value chains for rural development q2 progress report,...

Value Chains for Rural Development

Q2 Progress Report, Annex 4

Value Chains Assessment Report:

Soybeans - Southern Shan

March 6, 2015

DISCLAIMER The author’s views expressed in this publication do not necessarily reflect the view of the United States

Agency for International Development or the United States Government.

USAID/Burma’s VC-RD Project AID-482-LA-00004

Q2 (2015) Progress Report, Annex 4, Soybeans Assessment

ii

TABLE OF CONTENTS

List of Acronyms ............................................................................................................................................................... iii

Introduction ........................................................................................................................................................................ 1

Market Trends .................................................................................................................................................................... 2

Demand ........................................................................................................................................................................... 2

Supply............................................................................................................................................................................... 5

Soybean Value Chain Map ............................................................................................................................................... 8

Description of Value Chain Actors ............................................................................................................................... 9

Input Supply .................................................................................................................................................................... 9

Production ...................................................................................................................................................................... 9

Trading .......................................................................................................................................................................... 11

Processing ..................................................................................................................................................................... 12

Summary of Value Chain Constraints and Possible Market-based Solutions .................................................... 14

Illustrative VC-RD Facilitation Activities .................................................................................................................... 15

Appendices:

(1) Itinerary and In-Country Activities Conducted

(2) Contact Details of Soybean Value Chain Actors Interviewed

(3) Value Chain Interview Guides

(4) Example Question Guides: Developing Demonstration Plots & Establishing Trial Plots

(5) Reference Documents



iii

List of Acronyms

FAO Food and Agriculture Organization of the United Nations

ha hectare

kg Kilogram

MMK Myanmar Kyat (local currency)

MT Metric Ton

USAID United States Agency for International Development

USD U.S. Dollar

USDA United States Department of Agriculture

VC-RD Value Chains for Rural Development Project

WB World Bank

Conversion:

1 USD = 1,030 MMK (as of January 2015)

1 Viss = 1.63 kilograms

1 MT = 612.5 viss

1 ha = 2.47 acres

Prepared by:

Henry Panlibuton, Consultant

Acknowledgements

The author would like to extend his deepest appreciation for all of the extensive technical and logistical

assistance provided in Myanmar by Winrock and the VC-RD project staff. Special thanks and

acknowledgement goes to the dedicated and hardworking soybean value chain actors visited throughout

this assignment. Their warm hospitality and willingness to openly share and discuss experiences was greatly

appreciated.



1

Introduction

The goal of the Value Chains for Rural Development (VC-RD) project, funded by USAID/Burma, is to

sustainably reduce poverty and hunger through: (i) improved smallholder productivity and profitability; (ii)

strengthened value chain linkages and competitiveness; and (iii) increased private sector engagement to

support value chain upgrading.

Based on a selection process conducted by the VC-RD technical team, approximately 10 value chains

were short-listed. Among the top value chains considered, soybeans were selected for further assessment

and served as a model for the VC-RD technical team to learn how to systematically conduct value chain

analyses. This report describes the process and findings of the Southern Shan soybean value chain

analysis—conducted by a team of VC-RD technical staff (Thet Htun Aung and Thet Swe) and led by the

consultant. See Appendix 1 for a detailed itinerary and summary of activities conducted in Myanmar.

Description of Activities and Methodology

A preliminary map of the soybean value chain was completed first and enabled the assessment team to

identify the main value chain actors and key informants to interview in Southern Shan (the initial focus of

the VC-RD project). The mapping exercise also provided an opportunity for the assessment team to show

their current understanding of the value chain’s primary activities/functions and to detect possible

information and knowledge gaps.

From January 13-February 29, 2015 the soybean assessment team conducted over 44 interviews with

value chain actors and key informants throughout the Taunggyi District of Southern Shan and in Yangon

including: agro-input suppliers, smallholder farmers, medium/large-scale farmers, village traders, township

traders, merchants, large-scale agents/brokers, oil millers, soybean-based food processors, poultry

producers, and relevant trade associations. Below is a breakdown of the types of actors interviewed (Table

1) and their general location (Figure 1). Complete contact details can be found in Appendix 2.

Figure 1. Interview Areas – Southern Shan



2

Table 1. Type/Location of Value Chain Actors Interviewed

To ensure the consistency and breadth of primary data collected, a structured interview guide was

developed and reviewed with the VC-RD technical team. The interview guide is not meant to be

an exhaustive questionnaire, but a tool or checklist for the assessment team to review topics and

possible areas of inquiry during the interviews (see Appendix 3).

Throughout the primary data collection process, the value chain map was continuously refined and

updated as more information was compiled and relationships became clearer. The most recent

value chain map for Southern Shan soybeans can be found in Section 3, and a brief summary of

the major value chain functions and related actors is presented in Section 4.

Market Trends

Demand

China’s Unmet Demand for Soybeans: As the largest producer in the world for both soybean oil

and meal (for protein animal feed), China currently consumes 86.2 million Metric Tons (MTs) of soybeans

with domestic demand increasing almost 8 percent over the past five years. Yet, with local soybean

production of only 12.3 million MTs, China has significant unmet demand. See Figure 2.

Value Chain Actor Villag

e

Level

Township/

District

Level

Yangon

Level

Agro-input Supplier 1

Smallholder Farmers 11

Large-scale Farmer/Trader 1

Small/Village Traders 6

Township Traders 5

Township Merchants 1

Local Feed Mills/Poultry 1 1

Small-scale Oil Mills 2 2

Large-scale Oil Mills 2

Local Food Processors/

Retailers

4 1

Large-scale Feed Mills 2

Yangon Agents/Brokers 1

Exporters 1

Trade Associations 1 1

Total Interviews [44] 21 15 8



3

Figure 2. China Soybean Consumption vs. Soybean Production: 2005-2014 (‘000 MT)1

Therefore, China must heavily rely on soybean imports to meet its needs. Importing approximately 74

million MT in 2014/15 (or 65% of total global imports), China is by far the world’s biggest buyer of

soybeans. See Figure 3.

Figure 3. World Soybean Imports: 2010-2014 ('000 MT)2

Growing Domestic Demand for Protein Meal: In Myanmar, the growing local demand for soybeans

is based on the increased need for protein animal feed (especially from soybean meal or cake) for

use in poultry, livestock, and fishery production. Depending on the type of poultry/livestock being

1 USDA/Foreign Agricultural Service; Production, Supply and Distribution Online data via IndexMundi.com 2 USDA/Foreign Agricultural Service; Production, Supply and Distribution (PSD) Online; Table 07: Soybeans: World Supply and Distribution

12,350

86,200

0

20,000

40,000

60,000

80,000

100,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

SoybeanProduc on SoybeanConsump on

China,74,000EuropeanUnion,12,750

Mexico,3,950Japan,2,900Indonesia,2,350

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000

2010/11

2011/12

2012/13

2013/14

2014/15



4

raised, the specifications for oil and protein content in animal feed can vary. For example, poultry layers

require higher protein and lower oil content while higher protein and oil is acceptable for broilers.

As a by-product of oilseed processing, the type of extraction method used will determine the protein and

oil content of the soybean meal/cake. (See Figure 4.) The primary type of oilseed extraction in Myanmar

is the mechanical screw press—a relatively inefficient

method that produces soybean cake with high oil

(approximately 30%) and low protein (approximately

15%) content. The use of hexane solvent, on the other

hand, is a more productive extraction process and

results in soybean meal with very little residual oil (less

than 1.5%) and higher protein (approximately 48%).3

Only one company, Ruby Lion Manufacturing Co.,

currently has the capacity for hexane processing in

Myanmar.

