Posted in Legislative Research on Aug 27, 2019

On 04.06.2019 , the Bago Region’s Contract Farming Bill has been submitted to the Bago Region Hluttaw. Current status (04/09/19): The Bago Region Hluttaw will debate it this month.

Bill in brief

The Bill proposes regional, district and township level committees to approve all contracts between farmers and buyers, in accordance with ambitions to improve regional agriculture.

Summary of main provisions

• The stated objectives of the Bill are to:

  • improve the agricultural sector and farmers’ “social life” through a contract farming strategy;
  • promote agricultural products and their quality through technical knowledge, improved inputs and finance;
  • increase regional income through exports of a variety of agricultural products;
  • provide benefits to farmers through rental of agriculture land or engaging in contract farming

• Supervisory Committees would be formed at regional, district and township levels to realise these of objectives and monitor contract farming.

  • With the consent of Bago Region Government, the Regional Supervisory Committee (RSC) would be led by the Regional Minister for Agriculture, Livestock and Irrigation, and will comprise representatives from relevant government departments, a regional legal officer, experts, representatives from the private sector and farmers, the regional head of the agricultural department, and the regional head of agriculture land management and statistics.
  • The Minister would form District and Township Supervisory Committees (DSC & TSC) to be led by the respective administrators along with district/township officers, enterprises and farmers.

• The RSC can:

  • prioritize the potential of agricultural export products;
  • determine local production zones;
  • coordinate production processes;
  • formulate standards for the sale of input factors, plant species and products;
  • examine the practice and spread of technical knowledge;
  • monitor, and make decisions on contracts and their implementation.

• The RSC would also be able to dictate the size and amount of contract farming, delegate powers to DSC and TSC, and prevent and solve disputes.

• The DSCs and TSCs are expected to perform duties delegated by the RSC.

• There Bill refers to are five models of contract farming: centralized, multipartite, nucleus estate, intermediary and informal.

• Those who want to engage in contract farming must apply to the RSC. Permit holders (buyer companies, brokers and farmers), have to agree their contract and register it with Bago Region Investment and Company Administration and the related registration office.

• Regulations to be followed in farming contracts are described in the bill. These are:

  • to accept examination by the TSC when applying for the permit
  • to avoid “any environmental and social harms”
  • to report a detailed plan for establishing business arrangements
  • to state the precise duration of business arrangements

• In order to fund compensation for any violations of regulations; contract signatories must pay a fee to the RSC.

• There are also steps to be followed for contract farming:

  • to make a prior study and negotiation of the contract
  • to scrutinise land ownership
  • to choose a farmer representative
  • to determine location and obligations under the contract
  • to describe the amount, quality, basic price, duration and payment system for agricultural produce
  • to include compensation for damages caused by pests and natural disasters
  • to be accountable for environmental and social harms caused by the business
  • to determine conditions, that require contract renegotiation
  • to provide, in time, seed, other input factors and production costs
  • to ensure an individual or farmers’ representative sign the contract

• The contract must be made with the supervision of supervisory committee members and other witnesses, and the quality of agricultural products will be examined by the agricultural department. Supervisory committees have to monitor the development of contract farming, and the regional committee will support this with a research team.

• For not following the steps required in making the contract, the RSC can take a range of actions, including suspending the contract farming/registration/permit, or levying a fine.

• Disputes must be submitted to the township committee. If not satisfied with the decision, the appeal will go to the district committee within 30 days and from there, to the regional committee within 60 days. The regional committee has a final say.

• The bill forbids conducting prohibited agriculture, contract farming without a permit, destroying crops, whether intentionally or not, and violating contract terms. For each of these contraventions, the Bill sets respective penalties.

Other relevant legislation

The Farm Land Law 2012

The Law of Protection of the Farmer Rights and Enhancement of their Benefits 2013

Myanmar Investment Law 2016

Myanmar Companies Law 2017

Links

APSID (2018) Contract Farming Pros & Cons. https://www.apsid.org/2018/06/16/contract-farming-pros-and-cons/

AgriProFocus/Holtland (2017) Contract farming in Ethiopia: Concept and practice. https://images.agri-profocus.nl/upload/Contract_Farming_in_Ethiopia_-_Concept_and_Practice1495022084.pdf

FAO (2017) Contract farming and the law: What do farmers need to know? http://www.fao.org/3/a-i7581e.pdf

World Bank (2014) An Analytical Toolkit For Support to Contract Farming. http://documents.worldbank.org/curated/en/575871468204575206/pdf/881810REVISED00y020140WB0Internal02.pdf

Myanmar Agricultural Development Strategy https://www.lift-fund.org/sites/lift-fund.org/files/publication/MOALI_ADS_June2018_compressed_EN.pdf

Contact

Hla Myo Kyaw, The Ananda, hlamyokyaw@theananda.org