The role of producer organisations : the economic impact of membership on smallholder tea farmers in Myanmar : a thesis presented in partial fulfilment of the requirements for the degree of Master of Agribusiness at Massey University, School of Agriculture and Environment, Palmerston North, New Zealand
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2024
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Massey University
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Myanmar, despite its ideal climate conditions for tea cultivation and its being one of the major tea producers, smallholder tea farmers in the country face numerous challenges, including limited access to value-addition techniques, market information, affordable credit, and adequate infrastructure. Numerous studies suggest that producer organisations can address these issues by providing technical training, facilitating market access, and enabling collective bargaining, among other benefits. However, there is a significant research gap in understanding the economic impact of these organisations on Myanmar's tea industry. This study addresses this gap by exploring how producer organisations influence farmers' decisions to join and how membership subsequently affects their profitability. The study adopts a quantitative research approach using survey data collection methods. Before the survey, pre-interviews were conducted to gather insights and develop a comprehensive and relevant survey questionnaire. A survey was conducted with 400 smallholder tea farmers, comprising 239 members and 161 non-members of producer organisations. Econometric techniques, including probit regression and propensity score matching (PSM), were used to analyse the data. The probit regression model identified significant factors influencing the decision to join producer organisations, such as certification, access to market information, extension services, and education level. Specifically, certification increased the likelihood of joining by 89%, access to market information by 24%, extension services by 43% and education by 5.33%. In addition, the impact of membership on profit per acre was assessed using PSM, which revealed that membership significantly enhances profitability. The Nearest Neighbour Matching (NNM) and Radius Matching (RM) methods showed that membership results in significant average profit increases of 698,094 MMK and 640,183 MMK per acre, respectively. These results indicate that membership in producer organisations significantly enhances the profitability of smallholder tea farmers. The study suggests that encouraging wider participation in producer organisations is essential for enhancing the economic outcomes of more farmers. Producer organisations should strengthen their efforts, particularly in remote and less accessible areas, to inform farmers of membership benefits. Furthermore, governments and NGOs should actively support the development of producer organisations. Strengthening producer organisations' roles in facilitating certification, improving market linkages, and supporting sustainable farming practices will contribute to Myanmar's tea industry's long-term growth and sustainability.
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smallholder farmers, tea, probit regression, propensity scores matching, membership, economic outcomes, certification, Myanmar