Agriculture, which includes crop production, hunting, fishing, and forestry, is the mainstay of the Burma economy. This sector is responsible for much of the income and employment in the country. About 60 percent of the GDP comes from agriculture, and as much as 65 percent of the labor force is employed in this sector alone. Burma produces enough food to feed its entire population. In the absence of purchasing power, however, many people go hungry. Further, about a third of the rural households do not have any land or livestock. Only half of the arable 45 million acres is under cultivation.
Rice is the most important agricultural commodity of Burma. Rice production increased from 5,200,000 metric tons in 1950 to 16,760,000 metric tons in 1993. The crop is cultivated along the river valleys, coastal areas, and in the Irrawaddy River delta. A wide variety of crops are cultivated in the northern dry zone. Rubber and other commercially useful products are cultivated in the Irrawaddy and Tenasserim regions. Agricultural products form the bulk of the export trade and include rice, teak, prawns, beans and pulses, and opiates.
Burma's agriculture is heavily dependent on the monsoon rains. While some areas suffer from too much rain, other regions receive too little. Government efforts in the 1990s increased the amount of irrigated land to 2.2 million acres. Many agricultural products like tobacco, sugar, groundnut, sunflower, maize, jute and wheat, however, have not reached their pre-1985 production levels. This reduction is offset by higher production in rice, pulses and beans. Rice production increased due to supportive government policies as well as favorable market forces. According to Asian Development Bank estimates, however, real annual growth in agriculture declined from 5.0 percent in 1996-97 to 3.7 percent in 1997-98 and to 2.8 in the 1998-99 fiscal years. Further, per-acre yield of the crops has not increased because of inadequate application of fertilizers and pesticides. One factor that helped to improve production was the removal of government controls over the agricultural sector.
Deforestation has been a major concern in Burma. The slash-and-burn method of agriculture is destroying the forests of the country, causing soil erosion and depletion of fertility. Periodic droughts, floods, landslides, and cyclones sometimes have devastating effect on agriculture. For example, flooding in Pegu and Irrawaddy during the 1997-98 growing season did considerable damage to rice production. Consequently, Burma exported only 28.4 thousand metric tons of rice in the 1997-98 season as opposed to 93.1 thousand metric tons in the previous year.
The heavy reliance on monsoons is a major handicap for Burmese agriculture. The authorities have recently renovated dams and reservoirs, built new ones, pumped water from rivers and streams and taken other measures to improve irrigation. More remains to be done in this regard. Another impediment to agricultural improvement is the inability of farmers to secure adequate loans to enhance cultivation. Private lenders charge exorbitant rates, and there are not enough banking institutions to serve people in the rural areas. As a result, farmers are not able to buy fertilizers and pesticides for their crops. Financial services need to be improved to make funds available to the cultivators.
The economic liberalization policies of the military junta have transformed the agricultural sector. Under the new economic system, the government distributed land among the landless, improved irrigation facilities, and increased the floor price of paddy that the government procures from the farmers. Some private activity in the export sector has been allowed since economic liberalization began in 1989. Consequently, the share of the agricultural sector in the GDP has gone up.