The expanding poultry and livestock industry demands

a substantial amount of high protein (and low oil) feed

meal that cannot be met by the small volumes of poor

quality, locally available soybean cake. Thus, it is estimated that over 65,000 MTs of soybean meal is

imported into Myanmar annually.4

Soybeans that are not crushed for oil are called “full fat”

and produce full fat soybean meal with higher oil

(approximately 18%) but slightly lower protein

(approximately 36%) than hexane-extracted meal. (See

Figure 5.) Full fat soybean meal is preferred for poultry

broiler production. As the largest broiler producer in the country, C.P. Livestock Co. meets 60% of its

animal feed needs with its own in-house full fat soybean processing. But the high cost and limited availability

of imported enzymes have hampered broad commercial production of full fat soybean meal in Myanmar.

Small but Developing Local Demand for Healthier Vegetable Oils: While the Myanmar market

for vegetable oil is quite sizeable (almost 1.3 million MTs in 2011), three-fourths of total

production/imports comes from only three sources: imported palm; sesame seed; and groundnuts. Cheap

imported palm oil, either used directly or mixed with other oils, is now the main vegetable oil

(approximately 31% of the total) in Myanmar. See Figure 6 below.5

3 Based on primary data collected via key informant interviews. 4 Ibid. 5 Source: based on FAOstat Food Balance Sheet; data and graphic extracted from Business Opportunities and Food Safety of the Myanmar Edible Oil

Sector (2014).

Soybean Oil (via screw press)

Soybean Oil (via hexane)

Soybean Meal

Soybean Cake

Soybean

Soybean

Figure 4. Types of Soybean Oil Processing

Full Fat Soybean*

Full Fat Soybean Meal

+ Enzyme

Figure 5. Full Fat Soybean Meal Processing

Figure 6. Myanmar Production and Imports of Vegetal Oil (2011)



5

Palm oil has high saturated fat that hardens in colder temperatures so most consumers prefer lighter oils,

especially groundnut. But pure groundnut oil is more expensive (4,500 MMK/viss or USD 2.68/kg.) than

sunflower, sesame, and other locally available oils. At the moment, soybean is only 3% of total vegetable

oils in the country yet there appears to be emerging domestic demand for it as a healthier and cheaper

(3,000 MMK/viss or USD 1.79/kg.) edible oil.

Supply

The United States, Brazil, and Argentina alone produce

over 82% of the world’s supply of soybeans (see Figure

7).6 China is also a major producer but, as mentioned

above, is not able to meet its own domestic

consumption needs and must rely on imports.

Within the Southeast Asia region, the top soybean

producing countries are Indonesia, Myanmar, Vietnam,

and Thailand. Over the past few years, soybean

production has generally declined throughout the

region. While starting with a smaller base, soybean

production in Myanmar has remained steady at 22% of

total regional production and area planted. (See Figure

8.)

6 USDA/Foreign Agricultural Service; PSD Online; Table 07: Soybeans: World Supply and Distribution

Figure 7. Global Soybean Production (‘000 MT)



6

Figure 8. Southeast Asia Soybean Production (2000-2014)7

The biggest soybean producing area in Myanmar is Shan State, accounting for more than 52% of total

domestic production. Other important production areas include the Ayeyarwady, Sagaing, and Bago

regions. (See Figure 9.) A more detailed description of soybean production in Southern Shan can be found

in Section 4.2 below.

7 USDA



7

Figure 9. Myanmar Soybean Production by Region/State (2011)8

8 Myanmar Statistical Yearbook 2011; Table 5.12 Sown Acreage of Selected Crops by Region and State.

KachinState4%

KayahState3% KayinState

2%ChinState1%

SagaingRegion8%

BagoRegion9%

MagwayRegion3%

MandalayRegion7%

MonState1%

ShanState52%

AyeyarwadyRegion10%



8

Soybean Value Chain Map

Input Supply

Production

So. Shan

Trading

Processing

Export

Smallholder Farmers

Agro-input Dealers

Small / Village Traders

Township Merchants Small Oil Mills

Large Oil Mills

(Ruby Oil, etc.)

Local Food Processors

Imported

Soybean Meal

Poultry Proc.

(CP, Teck Chg)

Large Feed Mills

(CP, May Kha)

Township Traders

Wholesale

Merchants

Exporters

CHINA

Yangon Food Processors

Med/Large-

scale Farmers

Imported

Soybean Meal

[Township Processor Channel] [Trader Channel] [Large Processor Channel]

Yangon

Brokers

Legend

line thickness is approx. trade vol.

= soybean oil/cake

= integrated relationship

Yangon

Trading

Local Poultry

[from Lashio]

[from Taunggyi]

Other Markets



9

Description of Value Chain Actors

A description of the major functions and related private sector actors shown in the soybean value chain

map (Section 3) are presented below.

Input Supply

Soybean farmers in Myanmar do not use many agro-inputs for production. Seed is their primary input and

is usually saved from previous crops and manually broadcasted. Commercial improved or hybrid seed is

not used in Myanmar. In general, soybean farmers will self-sort and select seed based on crop duration,

seed and plant size. Some farmers may get seed from small traders (that they sell to) or other soybean

farmers when needed. For an acre of irrigated land, it is estimated that eight to nine viss (approximately

14 kgs) of seed are needed. At a reported seed price of 1,700 MMK (USD 1.65) per viss at planting, total

local seed cost would be 14,450 MMK (USD 14.00) per acre.9

The two most common types of soybeans in Shan

State are “small round” seed with a three-month

duration and yield of 600 viss (978 kg.) per irrigated

acre, and “large round” seed with a three and a half-

month duration and yield of 800 viss (1.3 MT) per

irrigated acre. There is reportedly only 50 MMK

(USD 0.05) per viss difference in price between the

two seed types. It should be noted that soybean yields

for upland areas are significantly lower at only 250 to

350 viss (408 to 571 kg.) per acre.10

Overall, smallholder farmers feel that input costs for

soybean production are much lower than other

alternative cash crops. Since soybeans are typically

grown in rotation, fertilizer is not purchased explicitly

for its production. Soybeans benefit from the use of fertilizers for the previous crop (e.g. garlic, maize, or

rice). In areas where pod borers are prevalent, farmers will spray their plants during flowering to reduce

infestation. The cost for the pesticide spray is minimal at 2,000 MMK (USD 1.94) per acre.

Production

There is no large-scale or mono-crop production of soybeans in Myanmar; it is grown by smallholders

(i.e., < five acres) or medium/large-scale farmers (i.e., > five acres) on a crop rotational basis. In Southern

Shan, soybeans are produced on irrigated (Le) or upland (Yar) areas by an estimated total of 30-40,000

smallholders. Depending on the specific location and land type, cropping patterns for soybean will differ.

In Southern Taunngyi district, soybeans are produced in rotation with maize or rice in upland areas; or

9 Based on primary data collected via key informant interviews. 10 Ibid.

Sithu is a successful agro-input dealer in Shwe Nyaung,

within Taunngyi township, Southern Shan. In addition to

selling local/imported fertilizers and maize seed, he also

has farmland and is a larger-scale township trader of

maize. He is very interested in developing and

promoting improved soybean seed for farmers in the

area, and possibly trading soybeans.



