South-South Ideas: Sustainable Rubber Value Chain Development: Analyzing Myanmar’s Opportunities and Challenges for Green Transformation for South-South Cooperation

By March 18, 2019 October 26th, 2020 Research, South-South Global Thinkers, South-South Ideas

Myanmar’s rubber sector is at a critical juncture. Rubber production in the country is projected to increase in the coming years while international market demands suggest a continuing downward price trend for natural rubber. Among a few agriculture value chains that exist in southeast Myanmar, natural rubber provides a unique opportunity to address the political economy of inclusive growth. This study uses value chain analysis to understand the challenges and opportunities facing primary producers in Myanmar or rubber small-holders in this case, who are trying to engage with global markets in a manner which would provide for sustainable income growth.

This study demonstrates that the strengthening of vertical linkages between stakeholders can create synergies leading to higher value addition along the whole value chain. More importantly, the findings also highlight the importance of horizontal linkages particularly among primary producers to enable value chain upgrade covering functional, product, and process dimensions critical for Myanmar to achieve sustainable goals in the sector.

The study compares and contrasts Myanmar’s situations with experiences from neighboring rubber economies and it concludes that horizontal linkages in the forms of farmer organizations or producer cooperatives are important to overcome the scale threshold if farmers wish to upgrade their products from low quality to high quality grades, improve processes from manual to machine processing and innovate functions by focusing more agro-forestry and farm inter-cropping to support the incomes of small-holders.

The study recommends a concerted effort is needed on the part of public institutions to support all value chain actors of the rubber sector. Most important of all, it suggests targeting reform policies towards smallholding farmers who also represent the weakest link in quality and productivity reforms that Myanmar needed critically. Finally, the study suggests that the government of Myanmar can gain immense benefits from learning the lessons of various value chain upgrade experiences from neighboring rubber-producing countries such as the People’s Republic of China, Viet Nam, Indonesia and Thailand. Through South-South Cooperation modality, Myanmar may consider seeking technical assistance and capacity building support for effective value chain upgrades that are suitable to Myanmar’s context.