INTRODUCTION
Background of the study
Social entrepreneurship is gaining traction as a solution to social and environmental challenges, particularly in South East Asia where the concept of social enterprise is well-known Social entrepreneurs leverage innovative business models to tackle niche issues that often go unaddressed by legislation or private investment, ultimately driving meaningful social change and shifting the socioeconomic landscape to benefit specific communities A key sector where social entrepreneurship can have a significant impact is agriculture, which plays a crucial role in the economic development of many developing nations.
Myanmar, the largest mainland nation in Southeast Asia, is rich in natural resources, including land and water, and boasts favorable climatic conditions for agriculture, highlighting its significant growth potential However, despite these advantages, the country ranks as one of the poorest in the region, positioned 149th out of 191 countries in the Human Development Report 2022 (UNDP, 2022).
Rural regions in Myanmar face significant challenges, with many residents experiencing limited access to nutrient-rich foods and essential non-food items The central dry zone and hill tracts, predominantly inhabited by ethnic minorities, are particularly hard-hit due to agricultural land scarcity and ongoing violence Recognizing the agricultural sector's crucial role in fostering economic growth and social development, this master's thesis aims to explore the potential of social entrepreneurship in agriculture to tackle social and environmental issues while promoting economic advancement and community development.
This thesis will incorporate diverse qualitative research methods, including literature reviews, case studies, and stakeholder interviews It will also integrate relevant theoretical frameworks and concepts drawn from the literature on social entrepreneurship, sustainable agriculture, and rural development.
This master's thesis aims to enhance the understanding of social entrepreneurship within Myanmar's agricultural sector, focusing on its ability to address social and environmental issues while fostering economic growth and community development By examining the critical success factors and challenges faced by social entrepreneurs in agriculture, the research seeks to provide valuable insights for policymakers, development practitioners, and social entrepreneurs to effectively support and expand this approach, ultimately promoting sustainable development in Myanmar and beyond.
A social enterprise is an organization focused on achieving specific social objectives while generating profits Most of its earnings are directed towards charitable causes, aiming to enhance societal and environmental welfare The Asia Development Bank defines social enterprises as entities that tackle social or environmental challenges, create job opportunities, and offer goods and services to underserved communities.
2014), social enterprises are hybrid organizational structures that blend elements of for-profit firms with nonprofits.
Social enterprises are independent organizations focused on delivering goods and services with a social mission They aim to create social, environmental, and economic benefits through entrepreneurial initiatives The impact of social enterprises on socioeconomic development can be examined from various perspectives.
Social enterprises play a crucial role in delivering essential services—social, educational, and agricultural—to underserved communities, ensuring equitable access for all socioeconomic levels By actively engaging local stakeholders, social entrepreneurs promote a balanced use of resources, fostering sustainable development that aligns with community and environmental needs Furthermore, these enterprises create job opportunities, particularly for marginalized groups like women and rural entrepreneurs, thereby reducing poverty and enhancing their integration into the workforce.
Lastly, social companies increase local social capital through broad ownership and local participation This is crucial because it develops social cohesion and fosters a sense of community.
Main Crop Paddy, Sesame, Groundnut, Pulses, Tomato, Chili, Garlic and
Table 1 1 Data of smallholder farmers in Myanmar Source: The 2014
Myanmar Population and Housing Census.
Smallholder farmers in Myanmar are individuals or families who manage small plots of land, usually between 0.5 to 10 acres These farmers primarily practice subsistence farming, relying on their agricultural output to support their livelihoods Their farming activities are essential for food security and economic stability within their communities Smallholder farmers often cultivate a variety of crops, contributing to local biodiversity They face challenges such as limited access to resources, markets, and technology Despite these obstacles, smallholder farmers play a crucial role in Myanmar's agricultural sector Their practices are vital for maintaining traditional farming knowledge and cultural heritage Support for smallholder farmers can enhance sustainability and resilience in the agricultural landscape By improving their access to education and resources, the potential for increased productivity and income can be realized Overall, smallholder farmers are a key component of Myanmar's economy and food system.
Smallholder farmers in Myanmar are rural agricultural producers who own or work on small plots of land.
They typically cultivate crops such as rice, maize, pulses, vegetables, and fruits for sustenance and local markets.
These farmers often employ traditional farming techniques and rely on manual labor or simple tools and equipment.
Smallholder farmers play a crucial role in the country's food security as they contribute to the domestic food supply.
They are often part of farming communities and may engage in informal sharing of knowledge and resources.
The latest Myanmar Census highlights the vital role of smallholder farmers in the country's agricultural sector, with 80 percent of farms managed by these farmers who cultivate over half of Myanmar's cropland Despite their smaller scale, these farms are essential for addressing social and economic challenges, as their labor-intensive practices provide crucial livelihood opportunities and support local communities The commitment and efforts of smallholder farmers are key to ensuring food security, economic stability, and the overall well-being of Myanmar.
Smallholder farmers in Myanmar encounter significant challenges, including restricted access to credit, markets, and modern agricultural technologies, which contribute to low productivity and income instability Many of these farmers primarily engage in subsistence farming, focusing on self-consumption rather than commercial sales To supplement their income, some also cultivate cash crops or raise livestock In response, the government and various organizations are implementing initiatives aimed at supporting these farmers by offering training, improving credit access, and creating market linkages to boost their productivity and livelihoods.
Insufficient government support significantly challenges smallholder farmers, hindering their ability to maintain agricultural operations Moreover, international and non-governmental organizations often provide only project-based assistance, leading to a lack of ongoing support Additionally, agricultural extension services, crucial for delivering essential knowledge and guidance to farmers, are not effectively implemented or widely embraced by government and organizations.
Farmers in rural areas often lack access to essential resources, including vital crop information, financial support for their farms, and technological innovations that could significantly enhance smallholder agriculture.
1.1.3 Legal framework of the Social Enterprise in Myanmar
Myanmar's social enterprise sector is still emerging, with an unclear number of enterprises and a lack of regulatory frameworks or government recognition as legal entities The British Council is partnering with the Ministry of National Planning and Economic Development to enhance support for social enterprises, focusing on empowering government officials to foster an environment that amplifies social impact and to develop specific policies for the sector's growth.
