Effects of COVID-19 restrictions on mechanization service providers and mechanization equipment retailers: Insights from phone surveys in Myanmar

Agrifood sector mechanization service providers (MSP) and mechanization equipment retailers (MER) have increasingly become the providers of mechanical technologies for smallholders in developing countries, including Myanmar. Evidence remains scarce on the effects of COVID-19 on these MSPs and MERs. This study provides insights into the effects of COVID-19 restrictions on MSPs and MERs in Myanmar, using unbalanced panel data from five rounds of phone surveys. Direct responses to COVID-19 involving movement restrictions, market disruptions, and growing financial challenges had significant negative effects on revenue prospects, service delivery, and sales of machines and equipment. Negative revenue prospects during a particular period can further hurt revenue prospects in subsequent periods. This is consistent with the hypotheses that MSPs who had incurred high sunk costs in machines can engage in more desperate and, thus, potentially suboptimal business practices to recover the sunk cost. Overall, policies to minimize movement restrictions and various financial struggles and mitigate any pessimism at the beginning of the production season are all important to make sure MSPs and MERs continue to function effectively under COVID-19.

Impacts of COVID-19 on agricultural production and food systems in late transforming Southeast Asia: The case of Myanmar

The objective of this contribution is to report the initial impacts of measures taken to contain the COVID-19 pandemic on Myanmar's agri-food system. Myanmar is one of several late-transforming low-income countries in Southeast Asia where agriculture still plays a large role in rural livelihoods, and where food prices are a key factor affecting nutrition security for poor urban and rural households. Whereas the economic impacts of COVID-19 disruptions on tourism and manufacturing were obvious to policymakers, the impacts on the agri-food system were less evident and often more indirect. This resulted in the rural sector being allocated only a very small share of the government's initial fiscal response to mitigate the economic impacts of COVID-19. To correct this information gap, a suite of phone surveys covering a wide spectrum of actors in the agri-food system were deployed, including farm input suppliers, mechanization service providers, farmers, commodity traders, millers, food retailers and consumers. The surveys were repeated at regular intervals prior to and during the main crop production season which began shortly after nationwide COVID-19 prevention measures were implemented in April. While the results indicate considerable resilience in the agri-food system in response to the initial disruptions, persistent financial stress for a high proportion of households and agri-food system businesses indicate that the road to a full recovery will take time. The experience provides important lessons for strengthening the resilience of the agri-food system, and the livelihoods of households that depend on it.