Tropentag, October 11 - 13, 2006 in Bonn "Prosperity and Poverty in a Globalized World – Challenges for Agricultural Research"

Rice Market under Halfway-liberalised Economy in Myanmar: Structure, Conduct and Performance Approach

Justus-Liebig-University Giessen, Institute of Agriculture and Food Systems Management, Project and Regional Planning, Germany

Abstract

Rice plays an important role in Myanmar's economy as an staple food and high amount of foreign exchange earning comes through export. The agricultural economy of Myanmar has been under transition from a planned to a market system since late 1980s. Two liberalisations of rice marketing had been done in 1987 and 2003. The first liberalisation implemented by allowing free domestic marketing and private export of some agricultural products except rice. Rice procurement and rationing systems were abolished under the second liberalisation. However, the government is still not undertaking full-scale rice export deregulation actually. Therefore, the rice marketing system in Myanmar works within the boundaries and limitations of a halfway-liberalised economy which triggers questions about the structure, conduct and performance of rice marketing system.
In this study, the general SCP (Structure, Conduct and Performance) approach is adapted, which allows for feedback relationships, competitive behaviour (conduct) of firms and performance (in terms of price, transaction cost, etc.) that might influence the market structure elements by analysing the secondary and primary market survey data of rice surplus and deficit regions. Market structure describes the environment and the characteristics of a market that exercise strategic influence on the nature of competition and pricing.
According to the findings, dimensions of rice market structure seem to be competitive market however government intervention on supply side exists as the land policy tightly control in paddy production and procurement system as well. Market intermediaries set the rice price as prevalent market even though they are not allowed to access the international market as export is monopolised by government institutions. Therefore, the rice market performance indicates lower retail price share to producers from the results of high marketing margins along the channels across rice markets taken in this study. The results show an idea intended for the rice market that the current policy environment might develop by deregulation of land policy in supply side along with getting access the international rice market in demand side to become efficient competitive rice market in Myanmar.

Keywords: Halfway-liberalised economy, Myanmar, rice market, SCP approach

Contact Address: Theingi Myint, Justus-Liebig-University Giessen, Institute of Agriculture and Food Systems Management, Project and Regional Planning, Senckenbergstr. 3, 35390 Gießen, Germany, e-mail: theingi.myintagrar.uni-giessen.de