Informal Social Enterprises, including socially conscious organizations, have the potential for financial sustainability despite not being officially recognized as formal entities These include NGOs and associations that generate income alongside donations, as well as cooperatives that operate similarly to private companies while focusing on social issues Small and medium-sized businesses (SMEs) that integrate their social mission into their business model also qualify as Social Enterprises Additionally, many prominent figures and businesses in Myanmar are establishing foundations and participating in charitable activities.
The following overview outlines the various legal structures utilized by both formal Social Enterprises and informal Social Enterprises.
Problem Statement
Rising food insecurity and poverty
Before the coup, the COVID-19 pandemic had already caused significant economic distress in Myanmar, with research indicating that the percentage of households living below the poverty line surged from 16% to 30% in 2020 Additionally, the World Bank reported that both the pandemic and the coup collectively diminished Myanmar's economy by 30% compared to its potential growth.
The prolonged political crisis in Myanmar is severely impacting both urban and rural populations, with 14.4 million people requiring humanitarian assistance as outlined in the 2022 Humanitarian Response Plan Nearly half of the population, approximately 25 million, lives in poverty, while 13.2 million face food insecurity, prompting vulnerable families to skip meals, sell assets, and take loans for food The International Labour Organization (ILO) has reported a projected loss of 1.6 million jobs in 2022, exacerbated by the effects of four waves of the COVID-19 pandemic and ongoing political unrest, leading to devastating socio-economic consequences.
Research Gap
Social enterprises play a crucial role in agricultural and rural community development, yet there is a significant gap in research focusing on their impact in Myanmar While existing studies have explored social enterprises in various contexts, the specific challenges and opportunities they face within Myanmar's agricultural sector remain underexamined Addressing this research gap is essential for understanding how social enterprises can drive sustainable development and enhance the livelihoods of rural communities Insights from such research can offer valuable recommendations for policymakers, practitioners, and social entrepreneurs aiming to effectively integrate social enterprises into Myanmar's agricultural and rural development initiatives.
Research objectives
This study aims to thoroughly analyze the role of agricultural social enterprises in fostering agricultural and rural community development during crises The specific objectives include evaluating their contributions and impact on these communities in challenging times.
1 To identify and examine the challenges and opportunities faced by agricultural social enterprises in Myanmar in fulfilling their intended roles within the agricultural sector.
2 To analyze the extent to which agricultural social enterprises have contributed to the development of agricultural practices, rural livelihoods, and overall community well-being in Myanmar.
This research aims to illuminate the impact of agricultural social enterprises on fostering sustainable farming practices, enhancing socio-economic development, and building resilience in rural communities, especially during crises.
Research questions
This thesis investigates the role of social enterprises in enhancing the agricultural sector and fostering rural community development in Myanmar It seeks to uncover the diverse ways these enterprises contribute to agriculture and rural areas, ultimately aiming to improve livelihoods and promote sustainable practices.
The second research question explores the challenges and opportunities present in Myanmar's current landscape, focusing on how to strengthen the role of social enterprises in fostering agricultural and rural community development.
1 How social enterprise contributes to the Agricultural sector and rural community development?
A How do social enterprises help smallholder farmers by finance, knowledge and agricultural input?
B How do these resources provided by social enterprise impact the farmers?
2 What are the Challenges and Opportunities in the current situation and toward improving the role of social enterprises in agricultural and rural community development in Myanmar?
Organization of the study
This paper is divided into five parts.
This article outlines a comprehensive study on the role of Social Enterprises in agriculture and rural development, structured into five chapters Chapter one introduces the study's background, problem statement, and organization Chapter two reviews existing literature on the strategic significance of Social Enterprises, highlighting the associated challenges and opportunities Chapter three details the research design and methodology employed in the study Chapter four analyzes the specific challenges and opportunities faced by Social Enterprises in contributing to community development in Myanmar's agricultural sector Finally, chapter five presents the conclusions drawn from the research along with actionable recommendations.
Scope of the Study
This study examines agricultural social enterprises in Myanmar amid the challenges posed by the Covid-19 pandemic and ongoing political unrest Utilizing Proximity Designs and Taungthutada (TTTD) as case studies, the research incorporates in-depth interviews to explore how these organizations navigate difficulties during this critical period.
17,000 villages, 227 townships,75% of the farming population
Focused crop Paddy, Sesame, Pulses, Beetle, tomato Garlic and Onion
Table 1 3 Profile of Proximity Designs Source: Proximity Designs
Proximity Designs, a Myanmar-based social enterprise founded in 2004 by Jim Taylor and Debbie Aung Din, focuses on enhancing the livelihoods of smallholder farmers in rural regions through sustainable and cost-effective agricultural solutions The organization addresses critical challenges faced by these farmers, including limited access to information, resources, and markets.
The organization's vision is to create a world where everyone has the opportunity to achieve their full potential, regardless of their circumstances.
Proximity Designs is dedicated to enhancing the lives of smallholder farmers and rural families in Myanmar by designing and delivering affordable, income-boosting products and services The organization focuses on empowering rural communities through essential tools and resources that promote sustainable agriculture, increase financial inclusion, and foster innovation in rural development By striving for a more equitable and sustainable future, Proximity Designs aims to serve as a leading example of social entrepreneurship and sustainable development globally.
Proximity Designs addresses these challenges by providing a range of products and services tailored to the needs of smallholder farmers These include:
Proximity Designs offers personalized farm advisory services through a dedicated team of over 300 field staff, assisting farmers in adopting best agricultural practices, accessing credit and markets, and effectively managing risks.
Financial Services: Proximity Designs partners with local financial institutions to provide farmers with access to credit and savings products, as well as insurance products to manage risks.
Irrigation Systems: Proximity Designs manufactures affordable, high-quality irrigation systems that allow farmers to irrigate their fields more efficiently and effectively, thereby increasing yields and reducing water waste.
Farm Machinery: Proximity Designs distributes affordable and durable farm machinery, such as rice threshers, seeders, and weeders, to improve productivity and reduce labor costs.
Proximity Designs offers affordable and sustainable renewable energy solutions, including solar-powered irrigation pumps and lanterns, enabling farmers to decrease their dependence on fossil fuels while enhancing their energy security.
