To understand the effects of recent economic and political disruptions on Myanmar’s rice sector, researchers from the Myanmar Agriculture Policy Support Activity (MAPSA) conducted an additional round of a telephone survey of medium- and large-scale rice millers in June 2021.
You can view the full research note in English here.
Background
Rice mills are the most important link in Myanmar’s rice value chain. Mills buy paddy from farmers and process it into rice, the primary staple of Myanmar accounting for more than 50 percent of calories consumed in the country. Thus, disruptions to the milling sector have important upstream implications for farm incomes as well as downstream implications for household food security.
In this Research Note, we present results and analysis of recent economic disruptions to rice mills from a June 2021 round of a telephone panel survey of 425 millers in Ayeyarwady, Bago, and Yangon. We examine (i) disruptions caused by the current political and COVID-19 crises; (ii) changes in business operations including throughput, paddy stocks, and credit offered to farmers; (iii) paddy and rice price changes from January to June 2021 with comparisons to 2020; and (iv) byproduct sales and price changes compared to the same period in 2020.
Disruptions to rice milling
To understand the effects of recent economic disruptions on rice millers, we asked a series of questions about the different types of disruptions that mills experienced in the 30 days prior to the interview. Figure 1 shows comparisons between the April and June survey rounds. The four largest categories of disruptions were related to making/receiving payments and transportation. These show no signs of lessening between April and June. However, other disruption categories show improvements. Multiple credit related disruptions were still prevalent in June but much less common than in April. Additionally, the largest improvements reported were in telecommunications disruptions as internet services were restored albeit with restrictions for many applications and websites.
Disruptions experienced by rice millers in 30 days prior to interview, percentage reporting
To understand the relative impacts of these disruptions, we asked millers to identify which group of disruptions they considered to be the most severe. Disruptions in the banking system stood clearly as the largest problem for rice millers and were reported by 87 percent of respondents. Transportation disruptions, which were reported by a high share of millers in the figure, fell to a very distant second with only 5 percent of millers saying they are the most significant.
Rice milling operations changes in response to disruptions
Rice millers were asked a series of questions to understand how they have responded to the disruptions reported above. Following the large banking sector disruptions, the April 2021 survey showed a shift in payment methods to a heavy reliance on cash. That shift continued into June with 94 percent of paddy purchases and 77 percent of rice sales conducted in cash. Additionally, working capital was 14 percent lower than during the same time in 2020. The result was a decline in summer season throughput of the mills; it implies a lower supply of paddy and rice heading into the monsoon production season – which is also expected to be lower – so it kind of sets the stage for a troubling situation. If (1) summer production/throughput was low and (2) monsoon production is projected to be low, then aggregate supply of paddy is definitely going to be lower.
Changes in throughput, working capital, hired workers, and paddy stocks, averages among active mills
This blog post highlights one of the many recent surveys and research notes that MAPSA has conducted to assess the emerging constraints that key agricultural actors face and to mitigate the possible impacts of COVID-19 and recent disruptions on rural livelihoods and food security. Additional blog posts are available highlighting MAPSA’s research on the impact of disruptions on key actors in Myanmar’s agri-food system. Surveys are ongoing, and findings and recommendations will be periodically updated.
