In November 2021, Researchers from the Myanmar Agriculture Policy Support Activity (MAPSA) surveyed 392 medium- and large-scale rice millers from major rice-growing regions of Myanmar to learn more about the impacts of the COVID-19 crisis and political instability. This blog post highlights important results and analysis from those interviews.
You can view the full research note in English here.
Introduction
Rice mills are the primary link in the rice value chain between farmers and consumers. Therefore, it is critical to monitor milling shocks as they will affect both farmers' incomes and urban rice prices. Since June 2020, we have monitored the impact of COVID-19 and political instability on rice millers in Myanmar and this is the tenth Research Note in the series. In this Research Note, we present evidence from interviews with 392 rice millers conducted in November 2021 in Myanmar’s three major rice-growing regions–Ayeyarwady, Bago, and Yangon. We present evidence of the current situation in relation to previous survey rounds, including 1) disruptions in milling caused by the political and health crises; 2) changes in operations such as throughput, paddy and rice storage, and working capital; 3) reasons for expected throughput changes in the 2021 monsoon harvest season; and 4) prices of paddy, rice, and byproducts.
Disruptions to rice milling
In the November 2021 survey, we continued to ask millers a series of questions on different forms of disruptions faced in the 30 days prior to interview to better evaluate the effects of COVID-19 and political disturbances over time. Disruption levels have mostly decreased since June and September (Figure 1). Yet, the level of business disruption remains high. More than half of the respondents (63 percent) report higher transportation costs and 36 percent report being affected by transportation restrictions/curfews. Other common challenges include disruptions to receiving payment for rice (50 percent) and paying for paddy (44 percent) as well as transportation restrictions (36 percent). On the other hand, difficulties with repayment on credit lent to farmers lessened slightly since September, likely due to farmer repayment following paddy sales. However, this challenge was still reported by 19 percent of our sample.
Furthermore, all credit related disruptions increased substantially this year compared to last year. The shares of interviewed mills reporting difficulties in (i) collecting repayment on credit given out to farmers; (ii) higher demand for credit out to farmers; (iii) repaying own loans; and (iv) obtaining new loans each rose to at least 17 percent in November 2021 from less than 7 percent in November 2020.
Figure 1. Disruptions experienced by rice millers in 30 days prior to interview, percentage reporting
To further evaluate these disruptions, we asked millers to identify which group of disruptions they considered to be the most significant. Disruptions to the banking system continue to be the largest challenge for rice millers (58 percent, Figure 2) though they have decreased by 18 percentage points since September. Transportation disruptions are more often cited as the main disruption in November (17 percent up from 10 percent in September). Exports and imports are not a primary concern for millers, though we note that few mills sell directly to exporters and the effects of border closures and trade disruptions are likely more indirect.
Figure 2. Most significant business disruption experienced, percentage of rice millers reporting
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.