SPECIAL SESSION AT THE 10TH SRI LANKA ECONOMIC RESEARCH CONFERENCE
IFFRI’s special virtual session at the 10th SLERC from IFPRI South Asia on Vimeo.
Sri Lanka Forum of University Economists (SLFUE) in collaboration with International Food Policy Research Institute (IFPRI) organized a special virtual session in the 10th Sri Lanka Economic Research Conference (SLERC) on January 28, 2022, 5:00 PM (SLST).
Theme of the session – ‘Consequence-Action-Consequence of COVID-19 for a quarter of humanity: Assaying evidence from diverse countries and contexts in South Asia’.
The consequences of the COVID-19 pandemic have been multi-faceted and long lasting. It led governments across the world to adopt various policy measures to regulate their economies which subsequently created a myriad of consequences not only on human health but also on other aspects of the economies. The depth and breadth of effects are predominant in South Asia which house quarter of people and half of the poor in the globe. It is estimated that approximately 50 million additional people in South Asia were pushed into extreme poverty during the pandemic. The special session on ‘Consequence-Action-Consequence of COVID-19 for a quarter of humanity: Assaying evidence from diverse countries and contexts in South Asia’ presents the policy responses of COVID-19 and their diverse effects on selected sectors in Bangladesh, India, Nepal, Pakistan and Sri Lanka.
Abstracts of Presentations
Impact of Covid-19 on Women Home-Based Workers in South Asia, Feb 2020-Aug 2021
Home-based workers (HBWs) are those who produce goods and services from, in, and around their own homes; they may be self-employed and/or subcontracted piece-rate workers, and most of them are women. Although they remain largely invisible, HBWs are engaged in several branches of industry and many are integrated into both domestic and global supply chains. They represent a significant share of employment – almost all informal in nature – particularly for women and especially in South Asia. A large percentage of these earn from work generated in garment-related supply chains and several others are involved in making food products and handicrafts. COVID changed the world and its economic reality for these women HBWs. Over two rounds of data collection – the first in August 2020 and the second in August 2021, HomeNet South Asia (HNSA) conducted a study to investigate the impact of the crisis triggered by COVID-19 on women HBWs in the South Asia region. It covered the period from February 2020 to August 2021. Twelve locations in seven countries were covered with the participation of thirteen organizations of women HBWs. This study has benefitted from a similar study that Women in Informal Employment: Globalizing and Organizing (WIEGO) is conducting on informal economy workers on a global scale.
The study found that over February 2020 to August 2021, work and incomes slumped in all survey locations and for over 70 percent recovery is still not perceptible. Moreover, care and household responsibilities increased substantially for women forcing them to allocate more of their time to non-earning chores. Government relief has been limited, uneven and progressively declining, largely unable to target this group well. As a result, women HBWs and their families have been pushed into large and unpaid borrowing just to cover survival needs. Notably, the distress would have been much more acute in the absence of women HBWs organizations and their networks that continue to play a critical supportive role even as their own resources have been severely eroded during the pandemic. The study recommends a central role for these institutions in planning for the recovery of women HBWs in South Asia. Immediate support to cover essential expenses, pay off debts, and secure working capital seems imperative. In addition, rationalizing lock-down restrictions to allow pre-crisis workflow is one of the major demands of HBWs. To strengthen their resilience to such crisis situations, identifying and recording HBWs in government registers is the necessary first step as it will allow for expansion and targeting of social protection for this group, that is vulnerable and can easily slip further into poverty.