10

grown in between garlic and rice on irrigated land. In Eastern and Northern Taunggyi districts, farmers

rotate soybeans with niger seed or else plant only maize/pigeon pea in upland areas; on irrigated land they

will grow soybeans both before and after rice. (See Figure 10.) The shorter duration (“small round”)

soybean is particularly important in the irrigated Le areas since the subsequent planting of rice immediately

after the soybean harvest cannot be delayed.

As stated in Section 4.1, higher-yielding commercial soybean seed varieties are not currently used in

Myanmar. In addition, the conventional farming and post-harvest practices (e.g. seed application, plant

spacing, land preparation, drying, storage, etc.) of most smallholders limits productivity and yield. No

formal extension advice or technical support for soybean smallholders was reported.

In the major production zones of Eastern and Northern Taunggyi, soybean harvesting takes place during

Monsoon so drying is an acute problem. Consequently, many farmers in these areas do not bother to dry

their soybeans very much, or at all, before selling to village/local traders. Similarly, local traders will sell to

larger township traders despite price deductions for high moisture content. Moreover, the available labor

needed for soybean harvesting during Monsoon is allocated for land preparation and planting of rice. See

Figure 11.

Figure 11. Cropping Calendar – Southern Shan

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Maize/Pigeon Pea – North & East Taunggyi (Yar)

Soybean - East Taunggyi (Le)

Garlic

Maize/Rice – South Taunggyi (Yar)

Niger Niger

Soybean - East Taunggyi (Le)

Garlic

Soybean - South Taunggyi

Soybean - North & East Taunggyi (Yar)

Pigeon Pea (Yar)

Soybean Maize/Rice

Garlic Soybean Rice

Yar (upland)

Le (irrigated)

[SOUTHERN TAUNGGYI]

Soybean Niger

Soybean Rice Soybean

[EASTERN & NORTHERN TAUNGGYI]

Maize/Pigeon Pea

Figure 10. Soybean Cropping Patterns in Southern Shan



11

In total, soybean farmers in Southern Shan produced an estimated 122,250 MTs (or 50% of national

soybean production) from approximately 80,000 acres last year.11

Trading

Soybean prices can range from 800 to 1,000 MMK per viss (or USD 0.48-0.60 per kg.) based on quality

specifications of moisture content, seed size, consistency of seeds, waste material, etc. Garlic prices are

more volatile, fluctuating from 500 to 2,000 MMK per viss (or USD 0.30-1.19 per kg.). Though maize

prices are more stable than garlic, at 280 to 400 MMK per viss (or USD 0.17-0.24 per kg.), the market is

unpredictable and input costs are high. Other cash crops may get better prices (e.g. black sesame at 4,200

MMK/viss or USD 2.50/kg; niger seed at 1,100 MMK/viss or USD 0.66/kg.; white sesame at 2,500 MMK/viss

or USD 1.49/kg.) but do not have the same trading volume and market potential as soybeans. Therefore,

smallholders remain attracted to soybean production with its relatively lower input costs, shorter

duration, larger volume market, and comparatively higher margins.

Like most agricultural crops, there are many levels of trading from the farmer to the final consumer or

buyer. At each level along the way, products gets collected and consolidated into larger volumes for

onward transportation and sales. From Southern Shan, the approximate flow and scale of formal soybean

trading is as follows:

from small/village-level traders (20-30,000 viss or 33-49 MT per year)

to township traders (200,000 to 1 million viss or 326 to 1,630 MT per year)

to district-level merchants (2 million viss or 3,260 MT per year)

to Yangon merchants (60,000 MT per year)

11 Ibid.



12

The main formal market channels for Southern Shan

soybeans are for processing (in the township/district or

at larger-scale factories in Yangon) or for eventual

export. See Section 4.4 for more on processing.

According to the Yangon-based exporters interviewed,

they cannot compete with other countries exporting

soybeans in bulk. “Value-added” soybean products

(sorted, graded, packaged and ready-for-retail) for

regional export are more competitive. Unlike

merchants or traders, exporters do not buy and store

commodities. They will only purchase once an order

has been placed and the final sales price is determined.

The soybean trade flows shown in Figure 12 (from

2005/2006)12 have not drastically changed, but

informal trade to China is now predominant. The

enormous unmet demand in China, not only for

soybeans but other commodities, drives border trade

from Southern Shan through buyers/agents in Lashio.

Lower transaction costs and direct transportation links

from Eastern and Northern Taunggyi to Lashio make

formal exports via Yangon less profitable. However, when the China gate is open it can adversely affect

other value chain actors by limiting available transportation to Yangon and other markets, decreasing raw

material for local mills/processors, etc.

It was noted that improved communication

technology and the pervasive use of cell

phones have shortened trade links in the

value chain. For example, several village-

level soybean traders in Southern Taunggyi

have grouped themselves together and can

now sell directly to large-scale buyers in

Yangon.

Processing

Soybeans from Southern Shan are

processed into oil, protein meal, and other

soy-based food products. Protein meal for

animal feed appears to be the fastest

growing market segment for processed

12 An Analysis of the Myanmar Edible Oil Crops Sub-Sector, Favre and Myint, FAO (2009), Map 9, p. 202.

Figure 12. Myanmar Soybean Trade Flow

(2005/2006)

Aung Na is a small trader of soybeans and other agricultural

crops in his village of Humsee, Southern Taunggyi District. He

started trading over four years ago and soon realized that with

the traditional ethnic cooperation in his community they could

generate economies of scale and bypass conventional sales

through district-level merchants. His village-based consortium

now annually sells approximately 2 million viss of soybeans

(3,260 MT) directly to large-scale buyers via his

broker/nephew based in Yangon.



13

soybean products in Myanmar, as mentioned in Section 2.1 above. With 65,000 MT of imported soybean

meal in the country per year (and possibly increasing), it will be impossible for local production to fully

meet this demand. Large animal feed mills and livestock/poultry producers state that locally available

soybean cake is not adequate for their compounds, but local poultry producers at the district-level still

use it for protein feed.

Figure 13. Soybeans and Soybean Meal Price Trends: 2005-2015 (US$ per kg., FOB Gulf)13

As a globally traded commodity, the local price of soybeans and soybean meal can be affected by current

global price indices. The price trends of soybeans and soybean meal are closely correlated as shown in

Figure 13.

Production costs in Myanmar are generally higher than imports due to lower yields, seed varieties, poor

production and post-harvest practices, etc. If the price of domestic soybeans far exceeds the landed cost

of imported soybeans or soybean meal in Myanmar (or the region), local production will suffer as a result.

The prevailing prices for various local oilseed cakes are shown in Table 2. Although soybean cake is more

expensive, it is preferred for its higher protein content.

Table 2. Local Oilseed Cake Prices

Type of Cake Price

(MMK/viss)

Price

(USD/kg.)

