The Myanmar Government announces Standard Operation Procedures for contract farming
On 31 January 2020, the Myanmar Ministry of Agriculture, Livestock and Irrigation (MoALI) announced Standard Operating Procedures (SOP) * for contract farming. For private companies, entrepreneurs and organizations, that work with farmers or growers in the chain of agriculture and livestock production processes, it is now mandatory to follow these procedures according to the “Law of Protection of the Farmer Right and Enhancement of their Benefits”, section 29, sub-section (b). *
Aim of the standard operating procedures is to systematically improve cooperation and functioning between farmers, growers and private companies, entrepreneurs and their organizations or associations.
In the SOP, there are 3 different sections included: (1) instructions for farmers (2) instructions for private companies / entrepreneurs / organizations and associations and (3) instructions for relevant departments of the Myanmar government.
In total, there are 9 different instructions for farmers, 11 instructions for private companies/ entrepreneurs/ organizations and associations and 9 instructions for relevant departments of the Myanmar government to follow.
As this SOP is only available in the Myanmar language, a brief summary of these instructions is hereby given.
Instructions for farmers
Farmers who take part in a contract farming system must have evident document of land ownership and are expected to study the terms on the contract in advance and in detail in order to have a good understanding on the procedures. Depending on the contract, farmers have to follow standard good agricultural practices to meet the agreed products quality. Agricultural inputs (seeds, chemical fertilizers or other inputs or support) are to be used only for the agreed land-area, as stated in the specific contract. According to the agreed contract, either the amount of crops equivalent to the value supported, or all of the produced amount of crops, must be sold to the contractor for the guaranteed price. However, surplus crops over the amount set can still be sold freely.
Instructions for private companies, entrepreneurs, organizations and/or associations
Private companies, entrepreneurs, organizations and associations must explain the detailed procedures of business, profit, rules and regulations to the farmers, but also to the relevant governmental organizations and departments before finalizing a contract. Private companies and organizations must also be trained to understand agricultural inputs and expenses for production of farmers. They have to give a guarantee that inputs including items such as seeds and fertilizers, and other agricultural inputs like land preparing, planting, harvesting, etcetera will be paid. For the seeds production business, all the seeds produced must be checked by the relevant department(s) in order to apply for seed certification. Companies are responsible to bear the costs for running the tests needed for certification. Again according to the contract, either the amount of crops or seeds, equivalent to the value supported, or all the produced amount of crops or seeds must be bought at the agreed (guaranteed) price.
Both parties must sign an agreement in front of the responsible person(s) from relevant departments of the Myanmar government. As it is new regulation, procedures are not all equally clear or transparent, but for this part of the SOP it for instance depends on which states or regions the contract is signed and is not always very clear or concrete, but again as example, in Shan State or Ayeyarwady Division, you have to contact the ‘regional government’. Also any possible corrections, revisions and amendments on the contract should be mutually agreed and signed by all relevant parties.
Instructions for relevant departments of the Myanmar government
The relevant departments of Myanmar government play an important supervisory role to oversee the implementation of State’s legal procedures. When the agricultural producers, companies, private entrepreneurs, organizations or associations in the specific township break the agreed rules, then the relevant township General Administration Department has the responsibility to coordinate and solve the issue according to the agreement terms and conditions.
For the seeds production business, they have to ensure that the standard quality is met and the companies follow the seed law, rules and regulations, guidance, notification and procedures laid down by the government. Furthermore relevant departments must monitor in line with Stakeholder Participatory Monitoring System. In addition, these businesses need to announce their qualification standard, rules and regulations and information of local and export markets.
Note: The SOP is still quite unclear on how most procedures will work exactly in practice, how law enforcement will be organized and (not) add to an abundance of new red tape. Expected is that more specific, detailed or clarifying information on procedures, instructions and guidelines will have to be developed – and required - for farmers, growers, companies, entrepreneurs and their organizations to achieve the aims set for this new law.