Introduction
Myanmar has a multitude of underutilized agricultural resources, particularly cattle with a strong potential for regional export. Moving from the currently smuggling-dominant mode to a more formalized model of cattle trading will boost trade and have benefit-redistribution effects that will improve both efficiency and equity and address the goals of inclusion and sustainability. At the moment, Myanmar’s local farmers are mainly engaged in subsistence agriculture and participate little in the global supply chains. Most of the benefits of cattle smuggling to China would accrue to Chinese buyers, local traders, and influential individuals connected to the Chinese network, while farmers who supply surplus cattle tend to gain little. Long-standing armed conflicts along the Myanmar–China border have added to the unstable trade environment. We argue there is a strong case for formalizing and standardizing the cattle trade between the two countries. Formalization will improve the distribution of benefits by being more equitable for local farmers. Standardization will reduce uncertainty (especially, regarding animal diseases), improve transparency, and increase travel volume, thereby benefiting all the parties involved: Myanmar farmers, transporters, traders, Chinese consumers, regional residents, and potential foreign investors.
Marginalized farmers across Myanmar are facing enormous challenges as a result of the COVID-19 pandemic and the 2021 military coup. Rural cattle farmers and local traders have severely felt the harsh effect of the pandemic-related restrictions on mobility. In addition, Myanmar experiences unitary border closures from China, which has had a devastating impact on live cattle exports. The inability to continue legally exporting live cattle to China has had a knockdown effect on all the actors across the cattle value chains in Myanmar. Hence, there has been a re-emergence of illegal cattle exports. Legitimate cattle trade numbers increased after Myanmar eased the ban on live cattle exports in October 2017, but China’s closure of its border, along with the coup in Myanmar, has exacerbated the existing ineffective cattle trading, and the lack of functioning cattle markets made the existing cattle trade disrupted by COVID-19 even worse. Thus, the actors along the cattle value chain (i.e., cattle farmer, collector/aggregator/agent, transporter, and trader/exporter) are forced to find any means of trading within the opaque regulatory environment.
This study attempts to assess the current situation, solidify available information, and recommend further research. The information in this paper comes from multiple phone interviews with cattle traders, key informants, industry pundits, and extensive desk research. The paper is organized into six parts: (1) cattle trade policy since Burma’s independence, (2) the cattle population, (3) the structure and performance of the cattle market, (4) the impact of the double shock in the past two years, (5) animal disease control, and (6) policy prescriptions for policy stakeholders.
Cattle market policies of successive Myanmar governments
Beef consumption prohibited era (1948–1957)
The history of the cattle and beef industry in modern-day Burma can be classified into four periods. The first is the post-British colonial period between 1948 and 1957. During this time, slaughtering cattle for the beef market for public consumption was entirely prohibited by the Union of Burma government as cattle were considered sacred animals, an idea that comes from Buddhism, which is the dominant religious belief in the country. However, slaughtering cattle was allowed in the proximity of military camps. Licenses to slaughter cattle were given to areas near army encampments, and the license was wholly preserved to supply beef to soldiers. Thus, the general Burmese population could not purchase beef on the market (Hla 2022).
Relaxation of cattle slaughtering (1957–1972)
The second period was between 1957 and 1972. In 1962, Burma had its first military coup. It came around the time when the democratic government had handed over power from the caretaker government to General U Ne Win. U Ne Win abolished the policy that had prevented the public consumption of beef. He subsequently granted permits to slaughter cattle older than 13 years. Cattle-slaughtering licenses were issued at the townships’ municipal offices across the country. At the time, beef was inexpensive thanks to the glut supply of ruminant cattle. However, the relaxation of the policy faced significant public backlash in some townships in lower Burma, especially conservative Buddhist strongholds, because killing an animal is not in line with Buddhism. In the delta areas of Burma, mainly the Tanintharyi region, Buddhist associations bid for cattle slaughtering licenses in some townships and tried to save cattle by outbidding the butchers.
