Since April 2020, the International Food Policy Research Institute (IFPRI) and Michigan State University (MSU), with support from the United States Agency for International Development (USAID) and the Livelihoods and Food Security Fund (LIFT), have undertaken analyses of secondary data combined with regular phone surveys of actors at all stages of Myanmar’s agri-food system in order to better understand the impacts of COVID-19 on the system.
Findings summarized
These analyses show that the volume of agribusiness has slowed considerably in Myanmar since COVID-19 restrictions were put in place. There is lower demand from farmers for agricultural inputs and mechanization services and lower volumes of produce traded, especially exports to neighboring countries whose borders are closed. All actors in the agri-food system are also facing liquidity constraints and are experiencing increased difficulties in borrowing and recovering loans.
The hardest-hit segments of the agri-food system are smallholder farmers and low-income households in both rural and urban areas who depend on selling their labor. Among a sample of 2,000 households in the rural Dry Zone and urban Yangon:
- 75 percent of rural and 85 percent of urban households reported a loss of employment and income between April and October;
- The median decline in rural incomes was 38 percent as of October, and half of rural households were income-poor in June. The corresponding decline in urban incomes was 31 percent, with 28 percent in urban households being income-poor in June;
- The highest increase in rural income poverty rates occurred among farming households, from 20 percent being poor in January to 55 percent in June. Those most at risk of falling into poverty are smallholders farming five acres or less. Such households directly support more than 5 million individuals nationally; and
- The most common coping strategies used by households to manage the economic shocks associated with COVID-19 involve borrowing (48 percent of households) or using savings (31 percent). Smaller shares of households reported cutting both food and non-food expenditures or selling assets.
The increase in poverty among farmers inevitably impacts agribusinesses. Farmers are less able to purchase inputs, including hired labor. This results in their farms being less productive, reducing the volumes of produce for agribusinesses to handle.
The scale of the COVID-19 Comprehensive Economic Recovery Program (CERP) of the Government of Myanmar and the share of CERP expenditure on agriculture have been too small to offset serious economic harm to labor-dependent households in Myanmar’s agri-food system or to prevent food and nutrition insecurity from increasing.
Key recommendations
To avoid transient economic shocks causing long-term economic harm and human suffering, it is essential that the scale of CERP be increased greatly in the coming months. In addition to continuing programs that provide loans for agribusinesses, priorities for an expanded CERP should include:
- Scale-out maternal and child cash transfer programs to achieve nationwide coverage;
- Expand employment subsidies for both rural and urban workers (employer subsidies, cash for work);
- Rehabilitate the financial condition of smallholder farmers in order to avoid a cycle of chronic indebtedness – this can be done through a combination of short-term input subsidies, flexible loan repayment conditions, freezing interest payments on overdue loans, and repayment incentives; and
- Expand access to mobile money platforms for financial transactions, including for social protection grants and employment subsidies – doing so will increase the timeliness of payments and reduce exposure to infection among those involved.
In the short term, despite increasing numbers of COVID-19 infections, it will be important to allow movement of agricultural inputs and produce throughout the country; to ensure that consumers and suppliers have continued access to markets using safe practices such as reducing congestion or remaining open for longer hours; and to negotiate with neighboring countries to re-open border trade. This is especially important in view of the extension of the recent lockdowns of Yangon to include Ayeyarwady, Bago, and Mandalay regions and Mon state.
To learn more about recent COVID-19 impacts on Myanmar’s agri-food system and their policy implications, read the full working paper here.
Related blog posts
- Myanmar survey findings summarized (November 2020)
- Community perceptions of COVID-19’s impacts in Myanmar (October)
- Waves of disease, waves of poverty
The Myanmar Agriculture Policy Support Activity (MAPSA) is conducting surveys 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.
This blog post was prepared by Michael Wang, Mickey Leland International Hunger Fellow at IFPRI, based in Yangon. The analysis and opinions expressed in this piece are solely those of the authors.
