Roundtable Discussions on Financing for the Development of Agricultural Sector and SME Sector in Myanmar (Part -3)

  • By Shin Min and Hmwe Kyu, Photo: Aye Than

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Continued from Yesterday
U Khun Aye Naing: Upper Myanmar Training Institute is situated in Meikhtila; the Lower Myanmar Training Institute is in Bago; Agriculture Technical Training Institute is in Ye Zin of Nay Pyi Taw. If the farmers and the new generation youth would like to pursue studies at these three institutes, we could accept them and provide them training. If they could not enable to attend for long duration training courses, we could provide them with just two weeks short term training course at their own township on subjects what they wanted to learn about. We are providing knowledge on agriculture mechanization subject. This is an initiative launched by the government for the farmers on their technical knowhow.
In the agricultural sector, the majority of farmers purchased the machinery to use by themselves as well as to hire for profit rather than working only on a manageable scale. Some farmers acquired more number of machinery and worked closely in a coalition involved in the same business. We would like to encourage them to move to such a business grouping. Instead of working individually, working in collective means could pave way for the development and strengthening agriculture sector. Therefore, we have allowed them to form the mechanized farmers’ associations to let them work in an alliance as private mechanized agriculture service provider in their respective townships. Now there are 107 agriculture machinery owners’ associations in the whole country. We do not need to inform matters individually to each farmer, but to inform the association. When they have problem, it is easier them to submit to us, and we could answer them easily. If there is any problem between the machinery selling company and the buying farmer, it is easier for us as a negotiator to solve it and this is an exemplary model of an improvement.
Those farmers that purchased the machinery are not necessarily rich people. They bought the machinery with the money that has been borrowed from others. When they loan out the machinery to other farmers, some hiring people settle in cash, and some other farmers only repay when they harvested the crops. On the part of the owner, the machinery was bought on loan, and he is not getting the cash for the service. Therefore, there is problem if he could get the money only after the harvest. The machinery needs fuel for power. Moreover, it might also need to spend for the cost of spare parts, resulting cash flow deficit for owner. When the financial institutions founded, the investments and the inputs are available for the farmers for possible development. Now, it is the operation cost that matters. Each individual could get 50 millions Kyats, and that the group or the cluster could draw 500 millions Kyats, and therefore everyone is happy.
We are working on the land quality elevating and enhancing program at the same time. Our land plots are mostly in irregular shapes. The farmers have to observe the land features and make the plot marker boundaries in the fields. When we are using the machinery in the field, it is not effective to move the machinery in twist and turn with difficulty. If the farm lands are formed in square or rectangular shape, the machinery could be utilized effectively. The State is assisting in this matter and the foreign organizations are also providing their help in the land quality enhancement program in joint efforts.
We also emulate and follow the methods of developed countries in mechanized agriculture. In Japan and South Korea, the farmers do not make paddy seedling for nursery beds in their fields. They ordered and purchased the rice seedlings. The company delivered the paddy seedlings in trucks. The farmers acquired easily and transplant paddy seedlings into the fields. These works are not being assisted by the government. The private sector is working for paddy nursery on a commercial basis. We intend to work for further development. Instead of making paddy seedling in nursery beds, it would be more efficient by establishing company that sells ready-made rice seedlings for the farmers. This would be a win-win situation for both the farmers and the companies. As there would be more production of rice, the State is sure to benefit out of it. It would be a system that the farmer, the producer and the State could reap the advantage.
Today, we need to produce quality crops. With a view to produce the quality crops, we need to use the machinery in the agriculture mechanization system. On the other hand, we need investment. For that reason, the Agriculture Mechanization Department is organizing and persuading the farmers to come forward and work for it.
U Min Thu: I would like to request U Khun Aye Naing to discuss on a matter. Our JICA Two-Step Loan is getting momentum. We have already given out loans to buy 500 numbers of large tractors. We have delivered for over 260 numbers of trashing and harvesting machinery. Naturally, the machinery would breakdown after heavy use. Therefore, we asked the sellers to provide the guarantee by fixing after sale service. We requested quality machinery and immediate repair if and when required, including after sale service. Moreover, we also requested for the fast supply of spare parts.
The loan under JICA is for 40 years. Now, there are many car repair and workshops in the country, but there are no tractor repair and workshops. They wanted us to create tractor repair shops and trained for tractor mechanics. They have no idea where they could be imparted with the training for the repair of tractors. The Deputy Director-General mentioned that there are training going on. They wanted their offspring to become mechanics to be trained at the expense of the selling companies. In this regard, what sort of assistance could be offered by the Agriculture Mechanization Department?
U Khun Aye Naing: On our part, we have already laid down plans to train out mechanics for the repair of the machinery being used in the agriculture sector. In our Meikhtila Central Training Institute, we have been providing mechanic training courses on various levels on the repair of machinery in accordance with the prescribed standards of NSSA. We are also providing completion certificates on courses. However, we are not in a position to establish tractor workshop in each and every village.
Another difficulty is to move the tractors to the workshop. It is not like motor vehicles as they could be pulled into the workshop by another vehicle. However, the tractors could not move easily. We have mobile mechanics to solve the problems. In many townships, there are qualified mechanics with training certificates issued by our institution, and we also have our own mechanics in our departments.
When we are being informed for the repair of tractor, we noted down in the register and send the mechanics on duty to the village. We also replenish all the repair tools ready at the workshop and send our mechanics to the village. This is short term solution in the repair of the tractors. In the long term plan, we have 117 repair stations in various townships for the maintenance of agricultural machinery. These agriculture mechanization stations would be transformed into practical agro-machinery workshops in the future. We have certain program namely “training for trainers”, where relevant companies conducted training in connection with multiplier courses on a broader scale. If the farmers would like to repair the machinery, it could be repaired at our mechanization stations. With regard to the repair matters, the most essential part is the availability of spare parts, and that we have discussed with the companies to keep the parts ready. Therefore, things go well in the repair cases.
Deputy Minister: It’s a good discussion as the topics are really necessary for the State. The agriculture sector and the SMEs sector are very much broad in nature. In this wide ranging aspect, the financing tasks could not be adequately and completely fulfilled and complied at the moment. The voice of the people is heard through the lawmakers from the Hluttaws. We need to do a lot both in the SMEs sector and the agriculture sector. Now, the JICA Two-Step Loan has the intention and purpose to transform into mechanized agriculture, and therefore, we encourage to buy machinery as well as to do business with the application of the machinery. The plan is under way for those who wanted to establish rice mill and edible oil mill.
With the MEB Two-Step Loan, we are making to provide loans to buy machinery as well as other loans or agriculture sector. JICA requirement and constraint on SMEs are a bit high and rigid. When they have missed the chance, we offer them with SMEs Loan being provided by the MEB. If it is not an adequate funding, we would try to extend from our side. On the part of the business people in connection with agriculture and breeding, they should try to be in line with the standard rules and regulations to enable them to enjoy the possible loans.
Among other things, the most important aspect in our discussions is about that they have to be dedicated to their work, and work it on the culture of collective way. If such practice is developed, consequently, our national economy would grow faster. In conclusion, I promise that we would try to the best of our ability, and we also urged people to come together and work together inclusively.
Thank you.
Translated by
UMT (Ahlon)

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