Impacts Of Covid 19 On Myanmar S Agri Food System Evidence Base And Policy Implications

Between April and October 2020, the International Food Policy Research Institute (IFPRI) and Michigan State University (MSU), with support from the United States Agency of International Development (USAID) and the Livelihoods and Food Security Fund (LIFT), have undertaken analyses of secondary data combined with regular telephone 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. 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 facing liquidity constraints and experiencing increased difficulties in both borrowing and recovering loans.

The recent sudden imposition of a stringent 21-day lockdown in India in the face of the COVID-19 pandemic has adversely affected the food security of many vulnerable Indians. These impacts highlight the many challenges that this kind of anti-COVID intervention can pose in other settings where the labor force is mostly informally employed with poor job security and low wages, and where the agri-food systems is similarly informal with widespread use of open-air markets. Myanmar is such a setting. India’s chastening experience with food security during its lockdown suggests the following actions would be imperative for maintaining food security in Myanmar: • Allow the free movement of all goods. A stable and reliable agri-food system requires free movements of a wide range of food products (including micronutrient-rich fruits, vegetables and animal-sourced foods) as well as essential non-food goods. • Monitor food markets and agricultural value chains as closely as possible to address problems when they do arise. • Reduce risk of COVID-19 contagion by improving hygiene in Myanmar’s food markets. • Issue clear directives to police, military, and local authorities not to impede the movement of goods. The Government of Myanmar should learn from the mistakes made in India and other developing countries. We must recognize that basic food and nutrition security must be maintained at all times through this complex health and socioeconomic crisis.

The recent history of rural economic transformation in Myanmar and the effects of COVID-19 and the military coup in February 2021 provide important lessons for the design and implementation of plans to help the country recover from these scourges. The impoverishment of farming communities in Myanmar during decades of socialist military rule, beginning in the 1960s until the turn of the century, led to an outflux of migrants to neighboring countries. As the country opened up to foreign investment through economic reforms initiated in 2011, rural wages surged and farm mechanization services expanded rapidly. Together with increased remittance flows from migrants, higher rural household incomes drove growth in a wide range of non-farm service enterprises. Nevertheless, agricultural growth was low and most crop subsectors stagnated due to underlying and unresolved structural constraints such as poor infrastructure and inequality in land access. As in many other countries in Asia, border closures and lockdowns instituted to prevent the spread of COVID-19 in early 2020 resulted in widespread employment and income losses. The Myanmar government pro-actively sought to mitigate the impacts through expanded credit to farmers and businesses. By the end of 2020, Myanmar was beginning to recover from the economic stresses of COVID-19. However, the February 2021 military coup resulted in a far more severe economic downturn than COVID-19 due to the collapse of the financial system, the massive resignations by public sector employees, and the prolonged movement restrictions. Coup-induced state failure greatly magnified the health and economic consequences of COVID-19 in terms of poverty, food insecurity, and stalled economic transformation. This paper uses a combination of macro, meso, and micro-level analyses to measure the impacts of COVID-19 and state failure on rural economic transformation through the lens of the agri-food system, and to draw lessons for policies to support broad-based and resilient economic recovery.

Key findings Forty-two percent of farming communities experienced lower agricultural production than normal in the past 12 months, mainly due to drought and pests. Forty-four percent of farming communities reported greater difficulties in selling agricultural products than usual. Low crop price was the most frequently reported disruption. There are pressing concerns for the upcoming monsoon season harvest. Inorganic fertilizer prices are skyrocketing–compound fertilizer prices increased 56 percent in September 2021 compared to September 2020 while urea prices increased 72 percent compared to last year. About one-third of farming communities hired fewer agricultural wage workers this year compared to last year, with 46 percent reporting that this was mainly due to financial problems. For the current monsoon season, 45 percent of farming communities expect overall agricultural production will be lower than that of last year. Recommended actions Implement measures such as input subsidies, vouchers, or agricultural grants to limit the impact of the price increases of fertilizers and other inputs on agricultural production. As farming communities risk falling into vicious cycles of income loss, financial support is urgently needed to avoid long-lasting impacts of the crises on the agricultural performance of affected communities. Social protection is urgently needed in rural areas, including food/cash for work schemes to offset lower demand for agricultural labor.

Report on how the first wave of COVID-19 impacted on smallholder farmers in northern Shan State in Myanmar. The study examines the interactions of reduced border trade, remittances and contracted labour markets on household food security, nutrition and land tenure. In turn, tenure insecurity in rural areas may deepen the effects of COVID-19, as most rural people struggle to sustain their livelihoods through access to land and other natural resources. This is relevant as many ethnic groups in northern Shan State continue to manage their land through customary tenure systems that are not fully recognized by state authorities.

Agricultural input retailers play a key role in Myanmar’s agri-food system by supplying farmers with fertilizer, seed, pesticides, and other inputs necessary for successful harvests. Because farm-level input use is an important driver of yields for all major food crops, shocks to the input retail sector have major implications for the welfare of rural households, as well as for their food security. This policy note presents results from round two of a five-round phone survey of agricultural input retailers. Our purpose is to provide data and insights to the Ministry of Agriculture, Livestock, and Irrigation (MOALI) and other agricultural sector stakeholders to assist them in better understanding COVID-19 related shocks to Myanmar’s agricultural input retailers. The round one results emphasized (i) widespread disruptions from the COVID-19 to both input supply and demand, (ii) higher transportation costs leading to higher input prices, and (iii) dramatically lower revenue expectations for retailers in 2020 compared to 2019.1 This note builds on the round one results by (i) exploring the effects of the COVID-19 crisis since the first-round interviews, (ii) tracking sales changes since the first round of the survey, and (iii) providing more detailed information on retailer credit and transportation.

After decades of isolationism and economic stagnation, Myanmar opened its economy in the beginning of the 2010s, leading to rapid economic growth (Myanmar’s Gross Domestic Product (GDP) was almost 50 percent larger in 2020 than in 2011). But the COVID-19 health crisis that started in 2020 and a military coup in the beginning of 2021 – and the subsequent increase in conflicts, forced displacements, and migration – dramatically reversed that outlook, with Myanmar’s GDP in 2022 estimated to be 13 percent smaller than three years earlier. The agricultural sector also changed accordingly during this period.

Two years after the onset of the COVID-19 pandemic, the health, economic, and social disruptions caused by this global crisis continue to evolve. The impacts of the pandemic are likely to endure for years to come, with poor, marginalized, and vulnerable groups the most affected. In COVID-19 & Global Food Security: Two Years Later, the editors bring together contributions from new IFPRI research, blogs, and the CGIAR COVID-19 Hub to examine the pandemic’s effects on poverty, food security, nutrition, and health around the world. This volume presents key lessons learned on food security and food system resilience in 2020 and 2021 and assesses the effectiveness of policy responses to the crisis. Looking forward, the authors consider how the pandemic experience can inform both recovery and longer-term efforts to build more resilient food systems.