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Factors affecting the decisionmaking of farmers and traders on rice storage in selected areas of Ayeyarwaddy Region, Myanmar
Thesis Abstract:
This study examined the nature and extent of rice storage by 70 farmers and 50 traders. The profitability of storing rice was determined and the effects of physical and socioeconomic factors on the farmers’ and traders’ decision on storing rice were evaluated.
The results showed that 71 percent of the rice farmers decided to either store all rice harvest or sell a portion and put the rest in storage while 60 percent of the rice traders followed the same practice. The rice farmers adopted the traditional practice of storing rice while traditional and modern practices were employed by the traders. Majority of the farmers and traders did not have to pay for rice storage fees except depreciation because they own the land wherein they have built storage houses.
Analysis of the productive efficiency of the rice industry using load factor method revealed that average storage facilities at the farmer’s level were underutilized with 35 percent capacity utilization and at the trader’s level, the average storage facilities were overutilized with 125 percent. Storage losses of rice farmers were much higher (21%) than that of the rice traders (12%).
The partial budget analysis revealed that by season, the average additional profit reached MMK 20.65 thousand per ton and MMK 18.29 thousand per ton for farmers in rainy and both seasons, respectively. Based on storage duration, the farmers with at least five months of rice storage obtained an average additional profit of MMK 76.08 thousand per ton while those with three and four months of rice storage earned MMK 18.70 thousand per ton. According to the financial source, traders who borrowed capital for rice storage earned additional profit of MMK 47,405.20 per ton while those who did not borrow capital for rice storage gained additional profit of MMK 50,656.23 per ton. Based on storage duration for traders who borrowed capital, additional profit with at least five months of rice storage was MMK 54,950.13 per ton while those with three months of rice storage realized additional profit of MMK 164.53 per ton due to price instability of the trading time. However, for traders who used own finances for rice storage, additional profit for at least five months of rice storage was MMK 39,032.44 per ton while those with four months of rice storage was MMK 38,407.09 per ton. Additionally, based on comparison of t-test by mean profit, the best time to sell rice for farmers was at least five months after storage. Similarly, the best time to sell rice for traders who borrowed capital and those who used their own finances was also at least five months after storage.
The factors found to be significantly affecting the farmers’ decision on rice storage were price of rice storage, storage costs, education, and availability of equipment. Also, the factors affecting traders’ decision on storing rice included price of rice after storage, experience in rice trading, availability of equipment, and availability of loan.