Yangon: A Thai company, the Sutech Engineering Company, will grow sugarcane in Myanmar’s Bago division under a contract farming system, the local Weekly Eleven News reported Wednesday.

According to a memorandum of understanding between the Thai company and the state-run Myanmar Sugarcane Enterprise (MSE) signed recently, the plantation of 2,000 acres (810 hectares) of sugarcane in Kangyigon region in Pyay township, 286 kilometers north of Yangon, is aimed at supplying raw materials for the Nawaday Sugar Mill already set up. The sugar mill could produce only 60,000 tons of the crop against the demand of 100,000 tons per year, the MSE was quoted as saying.

However, former agreement is yet to be signed for the Thai company’s 100-percent investment which involves bringing in technical know-how and agricultural experts, and creation of job opportunities for regional people, the sources said.

Myanmar and Thailand agreed early this month to cooperate in farming under contract system initiating some MoUs between the Myanmar Ministry of Agriculture and Irrigation, Ministry of Livestock and Fisheries and Thai Ministry of Agriculture and Cooperatives and covers cultivation of sugarcane, one of Myanmar’s designated main crops after paddy, beans and pulses and cotton.

It is the first time for such contract farming system to be implemented in Myanmar by a foreign country, under which Myanmar’s vacant and follow land will be allowed for reclamation and growing of crops by foreign enterprises.

Such contract farming system was proposed at the Second Ayayawaddy-Chao Phraya-Mekong Economic Cooperation Strategy ( ACMECS) Summit held in Bangkok, Thailand early November this year, involving Cambodia, Laos, Myanmar, Thailand and Vietnam.

Meanwhile, as part of the economic cooperation strategy program, Myanmar and Thailand have also begun detailed feasibility study on the establishment of three combined special economic and industrial zones in major cities of Myanmar, aimed at creating job opportunities in the region. The study is being jointly conducted by the Myanmar Ministry of Industry and the Industrial Estate Authority of Thailand.

The three zones are proposed to be set up in Myanmar’s Myawaddy and Hpa-an in southeastern Kayin state and Mawlamyine in southern Mon state where land areas of 384, 396 and 275 hectares are to be allotted respectively.

Under the Myanmar-Thai cooperation, Thai factories are planned to move to the zones and both countries are expected to benefit from the establishment economically and socially.

The ECS provides for cooperation in five strategic areas covering agriculture, industry, trade and investment, transport, tourist and human resources development.