Constraints to commercialisation of smallholder agriculture in Tanintharyi division, Myanmar

Myanmar is a country in rapid economic and political transition, with opportunities emerging for its smallholders to benefit from current economic growth. However many smallholders are trapped in semi-subsistence agriculture, disconnected from markets. Commercialisation can increase farm incomes, and - through the multiplier effect - lead to wider pro-poor growth in the rural economy. However, there are many constraints to commercialisation that prevent this process from occurring. While literature on constraints confronting smallholders abounds internationally, there is a paucity of literature on the challenges confronting smallholders in Myanmar. This study investigates constraints to commercial farming in the townships (districts) of Myeik and Palaw in Myanmar’s Tanintharyi Division. A representative two-stage sample of 259 rural households was drawn from these townships, and data relating to livelihoods and agricultural enterprises were gathered using a structured questionnaire. The most important determinants of commercialisation identified using Heckman regression were the household’s land endowment, liquidity, land quality, and productive assets. Access to affordable financial services could boost household liquidity and investment in farm inputs, assets and improvements to land, so alleviating the most important constraints to commercial farming.