Facilitating the Rise of the Soybean Seed Supply Chain in Myanmar
This post is excerpted from a Winrock International report, “From Seed to Fork: Triggering Systemic Changes in Myanmar’s Soybean Sector.” Read and download the full report below. The contents are the responsibility of Winrock International, prepared by the Value Chains for Rural Development team, including Nimish Jhaveri, Timothy May, Anne-Claire Degail, Thet Htun Aung and under contract by Lorene Flaming and Lay Thida, and do not necessarily reflect the views of USAID or the United States Government.
The work by USAID/Burma’s Value Chains for Rural Development project (VCRD, or “the project”) in Myanmar’s soybean value chain is a story of the nationwide revival of soybeans, a key domestic food security crop. The project, implemented by Winrock International, catalyzed two major systemic changes: development of a functional, profitable, open-pollinated variety seed supply chain benefiting smallholders, and a shift by domestic soybean buyers to purchasing high-quality soybean following clear quality standards for premium prices. For this article, we'll focus on the seed sector.
Prior to 2014, a reliable soybean seed supply chain did not exist in Myanmar. Farmers either used their own grain as seed or bought grain from traders. The genetic base was unknown and often mixed, while the germination rate was poor. Though the country’s Department of Agriculture Research (DAR) had tested and approved six new varieties that were adapted to different ecosystems, farmers had no access to these varieties because there was no mechanism to assess the demand or to produce and distribute seed.
Before and After VCRD
To address this disparity, VCRD supported soybean farmers, processors, and input suppliers to change the way they do business by proving that inclusivity, transparency, and commitment to quality leads increased income generation throughout the value chain. The project facilitated new connections between the DAR, the Myanmar Department of Agriculture (DOA), farmer groups, and private-sector service providers. These actors formed an informal public-private partnership to develop a functional, profitable, open-pollinated variety seed supply chain, benefiting smallholders.
At the project’s outset, systematic quality control of seed was difficult because testing for moisture and germination was a new concept. Because few soybean farmers initially understood the added value of working with pure seed, no incentive existed to explore or enter this market. Through demonstration plots run by lead farmers who knew their communities well, VCRD and community partners helped prove to farmers the value of using quality seed. This applied field research was conducted in different agro-ecosystems during different seasons. It enabled VCRD and lead farmers to identify local varieties along with “new” varieties developed by DAR that were best adapted to different geographies, seasons, and farming systems.
Outside circumstances also contributed to the shift in farming practices. In 2018, tensions across the border led to China banning maize imports from Myanmar. Maize prices tumbled, leading farmers to question their overreliance on this crop during the monsoon season in uplands areas. Then in 2019, the first-ever widespread Fall Army Worm outbreak in Myanmar destroyed maize crops across the country, sowing more doubt about the wisdom of relying so heavily on maize. In despair, farmers began turning to their networks and querying the DOA to seek guidance on alternative income-generating crops that could provide both a stable domestic market and reduce risks associated with border trade.
At the same time, demand for quality soybean seed began rising rapidly. Seeing value in high-germinating seed, farmers were ready to pay a fair price for it. Pure seeds' marketability, at double the price of grain, had two effects. It gave farmers an incentive to produce seed, and it gave service providers a reason to charge fees for quality-control services. A new soybean seed supply chain began to evolve. This supply chain is now sustained through collaboration between seed producer groups, service suppliers, the DOA, and the DAR.
The Two Models for Producing Quality Soy Seed
Two seed-supply models emerged, both of which have been validated by the DAR and the DOA: private sector-led and farmer group-led.
Private Sector-Led. In this model, farmers produce and sell genetically pure quality grain to a private firm, which is typically led by a local lead farmer who has liquidity, machinery, etc. This lead firm, in turn, sorts the grain, dries it if needed, tests its germination rate, and then packs and sells the seed. For example, a group of former local field assistants who had partnered with VCRD over the first few seasons on extension, training, and market activities decided to develop and launch a new kind of company called Sein Lan Wei. This company has since become an established and reputable extension service provider to both farmer groups and high-end soybean buyers. Sein Lan Wei drew on its network of farmers spread across southern Shan and parts of northern Shan. This network spans different ethnic groups including Pa’O, Shan, Danu, Larhu, and Taung Yo, and is embedded with local communities to spread information about soybean quality and market potential. As Sein Lan Wei and other private firms took off, VCRD took a step back and began coaching these new service providers on how to develop potentially profitable services, identify costs, develop business plans, and identify, approach, and retain customers.
Farmer Group-Led. Many farmers who approached the DAR in need of new sources of certified soybean seed were informed there simply was not enough supply available. The DAR had not foreseen or planned for a sudden dramatic spike in interest in producing soy. However, in recognition of the changing landscape, DAR expressed a new interest in collaborating with seed producer groups coached previously by VCRD, and who needed continued advice and support. As a response, 173 farmers banded together to form 13 seed grower associations in five different Shan townships. However, the groups lacked formal recognition required by the government in order to legally provide seed. With facilitation by VCRD, these seed grower associations were linked to the Shan State DOA, which helped begin the process of official government recognition required to certify the seed. The Shan State DOA not only provided technical support to the seed grower associations, but also helped two of the groups become registered as official, township-level seed producer cooperatives. This designation enabled 42 members of the seed associations to receive a combined total of $19,000 in cooperative loans (or around $490 per hectare over 36 months at two-percent interest per month). These are the first known loans provided to soybean seed groups in Myanmar.
A driver of success under VCRD was the facilitation of a soybean market system-wide collaboration to link seed producers, traders, and farmers from various regions across Myanmar to provide year-round access to quality seed and grain. This collaboration has taken many forms, with different models adopted according to new developments. These developments included: the market system shifting from exclusive to more inclusive; traditional traders adapting their business model; and farmers from different regions becoming incentivized to work together to create economies of scale and to continue working with traders with enhanced negotiating power.