Myanmar’s plantation industry has always been focused on the rubber and teak productions. The letter one has been stopped due to environmental concerns from various entities and efforts are in place to preserve the forests rather than promoting the timber productions. According to the Myanmar Rubber Planters and Producers Association, export of rubber has been fueled by strong demands from China, India, and ASEAN. The size of rubber plantations in the country was 496,878 hectares in the FY 2010-2011. Rubber plantation activity is concentrated around the Mon, Shan, Kachin, and Kayin states. The Chinese government has provided subsidies for Chinese businesspeople to develop rubber plantations in the neighboring Kachin and Shan states for export back to China as part of its opium substitution programme. Of the country’s 13,479,000 hectares of natural teak forest, around 80.3% are productive. The government gave permission to the private sector in 2006 to start teak plantations, 19,705 hectares of teak plantations have been established. Overall, there are more than 305,720 hectares of teak plantations in the country, with an annual planting rate of 9862 hectares. Most of the teak produced is exported, with India, Bangladesh, and Thailand being main the markets.
Myanmar Government is currently lying down measures to attract foreign entrepreneurs to establish agriculture-based industries. It is approving up to 5,000 acres of land and thirty year durations for investors with expertise, technology, and capital. Depending on the type of agricultural crops, exemptions from payment of land revenue will be granted for a period of two to eight years from the lease, along with at least three years of income-tax exemption from the year of commencement of business. There are also other incentives provided by the Foreign Investment Law, such as accelerated depreciation of assets, income tax relief on reinvested profits, reduction of up to 50% on income taxes due on products exported from Myanmar, exemption from customs duty on machinery and other capital goods as part of operations, and guarantees against nationalization. For the plantation industry, the government favors perennial and seasonal crops and horticultural crops. For general agriculture, the government also invites investment in sugar mills, cotton processing factories, jute mills, seed processing facilities, and production of light agricultural machineries and small farm implements.
For protecting Myanmar’s forests, the Forest Law (1992), Forest Policy (1995), and Forest Rules (1995) were established. These laws aim to find a balance between economic growth and sustainability. In 1997, with the help of the UN, Myanmar adopted Agenda 21 with an aim to integrate the management of natural resources and provides a blueprint for sustainable development. Other regulations include the Protection of Wildlife and Wild Plants and Conservation of Natural Areas Law (1994), the National Forestry Action Plan (1995), and the Community Forestry Instruction (1995). The National Commission for Environmental Affairs is the national coordinating body, with the Ministry of Forestry and Ministry of Agriculture and Irrigation involved in regulations and management.
Investment businesses foreign investors are not allowed to carry on are Production of forestry products from forest area and natural forests in the forested land under the management of the government.
Investment businesses which only the State has right to carry out is management and conversation of natural forest and forested area except for the business activities related to reduction of carbon.
Investment businesses allowed only in the form of joint venture with a citizen owned entity or a Myanmar citizen are Crop farming and production and distribution in domestic market and exporting, Production, and domestic distribution and sale of pulp and various kinds of paper.
Investment businesses permitted with recommendation of Ministry of Natural Resource and Environmental Conservation are;
Investment businesses permitted with recommendations of Ministry of Industry are Large scale pulp production and Service relating to quality assessment and issuance of certification.
Trade Restrictions Updated, Luther Law Firm Myanmar, January 2016
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