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. Because farm-level input use is an important driver of yields for all major food crops, shocks to the input retail sector have major implications both for rural household welfare and for national food security. In their research, Joseph Goeb, Duncan Boughton, and Mywish K. Maredia utilize the findings from recent phone surveys to better understand how Myanmar’s agricultural input retail sector has been affected by the COVID-19 crisis.
The full policy note by Joseph, Duncan, and Mywish is available to view in English here.
The Myanmar Agriculture Policy Support Activity (MAPSA) is monitoring the impact of COVID-19 on key actors in Myanmar’s agri-food system. This blog post highlights one of the many recent surveys and policy notes that MAPSA has conducted to assess the emerging constraints that these key 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.
Background
COVID-19 and the policies enacted to mitigate its spread have shocked Myanmar’s economy. Agricultural input retailers, like many other businesses, are squeezed between both supply- and demand-side shocks. On the supply side, agricultural inputs have long, international supply chains that could be disrupted by restrictions on international or internal trade and transport. On the demand side, the shocks to rural households’ incomes, crop prices, and uncertainty could affect input purchases.
With phone surveys recently conducted with agricultural input retailers in Shan, Kachin, Bago, Ayeyarwady, Sagaing, and Mandalay, the MAPSA research team assessed the demand- and supply-side effects of the COVID-19 crisis on input retailers. The phone surveys incorporated detailed demand and supply questions for specific key inputs: fertilizers, maize seed, vegetable seeds, and pesticides.
Effects of the COVID-19 crisis on input retailers
COVID-19 has had broad effects on the input retail sector and 90 percent of the input suppliers interviewed reported experiencing at least one disruption from the crisis. The top-cited effects were disruptions to demand and supply, difficulties collecting loan repayments on recent credit lending, and challenges obtaining new credit or loans for purchases.
The sum of these COVID-19 shocks is lower input sales, which results in lower expected revenues. For each input, at least 40 percent of retailers reported lower sales this year compared to the same period in 2019, and well over 50 percent reported lower sales of fertilizer, maize seed, and pesticides. Details are displayed in Figure 1.
Retailer responses
To cope with COVID-19 related disruptions, input retailers have responded to the demand- and supply-side challenges by employing various strategies and behaviors. Safety practices, business responses and adaptations, and hiring employees were areas of emphasis.
As seen in Figures 2 and 3, 90 percent of retailers reported adopting safety practices as a response, with the most common measures being washing hands regularly, wearing face coverings, and maintaining a safe distance between people. Other common responses include closing businesses and reducing hours or days of operations.
Policy recommendations
From their analysis, Joseph, Duncan, and Mywish offer policy recommendations to mitigate COVID-19 impacts on Myanmar’s agricultural input retailers.
- Cash or lending support to smallholder farmers should be implemented immediately and without delay. Such measures would fall under Action 2.1.7(b) of the COVID-19 Economic Relief Plan of the Government of Myanmar.
- Agricultural inputs should be allowed to move freely within Myanmar to ease supply-side restrictions for farmers.
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 (June)
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.
This blog post was prepared by Michael Wang, Mickey Leland International Hunger Fellow in the Development Strategy and Governance Division of the International Food Policy Research Institute, based in Yangon. The analysis and opinions expressed in this piece are solely those of the authors.
