Identifying characteristics and drivers of the maize value chain in Shan State, Myanmar : a dissertation presented in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Agribusiness at Massey University, Palmerston North, New Zealand

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As an agrarian country, Myanmar’s economy largely relies on the agriculture sector. Maize is the second most important cereal crop after rice in Myanmar in terms of growing area and export volume and value. Maize is not a staple food crop, but is grown primarily for export and domestic poultry production. Shan State is the most important region for maize in Myanmar, and about 50% of the total maize growing area is in this State. It was expected that the maize-growing areas continue to increase as there were no better alternative crops for maize farmers in Southern Shan State, despite challenges such as the unpredictable dominant export market and price fluctuations. However, there had been little knowledge of why there was a robust growth of maize amid the challenges. A single case study approach was applied to explore the characteristics of the maize value chain and the factors influencing the chain. In this study, the qualitative method was used to learn how and why the maize value chain in Shan State was performing as it did. In this respect, semi-structured interviews were used to explore the answers to those questions. Taunggyi township, a major maize township in Southern Shan State, was selected as the primary research area, whereas other types of actors from other townships throughout the chain were also selected to be interviewed as research participants. For example, exporters from Muse in Northern Shan State exporting maize to China via cross-border trade, key informants from Muse Commodity Exchange Centre, an exporter from Yangon who dealt with overseas exports, and an exporter from Yangon who exports maize to Thailand via cross-border trade were interviewed. Purposive and snowballing sampling methods were applied to select participants. The thematic analysis method was used to analyse the collected data. Despite price fluctuations, maize farmers were willing to continue to grow and increase the area of maize grown because of the certainty of the market for maize and the relative uncertainty of markets for other potential alternative crops. In addition, maize had a relatively low labour demand, easy access to improved varieties of maize and limited access to improved varieties of other alternative crops, easy access to credit, mechanization, and suitability for large-scale production. Therefore, the growth of maize production is likely to continue in the foreseeable future. The price farmers received for maize fluctuated significantly, yet remained relatively high compared to other crops, and remained certain. The Shan State maize market relied strongly on an unstable dominant export market which accounted for close to 90% of Myanmar maize exported to the Chinese market. In the 2018-2019 season (at the time of data collection) the border trade with China stalled in large part due to policies of the Chinese Government, and there was an expectation that market access would resume. During the period when access to the dominant export market was stopped, the demand for maize was stabilised through domestic maize buyers buffering the stock of maize and because of the emergence of an alternative export market. This provided maize farmers with the certainty of market. Furthermore, an international company, which has a significant stake in the maize value chain in Myanmar influenced the access to the alternative export market. Informal relationships were dominant between the actors throughout the maize value chain in Shan State. Most transactions between the actors were informal and based on reciprocity. Local wholesalers provided credit to farmers who sold their maize to the wholesaler. Most large-scale farmers stored maize at their wholesalers’ storage houses. Both informal and formal agreements existed between wholesalers and feed factories and/or exporters. However, if there was a risk associated with a formal contract, particularly due to price fluctuation, wholesalers helped each other to mitigate the risk in an informal way based on their social relationships. Even the transactions between foreign buyers and the exporters from cross-border trade were made mainly through informal agreements. Only formal agreements were used for the transactions between foreign buyers and the exporters from the emerging and relatively small overseas trade. Informal relationships reduced risks, transaction costs, and the amount of investment capital in trading maize. There was a tremendous growth of maize in Myanmar over a couple of decades despite a lack of Government support. There was no Government policy specific to the maize sector, whereas there were general policies or rules and regulations for the whole agriculture sector, which probably had impacts on the maize industry. This was probably because maize is not a staple food crop in Myanmar like rice. Moreover, there were no formal quality standards for maize. However, despite some issues, transactions of maize were carried out quite smoothly because the domestic and international cross-border markets, which were major markets for Myanmar maize, did not necessarily require it, except for overseas export markets. This study identified some important potential areas to be improved by policy interventions. First, formal quality standards should be set for the stable market access of the maize sector. Second, the formal banking sector should practice flexible repayment schedules for better convenience for the farmers. Moreover, the formal banking sector should focus on small-scale farmers as they had more difficult access to informal credit than large-scale farmers. Third, the Myanmar Government should take account of a policy, which facilitates the improvement of infrastructures such as roads, drying machines, and storage facilities for reducing transaction costs and improving the quality of maize. In this way, the Government policy will support the sustainable development of the maize sector.
Corn, Economic aspects, Corn industry, Burma, Shan State