Aung Myint Myat is an 18-year-old farmer from Ingapu, a town in the Ayeyarwady region of Myanmar. He and his family have been growing paddy and pulses since he was born, using traditional farming methods. Eager to boost their yield, Myint Myat has been optimizing the production process by implementing methods gleaned from online training and other agritech services that are accessible via his smartphone.
“My phone is very important to my farming business. I use it for many things, such as attending training programs to learn about farming,” Aung Myint Myat told KrASIA.
Although the agriculture sector accounts for 38% of the country’s gross domestic product and the employment of 60% of Burmese citizens, farmers like Aung Myint Myat have long faced obstacles such as low productivity, high fragmentation in the supply chain, a lack of funding, and even exploitation by middlemen agents.
With abundant freshwater sources and fertile lands spanning several climate zones, Myanmar has favorable agricultural conditions for almost any crop, from tea in the hills of southern Shan State, to mangoes in the Mandalay region and rice in the areas near the Ayeyarwady River delta.
However, Myanmar’s agricultural sector is far from making the most of its agricultural assets. A day of farm work in Myanmar during monsoon season only generates 23 kg of rice paddy, compared to 62 kg in Cambodia, 429 kg in Vietnam, and 547 kg in Thailand, according to a World Bank report published in 2016.
The low productivity of land and labor has directly led to meager wages and slim profits for farmers, who only earn USD 1.8–2.5 per day during monsoon season, and up to a maximum of USD 3.5 during the dry season, according to the World Bank.
To tackle these problems, the burgeoning local agritech sector is targeting young users like Aung Myint Myat to start a tech-driven agriculture revolution in the country.
Race for wider digital adoption
For many farmers in rural Myanmar, Facebook is the internet. The social network is where they spend most of their time online. Dragging farmers outside of Facebook to other apps where they may reap valuable insights about their crops is no easy task, according to Adrian Soe Myint, CEO of Yangon-based agritech startup Village Link.
However, the firm has logged more and more traffic on its app, Htwet Toe, where farmers can view tutorials and seek answers about farming from agricultural professionals recruited by Village Link. If a user spots a problem with their crops, they can upload a photo of the plants. Village Link’s professionals will then examine the image and provide a diagnosis and possible remedies: irrigate with less water, reduce fertilizer quantities, or spray certain chemicals to remove bacterial infections.
With about 80% of farm holders in Myanmar each having less than ten acres of land, they usually lack technical resources as well as agricultural know-how, which is what Village Link is trying to address, Soe Myint explained to KrASIA.
The firm has amassed 600,000 users so far, but aims to reach as many as 2.5 million growers in the next five years, with ambitions to become the largest digital platform and data provider for Myanmar’s agricultural communities, Soe Myint affirmed. The firm implemented a new satellite service in February, aggregating agricultural satellite data and translating it into useful information for farmers and businesses such as localized weather monitoring, crop classification, crop extent measure, crop performance tracking, crop growth stage tracking, and flood monitoring.
Impact Terra is another agritech firm providing farming tips and useful information such as weather forecasts and crops market prices through its app, Golden Paddy. The company helps farmers expand their market connections and attain access to financing products, thanks to a digital credit scoring system developed specifically for growers, as reported by the Groupe Speciale Mobile (GSM) Association.
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A report published by regional agriculture network Grow Asia explains how the digital farmer advisory business model has shown “signs of viability” in the smallholders market, due to its affordability and ability to target farmers’ specific needs. “Once trust is established, the business could undergo viral growth, with one farmer suggesting the advisory application to another,” according to the study.
Farming advisory firms are constantly looking to level up their offerings to lure more users. Green Way, for example, provides advisory services as well as a channel for farmers to purchase chemical nutrients and seeds online, according to a report by local media Myanmar Times.
The services provided by firms such as Village link, Green Way, and Impact Terra are paving the way for the foundation of tech-enabled agricultural practices in the country. With 70% of the country’s population, or 38.5 million people, living in rural areas, there are still many opportunities for agritech businesses to expand their reach.
