Although demand for chicken and eggs is gradually returning to normal, poultry farms in the Yangon peri-urban area are still facing challenges due to the COVID-19 pandemic. In their research, Peixun Fang, Ben Belton, Hnin Ei Win, and Xiaobo Zhang utilize findings from the third round of phone surveys to understand how COVID-19 related challenges are continuing to affect poultry farmers. They also provide updated policy recommendations to help poultry farmers maintain operations and adapt to COVID-19 challenges.
You can view the full policy note by Peixun, Ben, Hnin Ei Win, Khin Zin Win, and Xiaobo in English here and in Burmese here.
မြန်မာဘာသာဖြင့်ရေးသားထားသော စာတမ်းအပြည့်အစုံကို ဤနေရာတွင် ဖတ်ရှုနိုင်ပါသည်။
Background
This blog post highlights one of the many recent surveys and policy notes that the Myanmar Agriculture Policy Support Activity (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.
MAPSA originally interviewed poultry farmers by telephone in early and late June 2020 to determine how their businesses were being affected by COVID-19 related restrictions. The results of those surveys were published in related blog posts (early June | late June). To trace the continuing impact of the COVID-19 pandemic on their economic activities, a third phone survey was conducted in early July 2020.
Effects of COVID-19 on poultry farmers
While some temporarily closed broiler farms reopened their businesses in early July to meet increasing demand, other temporarily closed ones permanently shut down. Most respondents reported that limited cash flow was the main reason for temporarily closing their farms and it is likely that this factor also prevented them from reopening. Despite this, the share of operational broiler farms increased from 71 to 78 percent between the second and third survey rounds. On the other hand, the share of operational layer farms decreased slightly. With continuing cash flow problems and challenges with procuring day-old-chicks, many of these farms can be expected to permanently cease business.
Broiler supply is likely to increase in the immediate future due to the recently reopened broiler farms. However, overall broiler production this year is likely to be considerably lower than was the case in 2019, mainly due to the loss of operational farms.
The price of broilers has been gradually decreasing since early July compared with June as supply has gradually increased (Figure 1). With the decreasing price of broilers and the increasing price of day-old-chicks, it will become increasingly difficult for broiler farms to survive. As such, some broiler farms reported that they will retain their mature chickens and wait for higher prices. Such lengthening of production cycles will again decrease broiler supply.
Cash flow considerably worsened for broiler farms in early July due to recent price increases for day-old-chicks and price decreases for broilers. Thus, the share of broiler farms that reported that they could not maintain operations with their current cash flow for longer than three months increased from 1 to 12 percent between the second and third survey rounds (Figure 2).
The supply shortage of day-old-chicks continues to be the bottleneck for broiler farms. Though fewer respondents (decreasing from 28 to 16 percent) reported longer waiting times for day-old-chicks, a higher share of respondents (increasing from 18 to 24 percent) reported the price of day-old-chicks as being too high for them.
The number of hired regular workers in operational poultry farms remained stable. However, compared with before Yangon’s semi-lockdown (i.e. early April), the average number of workers per operational farm decreased by 24 percent from about nine workers to fewer than seven.
Policy recommendations
Based on the analysis of the third survey round, all policy recommendations developed from the first and second survey rounds still stand – temporary income support to poultry farms; participation in government credit guarantee schemes; temporary waiver of the import ban on day-old-chicks; tax exemptions or deferrals; and lifting restrictions on transportation of livestock and livestock products. Two of these recommendations are stressed below, and a new recommendation regarding income support to vulnerable households is added.
- Egg is a critical animal-source food among low-income households. Income support to vulnerable households not only can mitigate nutrition security problems but also can increase demand for eggs, which in turn will help layer farms. The Myanmar government already adopted this policy under CERP Action 4.1.2 and the policy can be prolonged or expanded after the first two rounds of implementation.
- Because of recent price decreases for broilers and price increases for day-old-chicks, cash flow worsened for broiler farms. Layer farms also have suffered from persistent low egg prices. Many operational poultry farms reported that they are considering closing their farms. Therefore, the recommendation from the two survey rounds of mitigating cash flow problems still stands – providing temporary income support based on either the number of employees or the sales from last year would help operational farms buffer COVID-19 related shocks for several months and help some closed farms resume operations. The support should extend to both registered and unregistered farms. This recommendation falls within Action 2.1.7(b) of the CERP. However, income support to vulnerable households and government credit guarantee schemes should be prioritized ahead of income support to poultry farms.
- The supply shortage of day-old-chicks remains a significant bottleneck to increasing broiler production. A temporary waiver of the import ban on day-old-chicks by the Myanmar government allowed for the importation of 1.9 million broiler day-old-chicks between mid-May and mid-July. This measure should be continued. However, to protect domestic breeder farms and related businesses, the total supply of day-old-chicks should be monitored and the temporary import waiver measure phased out when domestic breeder farms return to their normal production capacity. This should be in about two or three months, assuming breeder farms started increasing their production in mid-May.
Related blog posts
- COVID-19 and business responses: How are Yangon’s poultry farmers adapting to the pandemic? (Late-June)
- COVID-19 and business responses: How are Yangon’s poultry farmers adapting to the pandemic? (June)
Peixun Fang is a Research Analyst in the Development Strategy and Governance Division (DSGD) of the International Food Policy Research Institute (IFPRI), based in Washington, DC. Ben Belton is Associate Professor, International Development, in the Department of Agricultural, Food, and Resource Economics, Michigan State University. Hnin Ei Win is a Research Analyst in DSGD of IFPRI, based in Yangon. Xiaobo Zhang is a Senior Research Fellow in DSGD of IFPRI and Chair Professor of Economics at Peking University.
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.
