BourLon on Dunsmore, Rugby, warwckshre, C\23 90Z, UK T +44 (0)T926 634400 l E mke.abu@pracLcaacLon.org.uk l W www.pracLcaacLon.org
PracLca AcLon s Lhe workng name of InLermedaLe Technoogy DeveopmenL 0roup LLd Company Reg. No. 87T954, Engand l Reg. CharLy No. 247257 l \AT No. 24T 5T5492 l PaLron HRH The Prnce of waes Abu & 0rffLh, 2005. Mappng The MarkeL 2 0ontents Executive 5ummary ....................................................................................................................... 3 1 !ntroduction ........................................................................................................................... 7 2 The Market Map: making market systems work for the poor ........................................................ 9 2.1 !ntroduction to the Market Map ......................................................................................... 9 2.2 The market-chain actors ................................................................................................. 10 2.3 The enabIing business environment ................................................................................. 12 2.4 Business and extension services ...................................................................................... 14 2.5 Participatory market mapping.......................................................................................... 16 3 The Market Map: operationaI chaIIenges and soIutions............................................................. 20 3.1 PreIiminary market mapping ........................................................................................... 20 3.2 Participatory market-chain anaIysis.................................................................................. 22 3.3 Moving from anaIysis to action ........................................................................................ 23 3.4 BuiIding capacity for Market Mapping and PM0A ............................................................. 25 4 0oncIusions & PoIicy impIications .......................................................................................... 27 4.1 0haIIenges for ruraI deveIopment agencies (meso-IeveI) .................................................... 27 4.2 0haIIenges for governments and donor poIicy ................................................................... 28 Annex 1 Market Mapping in the HerbaI Products sector, Kenya....................................................... 33
Abu & 0rffLh, 2005. Mappng The MarkeL 3 Executive 5ummary !ntroduction MarkeLs maLLer Lo Lhe rura poor. IL s ncreasngy cear LhaL n Lackng rura poverLy, markeL-reaLed ssues ncudng access Lo nformaLon, nsLLuLons, nkages and Lrade rues are vLa consderaLons. Faure Lo address Lhese ssues means LhaL Lhe benefLs of oLher deveopmenLs LhreaLen Lo by-pass Lhe rura poor. In Lhe compex conLexLs of rura poverLy, Lhe someLmes bewdered pracLLoner or pocy-maker s proffered a range of souLons or pocy prescrpLons ncudng. Lrade berasaLon, more producLve agrcuLure, more effecLve supporL servces and resources, beLLer oca governance, coecLve acLon and coaboraLon by producers, greaLer pubc nvesLmenL n nfrasLrucLure, a more aLLracLve nvesLmenL cmaLe and busness envronmenL. The probem s LhaL, wLh mLed resources, L s rarey pracLcabe Lo address a such facLors smuLaneousy across Lhe whoe economy. Ths paper w argue LhaL efforLs Lo secure or mprove Lhe ncome of poor rura producers and workers are besL pursued Lhrough concenLraLng on Lhe mproved overa performance of specfc economc channes or markeL-chans. Surprsngy Lhere s ofLen LLe emphass on markeL sysLems and Lher roes n poverLy reducLon wLhn Lhe concepLuasaLon and appcaLon of vehood frameworks, or n professona feds such as agrcuLura research LhaL seek Lo promoLe rura deveopmenL. The am of Lhs paper s Lo hep address Lhs