Proximity Designs is globally acclaimed for its innovative contributions to agricultural development, having received prestigious awards like the Skoll Award for Social Entrepreneurship and the Ashden Award for Sustainable Energy The company has garnered media attention from notable outlets including The New York Times, The Guardian, and CNN In 2019, Proximity Designs was recognized by Fast Company as one of the world’s 50 Best Workplaces for Innovators.
1.7.2 Context of Taungthutada, TTTD - Farmers' Bridge
Reach Cumulative 2,597 farmers, 27 villages in 2 townships
Focused crop Tomato, Chili, Corn, Garlic and Onion
Table 1 4 Profile of Taungthutada Source: Taungthutada
The team upheld their vision of "Solving Together with Farmer" by partnering with an e-commerce platform to supply Shan vegetables and fruits They also committed to cultivating crops like Pumpkin (Pyit Taing Htaung), Baby Kale, and Sweet Violet Waxy Corn sourced from East-West Seeds To fund their agricultural initiatives, the team raised capital from core members, aspiring to operate as a social business in the region.
Taungthutada is committed to fostering the growth of rural economies and agriculture to benefit all stakeholders Their mission aims to enhance rural community participation, improve livelihoods, and amplify the social and economic impacts of agricultural development By prioritizing market creation, sustainable agri-services, and rural business partnerships, the organization seeks to empower farmers, women, and youth in rural areas, ultimately striving for a more equitable and sustainable future for everyone.
In just three months, the team established a Facebook Page and created accessible agricultural information tailored for Shan farmers, successfully assisting 20 farmers through messenger chats and phone calls They participated in an ASEAN-level boot camp and published 33 educational posts specifically for garlic farmers Additionally, Taungthutada organized 28 events across 27 villages, engaging a total of 2,148 farmers, and onboarded 21 farmers to cultivate and market chili.
14 with them Seedbed farming process is in progress Assisting 20 farmers through messenger chat and phone call and published 33 educational posts for garlic farmers.
Taungthutada offers innovative inputs services by providing extension support such as seedbed farming and seeding techniques to contracted farmers growing chili The organization has trained 12 farmers in intensive seeding methods while also supplying seeds Additionally, Taungthutada collaborates with private companies to deliver fertilizers and pesticides at discounted rates and through installment plans, enhancing agricultural productivity in the region.
LITERATURE REVIEW
Agriculture and Rural Community Development in Myanmar
Agriculture is vital to Myanmar's economic growth, contributing 38% to the GDP and 32% to exports in 2020, as reported by the World Trade Organization in 2022 This sector not only drives the economy but also offers substantial opportunities for poverty alleviation and social progress, particularly since a majority of the impoverished population resides in rural areas, relying heavily on agriculture for their livelihoods.
The Myanmar government is advancing rural development by implementing a national strategic plan focused on eight key priorities to improve the socio-economic welfare of its citizens Since 2011, various initiatives have been introduced to foster rural development and decentralization, with a strong emphasis on poverty alleviation through collaboration between the government and international organizations Policymakers are prioritizing the agricultural sector as a vital strategy for promoting rural development in alignment with the national strategic plan.
Rural development aims to improve both the economic status and social conditions of rural communities, focusing on enhancing the welfare of the population Key objectives include eradicating poverty, addressing ignorance, and ensuring equal access to opportunities Numerous initiatives have been launched to alleviate rural poverty and improve the quality of life for those living below the poverty line However, rural areas often face challenges such as limited access to essential amenities, insufficient health and social services, and geographical isolation.
Rural development, as defined by the World Bank (2000), involves a holistic approach to improving social and physical infrastructure, financial services, and small to medium enterprises in rural areas and market towns, all of which are closely linked to the rural economy This strategy recognizes the potential for enhanced economies of scale in rural regions and emphasizes the importance of advancing traditional industries such as agriculture and natural resources Essential to this development are the provisions of social and physical infrastructure along with accessible financial services.
16 primary factors that can foster rural development The interaction between these three factors might enhance the living conditions of rural households.
Rural poverty significantly outpaces urban poverty, with 40% of individuals in coastal and mountainous areas living below the poverty line, and one in six unable to fulfill their basic needs Access to credit remains limited, as only about one-third of farming households obtain formal or informal loans, and the amounts provided are often insufficient (UNDP, 2017).
Redesigning government policies and programs poses significant challenges, particularly because around 70% of the population lives in rural areas where agriculture is crucial to the economy As a result, tackling various forms of poverty to achieve socioeconomic progress and development has emerged as a major issue.
Social Enterprise
In the late 1970s, the United Kingdom introduced the concept of social enterprises to differentiate them from traditional commercial enterprises These entities operate at the intersection of the for-profit and not-for-profit sectors, striving to balance financial returns with social benefits, such as affordable housing and job training The OECD defines a social enterprise as a private activity aimed at serving the public interest, organized with an entrepreneurial approach, primarily focused on achieving economic and social goals rather than maximizing profits, and capable of delivering innovative solutions to issues like social exclusion and unemployment.
Social enterprises are hybrid organizations that blend for-profit and nonprofit characteristics, playing a crucial role in rural community development by bridging local and global contexts (Eversoe, 2014; Berkes & Davidson-Hunt, 2007) This approach enhances understanding of the necessary cross-scale connections for sustainable development Additionally, rural entrepreneurship is essential for alleviating poverty, curbing rural migration, and boosting employment opportunities in these areas (Ansari, 2013).
Scholars Nicholls (2006) and Dart (2004) highlight that the definition of social enterprise remains unclear, leading to ambiguity in several areas This includes the degree to which commercial activities are employed to further social objectives, the relationship between the products or services provided and the social mission, the integration of the enterprise's operations with its social programs, and the connection of the social enterprise to the wider activities of the organization.
Social enterprises must effectively demonstrate their 'social value' to create a meaningful social impact (Barraket & Anderson, 2010) Although defining social enterprises structurally can be challenging, they are united by core principles that facilitate resource mobilization across various sectors to achieve developmental outcomes (Eversole, 2012) The literature has evolved the concept of social entrepreneurship into a multifaceted framework that encompasses risk-taking, a balanced evaluation of financial opportunities alongside social returns, and a belief in entrepreneurship's potential to foster social change, all while adhering to environmental constraints, sustainability requirements, and the overarching social mission (Weerawardena & Mort, 2006).