Public backlash was rampant throughout the delta areas, especially in Pathein city and Kyonpyaw town in the Irrawaddy region, where monks, among others, were firmly opposed to cattle slaughtering. Butchers could not compete against the Buddhist associations in obtaining slaughtering permits in these areas. As a result, local beef markets did not develop in such townships because selling beef was permitted only within license-issued municipalities. In some townships, the practice continues to this day. Owing to the strict regulatory environment on cattle meat in the country, approximately 40% of the country’s population has never tasted beef, according to anecdotal information.
The cattle market can be segmented into two categories: draft animals and animals for slaughter. Unlike lower Burma, people in upper and central Burma enjoy beef consumption because of the abundance of cattle in Sagaing, Mandalay, and Magway. Farmers in these regions breed cattle for the beef market and draft animals. They supply a surplus of cattle to lower Burma for draft animals to be used in intensified paddy cultivation practiced in lower Burma such as the Irrawaddy, Yangon, and Bago regions (Hla 2022).
Protecting farmers vs. exporting live cattle illegally (1972–2017)
From 1972 to 1988, the Socialist government’s policy gave much attention to the welfare of workers and peasants. The government considered workers and peasants to be the ruling class and was firmly against capitalism. Therefore, no market-oriented transformation could take place under the Burmese Way to Socialism. Debate over cattle slaughtering played an essential role in national politics since farmers were the sole producers of beef cattle. In this era, farmers constantly raised the issue of the shortage of livestock and called on policymakers to constrain the granting of slaughtering licenses. As a result, the government increased the cattle slaughter age from 13 to 16 years between 1982 and 1983. The new law resulted in an increase in cattle stock in the country. At the same time, some illicit cattle trading emerged on the Thai-Burma border during this period. Nevertheless, illegal traders encountered enormous challenges in transporting live cattle within Burma due to strict regulations. Hence, traders had to bribe local authorities to move through different townships until cattle arrived at the illegal trade post on the border with Thailand. They also had to pay informal taxes to ethnic armed groups along the transportation route from some towns within Burma close to the Thailand border (Hla 2022).
Liberalization of cattle trade (2017–present)
The fourth period began in 2017 during the second term of the quasi-civilian government. This was when the cattle market was liberalized for the first time, and the official live cattle export experiment started under the rule of the National League for Democracy (NLD). Before 2017, the General Administrative Department (GAD) governed legal power related to cattle. The GAD is a department under the Ministry of Home Affairs (MOHA). The controversial 2008 constitution of Myanmar states that the military chief appoints the MOHA minister. The NLD government reshuffled this institutional arrangement by moving the nation’s cattle-business governing body from the GAD to the Livestock Breeding and Veterinary Department (LBVD), which falls under the Ministry of Agriculture, Livestock, and Irrigation (MOALI). This was an institutional breakthrough. This liberalization was initiated in part by the government’s realization that massive illegal live cattle export was taking place on various land borders between Myanmar and China. This realization gave the government an incentive to create revenue sources by placing proper procedures, including issuing export licenses, doing inspections, etc. (Hla 2022). The government collects the 2% advance income tax for sales from the cattle exported to other countries. This policy change led to a significant increase in cattle exports: from USD 50 million annually in 2014–2017 to almost USD 400 million in 2019 (Diao, Masias and Lwin 2020).
At the same time, however, the greater volume of cattle heading to China alarmed the government and caused it to focus its attention on the sustainability of the cattle market. Recognizing a need for better-controlled facilitation of cattle trade, after a few months of liberalization, the Myanmar government immediately suspended formal cattle trade and started drawing up the Standard Operating Procedure (SOP) on cattle movement and trade, spearheaded by the LBVD. The SOP ensures that farmers are not selling female cattle and introduces cattle collection points, ear-tagging before moving to the border, and quarantine at the border. With the new SOP in place, cattle trading resumed in 2019. Cattle export destination countries include China, Laos, Thailand, and, to a much lesser extent, Bangladesh and India. China remains the largest importer of Myanmar cattle and represented approximately 70% of total exports in 2019.