Changes in Food Insecurity in Rural Bangladesh During COVID-19
We use pre-pandemic (2018-2019) data from the Bangladesh Integrated Household Survey (BIHS), together with three rounds of data collected by telephone in June 2020, January 2021, and September-October 2021, to understand changes in food security over time in a representative sample of rural Bangladeshi households. With the onset of the pandemic, combined with the lockdown restrictions imposed from March through May 2020, moderate and severe food insecurity (based on FAO’s Food Insecurity Experience Scale) tripled to 45 percent. This was likely driven by income losses and difficulties accessing food because of shop closures. By January 2021, the proportion of moderately or severely food insecure households had largely returned to pre-pandemic levels. The September-October 2021 survey showed no meaningful further change in the prevalence of moderate or severe food insecurity despite the strict national lockdown imposed in July-August 2021. A different picture emerges when we include the prevalence of mild food insecurity. The proportion of households reporting any food insecurity (mild, moderate or severe) increased from the pre-pandemic average of 45.7 percent to 87.8 percent in June 2020, before declining to 70.9 percent in January 2021 and 68 percent in September-October 2021. Dimensions of food insecurity that include consuming less diverse diets, being unable to eat healthy/nutritious food, and above all, being worried about not having enough food increased dramatically at the start of the pandemic and have remained elevated. Pre-pandemic, the majority of rural households in our sample were fully food secure; 18 months after the onset of the pandemic only 32 percent report no forms of food insecurity. In the immediate months after the outbreak (June 2020), many rural households coped by reducing expenditures on non-food goods, electricity and other utilities, and health-related items. The use of these forms of coping mechanisms has subsequently declined. However, the proportion of rural households that purchased food on credit (69 percent in June 2020) has barely changed and in all surveys fielded since the start of the pandemic, more than half of surveyed households have borrowed money to buy food. The continued use of savings and the ongoing use of credit to purchase food is consistent with the elevated levels of worry about not having enough food. A substantial share of rural households reported receiving cash or in-kind safety net support during the pandemic, mostly from government sources. Continued and expanded support from safety nets may be important, as many rural households face ongoing food insecurity and are using unsustainable coping strategies.
Effect of COVID-19 and Public Policy Responses
Pakistan’s GDP declined by 26.4 percent from mid-March to the end of June 2020 (14 weeks) compared to a non-COVID scenario. Services were hit the hardest, registering losses of 17.6 percent, followed by industry with losses of 6.7 percent. Agriculture turned out to be resilient and remained relatively unhurt, falling by 2.1 percent. Compared to other sectors of the economy, the effects of Covid-19 on the agri-food system have been relatively modest. The unemployment rate increased to a staggering 20 percent during April 2020. All households witnessed a reduction in incomes, but higher-income quartiles appeared to have lost more than lower-income ones during the first wave of COVID-19. The national poverty rate soared to 43 percent in April. Rural poverty increased with much more intensity than urban poverty, despite the fact that the lockdown was primarily enforced in urban centers, which indicated the particular vulnerability of the rural poor in Pakistan.
Policy responses to COVID-19 in the realm of fiscal, monetary, and administrative domain helped Pakistan much faster than expected and the economy is getting back on the sustainable path. These measures also helped bringing poverty unemployment back to pre-COVID normal. Exports and remittances increased substantially which helped the rural poor to augment their incomes.
Covid-19 Impacts on Maize Farmers in Nepal
Using multiple rounds of phone surveys with over 2300 maize growing farmers in Nepal, our paper captures the immediate and medium-term impacts of the lockdown to control the COVID-19 pandemic on access to agriculture inputs, extension, and product markets, and impacts on income and livelihoods. We observe prolonged effects of the lockdown on the incomes of the farmers, driven in part by reduced remittances. Farmers continued facing issues with accessing inputs, especially fertilizers, during the monsoon cropping season. The pandemic has intensified the inequalities in agriculture as we find heterogenous impacts on different castes and for female farmers. While more farmers relied on government relief immediately after the lockdown, over time, we see a shift towards secondary work and use of accumulated savings. As the pandemic continues, policy measures to support agriculture sector should target disadvantaged farmers, while simultaneously implementing long term strategies to shield agriculture sector from future shocks and crisis.