Rural Community Development
Smith (2017) introduces a comprehensive framework for rural community development that prioritizes local participation and stakeholder collaboration In a comparative study, Johnson et al (2018) emphasize the necessity of context-specific strategies by exploring various definitions and conceptualizations of rural community development Additionally, Thompson (2019) investigates the critical role of social capital, highlighting how social networks, trust, and community engagement contribute to sustainable outcomes in rural areas.
A study by Martinez et al (2020) highlights the significance of entrepreneurship, local value chains, and agricultural activities as key factors for driving economic growth and sustainability Additionally, Green (2021) explores the integration of sustainable environmental practices in rural community development, focusing on eco-tourism, renewable energy, and natural resource management to promote both environmental and economic sustainability.
(2018) also examine the role of technology and innovation in enhancing access to services, improving livelihoods, and bridging the urban-rural divide through digital connectivity and e-governance.
Brown et al (2019) highlighted the importance of community-based approaches that prioritize local participation, empowerment, and capacity building as essential for the success of bottom-up initiatives in rural areas Anderson (2021) examined the policy frameworks and governance structures that facilitate rural community development, focusing on the influence of government policies and multi-level governance in achieving sustainable outcomes Furthermore, Davis et al (2018) explored methodologies for evaluating the impact of rural community development programs, detailing indicators, evaluation frameworks, and monitoring systems that assess effectiveness and sustainability.
Social Enterprise in Agricultural and rural community development
Social enterprises play a significant role in local development, serving as essential resources for rural communities, as highlighted by Eversole (2013) Their increasing recognition as vital contributors to rural development, food security, and the agricultural sector is noteworthy Muhmode (2021) advocates for replicating successful social entrepreneurship initiatives in other villages in Sudan and developing nations, with local community support, to accelerate sustainable rural development Rural entrepreneurship addresses critical issues such as unemployment, poverty, and economic diversification, positively impacting the lives of villagers (Ansari, 2013) Furthermore, Rural Social Entrepreneurship (RSE) is identified as a fundamental component of rural socioeconomic development (Ahrari et al., 2018).
Due to the enormous social and economic issues encountered by remote and rural areas, social enterprises have evolved as prominent entities in the rural community (Vias,
Social enterprises play a vital role in enhancing the long-term sustainability of communities, particularly through innovative practices like upcycling waste food, as highlighted at the 12th Global Conference on Sustainable Manufacturing The development of rural entrepreneurship is crucial for achieving sustainable rural growth, positioning entrepreneurship as a key strategy for economic and social advancement As noted by Somerville and McElwee (2011), social enterprises are defined not by their industry but by their meaningful connections to the local communities they serve, underscoring their significant impact on social development.
Supporting rural entrepreneurship empowers individuals to create and manage their own businesses, leading to economic growth and enhanced job opportunities Ultimately, fostering entrepreneurship in these areas promotes sustainable development that benefits both individuals and communities.
Social Enterprise in Myanmar
Myanmar's social economy, still in its early stages, shows promising growth potential following its independence from British colonial rule in 1948 The military socialist regime that took over in 1961 led to significant underdevelopment and isolation for decades Nevertheless, recent trends indicate a resurgence in Myanmar's social economy, fueled by increasing investor interest in social enterprises that can tackle urgent societal issues while providing sustainable financial returns.
Institutional philanthropy has significantly advanced social enterprise development in Myanmar, with key contributions from the Japanese Government, Australia's development assistance program, and USAID These organizations have provided essential resources and funding, fostering sector growth Additionally, the impact investment market in Myanmar has expanded notably, driven by private funds and development finance institutions that offer capital, expertise, and networks, empowering social enterprises to scale their operations and enhance their impact.
Incubators and accelerators play a crucial role in Myanmar's socio-economic landscape by supporting social ventures and enhancing their sustainability They provide vital resources such as mentorship, networking opportunities, and business development, which are essential for the growth of the social enterprise ecosystem (Cheney C., 2017) Senior executive Henrich Dahm highlights that social enterprises in Myanmar can effectively create significant social impact through these supportive frameworks.
Social enterprises in Myanmar leverage innovative approaches and flexible structures to effectively meet community needs while generating revenue By adopting business-oriented models, these organizations ensure sustainability and resilience, allowing them to create a lasting impact that distinguishes them from traditional non-profit organizations.
Social enterprises are dedicated to fostering inclusivity and collaboration within their communities By adopting a generous, community-focused approach, they build trust, mobilize local resources, and enhance the potential for positive change.
The 2020 study by Kyaw, K HMoe, M H., and Myo M A explores the social enterprise ecosystem in Myanmar, focusing on the regulatory framework that affects these organizations It identifies key funding sources and support mechanisms essential for their development The research underscores the critical role of supportive policies and regulations in facilitating the effective operation of social enterprises and their access to vital growth resources.
Chaw, C Sein., Win, W H., and Chaw, T T (2019) explore how social enterprises in Myanmar facilitate connections between local communities and international markets Their research highlights the significant impact of social enterprises on poverty alleviation, community development, and sustainable economic growth By bridging the gap between local producers and global markets, these enterprises foster inclusive and equitable development.
Aye San Mon's (2018) comparative study examines the growth of social enterprises in Myanmar, highlighting the experiences of social entrepreneurs and identifying crucial factors that influence their development The study reveals both challenges and opportunities within the sector, offering insights into successful strategies and practices Additionally, the report by Rani Deshpande and Yuwa Hedrick-Wong (2018) focuses on scaling impact in Myanmar's social enterprise ecosystem, analyzing growth drivers and potential barriers It provides actionable recommendations for policymakers, investors, and support organizations to create a supportive environment for the sector's growth and expansion.
A study by Hla, H H., Mie, Mie K., and Chea, Sovichea (2017) explores the impact of social enterprises on sustainable development in Myanmar, focusing on their role in poverty reduction, environmental conservation, and social empowerment The research underscores the transformative potential of social enterprises in meeting the United Nations Sustainable Development Goals (SDGs) and stresses the necessity of adopting holistic and long-term strategies for sustainable development.