Cattle populations in Myanmar
There was a copious cattle population in Burma during the post-colonial period since there was so little consumption of beef. There were about 3 million mature females and 5 million working cattle at any given time (Cattle census, 1980–1990). In 1994, the cattle population was recorded as between 9.5 million and 10 million, although this number was merely an extrapolation from the previous year. The then-minister responsible for the cattle census skipped and saved the cost of running the census (between 3 million and 4 million kyat) to satisfy the priority of the military regime’s intelligence general at the time, U Khin Nyunt. Since then, the cattle census has been skipped for many years, and no reliable statistical information on the cattle population in Myanmar is available between Fiscal Year (FY) 1993/94 and FY2016/17. Published official numbers during this period appear to have applied simple upward extrapolation (see Figure 1).
In 2017, the Livelihoods and Food Security Trust Fund (LIFT), which is a multi-donor fund established to tackle the issue of poverty and hunger directly in Myanmar’s rural communities, offered financial and technical assistance to the Myanmar government to reinstate the cattle population census. It was found that 1.5 million male cattle were missing compared with the then-minister’s estimate of around 5 million. It is believed that the missing numbers were illegally exported to China. By contrast, a slight reduction in the number of mature females was identified. This was because farmers rarely sold females as they kept breeding calves (Hla 2022).
The latest estimate of Myanmar’s cattle herd is around 9.5 million, according to a National Livestock Baseline Survey conducted by the Food and Agriculture Organization of the United Nations (FAO) and the LBVD and published in January 2019. This number is an apparent decline from 15.5 million in 2015–2016 and 17 million in 2016–2017. Concerns about cattle number declines have been raised by academia and cattle market observers, but the Mandalay Region Cattle Exporters Association claimed there are sufficient cattle in Myanmar for domestic consumption. It further stated that each cow can produce one calf every year; therefore, new calves will bridge the supply and demand gaps each year.
Figure 1. Cattle population in Myanmar (2011–2021).
Data source: LBVD and authors’ estimate.
Since the political-economic reform began in Myanmar in 2011, an unprecedented transformation has occurred from farm to fork. New farming machinery was imported to the country, gradually replacing draft cattle in rice-cultivation regions in lower Myanmar (Belton, et al. 2021). Owing to farm mechanization, the demand for male cattle as draft animals started to diminish, and farmers have increasingly tended to opt selling male cattle to export them to China. Before the political transition, farmers had relied on bullock carts to transport the crops they produce in rural areas. Now motorbikes, almost all of which are imported from China and available at more affordable prices than before thanks to the economic openings, are a more convenient mode of transport. Farmers also began adopting new technology and utilizing small tractors, power tillers, big tractors for plowing, and combined harvesters. In tandem with high labor demand in cities at construction sites, there is a massive rural-to-urban migration underway within Myanmar. Similarly, the younger generation tends to migrate to neighboring countries for better job opportunities, and remittances become an essential component of rural livelihoods. This also results in a shortage of farmworkers in rural areas (ILO 2020).
Structure and performance of cattle market
While the policy trend reviewed above has pointed to a change in favor of the trade of live cattle from the production perspective of breeding and animal husbandry. Raising cattle in Myanmar is still dominated by smallholders who rely on it for draft power in their farms. Cattle raising on a commercial basis is largely for milk (Myint, Mu and San 2018, among others), and commercial beef cattle farms are rare. Hence, during the first year of trade legalization, price rises in cattle sold for export generated concerns among smallholders because of the shortage of cattle as draft animals.
In recent years, however, China’s meat consumption structure has changed, and beef consumption has increased significantly. The proportion of beef in red meat consumption has increased from about 4% before to about 11% in 2018. It is conceivable that Myanmar’s cattle-owning farm households would realize the potential of generating greater income by converting the use of their cattle to the beef market in China. But this would require the formalization and standardization of the cattle trade with public sector support in both countries and the transfer of technologies by external investments or assistance. Much to the disappointment of all the stakeholders involved, the initial breakthrough to such direction in 2017 has been severely disrupted by the “double shock” of COVID-19 since early 2020 and the military coup in February 2021, to which we turn in the next section.
