with modern test in the study area. Price fluctuation was found as a major issue for the sample stakeholders. Moreover, lack of market information, poor communication and electricity shortage were the mostly faced constraints by the sample millers in the study area. For sample paddy collectors, the high-interest rate for their debit was the main constraint they faced in the study area.
Based on the results of the study, farmers must enhance their awareness of the advantages of using certified seeds and varieties demanded by the market so that they could receive higher income and economic profit by producing high-quality rice in the study area. Therefore, it is needed to develop the quality and efficiency in rice mills, enhance better organization between different stakeholders related to farm machinery services and input credit along the supply chain, and to establish value chain development funds to promote farmer- enterprises and partnerships.
LIFT, 2017. Livelihoods and Food security fund: Paving the way for growth of the rice sector in the lower delta event, May 2017, https://www.lift-fund.org/en/event/paving-way-growth-rice-sector-lower-delta
MOALI, 2019. Official Report from Department of Planning, Ministry of Agriculture, Livestock and Irrigation (MOALI), Nay Pyi taw, Myanmar.
World Bank. 2019. Myanmar Rice and Pulses: Farm Production Economics and Value Chain Dynamics. World Bank, Washington, DC. © World Bank. https://openknowledge.worldbank.org/handle/10986/33283 License: CC BY 3.0 IGO.