The social enterprise ecosystem in Myanmar is evolving, yet faces challenges like regulatory complexities and scaling barriers To enhance the growth and impact of social enterprises, it is crucial for policymakers, investors, and support organizations to create an enabling environment through targeted interventions and comprehensive strategies.
Before the pandemic, Myanmar's development relied on economic reforms aimed at fostering a liberal business environment, leading to a reduction in poverty from 48% in 2005 to 25% in 2020 However, the country still faces significant social and environmental challenges Although the social economy sector is relatively small, initiatives are emerging to promote growth, with international organizations like the British Council playing a crucial role in formalizing the concept of Social Enterprise and fostering partnerships with local entities Despite these positive developments, Myanmar's Social Enterprise sector grapples with various internal and external challenges, similar to those encountered by its emerging private sector.
The primary obstacle for Social Enterprises is the limited access to capital, as loan financing is often difficult to obtain and bank lending is typically reserved for those with strong connections Additionally, the investment amounts needed, usually between US$50,000 and US$250,000, are perceived as too small to interest investors, and the insufficient protection for these minor investments further deters potential backers.
The existing international donor funding structure primarily emphasizes project-based financing, which restricts grants for essential operational costs like staff salaries, ultimately undermining organizational sustainability As a result, many Social Enterprises rely heavily on volunteers for their operations Furthermore, international donor efforts have fallen short in adequately addressing the capacity-building requirements of emerging Social Enterprises, including the establishment of governance systems, long-term strategic planning, and impact measurement frameworks.
The evolving political and economic landscape in Myanmar poses significant challenges for social enterprises, as the swift implementation of new laws complicates the ability of organizations to develop effective long-term strategic plans.
The political and economic landscape in Myanmar is undergoing significant transformation, complicating long-term strategic planning for organizations Established social enterprises and organizations have successfully cultivated partnerships with the government, focusing on local positive social impact through initiatives like livelihood programs in agricultural communities To ensure sustainable outcomes, it is crucial to maintain a balance between fostering civil society, enhancing the skills of social entrepreneurs, and securing funding from local foundations.
Social Enterprise in Viet Nam
In Vietnam, social enterprises are businesses aimed at addressing significant social or environmental issues while achieving financial viability These can be non-profit organizations that operate social businesses to generate revenue or for-profit entities with a mission to fulfill a social goal Recognized as a distinct category of business by the Entrepreneurship Law of Vietnam in 2014, social enterprises have shown promising results; recent reports indicate that 80% of them have performed positively, with 50% of profits shared with staff and beneficiaries, marking the highest allocation rate in Southeast Asia.
The situation of social companies in Vietnam has been the subject of research conducted by the Center for the Promotion of Social Initiatives (CSIP-2011) in Hanoi and
In their 2012 study, Nguyen Dinh Cung and colleagues examined the concept of social enterprises in Vietnam and globally, assessing the current landscape and suggesting policy changes to foster the development of these enterprises in Vietnam Additionally, Dang Kim Son and Nguyen Minh Tien (2012) explored the operations of cooperative groups in Taiwan, drawing insights that could enhance the growth of agricultural cooperatives in Vietnam.
However, the study of social enterprises in Viet Nam is limited due to the novelty of their introduction in 2008.
The agricultural sector of Viet Nam has a significantly large production capacity. However, the dearth of agricultural support industries and low labor productivity leads
The rising costs of various agricultural products pose significant challenges for farmers and agricultural enterprises in Vietnam, despite an anticipated increase in competitiveness across the domestic market While the Vietnamese government is making efforts to improve capacity, human capital, and awareness of social enterprises, as well as fostering an ecosystem to support these initiatives in collaboration with NGOs, actual governmental support for the social enterprise sector remains lacking, as highlighted by Umfreville and Bonnin (2021) This situation reinforces the findings of Phan and Nguyen.
Social enterprises in Vietnam encounter considerable challenges, as highlighted in 2017 Many choose not to pursue official recognition due to factors such as unclear regulations, complicated bureaucratic processes, minimal perceived advantages, apprehensions regarding loan acquisition, distrust, and fears of corruption.
Illustrating the symbiotic link between the state and civil society, the Vietnamese government may play a vital role in overcoming these obstacles and promoting opportunities.
Vietnam's robust agricultural sector presents significant opportunities for social enterprises to positively impact small-scale farmers and rural communities while achieving financial success Many of these farmers still depend on traditional methods and face challenges in accessing markets to secure fair income By offering training in sustainable practices like organic and regenerative farming, social enterprises can empower farmers and facilitate market access for their produce Additionally, the lack of infrastructure and transportation options hinders market access, creating an opportunity for social enterprises to develop distribution channels and logistics networks that connect farmers directly to customers.
Recent research highlights the vital role of social enterprises in promoting socio-economic inclusivity and providing employment opportunities for marginalized groups, such as individuals with disabilities (Nguyen et al., 2021) The Vietnamese government supports these initiatives through the Vietnam Enterprise Law of 2014, which mandates that social enterprises address social or environmental issues and reinvest at least 51% of their profits toward these goals This legal framework not only recognizes the importance of social enterprises but also facilitates their access to foreign aid, fostering growth and helping them achieve their objectives (Loi, 2015) Consequently, the social enterprise sector in Vietnam is poised for significant growth and expansion.
RESEARCH DESIGN AND METHODOLOGY
Research Design
The author has developed a comprehensive conceptual framework that identifies key variables in examining how social enterprises contribute to the growth of agricultural and rural communities during health and political crises In this study, social enterprises and farmers are the primary independent variables, significantly impacting rural community development, which serves as the dependent variable Additionally, challenges and opportunities act as a moderating factor, shaping the relationship between social enterprises, farmers, and rural development Social enterprises provide essential resources, including loans, training, and agricultural inputs, that benefit smallholder farmers and subsequently influence community development Despite these contributions, there remain challenges and opportunities to effectively integrate social enterprises into agricultural and rural development strategies in Myanmar This framework seeks to clarify these dynamics.
