Although demand for chicken and eggs has increased in the past two months compared to the beginning of the pandemic, demand growth is sluggish compared to 2019. In their research, Peixun Fang, Ben Belton, Hnin Ei Win, and Xiaobo Zhang utilize findings from a fourth round of phone surveys to the challenges that COVID-19 poses on poultry farms, nutrition, and food security in Myanmar. 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
The Myanmar Agriculture Policy Support Activity (MAPSA) originally interviewed poultry farmers by telephone in early June, late June, and early July 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 | early July). To trace the continuing impact of the COVID-19 pandemic on their economic activities, a fourth phone survey was conducted in late July 2020.
Effects of COVID-19 on poultry farmers
Additional temporarily closed broiler farms reopened their businesses in late July to meet increasing demand, though a small number of temporarily closed farms permanently shut down. The share of operational broiler farms increased form 78 to 82 percent of all broiler farms surveyed between the third and fourth survey rounds. This is expected to increase the supply of chicken to the local market and drive broiler prices further down.
The price of broilers continued to gradually decrease in the second half of July as supply gradually increased (Figure 1). Recent prices are very close to the 2019 average. However, the overall supply of broilers is still much lower than that of 2019. The importation of day-old-chicks allowed by the Myanmar government since mid-May contributed to the stable price for chicks in June July.
The price of eggs continued to increase, rising by 14 percent from 2,300 MMK/viss in late June to 2,620 MMK/viss in late July (Figure 1). Prices are expected to increase further in August as more eggs will be purchased for mooncake production in preparation for the Mid-Autumn Festival (October 1). However, the minimal change in quantity of eggs sold between June and July indicates sluggish growth in demand. The Myanmar government should consider expanding its current income support to vulnerable households, as doing so would bolster not only nutrition and food security for this population but also egg demand for layer farmers.
Cash flow is still very poor for broiler farms and has considerably worsened for layer farms. While the share of broiler farms reporting that they could not maintain operations on their current cash flow for longer than three months decreased from 12 to 8 percent between the third and fourth survey rounds, the share reporting that they could not maintain operations on their current cash flow for longer than 5 months increased from 22 to 26 percent (Figure 2). As was seen in the third survey round, the high price of day-old-chicks and the price decrease for broilers are still the two main challenges for broiler farm cash flow.
Supply shortages of day-old-chicks continues to be the bottleneck for both broiler and layer farms. This issue combined with price increases for feed were the two main supply-side problems for both broiler and layer farms in July. The price increase of feed is likely the delayed effect of feed factories reducing production during the lockdown period in response to earlier reductions in demand.
The number of hired regular workers in operational poultry farms did not change significantly between June and July. However, the number of workers is lower than before lockdown. This implies that the operational capacity of poultry farms did not improve in June and July. Taking closed farms into consideration, we find that 684 jobs were lost among the 275 surveyed farms, which makes up about 30 percent of the total labor in 2019 for the farms surveyed.
Policy recommendations
Based on the analysis of the fourth survey round, all policy recommendations developed from the first three survey rounds still stand – prolonged or expanded income support to vulnerable households; participation in government credit guarantee schemes; temporary income support to poultry farms; temporary waiver of the import ban on day-old-chicks until at least mid-or late September; tax exemptions or deferrals; and lifting restrictions on transportation of livestock and livestock products.
The recommendation regarding income support to vulnerable households is further stressed here, and the recommendation regarding the importation of day-old-chicks was revised to be as follows.
- Demand for egg is still sluggish. With the price of eggs very likely to be further increased in August, egg consumption for additional households will be affected. As egg is a critical animal-source food among low-income households, prolonged or expanded income support to vulnerable households could bolster egg consumption and ensure food and nutrition security. Such support will also help layer farms.
- Thanks to the Myanmar government’s temporary waiver of the import ban on day-old-chicks from mid-May to mid-August, about 3.8 million broiler day-old-chicks were imported. Thus, broiler farms were again able to obtain day-old-chicks at reasonable prices and to recover their businesses. Though the shortage of layer day-old-chicks is not as serious as that for broiler day-old-chicks, we are seeing that more layer farms report this problem. Therefore, this temporary waiver of the import ban on day-old-chicks should be extended to layer day-old-chicks over the next couple of months to help layer farms.
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.
Related blog posts
- COVID-19 and business responses: How are Yangon’s poultry farmers adapting to the pandemic? (July)
- 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.
