U Thein Myint
Myanmar’s farmers have very close ties with Myanma Agriculture Development Bank (MADB) since it was established by the country’s founding fathers 60 years ago and the relationship has now reached down to their grandchildren who inherited the farm. Of course, over the decades, different rulers and governance systems did come and go but MADB has always been going on, providing cultivation loans without collateral and with affordable interest to the 2 million individual farmers every season throughout the period.
In those days, all farmers worthy of their names must own full set of farm implements, such as plough, ploughshares and harrows, enough quality seeds of paddy, sesame, beans etc of their own, stored in large bamboo baskets, as well as organic fertilizers gathered on the farm, all set ready for the coming crop seasons. Land preparation was done by family members with own or hired cattle. Those who could buy power tillers also hired out to neighbors who wanted to finish in good time. The money borrowed from MADB was mainly for costs of hired labor in transplanting and for buying NPK fertilizers and pesticides, if needed. Reaping and harvesting were done by neighboring farmers and relatives who took turn on one another in good spirits. No wages. After the day’s work, all enjoyed a big meal cooked by the host’s wife. Work was tiring and sweat, mud and dirt were all over their bodies but their hearts remained clean and their spirits sweet. Farm cattle with whom they toiled in the mud and dirt, were regarded as benefactors and accordingly taken care of with love and attachment just like family members.
Loan disbursements and collections were done in the village at no cost to the farmers. The MADB staff who came to the villages were treated as kins. Their faces were familiar in the area and villagers took care of their security and ensured no harm whatsoever fall on them in their jurisdictions. Where no public transport was available they would send on own bullock carts or small boats to the main centres. Where there are no food shops in the villages, staff need not skip meals. They were not allowed to go home without having an impromptu meal cooked in rural style.
After harvest, just a portion of the crop would be sold for cash, in order to repay MADB loans. They did not need to worry for fresh loans for the coming crops because they knew MADB, unlike private moneylenders in many cases, never failed and let them down. Also, nobody would like to carry their debt to their graves and no one ever did, knowingly. Even in cases of sudden deaths the children would clear their parent’s debts.
The surplus crops, after setting aside enough quantity for consuming on the farm before the next crop, for alms to the monks and for visiting relatives, were then sold out to the best buyers. With this earning from the soil, rich and poor alike would seek to gather as much good merits as they can. In years of good harvest and better prices families may find a bride for the unmarried son, or hold a big novitiation ceremony by erecting a big pandal and offering meals to comers from all corners for some seven days. Those who could afford more would renovate or build local monasteries and pagodas so that they could claim highly coveted religious titles like in Buddha’s times. What an adorable way of life and a simple but noble outlook. And no harm done whatsoever to mankind.
Of course farming is a hazardous business always prone to the vagaries of weather, destructive pests and the highly volatile crop market. Low yields due to erratic rainfall, damages due to floods or draughts, loss due to pest attacks suffered by some farms were not uncommon. In such cases friends and neighbors always pitched in by helping the affected families to hold on until the next season. Only in cases of no harvest at all around the area, a crop failure is registered by the authorities. Always good friends, MADB would come in the face of such disasters with offers of rescheduling loan repayments, cancelling the due interest, and or issuing new loans. No bad feeling and no love lost between clients and creditors. Farmers reciprocated en mass by repaying all due instalments and MADB could steadfastly maintain a near 100% repayment records for decades, unrivaled in the region and even around the world.
At the same time MADB cultivated savings habit among farmers in both voluntary and loan tied programs. In addition to seasonal credit for 23 types of crops, a variety of loan products, both short term and medium term, were offered and many farmers in need of draft cattle, bullock carts, pump sets, power tillers benefited with such loans. Loans for livestock raising and fish ponds were also introduced later.
However, bad luck has befallen on MADB since the transfer of its management in 1996 to another Ministry. Just to mention a few–The loan disbursement in the village system was arbitrarily cancelled and farmers have to come to town to receive loans, incurring cost of travel, meals and loss of working days. Deductions from loans for several nontransparent reasons reduced the real value they need to use on the farm. This sent many farmers unwillingly to the moneylenders for supplementary cash, on which they have to pay very high interest thus defeating the aim and spirit of the government. Inevitably, the productive function and repaying capacity of farmers declined resulting in large number of nonperforming loans for the once proud and prestigious MADB . The warm and close ties and long time relationship nurtured between debtors and creditors withered. In addition, all other crop loans with the exception of paddy were stopped without any explanation. All short and medium term loans were withdrawn and no new loans given. Repayment date for paddy loans were arbitrarily set and reset many times, often forcing farmers to sell their crops when prices were at the lowest. The trust built between farmers and MADB as reliable partners became weaker. The worse came in 2012 when all farmers were ordered to come and take out all their savings they have put at MADB for many years, instantly making all farmers without savings and also resulting in a cash crunch and operating fund loss of K 8 billion at MADB. This was in a way cutting the crucial link between the clients and their banker. Never seen or heard of such a phenomenon in banking around the world.
What a divide and what a damaging divide that had been created on the relationship between the rulers (bank authorities) and the people (farmers) they were supposed to serve. Nevertheless, under this new government today with a humane heart and a peoples first approach, divides can be bridged, and wrongs can be corrected at no time, by reintroducing good governance and accountability, by putting the professional staff in their rightful places, by adhering to sound banking principles and best practices and by reestablishing the warm and cordial relationship between the clients and their bankers and above all else, by giving due respect and genuine concern to our 2 million farmers, especially at the change mode like now. The adorable farm life and values in Myanmar as well as the private-public partnership built between farmers and government institutions like MADB, will certainly flourish once again.