Figure 3 1 Conceptual framework of the study
This study explores the impact of Social Enterprises on rural areas in Myanmar, focusing on their contributions and the challenges they encounter, particularly during economic crises Through qualitative case studies of Proximity Designs and Farmers' Bridge (TTTD), it highlights the significant role these enterprises play in supporting smallholder farmers amid difficulties in the agricultural sector The findings suggest that Social Enterprises are a viable option for providing essential support and fostering resilience in Myanmar's rural communities.
Research Methodology
This study employs qualitative research through a case study approach to explore the challenges and opportunities faced by Agricultural Social Enterprise organizations in Myanmar amid the political crisis and post-Covid-19 pandemic It specifically examines the role of social enterprises in supporting smallholder farmers and fostering rural community development The research will involve two agricultural social enterprises and will include in-depth interviews with 10 senior managers, middle managers, and field staff, alongside 10 farmers, utilizing semi-structured questions to enhance the qualitative analysis.
According to Alshenqeeti (2014), semi-structured interviews are the most commonly used method in qualitative research, requiring careful preparation of topics and questions The author emphasizes the benefits of conducting face-to-face interviews, as they enable researchers to gather a substantial amount of data Furthermore, Opdenakker (2006) highlights that in-person interviews create a comfortable atmosphere, facilitating the effective collection of information from participants.
The process of analyzing qualitative data involves understanding and interpreting the perspectives and opinions of research participants regarding various situations This
Qualitative data analysis focuses on identifying recurring patterns and themes within participants' views, as highlighted by Cohen et al (2007) In social sciences, qualitative semi-structured interviews are a vital tool for data collection, widely recognized for their ability to capture subjective perspectives (Bradford & Cullen, 2012; Flick, 2009).
This research utilized online data and reports from government agencies and relevant stakeholders, such as associations in the social enterprise sector Due to travel restrictions in Myanmar, the study focused on two case studies Engaging with organizations in the agricultural sector and rural farmers proved to be challenging The criteria for including respondents were clearly defined.
1 Field staff and middle level manager and senior management from Proximity Designs and Farmers’ Bridge-TTTD
2 Farmers’ who have been using the products and services from the social enterprises
The research was conducted with a number of ethical factors in consideration
Confidentiality - All the participants of the study participated as voluntary and all the collected data are only for academic purpose.
Reliability - All the participants are informed that their responses are anonymous
Validity - All the collected data are related to Social Enterprise and agricultural and rural communities.
The researcher chose not to disclose personal information about the respondents in Myanmar to prioritize their safety, ensuring that both the researchers and participants faced no major ethical or risk-related issues during the study.
3.2.2 Reason for choosing the case studies
The researcher chose Proximity Design and Farmers’ Bridge-TTTD as case studies because they are both social enterprises with a focus on agriculture and rural development.
Proximity Design, a prominent social enterprise in Myanmar established in 2004, focuses on enhancing the prosperity of rural families through innovative, human-centered design principles By offering a diverse range of products and services—including microfinancing, technical training for farmers, and irrigation solutions—Proximity Design significantly boosts farmers' productivity and incomes The organization has received multiple accolades from the Skoll World Foundation and other entities, exemplifying its commitment to socially responsible development and its impactful contributions to the agricultural sector.
Farmers’ Bridge (TTTD) is a social enterprise dedicated to enhancing information access for farmers in conflict-affected Southern Shan State, Myanmar By partnering with e-commerce platforms, they supply Shan vegetables and fruits, showcasing their commitment to sustainable rural economic growth The team, primarily composed of members from farming families, leverages local knowledge to address the unique challenges faced by farmers Their innovative approach has allowed them to adapt to obstacles such as the global pandemic and political crisis, demonstrating their resilience and dedication to supporting agriculture and rural communities effectively.
Exploring Proximity Design and Farmers’ Bridge (TTTD) offers valuable insights into diverse strategies for social enterprise within rural development and agriculture, allowing us to learn from their achievements and obstacles.
3.2.3 Data collection instruments and analysis procedure
The survey consisted of two parts: the first gathered socio-demographic data from respondents and addressed the current and potential challenges and opportunities faced by Social Enterprises It also explored the impact of Social Enterprises on rural communities and the agricultural sector, along with suggestions for enhancing their role.
Section 1: Demographic and general personal questionnaires The author constructed the questionnaires It contained five questions concerning the respondent's education, age, gender, location, employment status and service year.
Section 2: For in-depth interviews, the author assessed the questions derived from the literature and past findings, as well as additional follow-up questions based on the interviewee's responses.
The author conducted in-depth interviews with 20 participants—10 from organizational backgrounds and 10 farmers—using online platforms Zoom and Messenger The interview questionnaires, featuring open-ended questions in Burmese, were designed to enhance outreach effectiveness Each interview was subsequently transcribed into English to facilitate interpretation and analysis.
The analysis of in-depth interview responses was conducted using QDA Miner qualitative software, which facilitated coding and qualitative data analysis The participants were divided into two main groups: Social Enterprises and Farmers, with the former labeled from E01 to E10 and the latter from F01 to F10 Through line-by-line coding of the interview data, the author identified key categories and major themes based on the participants' responses.
Limitation of the Study
This study focused on two Social Enterprises in the Agriculture sector during the crisis, highlighting the need for future research to encompass a broader range of Social Enterprises across various industries that serve agricultural and rural areas in Myanmar Due to the current situation, data collection from the Ministry of Agriculture (MOA) was not feasible Therefore, further research should investigate the perspectives and strategies of both ministries regarding the enhancement of Social Enterprises' roles in agricultural and rural community development.
FINDINGS AND DISCUSSION
The role of Proximity Designs and Taungthutada in the agricultural sector and rural
Proximity Designs' latest donor report and annual impact survey reveal that the organization served 57,772 unique customers in the first half of the year, with approximately 70 percent being new clients.
In 2022, the demand for the biological fungicide Trichoderma surged due to its cost-effectiveness compared to increasingly expensive chemical pesticides This shift has made pest and disease protection products and services the core of the business The organization significantly enhances farmers' income by boosting agricultural productivity through a comprehensive range of services By providing specialized support in seed selection, soil health management, fertilizer application, and pest and disease management, the organization empowers farmers with vital knowledge and techniques throughout the growing season.
