Food security concerns mount as COVID-19 disruption leaves Myanmar farmers unable to plant

Food security concerns in Myanmar are looming as farmers are unable to start the new growing season due to COVID-19 disruptions.

“Since COVID-19, there is no longer usual trading as crops simply don’t sell anymore,” said Ba Myint, a farmer in Taungup township in southern Rakhine State, where the primary crops are rice and beans.

The price of produce has crumbled, and at times there were no buyers even when the price was slashed by 75 percent, he told this newspaper.

Ba Myint’s plight underscores the struggles farmers across the nation are now facing. Travel restrictions imposed to prevent the spread of COVID-19 have led to lower sales for farmers and resulted in significant losses for those who rely on loans. That has strangled their ability to plant this season, leading to a near collapse of Myanmar’s agricultural economy.

The planting of monsoon rice – accounting for 80pc of Myanmar’s paddy crop production – typically begins in late April with harvests in September and October.

But as government loans have paused and microfinancing institutions have suspended operations, many farmers have been unable to raise money to invest in this growing season.

Myanmar is now at risk of missing the entire season of production unless agricultural activities and access to finances resumes within the next two weeks. Worse, experts warn there could be a severe food shortage in six months if farmers are unable to start planting before the monsoon arrives.

Food crisis

This trend of reduced food production, transport constraints and price volatility could lead to disruptions in food supply chains, different forms of social breakdown and even fatalities, according to the UN Food and Agriculture Organisation (FAO) in Myanmar.

“As of now, the priority is to ensure that we save lives and jointly implement measures to ensure that this pandemic does not translate into a food crisis,” said FAO representative Xiaojie Fan.

Agriculture accounts for a quarter of Myanmar’s GDP and employs 12 million people, or around 50pc of the labour force. It has also contributed to around 20pc of export value at US$3 billion annually. Rice is the most common crop in the country, followed by pulses and maize.

Despite its importance, the sector remains underfunded and experts say the crop yield per hectare lags behind neighbouring countries.

The government has set out plans to support farmers in its COVID-19 Economic Relief Plan, which was announced on April 27. Under the plan, the agriculture ministry and the state-run Myanmar Agriculture Development Bank will provide cash and loans to affected smallholder farmers who have “lost sales revenue or remittance income to support input purchases in time for monsoon planting” by the end of this year.

But time is running out.

“Financing has to happen in the next two weeks. Otherwise, it will be too late,” warned agricultural consultant Dr Ohnmar Khaing who serves as an adviser to the non-governmental network Myanmar Food Security Working Group.

Funds needed

For smallholders like Ba Myint, the key is access to finance. The vast majority of farmers are smallholders of lands ranging from one to five hectares who rely on borrowing to invest in each season of farming.

Farmers cannot survive by relying solely on government loans, said U Than Soe, a sesame and chilli farmer in Ngape township of Magwe Region. In any case, the government will only provide loans after previous loans have been repaid. “As such, the extension of the deadline for repayment of winter loans means a delay for us to receive monsoon loans,” U Than Soe added.

Many farmers survive on multiple loans and often incur new debts to pay for earlier loans. Some resort to illegal loan sharks who charge extremely high rates.

Up until recently, microfinance institutions (MFIs) had provided farmers with loans at lower interest rates than the illegal ones. However, the authorities have instructed the MFIs to halt their operations and delay repayment collection to slow the virus spread until May 15.

“If loans are not provided in time these farmers could miss an entire season,” said Brindley de Zylva, managing director of LOLC Myanmar, one of the largest microloan providers with over 4000 farmer clients.

With lockdown orders in place, it is unclear how farmers could access the services of MFIs and how the latter could disburse the funds under these limitations.

For Pact Global Microfinance Fund, the largest MFI in Myanmar with over a million active clients, 32pc of the villages where they operate are under lockdown.

Meanwhile, 67pc face difficulties in businesses. The fund has planned agricultural loans of K36 billion ($25 million) for up to 80,000 farmers in the next three months. The loans the fund provides for farmers normally reaches K120 billion ($85 million) a year.

“Everything will depend on how soon the government will lift travel restrictions and lockdowns at villages,” said the fund’s president, Fahmid Bhuiya.

He urged regulators and policymakers to come up with special arrangements for loan disbursements and ease mobility among farmers.

Market demand for all kinds of agricultural commodities has fallen by around 50pc as a result of poorly communicated and coordinated travel restrictions, said Dr Ohnmar Khaing.

“As restrictions imposed by different regional or state governments vary, it makes transportation much more difficult and more expensive,” she added. “Farmers are not willing to and lack incentives to plant in this season without having the market to sell.”

Government support needed

The government is now under pressure to avert a looming food security crisis. Experts have urged the authorities to keep the supply chain lines open and provide social protection measures for farmers.

“The government should also negotiate openly with agribusiness companies and associations on how they can squeeze the profit margin temporarily for the time being to salvage the country’s agricultural economy and the smallholder farmers,” said Dr Ohnmar Khaing.

She also suggested the government intervene to guarantee that agricultural commodities could reach their market destinations without disruption.

Similarly, Xiaojie Fan of the FAO emphasised the importance of removing measures that would hinder the mobility of those commodities, domestically or internationally.

“Any disruptions to food supply chains by poor policy management will intensify human suffering,” Ms Fan said.

The authorities should make sure that the latest market information such as prices and availability should be communicated effectively to the public, she added.

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Source : Myanmar Times

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