Corn contract farming system to be implemented in Ayeyarwady Region

By Admin 05 Jul 2023

DMG Newsroom
5 July 2023, Yangon

The Myanmar Corn Industrial Association and United Amara Bank (UAB) have cooperated to partner with local corn farmers in Zalun, Myanaung, Ingapu, Nyaungdon, Pantanaw and Maubin townships in Ayeyarwady Region this year.

Under a memorandum of understanding signed between UAB and the Myanmar Corn Industrial Association, a loan of 750,000 kyats per acre will be provided for corn growers at an interest rate of 1 percent under the contract farming system, according to the Myanmar Corn Industrial Association.

“The loan is intended for local farmers to buy seeds and fertiliser. We are collaborating with UAB bank. Yoma Bank also has an interest, and we have had an initial discussion,” said general secretary Dr. Phyo Ko Ko Naing of the association.

The memorandum of understanding came after a trial project in Zalun, Myanaung and Ingapu townships last year proved successful.

“We plan to introduce a Myanmar Payment Union card system in providing loans in the future to make sure farmers do not use the loans for other purposes. Farmers will be able to buy fertiliser and seeds at the agricultural shop with the MPU card. They will also be able to withdraw money with that card and pay for labour costs,” said U Thant Sin Tun, chairman of the Ayeyarwady Region Corn Industrial Association.

Under the contract farming system, partner businesses provide agricultural inputs including seeds and technology, and buy the output at prices agreed by both sides.

Contract farming is common in Ayeyarwady Region, but still relatively unusual in other parts of the country.

Said farmer Ko Min Khine from Salay Taung Village in Maubin Township: “It costs around 1 million kyats to grow an acre of corn. As I can get a bank loan of around 750,000 kyats [per acre] at a low interest rate, it is OK for me.”

Farmers in Myanmar face various challenges including high prices for agricultural inputs, lack of capital, and technology.