Recent strategies to address rural poverty and food insecurity in Myanmar's Ayeyarwady Delta emphasize the scope for market-based and smallholder-led agricultural development to catalyze broader positive change for rural populations. This paper challenges the appropriateness of this development model for the Ayeyarwady Delta. Assumptions of latent growth potential among an emerging smallholder capitalist agricultural class fundamentally misinterpret how farming is embedded within the Delta's regional economy. Using a long historical perspective informed by the food regimes approach, as well as household-level data from a recently completed livelihoods survey in two townships, we reveal a contemporary situation in which medium-sized and large landholders control most agricultural production. We argue that this is a path-dependent legacy from how the Delta has been successively incorporated into the politics of food production and trade at global and national scales. These arrangements have left the Delta without a broad smallholder base, meaning that policies that prioritize smallholder-led market development will not generate the type of pro-poor outcomes required to address the Delta's pervasive rates of food insecurity and poverty. Instead, a rural development agenda for the Delta should focus on its actually existing social and economic dynamics that are a legacy of its history.