Impact of the double shock on cattle trade
Access to the China market plays a vital role in stabilizing cattle prices as it represents the primary destination of Myanmar’s cattle exports. In late 2020, China stopped buying cattle from Myanmar due to the resurgence of COVID-19 in the latter. To resume cattle trading, bilateral trade negotiations between the relevant authorities from the two countries have been taking place since late 2020 (Thant 2020). Initially, the General Administration of Customs (GACC) of the People’s Republic of China provided nine recommendations to Myanmar, and an additional seven recommendations were made in early 2021. Until Myanmar fulfills all the GACC recommendations shown in Figure 2, formal exports are unlikely to resume. For legal trade, China permits live cattle imports only after ensuring the cattle is free from 20 different kinds of diseases. To meet the GACC’s procedures, the Myanmar government recently planned to run three control zones (see Appendix). Myanmar cattle traders’ hopes for a resumption of legal cattle exports have not materialized during this report writing. However, the Mandalay Region Cattle Exporters Association argues that by the time the Chinese government agrees to legal cattle imports from Myanmar, almost all the cattle will have been smuggled to China.
Figure 2. Chinese import food safety governance.
Source: GACC.
Upstream impact
Cattle can be found across Myanmar, but cattle farms are most prevalent in the Mandalay, Sagaing, and Magway regions. Calves are self-breeding (but bulls are distributed between households to impregnate their cows) or bought from the market. Farmers mainly rely on the LBVD’s services for animal health. The Food and Agriculture Organization of the United Nations (FAO) initiated an AI development project in Myanmar between 1972 and 1976. However, AI breeding is still in its nascent stage in Myanmar. The LBVD indicated the total number of AI service cows in 2019 was 25,812 (see Table 1). This number covered only the distribution of the LBVD, and there may be more if we account for private sector initiatives. Locally bred cattle still dominate the market, but development partners have introduced foreign species in recent years – mainly for milk production.
Table 1. AI service, pregnant and calving.
Smallholding farmers in Myanmar breed cattle with low input to economize their asset maintenance. Straw mixed with water is widely used as feed, and grazing on unimproved pasture happens often. Some farmers grow imported grass varieties (e.g., Napier) for their cattle and sell the surplus grass stock to cattle farm owners. In 2021, cattle farmers in Mandalay faced significant challenges accessing grazing land and feed. The grass has withered due to erratic weather conditions. Farmers have also faced difficulties finding pastureland near cattle-raising villages and towns, and access to land is inhibited by farmers’ insecure farmland ownership. Myanmar’s currency, the kyat (abbreviated as MMK) has lost more than 30% of its value in a 12-month period, which has pushed up the price of fuel and feed. As a result, cattle farmers reduced investment in feeds such as rice bran and other feeds (USDA 2021). The feed price surges are a combination of travel restrictions to prevent the outbreak of COVID-19, a reduction in human mobility due to security reasons, and a rise in transportation costs resulting from fuel price rises. Farmers mainly access market information through other farmers’ and traders’ social media posts. Owing to COVID-19 and the coup, Myanmar’s cattle export markets have been severely disrupted. Cattle farmers have little or no alternative source of income. The lack of income has forced some farmers to sell their cattle at reduced prices. Farmgate cattle prices slumped by 47% and domestic beef prices by 17% year on year.