Proximity Design's annual impact survey reveals that their services have significantly boosted farmers' crop productivity, resulting in an average yield increase of 10% to 15%, which in turn enhances their income growth.
The organization aims to support 72,000 farmers in fiscal year 2023, significantly enhancing their livelihoods By providing products and services that lead to an annual average revenue increase of $436 per farmer, the organization not only boosts agricultural yields but also delivers substantial economic benefits, ultimately improving farmers' overall income and quality of life.
The organization offers low-interest financial loans at a 2% annual rate, positively impacting farmers and rural communities by providing an affordable alternative to high-interest loans from informal lenders With five innovative loan products tailored for rural entrepreneurs, including crop, livestock, small business, on-the-go, and hybrid loans, they address unique needs The crop loan, their most popular product, supplies essential working capital for input costs, with loan sizes averaging between 250,000 to 600,000 kyats ($178-$427 USD) Since 2012, the organization has directly lent to over 250,000 smallholder farmers and entrepreneurs across 3,500 villages, amassing a loan portfolio of approximately $77 million in 2021 By offering affordable financing, they help stabilize finances, eliminate high-interest debt, and foster sustainable development in rural areas, ultimately enhancing the livelihoods of community members.
Yetagon Irrigation, part of Proximity Designs, is significantly enhancing the livelihoods of rural farmers across 223 townships Customers utilizing its services have seen an impressive annual median income increase of $250 Committed to supporting rural agriculture, Yetagon Irrigation aims to grow its customer base to 20,000 in FY23 Currently, the initiative boasts 112,617 active users who are reaping the benefits of its innovative solutions.
34 is also playing a crucial role in empowering rural farmers and contributing to the growth of the agricultural sector.
The author received the latest report in 2023 and data of their organization’s activities from the Farmers’ Bridge - Taungthutada for the analysis.
Total cumulative number since the beginning of project
Table 4 1 Total youth and women employed in Kayah Chili farming Source: TTTD
Table 4.1 illustrates Taungthutada's significant contributions to the agricultural sector, emphasizing the employment of women and youth while promoting good agricultural practices The organization's mission aims to enhance rural economies and agriculture in a manner that benefits all stakeholders By concentrating on market creation, sustainable agri-services, and rural business partnerships, Taungthutada strives to foster a more equitable and sustainable future for farmers, women, and youth in Hsi Hseng Township, Shan State.
Cumulative number since the beginning of project
Table 4 2 Total farmers have been introduced with new technology (farmer meeting, demonstration event, other activities)
The organization has significantly engaged with farmers, demonstrated by the participation of 2,597 farmers in meetings since the project's inception, highlighting the effectiveness of its contract farming initiatives.
Taungthutada has facilitated the planting of chili across 23.5 acres of farmland of 52 farmers.
Total cumulative number since the beginning of project
Table 4 3 Total farmers engaged for solar Irrigation service (Source: TTTD)
Additionally, Taungthutada has supported 25 farmers by providing them with group solar irrigation renting services, enhancing their irrigation capabilities sustainably according to table (4.3).
Total cumulative number since the beginning of project
Table 4 4 Total youth and women employed in Kayah Chili farming (Source: TTTD)
Taungthutada's initiatives have successfully employed 13 youth and women in Kayah Chili farming, highlighting its commitment to creating opportunities for underrepresented groups in agriculture By empowering these individuals and involving them in farming activities, Taungthutada promotes inclusive growth and economic development within the community Its multifaceted approach, which includes promoting good agricultural practices, supporting employment for women and youth, and fostering community engagement, underscores its dedication to advancing the agricultural sector and enhancing the well-being of the local community in Hsi Hseng Township.
4.1.2 Cost efficient and income generating
A recent survey revealed that 60% of farmers participated in agricultural technique training organized by Proximity Designs and Taungthutada, which covered essential topics such as quality seed selection, effective fertilizer application, and pest and disease prevention strategies.
Attending the training significantly improved my farming practices, allowing me to reduce fertilizer expenses Previously, I used four bags of fertilizer per acre, but I learned that three bags are sufficient This adjustment resulted in a savings of approximately 210,000 Myanmar Kyat (MMK), which is about $100.
United State Dollar (USD) for my 3 acres.
He attended a training session on effective fertilizer usage in his neighborhood, where he gained valuable insights that he shared with local farmers This knowledge helped his neighbors reduce their fertilizer expenses Together, they also participated in a subsequent meeting focused on pesticide awareness.
During an interview, a farmer from a six-acre delta farm shared his struggle with brown plant hoppers, which affected three acres during the COVID-19 pandemic in 2020 Despite investing 300,000 MMK in pesticides from a local store and multiple applications, the pests persisted However, after being referred to the Farm Advisory Services (FAS) by the village chief, he received crucial guidance A field staff member recommended draining the field's water and ensuring proper ventilation for the rice plants before pesticide application Following this advice led to significant improvements within a week.
"I don't really know how to thank the Farm Advisory Services team, " he stated “I would have lost three acres of my crops if I had not met them.
Now I had earned 1.4 million MMK ~ 650 USD during that season, so I invited the entire FAS office to lunch.”
Farmers play a vital role in their communities by sharing valuable knowledge and skills gained from social enterprises By learning sustainable farming practices, new technologies, and innovative business models, they can enhance their yields and achieve fair income This acquired knowledge can then be disseminated among fellow farmers, promoting best practices and boosting overall productivity within the community.
F06 encouraged individuals to reach out to the FAS team, sharing his personal experience to motivate more farmers in his village to become clients of Farm Advisory Services (PD) He emphasized the importance of utilizing Proximity for effective support.
Designs' financing and solar pump products in addition to their farm advisory services.”
According to farmer interviewee F10, a village chief who is also a farmer and maintains a strong relationship with the Taungthutada and Proximity Designs,
Challenges
Since the military coup in Myanmar two years ago, the State Administration Council (SAC) has maintained control, recently extending the "state of emergency," which raises concerns about potential delays in the promised 2023 elections In response, civilian-led armed forces have intensified their attacks on military targets and those collaborating with the military, signaling a significant increase in resistance against the SAC.
All indications suggest that the political deadlock will persist for an extended period.