Soybean Cake 1,040 - 1,100 0.62-0.66

Groundnut Cake 700 - 1,050 0.42-0.63

Sesame Cake 800 0.48

Niger Cake 650 0.39

Sunflower Cake 500 0.30

13 Source: World Bank Commodity Data via IndexMundi

Soybeans Price, 0.37

Soybean Meal Price, 0.38

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

Jan-

05

Apr-0

5

Jul-0

5

Oct

-05

Jan-

06

Apr-0

6

Jul-0

6

Oct

-06

Jan-

07

Apr-0

7

Jul-0

7

Oct

-07

Jan-

08

Apr-0

8

Jul-0

8

Oct

-08

Jan-

09

Apr-0

9

Jul-0

9

Oct

-09

Jan-

10

Apr-1

0

Jul-1

0

Oct

-10

Jan-

11

Apr-1

1

Jul-1

1

Oct

-11

Jan-

12

Apr-1

2

Jul-1

2

Oct

-12

Jan-

13

Apr-1

3

Jul-1

3

Oct

-13

Jan-

14

Apr-1

4

Jul-1

4

Oct

-14

Jan-

15

Soybeans Price Soybean Meal Price



14

For soybean oil processors, the sale of their soybean cake is critical and the basis for covering raw material

costs. The largest soybean oil mills in Myanmar stated that unless a contract for their soybean cake was

finalized, they would not even begin any oil processing or extraction.

The consumer market in Myanmar for soybean oil is still

developing, according to the dedicated soybean oil mills

interviewed. The prevalence of cheap, imported palm oil is

not impeding the emergent trend for eating and cooking with

healthier foods. Most of the oil mills in Taunggyi District

process groundnuts (sourced from the dry zone) but a new

soybean processing and refining company was identified and

interviewed.

Soybean-based food processors produce products including

tofu, tempeh, fermented soybean cake, soy milk, etc. The

local demand for these traditional foods is consistent, yet

there seems to be an opportunity to expand local

production of soy milk which is quite popular with children.

Most of the soy milk in Myanmar is imported from Thailand

but some local companies are promoting their own locally

manufactured products—Snowball Soy Milk is among the

most prominent.

Summary of Value Chain Constraints and Possible

Market-based Solutions

A list of the major constraints in the soybean value chain was

compiled based on the interviews conducted and review of

available secondary data/reports. All of these constraints were expressed by a number of value chain

actors during the interview process. Consolidation and grouping of relevant issues and concerns was done,

where appropriate. For each of the key constraints, possible market-based solutions were identified and

purposely kept general to allow for further analysis of its economic, technical, and developmental

feasibility.

Focus group discussions were then conducted with key informants and value chain actors previously

interviewed. The purpose of these discussions was to: (i) validate the findings of the value chain analysis,

and (ii) explore possible market-based solutions in greater depth. The discussions also provided a unique

opportunity and forum for different value chain actors to share their experiences and perspectives on the

soybean sector.

The Diamond Arrow Soybean Oil Mill, located

in the Taunngyi Industrial Zone, was established

in mid-2013 with an initial investment of 110

million MMK (USD 107,000) for equipment and

technical servicing from China. It is the only

soybean oil mill and refinery in the Taunngyi

District; providing toll refining services as well.

According to the manager, U Aung Aung, the

Delta region is their main source of soybeans

because of its lower price (35% less than

Taunngyi) and reportedly higher oil extraction

rate. One of their biggest constraints is the high

moisture content of raw materials, which

increases the roasting time for processing and

related costs. Similar to other oil mills, they

recover raw material cost from soybean cake

and generate profits from oil sales.



15

Table 3. Summary of Soybean Value Chain Constraints and Possible Market-based Solutions

Value Chain Constraint Possible Market-based Solutions

Smallholders only use saved seed for soybean; no

improved seed available

Availability and access to improved soybean seed

for smallholders

Smallholders do not invest in inputs for soybean; reply

on residual fertilizers or inputs (from previous crop)

Access to trial plots and demonstrations of

improved soybean seed and practices for So. Shan

Limited available labor in most upland areas; difficult

for harvesting

Availability and access to appropriate tech. to

improve smallholder productivity

Farmers lack knowledge of “best” production

practices; reduces yield

Training for smallholders in improved soybean

production and post-harvest practices for So. Shan

Harvesting during monsoon makes drying difficult.

High moisture = lower price, lower quality, no storage

Availability and access to improved drying

equipment for soybean/grains

Soybean oil consumption is small (but growing as part

of groundnut oil mix) Promotion of local soybean oil as part of healthy

diet Increased imports of crude palm oil decreases demand

for local oils

Processors operating below capacity (est. <40%) Increased soybean production (due to improved

smallholder productivity) Growth of poultry industry drives demand for animal

feed protein (soybean)

During the focus group discussions, participants ranked the following market-based solutions as the most

important for VC-RD support in the short-term (See Table 3, shown in green):

Availability and access to improved soybean seed for smallholders;

Access to trial and demonstrations plots of improved soybean seed for Southern Shan;

Training for smallholders in improved production and post-harvest practices for soybean in

Southern Shan

Illustrative VC-RD Facilitation Activities

Building on the identification of prioritized market-based solutions, the VC-RD technical team should

identify value chain actors or “lead firms” for possible project collaboration. It will be important for VC-

RD to establish clear selection criteria for lead firms,14 such as:

existing or potential commercial linkages with large number of smallholders – facilitates larger

scale impact and allows VC-RD to use its resources cost-effectively;

sufficient financial strength and a long-term perspective (i.e., can make needed investments and

have the patience to wait for benefits to materialize);

14 Facilitating the Development of Outgrowing Operations: A Manual, Action for Enterprise (AFE), August 2009.



16

strong demand for their products and able to compete in the market (i.e., can positively influence

smallholders by helping them produce to specification, training them to use new products,

services, techniques, etc.);

potential to influence the value chain – by developing new strategies and approaches that serve as

models for other value chain actors to learn from and replicate

an acceptable reputation reduces the risk of problems due to inappropriate behavior; and

a willingness to collaborate with VC-RD openly and transparently

A few possible lead firms were already identified/self-selected during the focus group discussions, based

on their interest to acquire and promote the use of improved soybean seed in Southern Shan: an

integrated agro-dealer (U Sithu), a village trader (Aung Na), and a larger-scale farmer (San Swe). Myanmar

C.P. Livestock Co. Ltd. also expressed a willingness to explore collaboration with the VC-RD project, if

appropriate.

The VC-RD technical team can then begin to develop facilitation strategies in support of lead firm

interventions (i.e., developing demonstration plots, establishing trial plots, conducting smallholder farmer

training, etc.) and their market-based solutions. Typical facilitation mistakes to avoid include being overly

involved in the direct management of demonstration and trial plots, or insisting on a particular production

package that may not be feasible for smallholders. Instead, VC-RD should build the capacity of lead firms

to manage the plots sustainably on their own using technology and advice appropriate for smallholders in

the target areas. Related facilitation guidelines for VC-RD consideration15 are presented below. Examples

of question guides can be found in Appendix 4.

Developing Demonstration Plots: Demonstration plots are used to show smallholder farmers effective,

modern agronomic practices and to discuss the benefits of adopting the improved practices, including the

potential to increase their incomes. Farmers who may be reluctant to change production agronomic

practices are more likely to adopt them up after seeing the results displayed in demonstration plots. These

plots also can help increase farmer productivity and enhance trust and foster stronger relationships

between a lead firm and farmers.

Question guides are useful tools to help lead firms address a series of critical issues, including:

demonstration plot objectives

technical production practices and/or inputs to be used on the demonstration plot

number of demonstration plots and their size

location of the demonstration plots

role of the lead firm in managing the demonstration plots

role of the farmer selected to cultivate the demonstration plot

compensation for the farmer who is cultivating the demonstration plot

using the demonstration plot to motivate farmers to adopt improved production practices

15 Ibid.



17

VC-RD can assist lead firms through the thinking and planning process using the question guide, and

promoting farmer field days. VC-RD could also provide cost-share support for the expenses incurred by

the lead firm in creating and cultivating demonstration plots on a declining basis (e.g. 70% first year, 50%

second, 30% third, etc.).

