How the Landless Households Survive in Myanmar’s Central Dry Zone: Focusing on the Role of Interlinked Credit Transaction between Toddy Palm Climbers and Traders

Abstract

Myanmar has a large number of rural landless households, even in the Central Dry Zone (CDZ) which does not have extensive rice cultivation. A hypothesis which explains it is that the palm sugar (jaggery) production industry has historically absorbed the labor in this zone. Although the industry has been in decline in recent years due to the sluggish demand growth for jaggery and a lack of palm climbers, in some areas the industry is still active. This study, based on the data from a village in the CDZ, shows the high labor absorptive power of the jaggery industry and how the landless palm climbers make a living by renting palm trees from farmers and selling jaggery to traders. Our focus is on the special credit relations between the climbers and jaggery traders. Their interlinked transactions as sellers and buyers of jaggery and as debtors and creditors has continued for generations. The credit is mainly extended during the lean season for consumption purposes and repaid throughout the next production season of jaggery. Money for purchasing foodstuff and other necessities by the climbers is given priority before repayment. The whole system functions to ensure minimum subsistence of the climbers. The estimated implicit interest rate of 3.4% per month is lower than the normal rates charged by local moneylenders. This credit relation has persisted even though there is a microfinance program operated by an international NGO, which covers nearly half of the landless households.