Food price hikes and food access during Covid-19 pandemic in Sri Lanka
Sri Lanka is well-known for its achievement in human development indicators. However, the progress in reducing malnutrition in the country is not on par with the progress in other social spheres. During 2018-2020, it was reported that 1.4 million people were undernourished, 0.3 million pre-school children were wasted, 0.3 million pre-school children were stunted, 1.8 million women in the reproductive stage were anemic and 0.8 million adults were obese (FAO, 2021). Though official figures are yet to come, Covid-19 pandemic must have further slowed down the progress towards reducing malnutrition or might even have increased the vulnerability to malnutrition. Covid-19 has impacted economic access to food and food stability more than food availability. Food prices, one of the main determinants of access to food also hit records high during the latter part of 2021, recording 22.1% food price inflation in December 2021 (Central Bank, 2021). Prices of many food items, rice, coconut, pulses, egg, chicken and vegetables is on the rise not only due to food system disruptions, but also due to the weather effects, government price regulations, import ban of chemical fertilizer, and inward-looking trade policies. This study assessed the effect of food price changes on the economic access to food. More specifically it estimated the change in the Cost of the Diet (COD) of residents in Colombo district over the last two years. Cost of the diet is a minimum cost that is needed to provide a typical family with a diet that meets their average needs for energy and their recommended intakes of protein, fat, and micronutrients. The study used COD software developed by Save the Children which uses data on the nutritional composition of locally available food, food prices, recommended intake of macro and micronutrients, portion sizes and composition of a family, to determine the minimum cost of the diet which meet the nutrient requirement and calculated the COD for two time periods, viz: pre-covid (November 2019) and during Covid (November 2021) using the food price data available in Department of Census and Statistics. The results revealed that the cost of the energy adequate diet in November 2021 is 29.5% higher than what it was in November 2019. The cost of the nutrition diet and the cost of the staple-adjusted diet, which considers the dietary behavior of consumers have also increased by 27.9% and 30.29% respectively during the study period. Since Covid-19 has severely affected the livelihood of poorer segments and eroded the purchasing power, this cost increase might have undoubtfully increased the food and nutrition security of already vulnerable communities.
Impacts of Covid-19, resilience, and recovery: Rice, fish and shrimp value chains in Bangladesh
Razin Kabir, Nahian Bin Khaled, Sudha Narayanan and Shahidur Rashid
A key response of the Government of Bangladesh to Covid-19 was a nationwide lockdown spanning March 26 to May 31, 2020. This led to significant disruptions to key agricultural commodity value chains. We focus on three commodities that occupy a key place in the agri-food sector in Bangladesh – rice, fish and shrimp. Whereas rice and fish are important domestically, both as food and as a source of livelihoods, shrimp is primarily export-oriented and is a large source of foreign exchange, though shrimp too has strong linkages upstream with farmers and processors. This study uses data from surveys of 3,342 actors in the rice, fish and shrimp value chains in Bangladesh conducted over two rounds in the first half of 2021, aiming to uncover the impacts of Covid-19 disruption on these value chains.
We explore two broad themes. First, we map the degree to which Covid-19 impacted operations of farms and enterprises along the value chain and the nature of these disruptions. Second, drawing on pre-pandemic characteristics of these value chain actors, we explore the heterogeneity of enterprises with respect to subjective resilience outcomes. Across value chains and segments, we observe widespread negative impacts on both business profits and household incomes during the first round, with modest improvements by the second round. There were, however, many more closures among processing and export segments. Farmers in the fish and shrimp value chains appear to have recovered the most between the two rounds. In general, however, the effects of the pandemic-related shocks seemingly continue to persist. In terms of resilience outcomes, clustering and remoteness from Dhaka appear to be negatively correlated with resilience among farming households. On the other hand, both remittance inflows and fish-crop systems are positively correlated with resilience. Among enterprises, greater vertical integration is positively associated with resilience.
Why Rural Non-farm employment the conveyor of COVID shock is also the key to recovery
We assess the role of Rural Non-Farm Employment (RNFE) in livelihoods and in likely impacts of shocks like COVID 19. In India’s agri-food system, with the preponderance of small farmers with low endowments of human and financial capital, RNFE has been the principal source of poverty reduction. Yet, RNFE is also the most adversely affected by shocks like COVID 19 and the measures adopted to prevent disease spread. To assess the roles of RNFE and possible effects of shocks, we uniquely utilize the recent rounds of nationally representative Periodic Labor Force Surveys (PLFS). To assess the “potential impact” of COVID 19 on workers, by using the large dataset, we match similar workers in different states of employment (SOE) where SOE may partly reflect the situation post shock. Job loss, reduction in work hours, movement across types of employment, casualization within RNFE is possible due to shocks to RNFE. We estimate that SOE in RNFE have significant association with poverty and income. With the data on COVID lockdown periods, we then validate with data for period of COVID lockdown to pair with the prospectively assessed impacts. Notwithstanding the effect of shocks, RNFE has the unique potential in recovery from shocks, being the prime rural income generator and risk mitigator apart from being a comparatively large employer of women and socially disadvantaged groups in India.
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