Sustainable Rice in Myanmara system approach for

Equitable Socio-Economic Development in Myanmar

SRP 6th Annual Plenary Meeting & General AssemblyDecember 7, 2016

2 2

Investment Banking Asset Management

ARIS - PrimePartnersAsset Management

Pte Ltd

PrimePartnersCorporate Finance

Pte Ltd

Prime Energy Partners

Ltd

Prime Agri Ltd

PRIME GROUPBusiness Areas and Main BU’s

FINANCIAL SERVICES INDUSTRIAL OPERATIONS

PRIME HoldingsPte Ltd

Energy & InfrastructureAgri & Food

PRIME Founders Inc

licensed by The Monetary Authority of Singapore Developer, Investor, Operator

PRIME Farms Banyin Construction Phase

3

PRIME Farms Myanmar

PRIME Farms Myanmar• potato seed multiplication (client -PepsiCo)

• MM’s first drip-irrigated commercial farm• first GlobalG.A.P. certified farm in MM• Food safety & sustainability compliant

Myanmar’s Comparative AdvantagePost-Harvest & Logistics Infrastructure

TROPICSTROPICS

• State of the art technology• Dutch engineered system• Phase 1 – 850 MT Capacity• 3C, 97% Humidity, CO2

Training ProgramsIn-field and Classroom

PRIME Internship & Certificate CourseIn cooperation with The Department of Agriculture

TROPICSTROPICS

State Agricultural Institutes (SAI)

41 SAI Graduates placed in PRIME Agri

operations

Plant Cane. 100 Ha @ 90 Mt/Ha

Average Yield 84Mt/Ha

Outgrower ProgramIrrigation & Training for Higher Value Crop Mixes

Rice-Centric Rice-Inclusive

Food Security & Tradition Commercially Drivenmarket forces

Low Profit, High Volume Economically Soundcomparative advantages

National Resource Burden Socially & Fiscally Responsiblesubsidy independent

Socio-Politically Unsustainable Politically Balancedequitable development

Future Policy Direction for Rice in MyanmarA System Approach

• Capitalize on Myanmar’s comparative advantages in factors of production: land, water, labour, agronomic zones

• Crop specialization and cropping systems • Aggregation of capital resources for economies of scale &

competitiveness to smallholders• Training and upskilling of smallholders to international standards for a

reliable commercial supply chain (“GlobalGAP”, FSSC22000, etc)• Investments in logistics and industrial infrastructure e.g. The PRIME

Heho Airport Agri & Food Industry Park• Partnering with Siemens for Rural Electrification (5MW -10MW modules)• Foreign Direct Investment (FDI) within rural communities for post-harvest

facilities and export-oriented food processing

The Rural Commercialization PlanThe Essentials

Myanmar’s Comparative AdvantageDiverse Agronomic Zones

TROPICSTROPICS

Crop Specialization by Agronomic Zones

Shan State: Agri & Food Sector PotentialCalifornia Benchmarks

Crop Mix by Agronomic Zones(California 2012 Farm Gate Value)

Table grapes

$4.5bnLettuce $1.5bn

Tomatoes$1.2bn

Floriculture$1.0bn

Broccoli $650mn

Garlic $220mn

Chili Pepper$100mn

Carrots $500mn

Onions$205mn

1 2 3 4 5 6 7

1. Water Resource Management & Irrigation2. Soil Management & Land Preparation3. Planting material and sowing4. Crop Nutrition5. Crop Protection6. Harvesting7. Post-harvest management

GAP – Food Safety GAP – Sustainability & Social ComplianceSRP – Sustainable Rice Protocol

Spectrum of Primary Production process & training modules

GLOBALG.A.P.

The Worlds Most Accepted Farm Assurance Program

for Safe and Sustainable Agriculture

GLOBALG.A.P. CERTIFICATION WORLDWIDEA Steady Growth for Integrated Farm Assurance (IFA) Version 5

• 170,000 certified producers

• over 124 countries

Sou

rce:

GLO

BA

LG.A

.P.

