Friday, May 29, 2009

Burma’s military rulers – holed up in their remote new capital, Naypitaw – are obsessed with ideas of self-reliance

TO BE NOTED: From the FT:

Crises test resilience of Burma’s farmers

By Amy Kazmin in Pay Chaung Gyi, Burma

Published: May 29 2009 18:14 | Last updated: May 29 2009 18:14

For the villagers of Pay Chaung Gyi – deep in Burma’s rice-growing Irrawaddy Delta – the past year has been one of catastrophes of biblical proportions.

First, Cyclone Nargis swept away their homes, rice stocks, water pots and animals last May, leaving them with little to their names – except outstanding debts.

Within weeks, villagers managed to plant a monsoon rice crop, with seeds donated or salvaged after the storm, and fresh loans taken from local rice millers, fertiliser dealers, and other rural moneylenders. But at the November harvest, their rice yields were much lower than normal, due to late planting, soil salinity from the cyclonic tidal surge, and poor seed quality.

Then they planted summer paddy, hoping a bountiful harvest would restore their financial stability. But their fields – like many across the cyclone delta – were affected by a devastating infestation of brown plant hopper, a pest that destroyed their crops.

Burma map

All the while, interest on their outstanding loans has accumulated at about 10 per cent a month. Unable to fulfil skyrocketing obligations, villagers are now losing some of their precious few remaining assets – including livestock and land – to creditors, pushing them ever closer to the edge.

“I can’t even think about why all this is happening to us,” said 53-year-old Sein Than, who lost four of his eight acres this month. “I feel I have no help.”

That sense of isolation is not surprising. Burma’s military rulers – holed up in their remote new capital, Naypitaw – are obsessed with ideas of self-reliance, not only for themselves, but also for their 52m mostly impoverished people. While the ruling junta profits from selling Burma’s natural gas and other valuable resources to Asian neighbours, they have spent little of this cash on improving the health and welfare of their struggling people, who have been left to fend almost entirely for themselves.

Even after Cyclone Nargis struck the Irrawaddy Delta last year – killing about 140,000 people and displacing some 500,000, the generals initially refused to grant international aid agencies access to the afflicted areas, and instead publicly touted the ability of Burma’s resilient peasants to cope with hardships. An international outcry finally prised the area open.

Supporters wait on Suu Kyi verdict

Burmese democracy advocates and their international supporters are awaiting the imminent verdict in the trial of Aung San Suu Kyi, the country’s Nobel Prize-winning democracy advocate.

Ms Suu Kyi was charged this month with violating the terms of her house arrest, after a US citizen swam across Lake Inya to her home, apparently to warn her of his dreams that she would soon be assassinated.

Ms Suu Kyi, who faces up to five years in prison for his visit, testified in court that he was unwelcome, but she permitted him to stay for a while, after he pleaded that he was too fatigued to swim away immediately.

The trial has outraged Ms Suu Kyi’s supporters who say the junta itself – rather than their prisoner – should be accountable for the security breach.

Than Htun Oo, a 35-year-old with eight acres, owed about $100 (€70, £62) to moneylenders before the cyclone. Since then, his two paddy crops have been abysmal. He recently surrendered one of his three buffalo to cancel some of his debt, which had soared to about $220. Yet even then, he still owes about $70, and needs fresh loans for the next planting season now under way. “I can only hope this coming monsoon harvest is better,” he says.

Apart from the cyclone victims, millions of other small farmers are struggling to stay afloat, with mounting obligations to the private moneylenders that flourish in the absence of a strong, state-run rural credit system.

A 50 per cent fall in farm-gate rice prices last November hurt farmers badly. Many families sold their entire crop – without keeping any rice reserves to eat or plant this season. Even then, they could not clear all their debts.

As the next season’s planting starts, experts fear many distressed farmers will try to reduce production costs which could sharply reduce yields and total output.

“The natural resilience of farmers that the government has always relied on is just at the breaking point,” said one expert on Burmese agriculture. “And you can’t have economic growth with an unprofitable farm sector.”

Burma has the natural potential to be an important global rice producer, on a par with Thailand or Vietnam, but today is only a marginal participant on world markets, exporting about half a million tons of low-quality rice each year. However, the US Department of Agriculture this month forecast Burma will harvest “a near-record crop” this year, up 6 per cent from 2008-09.

Although Burma’s total rice production has risen in recent decades, the increase is due mainly to an expansion of cultivated acreage, rather than improved yield.

Given their high capital costs, Burmese farmers cannot afford to invest much in fertiliser or other yield-enhancing inputs. The government’s agricultural bank does provide some low-interest loans to farmers, but only $8 per acre for up to 10 acres. Paddy costs about $80 to $100 per acre to produce.

Even when world rice prices are high, Burmese farmers reap little benefit, as their rice is discounted on world markets, and they receive a far lower percentage of the export price than their Thai or Vietnamese counterparts. “It’s not a healthy farming sector that can absorb many shocks,” the rice expert said.

In a village north of Rangoon, Blu Say, 42, frets that he could soon lose his 10 acres. His harvest last autumn was down by 25 per cent, and with prices also depressed, he could only repay half his $200 debt. Now, he spends his days trapping rats to sell in order to buy food for his family.

He will soon take out fresh loans for the next crop, praying for a good harvest to save him. “I have to face this – there is no choice,” he says.

In the cyclone area – where the military guards manning the numerous checkpoints only sporadically stop foreigners to verify they possess the clearances required to travel in the area, Sein Than is resigned to an uphill struggle to retain his remaining four acres. “If no one comes to help, we farmers need to stand on our own feet as much as we can,” he says. “We can only think of fate. It is up to the mercy of God.”

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