A phone survey was conducted in July 2022 to understand the effects of COVID-19 and political instability on Myanmar’s mechanization service providers (MSPs), crucial to enabling smallholder farmers to undertake a range of power-intensive farm and post-harvest operations in a timely manner. This blog post highlights the results of this survey, the ninth in a series of phone surveys, as well as on trends from earlier surveys.
You can view the full research note in English here.
Key Findings
• The typical tractor service providers (TSPs) provided fewer land preparation services in the 2022 monsoon planting season than they did in 2020 or 2021 monsoon planting seasons. The average (median) TSP in our sample reduced the area operated on by 13 percent (20 percent).
• These declines appear to be both due to declining demand from farmers, and also the rising costs of services due to increasing prices of machines, equipment, fuels, repair services and operators, which led to more than 50 percent increase in nominal values of hiring fees between 2021 and 2022.
• For farmers who continue to rely on mechanization services, the significant increase in hiring charges directly reduce their incomes and potentially lower yield.
• Revenue prospects among MSPs, which were already poor in 2021, continue to remain dire in 2022. Increases in operating costs are also more commonly perceived among MSPs.
Recommended Actions
• Set up measures to extend loans at affordable rates, including those dedicated for supporting small-scale enterprises. Doing so can help some MSPs to remain in business during the ongoing crisis, and prevent the losses of critical mechanization service skills which can be hard to restore once lost.
• Reduce taxes and fees temporarily, including imported goods like fuels or equipment, to mitigate the increase in costs for mechanization services.
• Disruptions that affect the equipment supply-chain and mobility of MSPs should be minimized, or at least made consistent, to allow MSPs to operate freely. Keeping repair shops open can also partly alleviate MSPs’ concerns on rising costs of repair work. These policies can also help MSPs who had suspended their businesses due to violence to resume their service provisions.
• Access to formal credit through the MADB or through microfinance institutions should be expanded to help ensure farmers’ access to affordable mechanization services, as farmers are likely to continue facing significantly increased costs in the 2022 season. The rising fees of mechanized services and the growing inability of farmers to make payments will continue to reduce monsoon season production.
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.