31

.12

.15

GLOBALG.A.P. FRUIT & VEGETABLE STANDARD V5 + SRP for RICEThe First Choice for Retailers and Producers around the World

Holistic Approach Fruit & VegetablesTotal Number of Control Points: 218

Food Safety99

Environment(incl. Biodiversity)

69

Traceability22

Workers’ OccupationalHealth & Safety28

+ RICE with

INTEGRATED FARM ASSURANCE STANDARD (IFA) V5A Modular Approach to G.A.P. Certification

INTE

GR

ATED

FA

RM

ASS

UR

AN

CE

(IFA

)

ALL

FA

RM

BA

SE

CBCROPS BASE

ABAQUACULTURE STANDARD

LBLIVESTOCK BASE

FV FRUIT & VEGETABLES

FO FLOWERS & ORNAMENTALS

CC COMBINABLE CROPS

TE TEA

PPM PLANT PROPAGATION MATERIAL

FINFISH, CRUSTACEANS & MOLLUSCS

PG PIGS

PY POULTRY

TY TURKEY

CS CATTLE & SHEEPDY DAIRY

CYB CALF/YOUNG BEEF

RICE

SHARE OF PRODUCERS UNDER CERTIFICATION PER REGION IN %

GLOBALG.A.P. CERTIFICATION WORLDWIDEA Steady Growth for Integrated Farm Assurance (IFA) Version 5

North America

1.4%South

America11.7%

Europe65.4%

Africa11.2%

Asia9.3%

OCEANIA

0.9%

Sou

rce:

GLO

BA

LG.A

.P.

31

.12

.15

AGGREGATING SMALL FARMS for Economies of Scale & CompetitivenessMore than 70% of Certified Farms are Organized in Groups

Sou

rce:

GLO

BA

LG.A

.P.

31

.12

.15

AGGREGATING SMALL FARMS RAISES INCOMEThrough Group Certification

GROUP CERTIFICATIONMulti-Site Certification

• A group of producers with a shared mandatory Quality Management System (QMS)

• Random sample inspections of some of the producers by a GLOBALG.A.P. approved certification body

• One certificate for the entire group following a successful audit of the QMS

Assurance for the Whole Supply Chain

GLOBALG.A.P. FSSC22000, IFS, BRC

Pre-farm-gate Post-harvest & Processing End of Supply Chain

Rural Commercialization in Shan State

Thante-KyaukniCorridor

Region Total Acres

Thante-Kyaukni Corridor 29,192

Pindaya Township 161,180

Hopong Township 102,665

TOTAL 295,581

PRIME Agri & Food Industrial Park(Shan State)

PRIME Agri & Food Industrial Park(Shan State)

Thante-Kyaukni Corridor(S. Shan State)

Village Tract Acres Population

Than Te(11 villages)

8,653 5,793

Kyauk Ni(6 villages)

8,595 6,350

Mong Thaw East (13 Villages)

8,056 14,372

Mong Thaw West (4 Villages)

3,888 2,558

TOTAL 29,192 29,073

High Impact Area - Selection Criteria

CriteriaSike

KhaungPindaya Than Te Kyauk Ni

Agronomics + - + +

Farmer Attitude - + + +

Growing Experience + + + +

Impact Potential - - + +

Access & Logistics - + + +

High Impact Area - Demographics

DemographicsThan Te

(11 Villages)Kyauk Ni

(6 Villages)

Mong Thaw – East

(13 Villages)

Mong Thaw –West

(4 Villages)Totals

Households 1,240 1,436 3,083 574 6,333

Population 5,973 6,350 14,372 2,558 29,253

Male 2,821 3,108 7,146 1,294 14,369

Female 2,972 3,242 7,226 1,264 14,704

High Impact Village Tracts

Township VillageTract

# of Villages

Cultivated Acreage (Wet Season)

Cultivated Acreage (Dry Season)

Taunggyi Than Te 11 8,653 580

Taunggyi Kyauk Ni 6 8,595 790

TaunggyiMong Thaw

- East 13 8,056 892

TaunggyiMong Thaw

– West 4 3,888 550

Key Points:- Cultivated acreage drops to 9% during dry season due to lack of irrigation - Unable to capitalize on optimum agronomic dry season - Optimal dry season in S. Shan ideal for high value temperate crops- Year round irrigation unlocks key to better crop mix and increased income- Traditional monsoon crop marginalized due to increasingly unpredictable

weather patterns

Shan State: Paddy SoilsSustainable High-Value Crop Rotation 1

Shan State: Certified OrganicsSustainable High-Value Crop Rotation 1

Monsoon Season Winter Dry Summer Dry California 2014/2015 Farm GateValue

(USD '000)

