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Burma News in International Herald (r)

Subject: Burma news in International Herald Tribune

It Seeks Foreign Help to Try to Expand Exports
By Thomas Crampton
International Herald Tribune
2 Nov. 1998

Phuket, Thailand - Burma, once the rice bowl of Asia, is renewing efforts
to revive its languishing agricultural industry by developing large
production zones for rice for export and enlisting foreign investment.

Among the projects is a 38,000 hectare (94,000-acre) island in the fertile
Irrawaddy river delta that has been set aside for long-term leasing to grow
rice for export. After selling half the crop to the govt. at near market
prices, investors can export the remainder.

Domestic and foreign investors have expressed an interest in growing rice
and other crops in Burma for export, but participants at an International
rice conference here last week said aging infrastructure and unclear govt.
policy could doom the plans.

The world's largest rice exporter in the years after World War II, Burma
has seen its agricultural production wither under decades of socialism and
isolation from the rest of the world. In recent years, rumors of increased
rice exports have caused hoarding.

This year, Burma expects to export nearly 100,00 metric tons (110,000 short
tons) of rice valued at about $23 million. While that is a sharp increase
from 14,000 metric tons last year, it is still millions of tons below what
is regarded as the country's potential.

While global demand for rice is easing now, it is expected to pick up again
in years to come. Growing population and shrinking amounts of land under
cultivation are expected to Asia's demand for rice imports over the next
decade or so. Burma is the only nation in the region positioned to meet the
shortfall, according to the International Rice Research Institute.

Confusing export-policy changes have doom several recent attempts to
encourage rice cultivation and could undermine the current initiative. But
a desperate need for hard currency is forcing the govt. to make greater
concession in return for foreign involvement, one source said, citing an
agreement with a foreign rice-trading company to select several thousand
tons of high-quality rice for export this year.

Malaysia, which ahs an industrialization policy that calls for development
of outside rice sources, is considering investment in the Burmese
production zone, said Larry Wong, senior consultant to Malaysia's monopoly
rice importer, Padiberas National Bhd., or Bernas.

The difficulty with projects such as Nyaungdon island in the Irrawaddy -
which already has several domestic investors - is that it involves large
tracts of land that require firming techniques never before employed in Asia.

While rice farmers in the United States and Australia seed 200-acre tracts
by aircraft and harvest by tractor, most Asian farmers plant and reap rice
by hand on small plots.

Large-scale cultivation requires a complex infrastructure, including
fertilization systems, irrigation pumps and modern drying facilities, that
is often unavailable for Burma's old fashioned rice industry.

"The greatest difficulty will be getting the full supply chain working," Mr
Wong said. "You may plant great rice in the world's best soil. But if you
can't mill, polish and export efficiently, the project will fail."

Burma Info
New Delhi.