Establishing Trial Plots: Trial plots are used to experiment with new varieties and production

methodologies. Trial plots differ from demonstration plots, which demonstrate proven practices that the

lead firm wants its smallholder to use.

Question guides are useful tools to help lead firms address a series of critical issues, including:

purpose of the trial plots

who will manage the trial plots

role of farmers responsible for cultivating the trial plot

information to be collected and the format for recording trial plot results

role of lead firm technical staff or “field agents” in supporting / managing the trial plots

choosing the area to be used for the trial plots

number of trial plots and their size

work plan for establishing the trial plots

VC-RD can support lead firms through thinking and planning trial plot development using the question

guide; building lead firm capacity to use trial plots to test new varieties and production techniques; and

organizing regional exchange/exposure visits for lead firms to meet relevant suppliers of seeds, inputs

and/or equipment for testing on trial plots. VC-RD could provide cost-share support for the trial plots on

a declining basis and facilitate access to technical specialists to advise and build lead firm capacity to manage

trial plots and effectively analyze results.

Finally, as VC-RD begins developing more detailed implementation strategies and work plans for the

soybean value chain, facilitation principles for the project to keep in mind include:16

promote relationships between lead firms and other market actors in the value chain

establish collaboration with lead firms

maintain professionalism and confidentiality

understand private sector and business principles

demonstrate VC-RD project track record with lead firms

transparency/neutrality

respect lead firms and their business, including their business risks

structure collaboration with lead firms in an appropriate way

ensure the sustainability of impact

16 Tools & Methodologies for Collaborating with Lead Firms: A Practitioner’s Manual, Action for Enterprise, 2014



1

APPENDIX 1

Itinerary and In-Country Activities Conducted



2

DATE ACTIVITIES

Jan 4, Sun am arrival in Yangon from Washington DC

Jan 5, Mon initial briefing with VC-RD COP and value chain team

Jan 6, Tue finalize and prepare materials for training

finalize and prepare materials for training

Jan 7, Wed training in Value Chain project design and implementation

Jan 8, Thu training in Value Chain project design and implementation

Jan 9, Fri am

pm value chain selection exercise

preparation for value chain analysis and initial mapping (soybeans)

Jan 10, Sat am

pm preparation of value chain analysis

initial review of secondary data on soybeans

refinement of interview guides and map

Jan 12, Mon am

pm review of draft interview guide for value chain analysis

finalize logistics for travel to Taunggyi

travel to Taunggyi; review of interview guide with Taunggyi team

Jan 13, Tue interviews with value chain actors in Tuanggyi town

Jan 14, Wed interviews with value chain actors in Taunggyi Industrial Area

Jan 15, Thu interviews with value chain actors in Southern Taunggyi

Jan 16, Fri interviews with value chain actors in Eastern Taunggyi

Jan 17, Sat am

pm continue review of available secondary data on soybeans

compile data from interviews and draft briefing PPT

Jan 19, Mon am

pm validate data from interviews with

de-briefing with VC-RD value chain team team and finalize briefing PPT

Jan 20, Tue am

pm interviews with value chain actors in Tuanggyi Industrial Area

present session on “Working with Lead Firms” to value chain team

Jan 21, Wed am

pm travel to Yangon

interviews with value chain actors in Yangon

Jan 22, Thu interviews with value chain actors in Yangon

Jan 23, Fri am

pm interviews with value chain actors in Yangon

compile data from interviews

depart Yangon to Washington DC

Fri-Sun, Feb 6–8 Travel to Myanmar (Washington DC-Yangon)

Mon, Feb 9 am

pm Travel from Yangon to Taunggyi

De-briefing with VC-RD technical team and discussion of activities to date

Review and revise presentation of soybean value chain analysis summary

Tue, Feb 10 Preparation for Taunggyi focus group discussion with VC-RD technical team

Wed, Feb 11 am Conduct Focus Group Discussion with Key Informants in Taunggyi

Thu, Feb 12 Compile notes and prepare write-up of Focus Group Discussion process

Fri, Feb 13 am

pm De-brief VC-TD team about process and results of Focus Group Discussion

Interview Value Chain Actors in Taunggyi (Diamond Arrow Soybean Oil Co.)

Sat, Feb 14 am

pm Compile notes and findings

Return travel to Yangon

Sun, Feb 15 Open

Mon, Feb 16 am

pm Interview value chain actors in Yangon (CP Myanmar Livestock Co. Ltd.)

Briefing VC-RD technical and management team

Tue, Feb 17 am

pm Interview value chain actors in Yangon (Ruby Lion Oil Co. & Mya Oil Co.)

Preparation for Yangon focus group discussion with VC-RD team

Wed, Feb 18 am

pm Conduct Focus Group Discussion with Key Informants in Yangon

Interview value chain actors in Yangon (CP Myanmar Livestock Co. Ltd.)



3

DATE ACTIVITIES

Thu, Feb 19 am

pm Interview value chain actors in Yangon (Ruby Oil Co. and ??)

Discussion of proposed M&E tools for VC-RD project

Fri, Feb 20 am

pm Present “Working with Lead Firm” session highlights to VC-RD technical and

management team

De-brief USAID on Value Chain Analysis findings and process completed

Sat, Feb 21 am

pm Compile notes and value chain analysis findings

Return travel to U.S. (Yangon to Washington DC)



4

APPENDIX 2

Contact Details of Soybean Value Chain Actors Interviewed



5

SOYBEAN VALUE CHAIN ACTORS INTERVIEWED

CONTACT DETAILS

Date of

Meeting

VC Actor Type Location Name Contact Information

Jan 13,

Tue

Township Trader Taunggyi Town U Hla Baw 081-2121423, 09250483302

West Town Circular Road

Chan Mya Tar Zi, Taunggyi

Township Trader Taunggyi Town U Maung Soe 09-5212089

No.20 , West Town Circular Road

Zay Pine Yat, Taunggyi

Local Collector Taunggyi Town U khun Saw Hla 09-250887877

Kan Gyi Ward , Kyauk Ta Lone Road

Trade

Association

Taunggyi Town Aung San Win

Chairman, Southern

Shan State

Chamber of Commerce & Industry

No. 43 Nagapwet Kyaung St.

Zaypine Qtr., Taunggyi

mob: +95-95108580

email: [email protected]

Trade

Association

Taunggyi Town U Aung Kyaw Nyunt

Deputy Director

Department of Trade Promotion

Ministry of Commerce

Taunggyi

mob: +95-9-5214375


Township

Merchant

Taunggyi Town Khun Aung Thein Shwe crops trading

No. (ma) 123, Yae Me street , Myoma Ward,

Taunggyi

081-2121364 , 081-21215283, 095214281,

095342279

Jan 14,

Wed

Local Oil Mill Taunggyi Industrial

Zone

Groundnut Oil Mill

U Htun Wai

Shwe Myar Oill mill

Aye Tha Ya Industrial Zone

081 2121929, 095212017

Local Oil Mill Taunggyi Industrial

Zone

Soybean Oil Mill

U Cho Cho

Nanda Linn Oil mill

Aye Tha Ya industrial zone

09-5213247

Agro-input

Dealer

Shwe Nyaung

Township

U Sithu Sithu Fertilizer and crops trading

No.1/33, Thida street , Thuhkachantha Ward

Shwe Nyaung

09-5210409, 095185270, 081 45345

Large

Poultry/Feed

Mill

Taunggyi Town Dr. Thein Sein

Teck Chaung

Teck Chaung poultry feed & livestock feed

413 Zaw Ti Ka street, Yae Aye Kwin Ward ,

Taunggyi

081-2121862, 081-2122657

Jan 15,

Thu

Smallholder

Farmer

Kaku Village,

Southern TGI Dist.

