Tuesday 21 May 2013

Debt crisis could produce jobless farmers

High interest rates will force farmers in Mandalay Region’s Patheingyi township to sell their summer harvest in June or July – when prices are at their lowest – leaving them without a profit and driving some to sell their land, farmers said.


“We had enough water for a good harvest this year, but most of us had to borrow to buy fertiliser and seeds and the interest rate was very high,” farmer U Mya Win from Myotharkone village said.

Farmers in the village say they will be forced to sell immediately after the harvest to repay debts that carry monthly interest rates.

U Maung Htwe said low-interest loans from government banks do not cover the costs of producing a single crop, so farmers rely on money lenders for the rest. Money lenders charge 20 percent a month.

U Mya Win said the summer harvest was likely to produce at least 130 baskets of paddy an acre. Prices in June and July are about K300,000 for 100 baskets but the total production cost is about K200,000, excluding interest on loans, he added. Farmers are selling land and switching jobs.

“A farmer near me sold 5 acres for K80 million (US$85,000) an acre,” U Mya Win said, adding that the land is on the main road between Mandalay and Patheingyi. Farmers who sell land are not doing so because land prices have risen. “The problem is that farming is so uncertain. We can never be sure whether we will make money,” U Mya Win said.

U Maung Htwe said he could not change jobs because farming is all he knows. U Nyunt Win, a farmer with 8 acres in the township, predicted that factories and shops would replace farmland adjacent major roads within two to three years even though farmers were reluctant to sell.

“We need to borrow money every season and eventually we will lose our land when we can’t repay the interest,” he said, adding that without more support from the government the seasonal debt crisis will eventually produce a generation of unemployed farmers.

source: The Myanmar Times

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