Agricultural input retailers play a key role in Myanmar’s agri-food system by supplying farmers with fertilizer, seed, pesticides, and other inputs necessary for successful harvests. In their research, Joseph Goeb, Duncan Boughton, Mywish K. Maredia, A Myint Zu, and Nang Lun Kham Synt utilize the findings from the second round of phone surveys to understand how COVID-19 related challenges are continuing to affect Myanmar’s agricultural input retailers. They also provide updated policy recommendations to help agricultural input retailers maintain operations and adapt to COVID-19 challenges.
The full policy note by Joseph, Duncan, Mywish, A Myint Zu, and Nang Lun Kham Synt is available to view in English here.
Background
The Myanmar Agriculture Policy Support Activity (MAPSA) originally interviewed agricultural input retailers in early May 2020 to determine how their businesses were being affected by COVID-19 related restrictions. The results of that survey were published in a related blog post. To trace the continuing impact of the COVID-19 pandemic on their economic activities, a second phone survey was conducted in early June 2020.
This blog post highlights one of the many recent surveys and policy notes that MAPSA has conducted to assess the emerging constraints that key agricultural actors face and to mitigate the possible impacts of COVID-19 on rural livelihoods and food security. Additional blog posts are available highlighting MAPSA’s research on the impact of COVID-19 on key actors in Myanmar’s agri-food system. Surveys are ongoing, and findings and recommendations will be periodically updated.
Results from the round one survey with agricultural input retailers emphasized the following:
- Widespread disruptions from COVID-19 to both input supply and demand;
- Higher transportation costs leading to higher input prices; and
- Dramatically lower revenue expectations for retailers in 2020 compared to 2019.
The round two survey builds on round one by exploring the effects of COVID-19 since early May, by tracking sales changes, and by providing updated information on retailer credit and transportation.
Two-week effects of COVID-19 on input retailers
COVID-19 continues to have broad effects on the agricultural input sector. Seventy percent of retailers reported at least one disruption in the two weeks prior to June 7th. Mandalay and Sagaing were the most affected regions with 85 and 88 percent of retailers reporting challenges, respectively.
Many input retailers cited difficulties collecting credit repayments, disruptions in input demand, and general supply shocks. Despite modest growth in input sales between the round one and round two surveys, many shops are still reporting lower input sales compared to the same time last year (Figure 1).
Retailer responses
Following a trend from the previous survey round, input retailers are continuing to increase the adoption of mobile phones and delivery services in response to COVID-19 shocks (Figure 2). Thirteen percent of retailers were offering input deliveries direct to farmers, and similar shares were selling or taking orders by phone (13 percent) or buying inputs by phone (15 percent). However, mobile payment and banking use rates were low for both sales and purchases.
Policy recommendations
The above results highlight the challenges facing Myanmar’s input retail sector. Although sales for many retailers increased in the two weeks between the round one and round two interviews, most retailers are still reporting lower sales this year compared to the same period in 2019. Thus, the following five policies are suggested:
- Cash support to farmers is still an immediate need and would facilitate greater input investment to increase monsoon crop production – this recommendation is aligned with Action 2.1.7(b) under the COVID-19 Economic Relief Plan (CERP) of the Government of Myanmar. The recently announced input voucher scheme to be implemented by the Cooperatives Department of the Ministry of Agriculture, Livestock, and Irrigation should be implemented quickly and the scheme should allow vouchers to be used to pay off debts for inputs already received on credit.
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Photo credit: Tong Stocker/Shutterstock Extend working capital loan support (CERP 2.1.1) to input retailers and other key actors in the agri-food system. This would help mitigate the effects of low credit repayment by farmers and allow for productive investments.
- Remove or delay payments of business taxes and fees (CERP 2.1.3) for input retailers.
- Ease transportation restrictions at all levels, including for travel within townships.
- Local and national governments should plan and design future lockdown protocols that allow input retailers and other essential actors in the agri-food system to function with limited interruption even during lockdowns, provided they follow safety protocols.
Related blog posts
- COVID-19 and Myanmar's agricultural inputs: What we know so far (July)
- COVID-19 and Myanmar's agricultural inputs: What we know so far (May)
Joseph Goeb is a Research Associate in the Department of Agricultural, Food, and Resource Economics of Michigan State University (MSU), based in Yangon. Duncan Boughton is a Professor of International Development at MSU, Policy Advisor for the Ministry of Agriculture, Livestock, and Irrigation of the Government of Myanmar, and a lecturer at Yezin Agricultural University, based in Nay Pyi Taw, Myanmar. Mywish K. Maredia is a Professor of International Development in the Department of Agricultural, Food, and Resource Economics at MSU, based in East Lansing, MI, USA. A Myint Zu and Nang Lun Kham Synt are Research Analysts with the Development Strategy and Governance Division (DSGD) of the International Food Policy Research Institute (IFPRI).
This blog post was prepared by Michael Wang, Mickey Leland International Hunger Fellow in DSGD of IFPRI, based in Yangon. The analysis and opinions expressed in this piece are solely those of the authors.
