Department of Agricultural, Food, and Resource Economics Food Security Group

• The economic effects of the COVID-19 pandemic on agrifood systems and food and nutrition security are complex and difficult to identify quickly, creating uncertainty for policymakers struggling to allocate limited fiscal resources effectively.
• A two-stage research and outreach approach featuring rapid analysis of existing data, followed quickly by brief policy research notes based on phone survey data, can have important impacts on government action during rapidly unfolding crises such as COVID-19.
• Researchers applied such an approach in response to the COVID-19 crisis in Myanmar, focused on the agrifood system. The following blog outlines the methods used, key results generated, and government actions implemented as a result of the phased research response.

As the economic effects of the COVID-19 crisis took hold in Myanmar in March 2020, it quickly became a huge challenge for policymakers with limited fiscal resources and limited research capacity to assess the consequences for agricultural production and the agrifood system (AFS). The initial policy response was a nationwide lockdown with transportation restrictions for three weeks beginning in April – a crucial time in the agricultural calendar for all of Myanmar’s diverse agro-ecologies as farmers were preparing their land and procuring inputs for their monsoon crops.

At first, the vulnerability of agriculture and rural livelihoods to COVID-19 was not apparent to the Economic Recovery task force that was set up by the government to develop a Comprehensive Economic Recovery Plan (CERP). Concerned about the initial lack of attention to agriculture and the AFS, a team of researchers funded by the USAID Myanmar Agricultural Policy Support Activity (MAPSA) and the Livelihoods and Food Security (LIFT) Fund undertook rapid analysis and phone survey monitoring to generate evidence on potential AFS vulnerabilities to inform government actions and to address these vulnerabilities. This note briefly describes this rapid research response and its role in guiding policies to mitigate the effects of COVID-19 on Myanmar’s AFS.

Two-phase research response

To guide government actions during the rapidly unfolding COVID-19 crisis, the team adopted a phased research and outreach approach featuring rapid analysis of existing data followed quickly by brief policy research notes based on phone survey data. In the first phase, researchers quickly sought to reduce the uncertainty around COVID-19 policy responses by conducting three types of analysis using secondary data: 1) a review of literature of rural livelihoods and household incomes in each of Myanmar’s agro-ecological zones, 2) an economy-wide social accounting matrix (SAM), and 3) a household-level simulation using nationally representative data. The goal of these analyses undertaken in April was to anticipate the impacts of international and domestic disruptions, and to outline potential recovery scenarios.

The second phase of the research response began in late May with a suite of panel phone surveys designed to monitor the impacts of the crisis and to quickly disseminate results to government and other stakeholders. These surveys are ongoing and cover almost the full spectrum of actors in the AFS, including farm input suppliers, farmers, commodity traders and rice millers, and consumers. Each survey is designed to be a dynamic and flexible panel and to provide 1) an overall picture of where the disruptions have occurred in the AFS, 2) insights into how firms and households responded to the initial disruptions, and 3) a sense of how those disruptions have been changing over time as policies and restrictions have evolved.

Key results and its influence in guiding policy responses

The two-phased research approach generated several important findings that resulted in significant government action. These include:

1. Stylized facts that brought to light constraints and hardships faced by rural households:

• A third of rural households depend on remittances from migrant household members for a major share of their income, and this would inevitably be interrupted by the economic restrictions designed to curb the spread of COVID-19;
• Finance through microfinance institutions is an important facilitator of post-farm activities, but restrictions on meeting sizes and government mandates for forbearance on repayment schedules have made it very difficult for these institutions to operate; and
• Rural economies and the AFS are largely reliant on micro-, small- and medium-scale enterprises that are hard hit by the crisis, and any reduction in microfinance lending could exacerbate the challenges businesses face and inhibit recovery.

These empirical facts together with simulation analysis resulted in government including two important measures to support rural households as part of the COVID-19 Comprehensive Economic Recovery Program: 1) supplemental loans of 35USD per acre to farmers through the Myanmar Agricultural Development Bank (MADB) to help with crop establishment, and 2) a cash-for-work program to employ agricultural labor.

2. COVID-19 is likely to have both short-term and persistent effects on the AFS. Three key results were:

• The early lockdowns and movement restrictions were enforced to varying degrees around the country, and they caused dramatic, but uneven disruptions throughout the AFS. Input prices increased due to higher transportation costs and 69% of input retailers reported lower year-over-year fertilizer sales. This will have persistent effects through lower crop yields and agricultural incomes at monsoon harvests;
• Rural incomes have fallen by a median of 37% since the onset of the crisis, with likely negative implications for nutrition and food consumption. Further, only 1/3 of households in Yangon and the rural dry zone reported receiving any government assistance;
• There was a significant increase in cellphone use as a business tool, including mobile banking applications at multiple stages of the AFS.

Based on these results, the research policy notes emphasized the need for two types of government action: 1) much more social protection through a scaled-up CERP; and 2) promotion and expansion of access to mobile money platforms. Government currently is considering further actions to take in social protection, and MADB recently announced that they will, for the first time, be providing and servicing loans through mobile applications.

Summary

A phased research and outreach approach consisting of a fast analysis of existing data and research followed by a series of rapid phone surveys can provide timely information to government and other stakeholders during times of unfolding crisis. In the case of COVID-19 in Myanmar, this approach, with phase one highlighting the expected impacts on the economy and the AFS, and phase two providing ongoing monitoring of the observed effects of the crisis, generated several important findings that are informing government actions.