Impact of COVID-19’s supply and demand shocks on the household economy of tilapia smallholder farmer

Abstract

PurposeThis study aims to verify the impact of the supply shock (fall in harvested output) and demand shock (fall in household income) due to the pandemic on the consumption of necessities and household savings of tilapia's smallholder farmer.Design/methodology/approachThe researchers randomly chose 144 households as research samples using the proportional random sampling technique in Padang Jaya District, North Bengkulu Regency. Researchers collected data on household income, farm losses, household consumption for basic needs, labor demand, use of production inputs, the amount of output sold and saving both during and before the pandemic. The data were collected from the sample using a questionnaire prepared by the researchers. This study used a simultaneous equations system for arranging tilapia's smallholder farmer household economic model.FindingsThis study verified that the demand shock phenomenon makes households more severe than the supply shock phenomenon. The demand shock phenomenon made worse-off tilapia smallholder farmers because it caused their household savings to drop during the pandemic. The fall in savings will disrupt the stability of consumption of household necessities (health, food, education and clothing) in the future.Originality/valueThe main contribution of this study was providing empirical evidence about the impact of the demand and supply shock of COVID-19 on the most vulnerable entities in the Indonesian freshwater aquaculture industry, namely, smallholder farmer households of freshwater aquaculture fish.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-08-2022-0554.