Myanmar's economy is in decline, leading to rising prices for essential goods and making it difficult for citizens to earn daily wages and feed their families The ongoing violence in rural areas has displaced nearly 1.5 million people, worsening the crisis With farmers cutting back on investments and resources, there is an increasing risk of food shortages that could affect not only Myanmar but also the surrounding region.
Social enterprises operating in the agricultural sector face several challenges that hinder their success and sustainability S01 shared:
A major challenge in the sector is the lack of funding and skilled talent, highlighting a significant skill gap that needs to be addressed To overcome this issue, proactive measures are essential, as hiring new employees typically involves extensive training, which compounds the existing difficulties.
Additionally, high staff turnover in operations further complicates the smooth functioning of social enterprises in this challenging time.”
The volatility of the agricultural market presents significant challenges, particularly with fluctuating input prices that can soar to three times higher than expected This unpredictability impacts the dynamics between social enterprises and farmers, notably in chili farming, where prices often surpass initial estimates As a result, these uncertainties hinder the formation of stable and sustainable partnerships with farmers.
The political and social landscape profoundly influences all stakeholders, particularly farmers, who face significant crop losses due to border gate closures and market challenges Additionally, social enterprises struggle to secure funding, as they depend largely on their own income and have limited access to external financial resources.
The current political sensitivity intensifies the challenges faced by Farm Advisory Services operating in conflict-affected regions with diverse ethnic groups This situation demands careful communication and engagement with farmers The worsening security landscape restricts the activities of social enterprises, which are under increasing pressure from the military regime In this difficult context, it is essential to partner with local actors who have the required knowledge, trust, and established relationships to navigate these complexities effectively.
44 the local communities Their involvement allows them to access and establish entry points for field work under conflict affected areas.
“Government reports and initiatives targeted at refugees face additional challenges as they may not be accepted by the military government.”
Electricity shortages are anticipated to worsen due to the military administration's lack of new investments and resources for adequate power generation, negatively affecting the economy and business environment This situation hampers our staff's remote work capabilities and complicates farmers' access to digital channels Additionally, ongoing banking weaknesses, import restrictions, logistics bottlenecks, and currency depreciation are expected to pose significant challenges to our operations at multiple levels.
The sector faces significant internal challenges, notably the brain drain phenomenon, where skilled professionals leave the country for better opportunities This exodus leads to a talent shortage, hindering the growth and development of the sector.
Inflation and rising input costs pose significant challenges for farmers, forcing them to confront increased expenses This financial strain may lead them to reconsider their crop selections or downsize their farms, as such adjustments are essential for maintaining operational sustainability amidst economic pressures.
“Our organization is currently facing the need to broaden our extension service for cultivating new crops, which requires the expertise of specialists and the training of field staff.”
Additionally, microfinance institutions encounter notable difficulties stemming from delinquency This situation negatively impacts their ability to provide financial support to farmers and other stakeholders This interviewee added,
Our microfinance team previously served as a dependable financial resource for our organization Unfortunately, the civil war affecting specific townships has hindered our ability to collect loan repayments, prompting us to implement cost-cutting measures to manage our expenses effectively.
Another challenge is the security issue due to the political unrest in Myanmar. The interviewee S09 shared:
“Unfortunately, our field staff are prohibited from entering these affected villages, and as a result, we have had to terminate the employment of field staff in some of these townships.”
The challenges faced by these institutions impede their operations and hinder their efforts to contribute effectively to the development of the agricultural sector.
On the other hand, farmers are also facing the challenges regarding microfinance due to inflation One of the interviewees, F07 shared:
The cost of agricultural inputs, such as fertilizer, has surged dramatically, increasing from approximately 30,000 MMK (15 USD) to around 100,000 MMK (50 USD) per bag This significant rise in prices highlights the inadequacy of loan amounts provided by microfinance or government sources, which fall short of covering the escalating expenses faced by farmers.
● Unstable Political and Social context
● Difficulty to work with government
● Increasing the poverty of farmers
Table 4 5 Challenges of agricultural social enterprises in Myanmar to play their role
Opportunities
Despite the challenging circumstances in Myanmar, opportunities for the future exist as companies become more open to collaborating with International Non-Governmental Organizations (INGOs) and adapting their business models for survival This shift fosters potential for impactful social entrepreneurship initiatives, which can significantly benefit conflict-affected and remote regions By providing job opportunities and skills development to marginalized groups, particularly men and women from ethnic minority communities with limited access to markets and services, these initiatives empower these communities economically and bridge critical gaps.
In Myanmar, social enterprises are stepping up to support farmers amid the crisis, filling the gap left by some international non-governmental organizations (INGOs) and government agencies that may be unable to operate This situation presents an opportunity for increased international support and funding to bolster these efforts.
Donor organizations are currently in discussions with us to implement vocational training and small farming initiatives for internally displaced persons in the Shan state refugee camp.
As S01 shared in the problems solving section,
Collaborating with local partners significantly increases the likelihood of securing funding, as donor organizations prefer projects that involve cooperation with other entrepreneurs and private companies This partnership not only enhances resource sharing but also facilitates seed funding opportunities, ultimately benefiting all parties involved.
Donor organizations are increasingly pursuing partnerships with social enterprises, local organizations, private companies, and entrepreneurs These collaborations are designed to harness the unique strengths and resources of each partner, ultimately fostering sustainable and impactful solutions for social and economic development.
Other opportunity according to the interviewee S04 discussed:
In Shan State, ample irrigated land exists across various village tracts, presenting an opportunity to introduce diverse crop varieties Establishing strong market connections is essential for facilitating the mass distribution of agricultural produce.
Moreover, increasing soil fertility in corn cultivated farms is to be considered to grow alternative crops in the Hsi Hseng township in Shan
The interviewee S09, from the microfinance business unite shared:
“We are negotiating with the private bank to invest in our organization.
Moreover, we have a plan to look for investment from international financial institutions as well.” but the interviewee did not want to explain about the plan and progress.
Opportunities ● Increased attention of INGO and Business
● Food safety for the IDPs
● Partnership with different stakeholders in the future
● Funding availability in the future after the crisis is over
● Extension to new crop and new region
Table 4 6 Opportunities of agricultural social enterprises in Myanmar to play their role