Dagon Group Of Companies

Dagon Agriculture Group Limited

Myanmar being an agricultural country, Dagon Agriculture Group Ltd. was established in 1999.Since then, we have farms all over the Country. 70% of people are employed under Agriculture sector. Dagon Agriculture’s vision is to help and contribute to this 70% of the workforce but introducing new farming techniques which are more effective and efficient, facilitate for mechanize farming. The most important thing is to help introduce Myanmar agriculture produce to International markets in order to get better income and margins all the way back to the grassroots level.

In Yangon Division, Dagon Groups’ Agriculture business unit grows 850 acres of rice to be used as seed production and R&D to produce hybrid seeds. Besides, we also have 6300 acres of commercial rice farms in Thandapin, Yangon and 4900 acres in Pwint Phyu, Magway Division. Most of the farms mention above are developed on lands which were previously can not be farm due to various reason such as no irrigation channels, infertile soil conditions. After many years of investing in necessary infrastructure, these farms can be commercialize. As for the farms which have existing farmers, we have gone into contracting farming system so that by contributing much need farm machinery, fertilizer and funds, it become a win win situation between the company and farmers.

Dagon Group always carefully safeguards the interest of the farmers, regardless of benefit towards the company. For the contract farmers, Dagon Group input necessaries for farming such as machineries, fertilisers and fuel, etc. The farmers input their labor forces and they can enjoy their labor effort in monetary term which rendered by Dagon Group. In addition, the benefit sharing ratio with the farmers and Dagon Group is 50:50.

• Ywarthargyi, Yangon Division :1102 acres Rice farms
• Thandapin, Yangon Division: 6300 acres of Rice farms
• Organic Vegetable Farm, Naypyitaw: 100 acres
• Pwint Phyu, Magway Division : 4900 acres beans and pulses

Organic Vegetable Farm in Naypyitaw

Dagon organic plantation in Naypyidaw has started with 100 acres. In Myanmar, people are now getting the awareness of health related knowledge. More and more people are now having the knowledge of how to eat healthier and risks of chemical fertilizers. Genetically transform vegetables and foods are not good for their health so Dagon Agriculture has been introduced organic vegetables for the sake of people.

Land Restitution Issue

Dagon International Ltd started the investment in agriculture sector in 1999. In this year, Myanmar Government invited all capable companies to invest in Agriculture Sectors with the following objectives:-

a. To develop the unused/waste land into agriculture land
b. To bring the new and modern technology of cultivation/plantation technique into Myanmar by using the strength of Company’s contact and financial capacity.
c. To do the pilot/demonstration farm using the modern technology and show to farmers that these systems and techniques can bring better productivity and higher quality of their crop which can improve their income to increase their living standard.

We are doing Agriculture Projects based on the under-mentioned Objectives and Policies:-

• Basically, our country is an Agriculture Based country and Industrial Sectors are not yet developed due to several constraints. In actual fact, even the agriculture sector is still lagging behind if compared to the neighboring countries like Thailand, China, India, Vietnam. The main reasons of the present position are due to lack of know-how, lack of preparation for proper infrastructure, and last, but not the least is the inability to inject enough sufficient investment to this Agri sector. For this, the Government also could not be able to support to the Agri sector and the farmers which is about 70% of our population. To fill this gap, Government invited us to invest in agriculture sectors and to bring the latest technical know-how, proper land preparation, use of agriculture machinery to turn into manual farming to mechanized farming, etc. By doing so, we will have to educate and prove the farmers to increase their production and at later stage, to improve their living standard accordingly. With this motive, and with the encouragement of the Government, our company become participated in Agri-sector of Myanmar.
• When we are going to start one Agri-project, we have to secure the land. In this concern, the policy we always keep is that we never tried to ask a particular land from government. Instead, we just choose the land which is already defined/ earmarked for project by the government.
• We never take over the farm / the land in which the farmers are doing cultivation. We will only develop on un-used land in which we will need to develop or prepare to cultivable land by our own effort and investment.
• Even that, there can be some farmers who are doing a few acres inside the project area, we plan to arrange with them by using one of the following options :-
  1. We will negotiate to buy their land at the prevailing market land price of that area.
  2. In case, they still want to do farming, we will buy the suitable plot of land/farm nearby the village which they proposed to us to substitute to them.
  3. If they (and their family members) want to work at our project, we are ready to accept/ appoint them as our agriculture staff and labour depending on their education and experience background.
  4. We also invite them to do contract farming with us if they wish to do so.
  5. Even then, if the farmers are still rejecting to accept the above options, we will leave out/return the land to them (farmers).

Moreover, we are ready to return back to the Government for project area which we do not have development plan yet and if somebody, private or company, want to do agri-project properly. (According to the existing regulation, project land cannot transferred directly to any organization and only need to return back to government. Only then, concerning government body will decide to whom the land should be re-allocated).

