By Aung Naing Oo (Mandalay)
Selling Rice as a Means of Aiding
It was a day in early May 2004 when the Managing Director (MD), U Min Hla Aung, gave me an instruction to accompany him to the Minister’s office for a crucial matter. I was working as a Deputy General Manager at the Export Department under Myanmar Agricultural Produce Trading.
Upon reaching the ministerial office, the Managing Director quickly went inside to inform the Minister, Brigadier-General Pyae Sone of his presence. In the meantime, I waited patiently outside the minister’s office. After a short wait, the Managing Director came out, and we headed back to our office together. On our way back, the MD asked if I was familiar with a country called Gambia. In fact, I was not aware of it yet, answering that I assumed it to be a country in Africa.
After hearing my response, the Managing Director instructed me, “A VIP from the Gambia (Official name is the Republic of the Gambia) is currently in our country. Having engaged with the high dignitaries, he has sought assistance due to a prevailing food shortage in his nation, necessitating the sale of rice. It is imperative that you collaborate with the General Manager and other pertinent executives to expedite the shipment process. Given the country’s difficulties, plan to sell the rice at the lowest possible price.” Upon returning to the office, the Managing Director called the General Managers to discuss the specific details of exporting rice to Gambia.
I distinctly remembered the directive from the Managing Director, stressing, “There is a food crisis in Gambia, and we must offer our assistance to the best of our ability.” The directive specified the necessity of reducing prices in comparison to other export markets, prioritizing the selection of good-quality long-grain white rice Emata (25 per cent broken). Additionally, it emphasized the importance of approaching this task with a sense of sympathy and a humane perspective. At that point, my knowledge of Gambia was limited, prompting me to gather information from various accessible sources to enhance my understanding of the country.
The Gambia in 2004
The Gambia, situated on the west coast of Africa, was primarily an agricultural country, with an estimated 70% of the population depending on the sector for its food and cash income. The agricultural sector accounted for 30 per cent of GDP and 90 per cent of its export earnings. In 2003, The Gambia’s population stood at 1.4 million. Over two-thirds of the population resides in rural areas and is primarily engaged in agriculture and/or agriculture-related activities. Remarkably, the country had a population density of 128 people per square kilometre, positioning it as one of the highest nations in Africa.
The Gambia River is an important source of water for the country’s agricultural sector, but salinity intrusion from the sea has made coastal areas unsuitable for crop cultivation. The production of the country’s agricultural sector has also been fluctuating over the years and because of this, The Gambia is classified as the least developed, low-income and food-deficit country. The country’s food production only caters to 50 per cent of its consumption requirement, primarily rice, requiring an annual expenditure of approximately 40 million US dollars for imports. This circumstance was adversely impacting the nation’s foreign reserves. The primary source of food for The Gambia was local production, supplemented by imports and international aid. With 47 per cent of the population living in poverty and 30 per cent in extreme poverty, food insecurity remained a significant challenge for the country.
Signing of Rice Sales Contract with the Gambia
According to the “New Rice Policy” introduced in 2003, Myanmar’s Agricultural Produce Trading (MAPT) shifted away from purchasing, milling, and storing rice. Consequently, the rice remaining at MAPT had aged, with a majority containing between seven per cent and 20 per cent yellow grains. Adhering to Myanmar’s standard specification, the tolerance of yellow grain is only two per cent in Emata white rice (25 per cent). This strict criterion made it the MAPT difficult to export good-quality rice to the Gambia. However, under the coordination of the then general managers — U Tin Shwe, U Maung Maung Kyi, and U Myo Oo — the entire staff of MAPT diligently worked to meet Gambia’s request for the purchase of thirty thousand tons of rice. Furthermore, following the guidance of the Managing Director, it was decided to sell the rice at a rate of 161.67 Euros per ton. During that period, the price of Emata White Rice (25 per cent) stood at approximately 180 Euros per ton to regular markets. Selling prices in US dollars faced challenges due to the sanctions imposed by the United States.
