Hiroyuki Takeshima

Endogenous technologies and productivity in rice production: Roles of social instability in Myanmar since 2021

Despite technologies’ critical roles in agricultural productivity, evidence is scarce on how conflict affects technology adoption and consequent agricultural productivity, often due to a lack of data in fragile states. Our study contributes to filling this knowledge gap by using unique large-scale data on rice producers before and after a military coup in Myanmar in 2021 that led to a significant increase in conflicts in the country. We find that the increase in violent events including those in adjacent townships significantly changed the rice production function in both factor-neutral and non-neutral ways. Specifically, increased violent events have been generally associated with downward factor-neutral shift in production function, and more importantly, increased output elasticity to agricultural capital (equipment) owned (in other words, reduced output resilience against capital ownership shocks). Our evidence also suggests that this has been led partly through reduced access to agricultural extension services, which would otherwise help farmers maintain productivity even with limited capital ownership by substituting it with human capital and skills. Our results consistently hold for both panel and cross-sectional production functions across various specifications and particularly in Lower Myanmar. Results also indicate that lower mechanization service fees partly mitigate these effects.

Agricultural mechanization: Drivers and characteristics

Widespread agricultural mechanization is a very recent phenomenon in Myanmar. In 2010, just 0.5 percent of farm households in the Delta used combine harvesters, and only 6 percent used threshers. A study of farm production economics in the country’s main agricultural zones in 2013/14 found that only 1 percent of paddy-cultivating households used combine harvesters. This was attributed to a combination of low wages and surplus labor in rural areas, poor infrastructure, a poor regulatory environment, and a lack of access to long-term capital among farmers. However, Myanmar’s policy reforms and reintegration into regional and global markets between 2011 and 2020 contributed to increasingly dynamic conditions, including economic growth averaging 7 percent per year (ADB 2018), accelerating out-migration from rural areas, and rapid rural transformation. This context gave rise to rapid and widespread agricultural mechanization. This chapter compares data from two pairs of complementary surveys to assess the effects of these economic changes on the uptake of agricultural mechanization. We combine demand-side (farm household) and supply-side (agricultural machinery retailer) surveys implemented between 2016 and 2018 across two major agroecological zones—a deltaic rice-growing environment (the Delta) and a rainfed semiarid zone (the Dry Zone). This approach allows for triangulation of results and captures variations in mechanization across geographies. In addition, we use data from multiple rounds of rapid assessments to evaluate the impacts of COVID-19 and other recent shocks.

Public expenditure’s role in reducing poverty and improving food and nutrition security: Cross-country evidence from SPEED data