Land Not for Sale in Myanmar

Background Information
Friday 12 October 2012 by LRAN

Smallholder agriculture is the foundation of Myanmar’s culture, and the bedrock of the nation’s local and national economies as well as food security. The country’s poetry, literature and art all reflect the prominent role of rural farming life.

Myanmar is unique in that the majority of people – nearly three-fourths of the population or about 40 million people – live in rural areas and rely on farmland and forests for their daily needs and livelihoods. Agriculture (including livestock and fisheries) contributes about one-third of the country’s gross domestic product (GDP) and 15 percent of total export earnings, and employs over 60 percent of the nation’s labour force (2008-09 government data).

However, Myanmar’s countryside has also been under a shadow during the military regime period, with routine land confiscations and forced cropping, with little recourse to protest. The current reform period, however, has started to reveal these historical and current land conflict issues, where farmers are beginning to voice their collective opposition to these on-going local land grievances. Since the mid-2000s, and escalating since national elections, officials have been reallocating smallholder farmland to domestic and foreign private companies. During the past year, farmers have been increasingly protesting land confiscation for development and agriculture projects, which has gained national prominence in local and international media as well as in the parliaments. Some high-profile cases include Yuzana’s Hukawng Valley cassava concession, the Dawei SEZ, Zaygaba’s industrial development zone, and the current Monywa copper mine expansion.

Due to a host of reasons, primarily from on-going civil war, poor land governance, farmers’ debt, and different types of land grabs, it is estimated that at least one-quarter of all farmers in government-controlled areas in Myanmar are now landless, with some studies showing upwards of 50 percent in some rural areas. In these areas, about half of household farms are under 5 acres, which is below minimum subsistence levels. Landlessness is therefore a serious and growing problem throughout Myanmar.

As the country opens up to global markets, and the government passes new land laws and policies to encourage foreign investment, new sources of land grabs are beginning. This is especially true in areas with valuable natural resources, such as minerals, hydropower, oil/gas, and now, land itself. And as the peace process continues and new rounds of ceasefire agreements are signed between the government and rebel groups, resource-rich border areas will be opened up to resource extraction fuelled by foreign investment. One of the sectors being targeted by the new Myanmar government is agribusiness – with Myanmar being advertised as the final land frontier of Asia. The 2nd Commercial Farm Asia is a perfect example how the government is putting the country’s land up for sale to foreign investors.

While there are several drivers of land loss and land grabs, one of the major new drivers of land confiscation in the country – and the focus of this briefing – is commercial agricultural development. The Ministry of Agriculture and Irrigation’s (MoAI) 30-year Master Plan for the Agriculture Sector (2000-01 to 2030-31) aims to convert 10 million acres of ‘wasteland’ for private industrial agricultural production. The ministry specifically encourages rubber, oil palm, paddy, pulses, and sugarcane for export. Examples of government ‘crop campaigns’ include palm oil promotion in Tanintharyi Region, a nationwide jatropha campaign (which targeted 0.5 million acres per state and region, for a national total of 8 million acres), rubber for the Chinese export market, and biofuels, including cassava and sugarcane These national agricultural policies serve to increase the export of crops to increase foreign exchange revenue. The government plans to achieve these industrial agricultural export goals by relying upon Myanmar companies, who maintain good connections to top officials, to develop agricultural concessions granted to them on behalf of the government.

Rubber development is mostly occurring in the north (northern Shan State and eastern Kachin State), financed by China’s opium substitution programme and carried out by Chinese businessmen, who kick farmers off their upland farms and build fences around their rubber farms. Smallholder rubber in Mon and northern Tanintharyi Region is becoming under threat from rubber and palm oil development. The Vietnamese government recently purchased a 120,000 acre rubber concession in southern Rakhine State.

Tanintharyi Region has been targeted in the last decade by palm oil development, with over 1 million acres already granted to Myanmar companies, many with informal foreign investment backing. The largest holdings are by Yuzana Company. The forests are being clearcut, but oftentimes no palm oil is actually planted as the company only sells the trees for profit.

Over the past decade farmers were forced to plant jatropha as part of a national crop campaign, which caused many hardships for farmers and households. The central dry zone has been particularly targeted because of its suitable climate. However, to date no jatropha is being harvested for domestic biofuel consumption. Cassava and sugarcane are also being encouraged by the government as biofuels, which can be grown in a range of agro-ecological zones. The most well-known example is Yuzana’s 200,000 acre cassava concession in Kachin State’s Hugaung Valley.

After cyclone Nargis in 2008, when farming households lost their crops and family members, the government allocated their paddy land to Myanmar companies to boost production for export. This has since started a trend with farmers’ land being given to Myanmar companies, rather than the government helping farmers with smallholder production schemes.

By 2001 more than one million acres had been allocated, involving nearly 100 companies. By 2011, 204 national companies had been allocated nearly 2 million acres of private agricultural concessions, with Tanintharyi Region and Kachin State together receiving over half of those concessions. Kachin State officially has 15 Myanmar companies that have been granted a total of nearly 600,000 acres (mostly rubber and sugarcane); Tanintharyi Division has 36 companies with over 670,000 acres (palm oil); Shan State South has 12 companies with over 65,000 acres (corn, rice, rubber); and Shan State North has 17 companies with over 51,000 acres (rubber). Kachin State and northern Shan State have received the biggest increase in concessions in the country from the big increase in Chinese rubber concessions supported by China’s opium substitution programme.