Case Example: Deep Water Land Paddy Cultivation and Fish Farming Project

This project is located in Yangon Division, Htantapin and Teik-Kyi township. The size of present project is (6,878) acres and we started in 1999. Before we started, this area is un-used wild land for about 100 years. It is shallow (low) land and turn to flooded area in rainy season. Nearby villagers are doing paddy cultivation at higher land at the edge to shallow area and the center of area is much shallow and is flooded in all seasons.

The government invited us to develop those un-used shallow land areas to turn into paddy field. This area, in those period (i.e. year 1999), there is no access of land route to the area and the villagers are only relying on water way. There is no snack shop or tea shop; the villagers are nearly out of touch from nearby towns and city.

When we started enter into that land, all the area was covered with weeds and no proper access road to that land. We have developed the land by doing land clearing, developing irrigation canals and systems, land leveling, making access roads to surrounding villages from nearest develop townships, school/ clinic/ hospital etc for development of village society. We have also donated 16 bedded hospital in 2010.

In the beginning, our project area is (14,300) acres and we have returned back to concerning Ministry about (6,878) acres for the farmers and organization whoever interested to do cultivation.

The area people were happy on those days. But, after 2010, the government changed into democratic way due to entering of more investors from all over the world even from EU and USA, the prices of land in most parts of the country are also suddenly shooting up in accord with this change of the country and people are also getting chance to talk more freely and openly than the period before 2010 which was under military government. With the rising of land prices, some villagers started claiming that their land plots are existing within the area of our projects.

In this concern, one big difficulties is that the villagers who claiming the land have no proper documents for ownership of the land. For some lands, two-three persons are claiming the same plot of land. Some villagers show the ownership documents in which the acres they possess is lesser than the acres which they claim. They also show the reason that they have officially declared less acres just to avoid the payable tax. Actually, it is really difficult for us to identify whether their telling is true or not. Moreover, those areas are very much undeveloped in those year 1999, and the government departments are also weak in keeping proper records too.

Therefore, in order to sort out the problem, we have done the following steps :-

1. Put the notice paper at the village administration office for one month that any person can claim the lands if these are in Project area.
2. After one month, we meet the villagers who claim the land and propose to them to accept one of the following three options:-
   • We declare to them that we will purchase the land as per the market price, and ask them whether they agree or not.
   • If farmers do not want to accept the payment, we will return the land to them.
   • We invite them to do contract farming with us, if they have interest to do so.
3. In this project, (10) villagers was claiming (34.75) acres as their land. As per the market price of land of that area, we proposed Ks. 600,000/- per acre but they did not accept at the beginning. So, we have returned the land to them accordingly. But, after about 2-3 weeks, they came back us and proposed that they were going to accept the payment. Therefore, in front of village authority, leaders of farmers, witness from government department, we have given the payment totalling of Kyats (23,100,000) to them on (19-2-2014).

Case Example: East Dagon Paddy Seed Production Project

This project is located in Yangon Division, East Dagon Township and it was started in 2008. The area is about 540 acres.

The historical background of starting this project is that, in 2007-2008, due to the international rice price was going down, the local paddy prices also keep on decreasing and farmers are in deep trouble because the price of paddy cannot cover even the cost of production or cultivation. The local paddy price happened at that time was about Ks. 1800 per basket (20kgs).

For the survival of farmers, Ministry of Agriculture found that the main issue is that the yield of farm are very much low and the quality of rice is also very low. The yield is about 2 to 3 times lower compared to Thailand, Vietnam and the price of rice also 30% to 50% lower in international market. It is very big job, that to increase the quality and yield of farmers to get proper income for their survival.

In this concern, out of several issues, one criteria/ requirement is that farmer need to use proper good seeds in their cultivation. Actually, in Myanmar, government can produce/ provide the good paddy seeds to farmers only about less that 5% percent of the national needs. Farmers are getting seeds for their cultivation by traditional way by collecting better seeds from previous crops. After doing such practice for about 50 years, the paddy seeds are degenerating and both the yield and quality are going down drastically.

Therefore, government invited companies to invest in Seeds production project and allocate the area which is owned by government.

This project area is owned by Ministry of Railway and due to delay of materializing project, government allocate us to do Seed Producing Farm in this area on 2008. Government has taken this land in 1990 for railway station project and we understand that the government had given compensation to farmers in those periods as per the land price of those days. But, as explained above, after 2010, some farmers claimed again that they want land or money for their survival. Authorities also instructed/requested to us to do some negotiation to farmers on their behalf since the government department has no such budget and permission.

So, we negotiated the farmers on behalf of government department as per above ways and finally, we give (69) farmers for (536) acres at the rate of Ks. 2,500,000/- per acre. Totally we have paid to farmers Ks. 1.296 billion (equivalent to usd 1.29 millions) in the month of December 2013.