Khun Maung Hein 0936194811, Kaku village

Smallholder

Farmer

Kaku Village,

Southern TGI Dist.

Sai Lu C/O U Pwe, Kaku village

Village Food

Retailer

Kaku Village,

Southern TGI Dist

Ma Aye Hla Kaku Pagoda retail shops

Small/Village

Trader

Humsee Village

Southern TGI Dist.

U Maung Latt Grocery, Fertilizer & crops shop

Hum See Village

mailto:[email protected]




6

Date of

Meeting


Small/Village

Trader

Humsee Village

Southern TGI Dist.

Aung Na Ph: 09-8351115 , Humsee Village, Kyauk Ta

Lone Township

Jan 16,

Fri

Medium/Large-

scale Farmer

Mai Pon Township

Eastern TGI Dist.

San Swe Ph:0949359697

Rice Hauler and crops trading

Mong Pon Township

Small/Village

Trader

Mai Pon Township

Eastern TGI Dist.

U Laung

(Soybean trader)

Zay Oo ward , Mong Pon Township

Local Food

Retailer

Taunggyi Market

Taunggyi Town

Htun Aye Yar

Cooking oil retailer

Ph:081-2124812 , Myoma Market, Taunggyi

Local Food

Retailer

Taunggyi Market

Taunggyi Town

Aye Thu Zar (85% Pure

Groundnut oil)

Ph: 095213557 Myoma Market, Taunggyi

Local Food

Retailer

Taunggyi Market

Taunggyi Town

Shwe Pyae Sone

cooking oil retailer

Ph: 09250254737, 095211671,

Myo Ma Market , Taunggyi

Local Food

Retailer

Taunggyi Market

Taunggyi Town

Say Ta Na Mon

Cooking oil retailer

No. (Nya) 1167 Thin Gi Street , Ward (1)

Nyaung Phyu Sa Kan , Taunggyi,

Ph:08124719, 09 5212986

Jan 20,

Tue

Local Food

Processor

TGI Industrial

Zone

Tofu Processor 1 Daw Mya Shwe, Ph: 093609339,

09250951731

Htoon Bo Ward, Aye Tha Ya Township

Local Food

Processor

TGI Industrial

Zone

Tofu Processor 2

Local Feed Mill TGI Industrial

Zone

Myo Win ,Feed Mill Ph:095343009, Aye Tha Ya Industrial Zone

Jan 21,

Wed

Exporter South Dagon

Yangon

Naing Win Aung

(Arthur), Director

No. 301-305 Bago St. Industrial Zone (1)

South Dagon, Yangon

mob: +959-540-9033

email: [email protected];

[email protected]

Aung Naing

Managing Director

No. 301-305 Bago St. Industrial Zone (1)

South Dagon, Yangon

mob: +959-500-7734


Local Food

Processor

Yangon Rick Chase

Snow Ball Soy Food

mob: +95-01-09-425 022 355


Jan 22,

Thu

Wholesale

Merchant

Yangon Dr. Myint Oo

Managing Director

Thein Yarzar Co. Ltd.

C.62 Aug Tha Pyay St.

Bayint Maung Mayangone Township

Yangon

mob: 0173009924, 095128424


[email protected]

Large Feed Mill

/ Trade Assoc.

Yangon Dr. Hla Hla Thein

Vice Chairman

Myanmar Livestock Federation (MLF)

Bayint Naung Road, West Gyogone

Insein Township, Yangon

tel: 01-642817; mob: 09-5147058










7

Date of

Meeting


Yangon Dr. Than Hla

Executive Advisor

Myanmar Livestock Federation (MLF)

Bayint Naung Road, West Gyogone

Insein Township, Yangon

mob: 09-5152694


[email protected]

Large Oil Mill Yangon Ms. Pont Pont

Marketing Manager

Ruby Lion Manufacturing Co. Ltd.

27/28 Thirimon Rd., Thirimon Plaza

Bayintnaung, Mayangone Township

Yangon

tel: 01-682461, 682462 682941, 682017

Jan 23,

Fri

Yangon Broker Yangon U Moe Chein (Nephew

of Aung Na)

No.D 31 ,Aung Tha Pyay lane , BaYint Naung

Commodities exchange, Yangon

Ph:09250254320

Jan 26,

Mon

Smallholder

farmer

(G’nut, Maize,

Rice, Niger)

Yat Saut Town ,

@Lawsawk

U Tin Swe Hle Toe Village , Yak Saut Township

Smallholder

farmer

(G’nut, Maize,

Niger)

Yat Saut Town ,

@Lawsawk

U Kamaraj Par Pann Village, Yak Saut Township

Smallholder

farmer

(G’nut, Maize,

Soybean)

Yat Saut Town ,

@Lawsawk

U San Mya Nyaung Paw village, Yak Saut Township

Smallholder

farmer

(G’nut, Maize,

Soybean)

Yat Saut Town ,

@Lawsawk

U Maung Pu Htone Pho Village, Yat Saut Township

Smallholder

farmer

(G’nut, Maize,

Soybean, Niger)

Yat Saut Town ,

@Lawsawk

U Maung Oo Htone Pho Village, Yat Saut Township

Smallholder

farmer

(G’nut, Maize,

Niger)

Yat Saut Town ,

@Lawsawk

U San Gyi Htone Pho Village, Yat Saut Township

Smallholder

farmer

(G’nut, Maize,

Soybean, Niger)

Yat Saut Town ,

@Lawsawk

U Mya Linn Nyaung Pauk Village, Yat Saut Township

Smallholder

farmer

(Rice, Maize,

niger)

Yat Saut Town ,

@Lawsawk

U Kyaw Naing Ga Naing Gyi Village, Yat Saut Township

Local Oil miller

(G’nut)

Yat Saut Town ,

@Lawsawk

U Nyo Htun Myoma ward, Yat Saut Township

Local Oil Miller

(G’nut)

Yat Saut Township

@Lawsawk

U Myint Lwin Myoma Ward, Yat Saut Town ships

Town trader Yat Saut Township U Nyunt Win Kyaw family crops trading





8

Date of

Meeting


@Lawsawk West New ward, Pinttaya Road, Yat Saut

Township

Ph: 0949364373 , 09428357587, 081 204182

Jan 27,

Tue

Town trader Le Char Township

@Laihka

U Ye Min Htun U Maung Htay Crops & Fertilizer trading

Malam Village, Le Char Town ship

Ph: 09492 63531

Town trader Le Char Township

@Laihka

U Tin Aung Kone Maung San Crops trading

Le Char Town C/O U Ye Min Htun

Smallholder

farmer

(Soybean, Niger,

Maize

Le Char Township

@Laihka

U Linn Pan Aye Village

Lechar Township

Jan 28,

Wed

Poultry Eggs

producer

Pang Long

Township

U Kyaw Win Pang Long Myoma Ward

Ph:09 5214609

Township trader

(Soybean,

Maize, grndnut,

Seasame)

Mongnai Township U Myo Min Ph: 09428219569, 094935144

Township Trader

(Grndnut, Maize)

Mongnai Township Daw Kam Sein Ph: 095216570

Jan 29,

Thu

Township Trader

(Maize, Grndnut,

Soybean, Niger,

Ginger, Pig. Pea)

Namsanng

Township

Daw Cherry Khine Ko thet+ Ma Khine

Crops & fertilizers trading

Namsang Township

Ph: 09 8362573 , 09 428354968

Feb 13,

Fri

Soybean Oil Mill

& Refinery

Taunggyi Industrial U Aung Aung

Diamond Arrow Soybean Oil Mill

3/39 Bo Gyoke Street, Aye Ta Yar Industrial

Zone, Taunggyi

Ph: 081 212 7844 , 09 861 2364

Feb 16,

Mon

Livestock Co.