Midstream impact
Live cattle demand from China remains the main driver of collecting cattle at the farm gate combined with demand from Bangladesh and Thailand. Chinese consumers prefer Myanmar beef cattle as it is bred organically. The domestic beef market in Myanmar is closely linked to the export market and cattle-related diseases in the country. For domestic traders, procuring cattle to slaughter or export to neighboring countries is not a big hurdle, but transporting live cattle has become more and more difficult since the coup. Unlike rice and other essential commodities, which are tax-free, cattle are considered tax-deserving in Myanmar. As a result, local traders for cattle trading have to pay different fees imposed on them by different authorities. For example, a collector based in Mektila in the Mandalay region has to pay MMK 7,000 (USD 4) to the township administrator for a transportation permit. Transportation costs paid to truckers are MMK 30,000 (USD 17) per head, and the cost can be higher depending on the distance. In addition, traders have to pay variable sums of money to uniformed personnel when transporting cattle from one town to another, and these payments are around MMK 25,000 (USD 14) per checkpoint. The transaction costs along the cattle supply chain have increased since the military coup. Moreover, when transporting cattle to Muse, which handles about 70% of border trades between Myanmar and China, traders are required to pay at least three different ethnic armed groups. The payments are based on the number of animals on the truck, and the usual fee is MMK 10,000 (USD 5.62) per head. Total amount of these payments, the collector can make a profit of between MMK 70,000 (about USD 39 as of February 2022) and MMK 100,000 per head for moving cattle from Mandalay or Bago and handing them over to traders at the Chinese border. The estimated distribution of profit margin among cattle trade participants is shown in Finger 3. However, transporting live cattle is risky, particularly in conflict-affected areas like Shan State and, more specifically, on the Mandalay–Lashio Road. Between 2019 and 2020 and in 2021, there were 36 gun-related events faced by cattle exporters, and 31 people died. The fatalities included truck drivers and truck helpers, according to the Mandalay Region Cattle Exporters Association (MRCEA).
Figure 3. Estimated profit margins among actors in cattle market value chains (in USD).
Source: Authors’ elaboration.
Downstream impact
Myanmar had been exporting cattle to China illegally, and liberalization in October 2017 prompted legal exports from Myanmar. However, the liberalization did not stop illegal cattle exports. Under normal circumstances (i.e., before COVID-19 and the coup), 1,000 cattle heads were legally exported to China every day, while 4,000 (the estimate of the chair of MRCEA) cattle heads were also going to China illegally. At that time, cattle/buffalo price ranged from MMK 1,500,000 (USD 843.60) to MMK 2,500,000 (USD 1,406) per head (see Figure 4). Myanmar’s annual cattle export to China is approximately 500,000 heads. In anticipation of the new cattle trading regulation that would take effect in early 2021, herds of cattle were kept at the Muse border trade post in January 2021. However, since the border continued to be closed, about 15,000 heads of cattle, owned by 150 companies, were stranded in the China-Myanmar border areas (Myanmar Digital News 2021). In response to the situation, the Myanmar authorities gave transportation permits to five trading companies to transport the stranded cattle back to central Myanmar, but the herds of the other traders are left stranded in the Muse 105-Mile Trade Zone (located 105 miles from the Shan State town of Lashio). Meanwhile, widespread illegal export trade routes provide ample opportunity for illicit cattle trading due to porous borders between Myanmar and China. The cattle exporters association has been urging the Myanmar government to facilitate a well-functioning cattle market system by strengthening the enforcement of rules and regulations. However, regulatory compliance and enforcement have been lacking.
Figure 4. Live cattle price in the Muse 105-Mile Trade Zone (MMK/cattle head).
Data source: Department of Trade (DoT), Myanmar.
Chinese traders prefer purchasing cattle on the black market as it is cheaper to do so. Trading cattle legally costs over MMK 500,000 (USD 281) per head, including transport costs and various payments, but illegal export costs only around MMK 300,000 (USD 169). Legal cattle export procedures and trade protocols in place infographic are depicted in Figure 6. A price quote provided by a trader at the Thailand border estimates the current cattle price at over MMK 2,000,000 (USD 1,125) per head. Currently, the major junction for illegal export routes is 20 miles away from Lashio, Shan State, on the way to the Lweje (Kachin State), Chinshwehaw (Kokang Autonomous Region), and Wa Autonomous Administration border areas. Traders stated that six companies currently export cattle illegally via the Kokang region. Some traders claim that several traders at the border collaborate with government officers, taking advantage of the current haphazard situation and for high risk/high return. The Myanmar government news outlet on 29 October 2021 reported that the cattle trade is booming on Myanmar’s black market, with 2,000 heads sent to China every day (GNLM 2021).
Figure 5. Trade protocol of exporting live cattle from Myanmar to China.
Figure 5 shows the current trade regulations on the part of China as a buying country requiring live cattle to be kept in quarantine for 75 days. Legal trade becomes less profitable and disease control is rendered ineffective, which forms the basis for the Myanmar Livestock Department, with the help of an FAO consultant, to develop a trade protocol that involves a shorter quarantine period, so long as the risk of disease spread remains unchanged. This is to disincentivize traders from going underground.