Following negotiations with representatives from the Gambia, it was agreed to export 30,000 metric tons of rice via two shipments and the Gambia sought prompt shipment. To facilitate this, plans were made to swiftly prepare the rice to be cargo-ready. The contracted value of the rice amounted to 4.85 million euros (4,850,100). Regarding payment, at that time, MAPT’s remaining rice was efficiently managed for quick export and only a telegraphic transfer (TT) system (Advance Payment) was preferable. However, to ensure a smooth transaction and alleviate any difficulties for the Gambia in purchasing rice from Myanmar, it was decided to adopt a letter of credit (LC) system, wherein payment is allowed to be made after the product is shipped.
Following successful negotiations with the Gambian delegation, the rice sales contract was formally signed on 6 May 2004, by Mr Tamsir M Manga, Permanent Secretary of the Ministry of Trade Industry and Employment of the Government of The Gambia, and U Min Hla Aung, the Managing Director of Myanmar Agricultural Produce Trading. Mr Momodou Lamin Kujabi and Mr Yusupha Jawara from the Gambian side, and U Tin Shwe, General Manager, and U Kyaw Zaw Maung, Deputy General Manager, also signed as witnesses in the sales contract. Subsequent to the signing of the sales contract, MAPT diligently prepared for the export of rice to Gambia.
Exporting Rice to the Gambia
After the contract was signed, a vessel from Gambia berthed at Yangon port a few days later and loaded 15,000 metric tons of rice. Unfortunately, Gambia was unable to ship the remaining 15,000 tons due to other difficulties, leading to the cancellation of the contract. Despite this setback, the MAPT continued their processes to assess the possibility of Gambia resuming shipments, showing empathy for the Gambian citizens.
Sympathy for the Gambia
Upon entering a contract to supply rice to Gambia, guided by our national leaders, the MAPT facilitated several supportive relief measures with a compassionate and humane approach to assist Gambia, a nation facing an acute food crisis. The measures encompassed the careful selection and collection of good quality rice from various regions of the country and the mobilization of a total of 30,000 metric tons of standardized long-grain Emata 25 per cent rice. The collected rice underwent re-milling to enhance its quality, and it was subsequently sold at a more favourable price compared to rates exported to other countries. These practical measures showcased Myanmar’s sympathy, empathy, and generosity toward the Gambia.
In adherence to the contractual terms, the designated shipment period was scheduled from May to July 2004. Myanmar, in the contract, also granted The Gambia a one-month extension, allowing flexibility in case the shipment couldn’t be dispatched within the initial timeframe. Moreover, within the sales contract, aligning with the policies at that time, a provision stipulated that “if the buyer cannot ship the contracted quantity within the agreed shipment period, inventory carrying charges at the rate of 2 US$ per tonne per week or part of thereof for the unshipped balance shall be paid to the seller”. It’s noteworthy; however, that the MAPT, by the guidance of a higher level, exempted the Gambia from paying such charges for the 15,000 metric tons that they were unable to ship.
The Generous Country
As a state-owned enterprise, the MAPT typically conducts the export of rice to foreign countries through commercial means, employing various market strategies to optimize crop prices. However, in the case of exporting rice to the Gambia, Myanmar adopted a stance driven by humanitarian considerations, prioritizing sympathy, a spirit of friendship, and adherence to the willingness of our leaders of the State to assist the small economy which suffered a food crisis. Under the guidance of the government, the Ministry of Commerce and Myanmar Agricultural Produce Trading strived diligently to accomplish the mission. Despite Myanmar grappling with developmental hurdles and challenges for some reasons, the country did not hesitate to extend support to those in need and the export of rice to the Gambia reflects our nation’s generosity. Myanmar actually is a generous country.
Reference
FAO.2004b. Gambia: TCP/GAM/2906 NEPAD-CAADP National Medium-Term Investment Programme.
