Growers of crops, who in some circles are referred to as ‘farmers’, will receive advanced loans depending on their crops under an advanced purchase system, the renowned Win Star variegated vegetables trading business in Tatkon has reported.
The advanced purchase is offered for both mixed cropping and multiple cropping. All the brokerages do not offer advanced purchase. Some brokerages offer the advanced purchase only with the close farmers. If they have to give loans to strangers, they need to be guaranteed by a respected person.
Advanced purchase has risks because there is a possibility of losses. However, the price of advanced purchase is always lower than the market price at a harvest time, at which time the loans will be repaid. The farmers do not need to pay interest, said U Maung Maung Win, the proprietor of the Win Star variegated vegetables trading business.
An advanced payment of between Ks50,000 and Ks500,000 will be provided for various things such as sunflowers, groundnuts, green grams, pigeon peas and mung beans in the coming growing season.
“The growers of paddy, chili, tomatoes and onion can also ask for loan. Almost all the growers take payments from the advanced purchase system. We do not need to give the interest but we are faced with the price manipulation,” said U Win Naing Tun, a grower form Tatkon Township. Local seeds merchants also make the advanced purchase.
Myanmar’s seed industry suffered from heavy losses because of advanced purchase system in 2008. The government had to intervene to save the farmers, and the advanced purchase lost its popularity.