(and agricultural

conglomerate)

Yangon Dr. Myo Thant

Assistant VP

Integration Business

Myanmar C.P. Livestock Co. Ltd.

135, Pyay Rd., 8½ mile

Mayangone Township

Yangon

mob: 09-513-3943

[email protected]

Feb 17,

Tue

Large-scale Oil

Mill

Yangon Ms. Thandar Linn

Director

Ruby Lion Oil Co.

27/28 Thrimon Road Plaza Compound

Bayint Naung , Mayangone Township,

Yangon

Ph: 09 5185599, 01-682941 Ext:107

Email: [email protected]

Large-scale Oil

Mill

Yangon Daw Khin Myo Thit

Mya Oil Mill Ltd

1/B, Padinwun U Shwe Bin St., Shwe Lin

Pann Ind. Zone, Hlaing Thayar Tsp. Yangon

Ph:01 617034, 09 500 7664

Feb 18,

Wed

Rep. WISHH

Project (ASA)

Yangon April Su Yin Nwet

Project Manager

www.wishh.org

675(B) Shwe Hnin Zee Lane (6)

8.5 miles, Mayangone

Yangon


mob: +95-9-254-1465-88


http://www.wishh.org/




9

APPENDIX 3

Value Chain Interview Guides



1

Interview Guides for Value Chain Analysis

This interview guide can be used with value chain participants at all levels of the chain, and is designed to (i) identify the primary actors in the

value chain, their roles, and interrelationships; (ii) identify market channels and trends within the value chain; and (iii) identify constraints and

opportunities for growth and competitiveness. Note: This should be used as a discussion tool for interviews, not a questionnaire for completion.

Introduction:

“thank you for taking the time to speak with us today. My name is____ with ___ an intl. development organization

“we are collecting information on [value chain] as part of a new project to support smallholder farmers”

“we realize the importance to speaking with people at ALL levels with the value chain to understand the sector”

INTERVIEW QUESTIONS NOTES

Background Information

Date of interview / Name of Person(s) Interviewed / Interview Location

Value Chain function / Name of Business

Contact information (including cell, address, etc.)

(1) Production [or Processing]

What crops/products are you producing?

How large is your production area / farm? What area per crop?

Do you own the land where you produce? Do you have documented title?

What is your yield per crop?

Which crops/products are most profitable? What are production costs/crop?

What is the seasonal cropping pattern? How many crops per year?

Where are the highest production areas located?

For how long have you produced these crops?

Do you hire any labor for production of these crops? How much/often?

What is the Labor calendar?

(2) Input Supply

What inputs are needed for your production?

Where do you get these inputs? (name of supplier, location) At what cost?



2

INTERVIEW QUESTIONS NOTES

How much (and how often) to you use of these inputs?

What support do your input suppliers provide to you?

What technical or extension advice do you access? From where? How?

(3) Market Access

Who are your main buyers? (names of buyer, location)

What volume do you sell to your buyers (volume per buyer)?

How long have you been selling to your buyers? What are the trends?

What support do your buyers provide to you?

Who/where are your major competitors?

What product promotion or advertising have you done?

What standards/requirements do your products need to meet?

What different product grades are used? What is the price per grade?

What are the final products? What are the consumer trends?

(4) Finance

Where do you go when you need money for your business? What terms?

Do you get credit from input suppliers or buyers? What terms?

Do need any additional financing? If so, for what purpose? At what terms?

What collateral is necessary to access finance?

(5) Policy/Regulation

What policies/regulations benefit your business? Local taxes (informal)?

What policies/regulations are obstacles to growing your business?

(6) Other Questions

What infrastructure constraints are affecting you?

Are you a member of an association/group for your business? What services do

members receive? Cost of membership?

What are the Top 3 major constraints affecting you at the moment?

What do you think should be done to address these constraints?



3

APPENDIX 4 17

Example Question Guides:

Developing Demonstration Plots & Establishing Trial Plots

17 Ibid, extracted p40-45.



1

EXAMPLE LEAD FIRM QUESTION GUIDE:

Developing Demonstration Plots

How will you use demonstration plots?

Demonstration plots are frequently used to demonstrate both effective, modern agronomic practices to

producers and the profitability and benefits of adopting the varieties and improved practices it

recommends. Farmers who are reluctant to change their agronomic practices are more likely to pick them

up after seeing demonstration plot results. Demonstration plots can lead to increased trust and stronger

relationships with farmers and, if used effectively, can improve farmer productivity.

1) What are the objectives of having demonstration plots?

Demonstrating production techniques that can increase productivity

Showing farmers the proper way to handle and use inputs such as:

new seed varieties

fertilizers

pesticides and herbicides

Motivating farmers to adopt improved practices and/or inputs for better yields and product

quality.

2) What technical production practices and/or inputs will you use on demonstration plots?

Production packages should be affordable and readily accessible, and farmers should be able to

adopt the demonstrated practices / inputs quickly and easily

Technical production practices / inputs used on demonstration plots should be practical and

appropriate to the local setting. The lead firm must ensure that practices / inputs correspond to

local agronomic parameters (soil, climate, geography, etc.).

3) How many and what size demonstration plots will you have?

It is better to have a few well-cared-for demonstration plots than it is to have many that are not

properly tended and, therefore, unlikely to display good results

Though it may seem ideal for each leading farmer to have a demonstration plot, it could be

expensive to set up and lead firm field agents might find them difficult to monitor

Plots should be large enough to provide a good demonstration of techniques, inputs, etc. and small

enough to manage easily.

4) Where will you locate demonstration plots?

Demonstration plots should be in strategic, easily accessible, visible locations for farmers living in

the area

Locating demonstration plots near areas where the company organizes farmer training / coaching

sessions is an advantage.

5) What is the lead firm’s role in managing demonstration plots?



2

Important considerations:

It is better for a lead firm to be involved in managing demonstration plots—leaving management

entirely to farmers could lead to substandard results

The lead firm should assign a field agent to monitor the plots and guide farmers

The lead firm should have a checklist for the preparation and management of demonstration plots.

The role of the lead firm in managing demonstration plots may include:

Selecting experienced farmers with suitable land and location

Selecting the demonstration plot site

Testing the soil when possible

Collecting and distributing inputs such as seeds, fertilizers and pesticides

Assessing seed quality through purity, germination and vigor tests

Treating seeds before planting

Preparing a detailed work schedule, monitoring the plot at regular intervals and providing guidance

and supervision to ensure:

Proper land preparation—plowing, laddering, fertilizer dosing, soil moisture, etc.

