Massive scale plantation forestry in Myanmar began in the early 1980s as a drastic measure to fulfil the increasing demand for timber and to prevent the conversion of deteriorated forestland to agricultural land. Myanmar Forest Department is recruiting shifting cultivators, establishing plantation villages and applying the taungya method in establishing teak plantations. From the very beginning, there was an argument about whether the project is creating forest protective groups or forest destructive groups. A key determinant to that question from the researcher point of view is the socio-economic situations; knowing the present situation of the plantation villagers can help to understand the forest management practices. Interview surveys were carried out in three villages in Bago Yoma, the main region of the special teak plantation program, to examine the current economic benefits to plantation villagers. Questions were designed mainly to explore the incentives for people participation and the socio-economic situations of the plantation villagers. Principal component analysis was used to analyze the collected data. It was found that local people are willing to participate in the initial establishment of plantations. However, all the incentives relating to the project are temporary, with no long-term consideration for taungya farmers, which jeopardizes the plan to create forest protective groups. It is concluded that the time has come for the Myanmar Forest Department to change its main aim of earning foreign exchange from establishment of teak plantations through the taungya method to redressing deforestation through people participation based on rural socio-economic development
