Arakan farmers yet to repay agricultural loans totalling K78 billion

By Admin 20 Feb 2023

DMG Newsroom
20 February 2023, Sittwe

Farmers in Arakan State have yet to repay more than K78 billion in agricultural loans, according to the Arakan State branch of the Myanmar Agricultural Development Bank.

Some of the loans date back to 2016, and the amount accounts for 30 percent of the total loans disbursed to farmers, according to a bank official.

The Myanmar Agricultural Development Bank provides agricultural loans to farmers in all 17 Arakan State townships, with unpaid debts most prevalent in Ponnagyun, Kyauktaw, Mrauk-U and Rathedaung townships.

“We want to lend money to farmers next year. We have been holding talks with farmers and persuading them to pay off their loans so that they can take out new loans,” said bank manager U Ba Kyaw Tin.

Because new agricultural loans are only offered to those who have paid back their last year’s loans, the number of loan applicants has declined while interest has accrued.

Many farmers are unable to pay back their loans as they have been hit hard by the Covid-19 pandemic and political instability, said U Ba Kyaw Tin.

“Our paddy plants were damaged after the fields were inundated by saltwater after the storm,” said U San Hla Aung, a farmer from Alel Kyun Village in Ponnagyun Township. “When we were forced from our homes by the fighting, we left behind our cattle in our village. The cattle ate up paddy. So, we had no paddy at all this year. We have to buy from others, even for household consumption. So, no one in our village could pay back their loan this year.”

Farmers have also been hard-hit by soaring fertiliser prices. 

“We could not plough or harvest in time because of the fighting. We can’t pay back loans as the output has declined. Fertiliser prices have also increased. And there is also a labour shortage. So, farmers can’t pay back loans,” said farmer U Hla Sein Aung from Kyauk Sik Village in Pauktaw Township.

The bank provides K150,000 per acre for up to 10 acres per farmer. The interest rate is K5 for every K100,000 borrowed per month, according to farmers.