Animal disease control in Myanmar
The double shock inevitably had an impact on the operations of the LBVD, a veterinary service authority in Myanmar. In 2017, Myanmar lifted the prohibition on live cattle export, and the LBVD has played an important role in disease control and monitoring to prevent the animal disease from spreading to neighboring countries. China has been interested in importing live cattle from Myanmar to serve Chinese beef consumers, especially in southern China. Therefore, the Chinese authority attempted to set up the protocol to import live cattle free of animal diseases, particularly foot-and-mouth disease (FMD), by issuing export certificates and controlling the disease by setting up animal posts at the border. The live cattle transportation route passes through Mandalay to the Muse-Ruili border. However, the double shock has disrupted these developments, and the initiation of legal trade free of animal disease has been postponed.
This situation may lead to a return of illegal live cattle trade at Myanmar’s borders. Reverting to illegal venues will lead to a higher risk of animal disease spreading across the border. In November 2021, the first case of lumpy skin disease (LSD) was reported in Myanmar (ProMed 2020), and then in March 2021, Thailand announced the first case of LSD (Arjkumpa, et al. 2021). These two countries are the main live cattle traders in South-East Asia. Thailand imports approximately 100,000 live cattle per year through the borderland. It is possible that LSD crossed the Myanmar-Thailand border with live cattle, although LSD can be transmitted via blood-feeding insects (FAO 2020). The LBVD takes full responsibility for animal disease monitoring and control; however, the LBVD alone cannot prevent the animal disease from spreading in the region. All countries in the region must collaborate to control the disease and prevent its spread.
Back in 2001, the Myanmar-Thailand-Malaysia Peninsular Campaign was developed to prevent FMD from spreading in the region and aimed to eventually eradicate the disease (Wongsathapornchai, et al. 2003). This campaign demonstrated the importance of collaboration among countries in South-East Asia to battle transborder animal diseases transmitted through the live animal trade. The campaign focused in particular on the live cattle trade from Myanmar through Thailand to Malaysia. The Regional Coordination Unit of the World Organization for Animal Health encouraged and coordinated the collaboration among three countries to apply FMD control strategies. Even though the eradication of FMD did not fully succeed, this approach is a model for multi-country collaboration to prevent the spread of animal diseases.
The current institutional disruption in Myanmar might affect the functioning of the LBVD in terms of animal disease control, but livestock activities, including animal trading, moving, or breeding, are not waiting for institutional repositioning. The farmers in the livestock community can be empowered to inspect animal diseases in their community and report them to the LBVD. This bottom-up approach can increase the LBVD’s capability in animal disease surveillance during the disruption period. Increasingly widespread usage of digital devices might lead to a breakthrough. For example, in Thailand, the “Participatory One-health Digital Disease Detection” (PODD) system has been developed, which integrated the one-health approach into disease surveillance activities at the community level. This system allows farmers to report animal disease or abnormal signs to authorities via smartphone. Authorities at the city and community levels can cooperate to solve the problems rapidly with the support of farmers who send the report (Yano 2018).
The PODD system is a digital surveillance tool that can be used to monitor animal diseases by the community and respond to the authorities. It is different from conventional surveillance methods (e.g., passive surveillance by animal authority) because the data flows from the source of the problem to all relevant stakeholders simultaneously. They can integrate resources to solve the problem immediately. The system also empowers farmers and the community to play an important role in animal health. They can monitor the problems and manage them before they get out of control.
Conclusion
Drawing on the observations above, along with prior suggestions by Khaing (2017) and Zhuning (2018), we lay out which types of policies and institutional changes could guide Myanmar’s cattle market and trade to achieve win-win outcomes, particularly for rural cattle-owning farm households.
Scenarios for win-win outcomes
Issues to be addressed in the development of formalized live cattle trade
Suggestions for public interventions and external assistance
References
Appendix. Official current cattle trade map and animal control zones.
Map source: MIMU.
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