Though the poultry sector stabilized recently, COVID-19 has had a lasting impact of continuing mismatches in supply and demand. In their research, Peixun Fang, Ben Belton, Hnin Ei Win, and Xiaobo Zhang utilize findings from the fifth round of phone surveys with poultry farmers to better understand 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, early July, and late 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 | late July). To trace the continuing impact of the COVID-19 pandemic on their economic activities, a fifth phone survey was conducted in August 2020.
Effects of COVID-19 on poultry farmers
Only a very small number of broiler or layer farms shut down or reopened in August (Figure 1). Unlike in June and July when many broiler farms reopened, very few temporarily closed farms reopened in August. Overall, the number of broiler farms was stable, with the net shares of operational and closed broiler farms changing only marginally between late July and August. Similarly, the operational level of layer farms was stable in August.
The supply of broilers increased from June to August but remained lower than the 2019 monthly average level (26 percent below the 2019 average level in August, as compared to 53 percent below in June). On the other hand, the supply of eggs decreased between June and August, falling from 4 percent below the 2019 average level in early June to 15 percent below in August.
With the recovery of broiler supply and continued low broiler demand, the price of broilers continued to gradually increase in August. Prices in August have fallen below the 2019 average and with the higher price of day-old-chicks and other inputs, it will be difficult for some broiler farms to survive. On the other hand, as the supply of eggs in August remained similar to that in July and demand continues to be sluggish, the price of eggs remained constant in August at 2,620 MMK/Viss.
Cash flow for broiler farms in August is still as poor as in July, and it continued to worsen for layer farms. Nine percent of broiler farms reported that they could not maintain operations on their current cash flow for longer than three months, while 14 percent reported that they could not do so for longer than five months (Figure 2). With the lower price of day-old-chicks in August, much fewer broiler farms reported the high price of day-old-chicks as a major business challenge. This should have eased cash constraints for some broiler farmers. However, the further price drop of broilers hurt the cash flow of broiler farms in August, which again made the low market of broilers the most significant challenge.
Supply shortages of day-old-chicks greatly eased in August. Thanks to the Myanmar government’s policy of allowing importation of day-old-chicks since mid-May, the share of farms reporting shortages of day-old-chicks decreased considerably between late July and August. As such, almost all farms could receive day-old-chicks on time and the supply of day-old-chicks is generally no longer the main constraint for poultry farmers.
All layer farms reported no problems in selling eggs and low market prices again became a problem for broiler farms. More than ten percent of layer farms complained about the low price of eggs in July, though all of them were content with the August price. On the other hand, while few broiler farms reported problems selling broilers in late July, 16 percent of broiler farms again reported low broiler prices being a problem in August.
The total workers hired by the surveyed broiler farms decreased by almost half between September 2019 and June 2020. The average number of workers hired by operational broiler farms decreased from 5.3 to 3.8 over the period. Though the total number of hired workers started increasing in late June thanks to improved market conditions, this trend did not continue into August due to drops in broiler prices due to sluggish demand and higher supply. On layer farms, the total number of workers also decreased until late June and have gradually increased since then. However, the number of operational layer farms decreased somewhat between June and August, which has hurt the supply of eggs.
Policy recommendations
Based on the analysis of the fifth survey round, all policy recommendations developed from the first four 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 recommendations regarding income support to vulnerable households, credit and income support to poultry farmers, and a temporary waiver for allowing the transportation of day-old-chicks are further stressed in the following.
- Operational layer farms were faring better in August thanks to the higher price of eggs. However, these higher prices are probably due to a decrease in supply rather than changes in egg demand. Demand for eggs remains sluggish. Prolonged or expanded income support to vulnerable households could bolster egg consumption and contribute to food and nutrition security, which will also help layer farmers.
- Current credit/loan programs mostly target registered livestock farms and exclude unregistered ones. However, many small-scale poultry farms in Myanmar are unregistered. To stabilize supplies of broilers and eggs, credit/loan programs should be extended to unregistered farms to help them reopen or maintain operations.
- The Livestock, Breeding, and Veterinary Department (LBVD) of MOALI normally holds meetings quarterly. Since the outbreak of COVID-19, LBVD has held monthly meetings with the Myanmar Livestock Federation and importers to discuss the importation of day-ol-chicks. Swift action by LBVD played an important role in averting a serious crisis in broiler and egg supplies. Though the price of broiler day-old-chicks has started decreasing recently, it is important to continue the government’s policy of allowing the importation of day-old-chicks. This is essential for broiler farms to remain in operation and for the supply of broilers to stabilize at relatively lower prices. This policy contributes positively to the recovery of demand for broilers.
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
- Poverty and food insecurity during COVID-19 (June and July)
- COVID-19 and last-mile delivery: Challenges for retail shops (late July)
- COVID-19 and business responses: How are Yangon’s poultry farmers adapting to the pandemic? (late July)
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 and Khin Zin Win are Research Analysts 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.