June July August September October November December January February March April May

Veg

etab

les

Beans (Dry) $69,472

Beans (Fresh) $36,082

Broccoli $806,561

Cabbage $177,710

Carrots $574,304

Cauliflower $309,040

Celery $288,423

Corn (Sweet) $184,382

Cucumbers $16,553

Garlic $255,888

Lettuce $2,032,389

Onion $275,620

Peppers (all) $595,203

Potato $189,577

Pumpkin/Squash $37,027

Spinach $189,280

Tomato $1,607,985

Fru

its

Avocado $333,760

Citrus $2,030,068

Melons $330,161

Strawberries $2,481,496

Dry Season Irrigated

Greenhouse/Tunnels

Shan StateHigh Value Crop Cycles & Agri Sector Potential

• Based on USDA’s California Agriculture Report 2015• “Comparative Value” is farmgate sales value

Focus Area – Thande Village

Village Acres

Thande 365

Focus Area – Kindon Village

Village Acres

Thande 365

Kindon 230

TOTAL 595

35

Kin Don Aggregated Community Farm

36

Drip-Irrigated Rice with NETAFIMCentral Irrawaddy River Corridor “CIRC” (aka Dry Zone)

Sustainable Drip-Irrigated Rice in Myanmar

Sustainable Drip-Irrigated Rice in Myanmar

Tillering Stage

FLOWERING STAGE

PI Stage

Flowering Stage

Sustainable Drip-Irrigated Rice in Myanmar

Thante Village TractAchievable Short Term Impact – 2years

Parameter Current Via WFL

Cultivated Acreage (Wet) 8,653 8,653

Cultivated Acreage (Dry) 580 4,327 (50%)

Income/Acre/Year $500 $1,500

Total Income/Tract/Year $4,616,500 $8,943,000

Total Households 1,240 1,240

Income/Household/Year $3,723 $7,212

Total Population 5,793 5,793

Income per Capita/Year $797 $1,544

Item Current Via WFL

Cultivated Acreage (Wet) 8,595 8,595

Cultivated Acreage (Dry) 790 4,297 (50%)

Income/Acre/Year $500 $1,500

Total Income/Tract/Year $4,692,500 $8,990,000

Total Households 1,436 1,436

Income/Household/Year $3,268 $6,260

Total Population 6,350 6,350

Income per Capita/Year $739 $1,415

Kyauk Ni Village TractAchievable Short Term Impact – 2years

42

Thante Village TractAggregated Community Farm

Thante Village Tract Taunggyi Township

Shan State

Summary Info:365 Acres

79 Farmers124 Plots

43

Thande Aggregated Community Farm Community Irrigation Infrastructure Design

Thante Village Tract Taunggyi Township

Shan State

44

Taung Ni Aggregated Community Farm

45

Than Loon Aggregated Community Farm

Thein Kone VillageCommunity Commitment

PindayaMechanized Farming Best Practices

PRIME Heho DTRFDemonstration & Training

Thanloon VillageDrip Irrigation & Sustainable Farming Training

Thein Kone VillageCommunity Integration

PRIME Heho DTRFGlobal G.A.P. Training for Group Certification

Global GAP classroom training at PRIME Heho office

Global GAP field training at PRIME Heho DTRF

Mong Thaw West Village TractGlobal G.A.P. Training for Group Certification

U Maung Sein, Thein Kone Village FarmerGrowing potatoes for export on 3 acres

U Maung Shwe, Thein Kone Village LeaderGrowing potatoes for export on 1 acre

Mong Thaw East Village TractGlobal G.A.P. Training for Group Certification

U Chan Mya, Heke Village FarmerGrowing potatoes for export on 1 acre

Global GAP field training at PRIME Heho DTRF

U Hla Thaw, Village Tract LeaderGrowing potatoes for export on 10 acres

Thante Village TractGlobal G.A.P. Training

U San Aye, Kindon Village FarmerGrowing potatoes for export on 4 acre

Global GAP field training at PRIME Heho DTRF

Daw Aye Mu, Thanloon Village FarmerGrowing potatoes for export on 30 acres

PRIME Farms MyanmarThank You!