Connecting growers with machines
The lack of know-how is a problem, but so is the absence of mechanization and infrastructure. Tun Yat, founded in 2017, is the first online platform connecting growers with tractors or harvesting machine owners in Myanmar, according to the firm’s CEO, Hujjat Nadarajah.
The online platform is currently used by 15,000 farmers in Myanmar, Nadarajah told KrASIA, adding that the company’s mission is to help farmers save money while harvesting more crops.
“I started using Tun Yat’s services last year. We mainly rely on Tun Yat for renting farm machinery, which can help us to get more acres of harvest,” Aung Myint Myat explained.
Building trust is key to fostering digital adoptions and leveling the playing field for smallholder farmers, Nadarajah said. When he launched the online booking application, many farmers did not trust the app and thought that it was a scam, he said.
However, the firm has been gaining traction thanks to frequent visits to villages to present their rental services, collect on-site data, and run workshops and training sessions in collaboration with international and local nonprofit organizations, according to Nadarajah. “As you establish that foundation, technology then becomes more like a conversation. Farmers will be willing to try new things after they know that you are a reliable partner.”
Pwint Pwint San, CEO of Hydro Plant, which offers an automatic internet-of-things (IoT) system that collects real-time data and controls irrigation, fertigation, and other processes, echoed Nadarajah’s point. “Once customers see the difference, they might pay afterward and even refer the services to the others.” The firm targets medium-sized and commercial farmers, and offers free trials to lure new customers.
Capital and credit scoring for farmers
While digital platforms target the lack of know-how and underdeveloped value chains, there are still other pain points. The most common one? Limited access to credit and finance.
Local fintech firms are also tapping into this segment. Impact Terra, for example, has been developing digital credit scoring for farmers by translating data collected from its application for lenders. A farmer’s profile contains an assessment of a farm’s assets, including variables like acreage, equipment, seeds, and the historical performance and financial conditions of the farm.
According to a GSMA report on digital credit scoring for farmers in Myanmar, the potential collaboration among local agritech firms with financial service providers could be critical for financial inclusion.
“Digital agriculture tools generate digital footprints, including farm and farmer data (e.g. farmer identification data, geolocation data), that can help farmers forge an economic identity. An economic identity is a form of functional identity that enables financial institutions to assess the credit risk of previously unbanked farmers. Digital agriculture tools can therefore offer farmers a pathway to financial inclusion,” said the report.
Yet more funds are needed for Myanmar’s agritech sector
Although digital data can contribute to financial inclusion for farmers, the sector still remains underfunded compared to other countries in the region. According to the Smallholder Agritech SEA Landscape 2020 report by Grow Asia, Indonesia’s agritech firms collected the major amount of funds in the region, with USD 50 million, followed by Singapore’s firms at USD 13.2 million, Cambodia at USD 2.8 million, Thailand (USD 2.7 million), and finally Myanmar at USD 2.3 million.
“In the beginning, we had to rely on grants funding and projects from donors. VCs are not familiar with this market. There are issues like political risk and so on that are beyond their control, which makes it harder for us to attract investment,” Tun Yat’s CEO Nadarajah said.
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Village Link’s CEO, Myint, added that startups also need more functional connections and strategic partners to reach out to farmers, as Myanmar is a big country where people live remotely, far from one another.
The country also has a natural advantage because of its location, providing a golden opportunity to outstrip neighbors like Thailand and Cambodia. “Given Myanmar’s location between two enormous regional markets as India and China, Burmese farmers and agribusinesses are potentially well-positioned to contest both regional and global agricultural markets, if the right investments are made in institutions and infrastructure,” the Asian Development Bank highlighted in a report.
Rapid digitalization in the agricultural sector has the potential to transform the lives of millions of farmers in Myanmar, who have struggled to eke out a living owing to an array of obstacles. With a growing number of agritech businesses empowering smallholder farmers, the vision of turning the country’s agricultural sector into a tech-driven reality may soon be realized.