BURMA: ECONOMIC IMPACT OF AVIAN INFLUENZA

UNCLAS SECTION 01 OF 03 RANGOON 000102

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR EAP/MLS, G/AIAG
PACOM FOR FPA
USDA FOR FAS/PECAD, FAS/CNMP, FAS/AAD, APHIS;
BANGKOK FOR USAID: JMACARTHUR, APHIS:NCARDENAS, REO:JWALLER

E.O. 12958:N/A
TAGS: EAGR EAID SENV PGOV PREL BIO KFLU BM
SUBJECT: BURMA: ECONOMIC IMPACT OF AVIAN INFLUENZA

REF: A) Rangoon 91 B) 07 Rangoon 738

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1. (SBU) Summary. Since March 2006, the Burmese Government has
responded to ten avian influenza outbreaks throughout the country,
with one human infection case. Responding to these outbreaks, the
Livestock Veterinary and Breeding Department (LBVD) culled more than
430,000 chickens, 357,000 quail, 98,000 chicken eggs, and 76,000
quail eggs, most of which were owned by private farmers. The total
value of the culled products totaled almost 1 billion kyat, or
approximately $740,000. The Burmese Government, due to lack of
funding, does not have a comprehensive compensation plan. In 2006,
the GOB compensated a majority of the farmers with day-old chicks,
low-cost loans, or cell phones. However, the number of compensation
packages in 2007 dropped dramatically, and military farms received
many of the cell phones and day-old chicks. Burmese farmers
continue to struggle with the financial implications of AI
outbreaks, and the GOB appears unwilling to improve compensation
packages in 2008. End Summary.

Compiling the Data
--------------


2. (SBU) Burma's first recorded outbreak of avian influenza (AI)
occurred in March 2006. Since then, the Burmese Government has
responded to nine additional outbreaks in four divisions (Mandalay,
Rangoon, Sagaing, and Bago) and two states (Mon and Shan). With
each new outbreak, the Livestock Breeding and Veterinary Department
(LBVD),which is responsible for animal health issues, and the
Ministry of Health (MOH),which monitors human health, have improved
their detection and response capabilities (Reftel). During the past
two years, LBVD teams have culled a total of 439,895 chickens,
357,305 quail, 98,500 chicken eggs, and 76,758 quail eggs. Private
farmers owned the majority of poultry and poultry products culled.



3. (SBU) The GOB does not keep statistics on the economic impact of
AI outbreaks, nor does it evaluate how these outbreaks affect
farmers' livelihoods. Working with LBVD and business contacts, we
were able to estimate the market value of the different poultry
products culled: chickens were worth between 1,000 and 2,000 kyat
each ($0.80-1.60),quail were worth 200 kyat ($0.16),chicken eggs
were 85 kyat each ($0.07),and quail eggs were 20 kyat each ($0.02).
The total value of poultry products culled was approximately
926,873,540 kyat, or approximately $741,498. On average, each
chicken farm lost poultry worth 1,946,612 kyat ($1,557),not
including future revenues, and each quail farm lost an average of
401,390 kyat ($321) due to culling. Considering that the average
Burmese earns $23/month, these losses are substantial.

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Economic Value of Burma's AI Outbreaks
2006-2007
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Area No. of Farms Total Market
Affected Culled Value*
-------------- --------------
Mandalay 180 Ckn Farms 236067 Ckn 472,134,000
(2006) 68 Quail Farms 172997 quail 34,599,400
91353 ckn egg 7,765,005
50000 quail egg 1,000,000

Sagaing 228 Ckn Farms 100023 Ckn 200,046,000
(2006) 69 Quail Farms 150613 quail 30,122,600
7075 Ckn egg 601,375
26758 quail egg 535,160


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Rangoon 23 Ckn Farms 65000 Ckn 131,732,000
(Feb 07)

Rangoon 1 Ckn Farm 866 Ckn 1,732,000
(May 07)

Bago 1 Ckn Farm 690 Ckn 1,380,000
(June 07)

Bago 1 Ckn Farm 5213 Ckn 10,426,000
(July 07)

