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Junta initiates reform in bean and pulses market |
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by Mizzima News
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Tuesday, 13 January 2009 14:19 |
After the unexpected slump in prices in the global bean and pulses market, many future traders were in trouble with liquidity crunch and finally had to abscond from fraud and cheating charges. To resolve this crisis, the military junta tried to decentralize the market monopoly in this segment. This might be good news for bean producers, who are being adversely affected. However, it is doubtful whether the junta will implement this plan seriously.. We might witness another failure in this regard, from these security-centered generals from whom we cannot expect any administrative and economic reform.
Secretary 1 of ruling SPDC Lt. Gen. Thiha Thura Tin Aung Myint Oo invited leading bean and pulses merchants and leading members of the 'Union of Myanmar Federation of Chamber of Commerce and Industry' (UMFCCI) to the International Business Centre and informed them of allowing formation of township-wise Bean and Sesame Trading Companies with not more than 50 members in townships.
The aim of establishing these companies is to alleviate the suffering of the bean producers and small traders in these townships, from market monopoly by Rangoon traders.
Currently, only three major trading companies are running in the bean market and all revenue circulation in this market depends on them. The junta expects the newly formed township level companies to tackle such problems.
Traders in Rangoon are buying at a price after deducting 10 percent sales tax payable to government and their profit margin. According to the nature of the market, the better competition in the market can give better profit to the bean producers.
But the rural traders are not yet interested in this new plan. These small rural traders could not afford to establish such companies in the past as they had insufficient capital.
Moreover these rural traders cannot yet handle the export trade. They have trading experience in just broker between producers and big traders.
But on the other hand, the government seems adamant to push this plan at any cost, the newly established township trading companies will emerge soon. The market turnover and export market will be in the hands of big financiers only.
In fact, there should be division of labour for a stable market. Producers should produce Traders trade and exporters should export the farm produce. To facilitate them, there should be free information flow in the market and slashing of export duty and taxes.
But according to the tradition of the junta, they assemble at the table and adopt imaginary and unworkable policies, which are never successfully implemented whenever there is a crisis. Currently too, there will be no significant and tangible result from this plan apart from increasing numbers of trading companies in the bean and pulse market.
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