Sowing seeds at the appropriate time

Transplanting seedlings at the proper age

Employing crop management practices such as mulching, fertilizer application, thinning,

weeding, rouging, etc.

Monitoring for insects and diseases and the application of control measures such as

appropriate pesticides and non-chemical / integrated pest management (IPM) alternatives

if available

Harvesting demo plot crop(s) separately from those in other plots at appropriate stages

and using proper methods

Post-harvest operations such as threshing, cleaning, drying, sorting, grading, packaging,

storing, etc.

Weighing and recording crop yield after completing post-harvest processing (both sorted

/ graded and ungraded / unsorted)

Recording data in the approved format.

6) What is the role of leading farmers selected to produce on demonstration plots?

It is important that the most qualified and trustworthy farmers should manage the demonstration plots—

lead firms should not automatically select any farmers as “plot managers.”

Possible roles for demonstration plot farmers:

Assisting the lead firm select suitable land

Preparing the land according to company directives

Timely and proper sowing of seeds as advised by the lead firm

Following crop management practices such as mulching, fertilizer application, thinning, weeding,

rouging, irrigation etc. per lead firm advice

Visiting the demo plot regularly and advising the lead firm of any problems



3

Adopting proper, company-directed pest control measures

Harvesting, threshing, cleaning sorting, grading and drying crops as directed by lead firm

Assist lead firm to record data

7) How will you compensate the farmer cultivating the demonstration plot?

Some lead firms engage an expert farmer, provide all the inputs and agree that the farmer can keep the

harvest in return for maintaining and opening up the plot for farmer field days. The lead firm may consider

contributing labor and irrigation costs up to harvest (weeding, mulching, etc.) to ensure they are done

correctly.

8) How will you use the demonstration plot to motivate farmers to adopt improved

production practices?

Prepare sign boards with specific information and arrange to display them at the demonstration

plot site

Organize formal field days at demonstration plots and invite neighboring farmers to observe

production and harvesting techniques

Use demonstration plots in conjunction with other training / coaching activities for farmers

Keep track of input / output data and share analysis results with farmers

Organize and conduct guided visits to the plot at strategic points during soil preparation, planting,

growing and harvesting.



4

EXAMPLE LEAD FIRM QUESTION GUIDE:

Establishing Trial Plots How will you use trial plots?

Trial plots are used to experiment with new varieties and production methodologies. Trial plots differ from

demonstration plots, which lead firms use to show farmers how to carry out a proven practice it wants

them to emulate. If the varieties and production methods grown and used on trial plots are successful,

companies may show them to farmers. Lead firms also use trial plots to conduct multi-location trials of

new varieties in conformance with government regulations that require they be tested before being

released throughout the country.

1) What is the purpose of your trial plot?

Lead firms use trial plots for a variety of reasons including testing new seeds in local climatic

conditions, new production methods (seed versus transplanting, etc.), flood versus drip irrigation,

spacing, multi-location trials, and the like

Lead firms need to make sure that chosen varieties and technologies under experimentation are

appropriate to the local climate, context and realities.

2) Who will manage your trial plot?

The lead firm may choose either a participatory trial managed by local farmers or a lead firm-managed

trial. There are arguments for either choice, depending on whether the lead firm has the land, qualified

staff, etc. In either case, the lead firm needs to be very involved in managing and monitoring the trial plot—

much more so than it does with demonstration plots.

3) What should be the role of the farmer responsible for cultivating the trial plot? (case of a

participatory trial in which a farmer takes an active role)

The farmer must follow strict lead firm protocols regarding trial objectives and purpose

The farmer should help the lead firm keep track of trial results

The agreement with the farmer must state that the farmer will provide or sell the harvest to the

lead firm, which should be prepared to compensate the farmer for lost production.

If the lead firm contracts with a local farmer to use his/her field, it must provide all inputs, labor

costs and other expenses to ensure quality

Farmer involvement can include selecting and preparing land, sowing seeds, applying company-

developed production packages, visiting the field regularly, reporting problems to the field agent,

taking preventive measures to protect against disease, harvesting / cleaning / storing the crop,

keeping track of the register, etc.

4) What information will be collected and in what format to record results of the trial plot?

(See Illustrative Format for Recording Data, below)

5) How will lead firm technical staff support and manage the trial plot?



5

The lead firm should be actively involved in managing the trial plots (preferably with hired

expertise on its own or leased land) to ensure that results are accurate.

The lead firm also must ensure that staff have clear instructions and correctly monitor the trial

plot—otherwise it is not worth the investment.

6) How will you choose the trial plot area?

Lead firms should take care when choosing land for trial plots, ensuring that soil and conditions

are both suitable for and similar to the projected outgrowing operation areas.

Trial plots should be located within easy access to facilitate visits

The selected area should be close to an irrigation source.

7) How many trial plots will you have and what size will they be?

It is better to have a few well-cared-for trial plots than it is to have many that are not properly

tended and, therefore, unlikely to display good results.

Trial plots should be large enough to provide useful trials, but small enough to be easily managed

8) What is your work plan for establishing trial plot(s)?

ILLUSTRATIVE FORMAT FOR RECORDING DATA WHEN TESTING THE PERFORMANCE OF FOUR

NEW SEED VARIETIES

Company Name: Farmer

Name: Location:

Crop:

Variety:

Plot size: Date of sowing/transplanting: Date of harvest

1st:

2nd

:

3rd

:

Variety Name

Germination

DF

at 50

%

DM (at

80-

100%)

No. of

Pods

/ Plant

Disease

Infestation

(%)

Insect Infestation (%)

Plot Yield (kg) Yield / Acre (kg)

No. of

days

% 1st 2nd 3rd 1st 2nd 3rd 1st 2nd 3rd 1st 2nd 3rd Total

Variety 1

Variety 2

Variety 3

Variety 4

…………

Total

DF=Days to flower DM=Days to maturity

Special notes (if any)

Note: Preferred size of plot should be 10’X10’ per variety



6

Illustrative activities include site and farmer selection, soil testing, input collection/distribution, seed quality

assessment, seed treatment, land preparation, seed planting, sign board preparation, crop husbandry

practices (mulching, fertilizer application, thinning, weeding, rouging, etc.), harvesting, cleaning, drying,

sorting, packaging, storage, etc.



7

APPENDIX 5

Reference Documents

Action for Enterprise (AFE), (2014), Tools & Methodologies for Collaborating with Lead Firms: A Practitioner’s

Manual, Action for Enterprise.

Action for Enterprise (AFE), (2009), Facilitating the Development of Outgrowing Operations: A Manual.

Favre, Raphy and Myint, U Kyaw (2009), FAO Consultants, An Analysis of the Myanmar Edible Oil Crops

Sub-Sector, Rural Infrastructure and Agro-Industries Division (AGS), Food and Agriculture Organization

of the United Nations (FAO).

Wijnands, Jo H.M.; Biersteker, Jaap; Hagedoorn, Leo F.; and Louisse, Jim (2014), Business Opportunities

and Food Safety of the Myanmar Edible Oil Sector, LEI Wageningen UR and The Netherlands Enterprise

Agency (Rijksdienst van Ondernemend Nederland (RVO.nl)).