Mon 2 Ckn Farms 980 Ckn 2,940,000
(July 07)

Bago 48 Quail Farms 40000 Quail 8,000,000
(Oct 07)

Shan Village farms 22804 Ckn 22,804,000
(Nov 07)

Shan Village Farms 1056 Ckn 1,056,000
(Dec 07)
-------------- --------------
Total 926,873,540
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Source: compiled from LBVD
*Value in kyat

Compensating the (Some) Farmers
--------------


4. (SBU) While the GOB technically has a compensation plan on the
books, more often than not, it provides no funds to reimburse
farmers for their loss (Ref B). When payment does occur, it often
takes the form of in-kind compensation, such as cell phones,
low-cost loans, vitamin supplements for poultry, or day-old chicks,
rather than cash.


5. (SBU) In 2006, the government provided 323 farmers from Mandalay
and 150 farmers from Sagaing cell phones. Each cell phone was worth
1,500,000 kyat ($1,200). We understand that many farmers resold
their phones for approximately 3 million kyat, earning a profit of
$2400. Additionally, the Myanmar Livestock and Fisheries
Development Bank in 2006 offered farmers in Mandalay and Sagaing
Division low-cost loans totaling 57 million kyat ($45,000) at a rate
of 19 percent (half of the current market rate in Burma). Farmers
had one year to pay back the loan, although LBVD officials could not
confirm that repayment occurred.


6. (SBU) Farmers also received support from the Food and
Agriculture Organization (FAO) in 2006. FAO provided the GOB's
Livestock Feedstuff and Milk Produce Enterprise with 300 grant
parent stock chickens to produce day-old chicks. Between September
2006 and January 2007, the GOB distributed 83,670 day-old chicks
worth 35.4 million ($28,000) kyat to farmers in Sagaing and Mandalay
Division, replacing only 0.01 percent of chickens and quail culled.
FAO also distributed 15.6 million kyat worth of poultry vitamin
supplements to farmers in Sagaing and Mandalay Divisions in 2006.


7. (SBU) The GOB also provided some compensation to farmers in
2007, although less than in the previous year. The Ministry of Post
and Telecommunications distributed 38 cell phones to the 24
AI-infected farms in Rangoon, which included several military farms.
Some farmers resold these cell phones, earning an estimated profit
of 1.2 million kyat ($960). Farmers from Bago Division, Mon State,

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and Shan State did not receive cell phones.


8. (SBU) The FAO continued to provide assistance to farmers in
2007, donating 13.9 million kyat worth of vitamin supplements to
farmers in Rangoon Division, 4.7 million kyat worth in Bago
Division, 300,000 kyat worth in Mon State and 900,000 kyat worth to
Eastern Shan State. We understand that the GOB also provided
day-old chicks to several farms in Rangoon and Bago, although many
went to military-owned farms. Village farms in Shan State may
receive native chickens (rather than commercial-quality chickens) to
replace their lost stocks, LBVD officials told us.


9. (SBU) According to LBVD, the GOB, led by the Rangoon Division
Broiler Producer Association, will establish a revolving fund for
AI, which will enable farmers affected by AI to rehabilitate and
restock their farms. The Association estimates it will collect at
least one million kyat per month from farmers and live bird market
stores, which should contribute one kyat per bird. The Myanmar
Livestock and Fisheries Development Bank will hold the funds, and
will disburse them to AI-infected poultry farms as compensation.

Comment
--------------


10. (SBU) Burmese farmers continue to struggle to recover from the
financial losses due to AI outbreaks. International organizations
have been reluctant to assist with compensation to avoid reimbursing
the Burmese military. While military farms received compensation in
2007, the majority of private farmers continue to wait for some GOB
assistance, which will likely never come. Officers at LBVD are
sympathetic to the farmers' plight and recognize the need for a
comprehensive compensation plan, but have little means by which to
offer assistance. Should more AI outbreaks occur in remote areas
where communications are rudimentary, we have less confidence that
farmers will report possible AI outbreaks to local LBVD officials.
Until Burma has a compensation plan that ensures civilian farmers
receive compensation, they will have little incentive to report
outbreaks.

VILLAROSA