Understanding the impacts of COVID-19 on rural smallholder farmers and food systems in the Ayeyarwady Delta


The COVID-19 Pandemic is jeopardizing economies, healthcare, and food systems throughout Myanmar. Although the health effects will certainly be felt very strongly, it is expected that the negative economic impact on the most vulnerable will be much greater in scope and duration. While it is not possible to fully grasp the geographic reach and severity of this rapidly evolving Crisis in Myanmar, the RMA, combined with learned experience from recent outbreaks, paints a picture of the likely impacts on food and income security of the COVID-19 Pandemic. The Crisis has affected urban areas more quickly and more prominently, with Yangon, the country’s largest city, marked as the epicenter of the Pandemic and significantly affected by physical distancing restrictions such as closures of stores and restaurants. In addition, Yangon’s densely populated urban and peri-urban areas make physical distancing even more challenging, amplifying COVID’s risk factors. However rural areas are also being increasingly impacted as the Crisis has forced tens of thousands of migrants to return to their villages, due to diminishing job opportunities in urban and peri-urban areas, as well as nearby countries.

The Ayeyarwady Delta is administratively divided into 26 townships and 6 districts, covering coastal and lowland areas, with three sub-agricultural zones. The Ayeyarwady River basin and its delta includes four main river arms and four main agricultural trade corridors indicated on the map. The Delta’s population is dominated by landless and smallholder farming households. Of these, the majority have incomes that are characterized as low, unreliable and overly dependent on the agriculture sector and/or limited remittances, resulting in protracted debt cycles and endemic food insecurity; this renders landless households particularly vulnerable to shocks and stresses. The region is known as Myanmar’s “rice bowl”, signifying the region’s importance in producing main staples for the country.

As the virus creates fragilities in the local market systems, it has the potential to trigger new food and income insecurity, particularly on the landless and smallholders farming households. Therefore, the country’s entire food security is at risk, as the inability of the agricultural sector in the Delta to cope with the Crisis could have knock-on effects throughout Myanmar. Findings from the RMA demonstrate multiple layers of economic impact related to the COVID-19 Crisis that has created breakdowns in supply chains: potential shortages and price spikes of inputs, reduced market outlets for agricultural products, distortions in the labour market, and reduced cross-border trade; all of these will affect food production and food security. As economic migrants move back to their rural areas as a result of COVID-19, local rural communities and farming families are faced with additional pressures. It is probable that already limited resources will be consumed quickly, and these additional pressures will place food systems in jeopardy. Given market uncertainties, farmers will be much more risk averse when it comes to investing in agricultural inputs. This could negatively impact overall production and result in a sub-competitive supply of food.

Executive Summary:

Funded by LIFT, Mercy Corps (MC) and Welthungerhilfe (WHH), in collaboration with Village Link (VL), conducted a joint Rapid Market Assessment (RMA) in the Ayeyarwady Delta from late April to early May 2020. The objective of the RMA was to better understand the current and potential impacts of COVID-19 (COVID) on rural smallholder farmers and the broader food system, with a specific focus on the rice and pulses value chains.
661 respondents were interviewed in total across 26 townships in the Delta. The survey targeted key actors involved in the agricultural value chain, from smallholders and the landless to seed producers, input suppliers, rice millers, other market actors and government officials. 428 respondents were surveyed through Village Link’s ‘Htwet Toe’ online application, with the remainder interviewed either via phone or online surveys following physical distancing guidelines, and circumventing logistical challenges due to travel restrictions.
The following report presents findings and proposed recommendations resulting from the assessment, to further inform the design and implementation of potential COVID-19 response and recovery programs in the Ayeyarwady Delta and more broadly, Myanmar.

Key Findings:

  1. Despite more optimistic views presented by farmers and local government, farmers access to improved seed will likely be constrained by an inability of seed suppliers1 to provide improved seed to market.
  2. Agro-input providers4 have already reported challenges due to mobility restrictions and are expecting to face further limitations over the following months – threatening farmers’ access to other key inputs5 to improve farm productivity.
  3. Extension and mechanization services have been halted, placing additional pressure on food production at the farm level.
  4. Despite a reported influx of migrants to home villages, difficulties in obtaining labour for farming is identified as an immediate impact of the Pandemic.
  5. Seed producers, companies and agro-input suppliers may be forced to adopt sub-optimal responses9 to increasing production costs, declining incomes and projected challenges in accessing loans.
  6. Operational suspensions and financing obligations will likely reduce the ability of financial institutions to provide loans to farmers.
  7. Mobility restrictions have also reduced the ability of rice millers to secure labour and logistical services to support processing, packaging, and storage of rice – resulting in decreased income and pushing them to apply different coping methods.
  8. Storms, flooding, and other shocks and stresses will negatively impact the agricultural sector even further.
  9. Trade and transport restrictions make it more challenging for farmers and
  10. market actors to benefit from the prospects of increased food demand – driven by fears of approaching shortages or increased prices.
  11. Market actors are challenged by increasing uncertainty of supply and demand due to information asymmetry – leading them to implement various measures to reduce their costs.
  12. The use of cash advances and credit terms typically extended in trading are reduced, with a high risk of anticipated default – scaling down established social capital across market systems.
  13. It is anticipated that food insecurity and malnutrition will be exacerbated among poor farming households in the wake of increased debt, rising costs, and eventual default on loans, if the Crisis is prolonged.
  14. Government imposed restrictions have significantly affected agricultural trade and market systems across all levels – critical relief measures are needed to reduce the severity of this impact.
  15. While the COVID-19 Crisis exposes fragilities in our food systems, it also provides an excellent opportunity to revisit and shift agricultural growth via rural – urban development paradigms (beyond CERP).

Source: Mercy Corps

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