Joanna van Asselt

Fertilizer and conflicts: Evidence from Myanmar

The number of farmers residing in fragile and conflict-affected countries is rising globally, yet the impacts of conflict on the economics of inorganic fertilizer in these settings remain poorly understood. We study how conflicts in Myanmar, combined with global fertilizer market disruptions, have affected inorganic fertilizer prices, use, response, and efficiency. We utilize unique nationally representative household panel survey data and a comprehensive approach that employs various analytical methods to examine the nexus between conflicts and fertilizer-related issues. Our findings reveal that greater intensity of violent events is associated with higher prices of major types of inorganic fertilizer, particularly in areas farther from major import locations. These price changes and increases in violent events have suppressed both the likelihood and quantity of inorganic fertilizer usage, leading to decreased rice yield responses at given nitrogen application levels. Panel stochastic frontier analyses, combined with a method addressing the endogeneity of inorganic fertilizer use, suggest a significant decline in fertilizer use efficiency each year since the onset of conflict. The increase in violent events is also associated with the reduced use of extension services, seeds from markets, irrigation, and optimal fertilizer blends, which may partly explain the diminished returns and efficiency of inorganic fertilizer use. Conflict therefore seems to be associated with a change in the economics of inorganic fertilizer use through various impact channels, affecting agricultural performance in these fragile and conflict-affected settings.

In good times and in bad, in sickness and in health: The continuous rise in adoption of labour-saving agricultural technologies in Myanmar

Vulnerability and welfare during multiple crises

The triple transition that took place between 2011 and 2019 in Myanmar—from a planned to an open market economy, from military to civilian rule, from conflict to peace—was not without its limitations. As discussed in Chapter 1, poverty reduction was modest relative to economic growth, a fully democratic system was not established, and ethnic conflict continued in many areas. In this mixed context of social welfare improvements and unfulfilled reforms, COVID-19 hit—the first in a series of crises. The pandemic had an immediate adverse impact on Myanmar’s economy and pushed many households into poverty. Then, while the country remained under threat from the pandemic, in February 2021, the military took over in a coup, and Myanmar fell into a political crisis. Declines in welfare accelerated for many. One year later, the Myanmar economy faced sharp rises in prices for food, fuel, and fertilizer as a result of a global economic crisis triggered by the start of the conflict in Ukraine. This triple crisis—pandemic, political, economic— has had enormous impacts on welfare and livelihoods in Myanmar. (Chapter 1 summarizes how the triple crisis unfolded; refer to that chapter for details on the causes, levels, and apparent consequences of the sequence of shocks.)