Area granted for large-scale commercial farming 31 Jan 2011
State/Region No. of companies Area granted (acres)
Kachin 15 596,180
Kayin 1 2,161
Sagaing 18 100,057
Tanintharyi 36 671,594
Bago (East) 9 5,859
Bago (West) 7 13,913
Magwe 38 202,492
Mandalay 16 10,300
Yangon 7 30,978
Shan (South) 12 65,985
Shan (North) 17 51,111
Ayeyarwady 28 193,353
Total 204 1,943,983

While nearly 2 million acres of recorded concessions have already been allocated in the country (not including those not recorded by the government, or those areas not under government control, such as in Wa areas), only about 20 to 30 per cent of the area of agricultural concessions is actually under cultivation. The government is not following their own land laws, where the concessions need to be fully planted within a few years of receiving the concession or else the land will be taken back. The government-allocated concessions to companies are not producing good results for farmers or achieving national objectives.

There are very few 100 percent foreign-operated agricultural operations in Myanmar to date. Before the current land reforms, foreign investors could not rent land concessions. Joint ventures with the government were possible, but very few foreign investors opted for this because of very high taxes for foreign companies and political risks were too high. Therefore, nearly all agricultural concessions in the country to date are formally run by Myanmar companies.

Although there is very little formal foreign agricultural investment in Myanmar so far, foreign investors sometimes back Myanmar companies who receive large agricultural concessions. For example, China’s opium crop substitution programme is largely behind much of the agricultural concessions in northern Myanmar, particularly for rubber. Agricultural land contracts negotiated with regional and local military authorities lead to land confiscation and displacement of local farmers. There is no support for smallholders in the north with Chinese investors, nor are local farmers hired as labourers (except in Wa-controlled areas).

Yunnan companies’ opium crop substitution projects in northern Myanmar
AcresTonnes (quota)
Rubber 47916 18877
Corn 5913 11090
Castor-oil 5270 5000
Rice 4032 9792
All other 28597 44756
TOTAL 91732 89515

But this situation is set to change with the two new land laws in Myanmar and the current push by the new government for foreign direct investment (FDI) in the agricultural sector. Earlier this year the government rushed through parliaments two land laws that allow for private, domestic and foreign investment in the agricultural sector, which is going to have a dramatic and deep impact on the development path for the country. The Vacant, Fallow, and Virgin Land Law (or VFV Law) legally allows the government’s Central Land Management Committee to reallocate smallholder farms (both upland shifting taungya land and lowlands without official land title) to private companies instead. As very few farmers have official 105 land title certificates from the Settlement and Land Records Dept. (SLRD), most farmers now have no formal land use rights. This is what is behind much of the land confiscation cases in the news today.

The other land law is known as the Farmland Law. This law states that land can be legally bought, sold and transferred on a land market with land use titles. This is a very significant law because it means that land has become a commodity to be sold on the market, just like other things we buy and sell. While farmers have been doing this informally for a long time, it is now different with this law. Much like the VFV law, anyone without an official land use title has no rights anymore to use the land. Land use titles will be issued by the SLRD, but that will take decades to title all the land in the country. Moreover, it will be impossible to title shifting taungya, which means that the uplands - now labeled ‘wastelands’ or ‘fallow lands’ – have no land tenure security under these two new land laws. Therefore ethnic upland areas are under the greatest threat.

These two land laws together allow for foreign investors to purchase these land use titles, pending the details of the foreign investment law. The Myanmar companies that have been granted or purchased land from local authorities would receive land use titles, which then could be sold to other investors, including to foreign companies. This creates a situation that encourages land grabbing and land speculation where Myanmar companies get as much land as possible to then sell to others for a profit as a way of doing business. Land has been put up for sale as a profit-making business. But farmers are left with few alternative options if they do not have land to farm.

Instead of orienting the agricultural sector to industrial large-scale concessions to companies, national land reform should encourage land reform that supports smallholder farmers. Land laws should support taungya as an upland, multiple-use agricultural system, as well as legally honour customary land tenure and institutions. Policies that help smallholder farmers will boost local food security, rural employment, and decrease rural poverty – all recommendations that have already been stressed by presidential economic advisors and by President Thein Sein. A supportive land governance framework will best ensure sustainable and equitable economic development for the country and rural communities. The government as well as domestic and foreign capital can be invested in smallholder farmers, such as with good contract farming schemes, rather than push farmers off their land. Farmers need to have the legal right to organize and form associations in order to increase their collective bargaining power in markets to gain better market prices. This includes freedom to cultivate whatever crops they choose. In addition, the government needs to provide capital loans and other supportive services to farmers in order for them to maximize farming revenues. Smallholder farmers, as the majority population, have been farming for generations – as their life, livelihood, and cultural traditions. To take that away is to take everything from them.

Land is not for sale!


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