defcency, and n parLcuar Lo provde a framework for encouragng an ouLook whch we ca 'market-Iteracy'. The Market Map framework The MarkeL Map framework s nLended Lo serve Lwo purposes. . For Lhe pocy maker and rura deveopmenL panner, L s a concepLua framework for Lhnkng abouL Lhe commerca and nsLLuLona envronmenL n whch sma-scae producers (ncudng smahoder farmers) operaLe. . For Lhe pracLLoner, L s a pracLca and poLenLay a parLcpaLory Loo, LhaL can be used Lo represenL and communcaLe knowedge abouL specfc producers, Lher markeL-chans, nsLLuLona envronmenLs and servce needs. Processes of eaboraLng Lhe MarkeL Map, f conducLed n a parLcpaLory way, can aso be mporLanL nLervenLons n Lhemseves - drecLy mprovng nkages and reaLonshps beLween markeL-chan acLors, and preparng Lhe ground for nLroducng or generaLng nnovaLon n producLs, processes and markeL access. The MarkeL Map s made up of Lhree nLer-nked componenLs. MarkeL chan acLors and Lher nkages Enabng busness envronmenL facLors Busness and exLenson servce provders The cenLra componenL maps Lhe economc acLors who acLuay own and LransacL a parLcuar producL as L moves Lhrough Lhe markeL-chan from prmary producer Lo fna consumer By beLLer undersLandng Lhe conLrbuLon each acLor n Lhe chan brngs Lo Lhe producL, Lhe am s Lo denLfy neffcences, nequLes and osses whch coud be remeded, or added-vaue whch coud be capLured by poor producers parLcuary. whe many markeL-chans are characLersed by nequLabe reaLonshps beLween acLors, a cear ob|ecLve of Lhe MarkeL Map approach s Lo hep sLakehoders rease muLua benefLs by mprovng Lhe 'sysLemc effcency` of Lhe chan. Key Lo Lhs s hepng sLakehoders become more aware of funcLons and processes aong Lhe chan LhaL are needed Lo saLsfy more ucraLve or reabe markeLs. Abu & 0rffLh, 2005. Mappng The MarkeL 4 The second componenL of Lhe MarkeL Map s a charLng of Lhe crLca facLors and Lrends LhaL are shapng Lhe markeL-chan envronmenL and operaLng condLons, buL may be amenabe Lo change. These 'enabng busness envronmenL` facLors are generaLed by sLrucLures and nsLLuLons LhaL are beyond Lhe mmedaLe drecL conLro of economc acLors n Lhe markeL-chan. The purpose of charLng Lhs busness envronmenL s Lo undersLand Lhe Lrends LhaL are affecLng Lhe enLre markeL-chan, and examne Lhe powers and nLeresLs LhaL are drvng change. Ths knowedge can hep deLermne avenues and opporLunLes for reasLc acLon, obbyng and pocy enLrepreneurshp. The Lhrd componenL of Lhe MarkeL Map framework s concerned wLh mappng Lhese servces LhaL supporL, or coud poLenLay supporL, Lhe markeL-chan`s overa effcency. The range of servces LhaL can poLenLay add vaue s huge and ncude. npuL suppes, markeL nformaLon, fnanca servces, LransporL servces, quaLy assurance - monLorng and accredLaLon, Lechnca experLse and busness advce, veLernary servces, supporL for producL deveopmenL and dversfcaLon. Mappng 'servces ' nvoves denLfyng parLcuar servce needs and Lher ocaLons wLhn Lhe markeL-chan n order Lo geL an overa pcLure of Lhe opporLunLes for usng servces Lo mprove markeL-chan effcency or equLy. Ths mappng s a precursor Lo subsequenLy assessng Lhe mosL appropraLe mechansms for devery of servces, n Lerms of ouLreach, susLanabLy and cosL-effecLveness.
The MarkeL Map n Ls enLreLy has proved Lo be a very usefu way Lo vsuay represenL and succncLy communcaLe knowedge abouL specfc markeL-chans` acLors, operaLons, conLexLs and needs Lo dfferenL sLakehoders. Participatory market-chain anaIysis ParLcpaLory approaches Lo markeL-chan anayss conLrbuLe Lo MarkeL Maps LhaL are more key Lo be accuraLe and Lo represenL a wder range of knowedge. More mporLanLy, Lhe parLcpaLon provokes nLeresL and buds LrusL. ULmaLey L can facLaLe Lhe coaboraLon LhaL s necessary for mprovng nkages and effcences wLhn Lhe markeL-chan, for effecLve obbyng on enabng envronmenL ssues and for coordnaLng coecLve acLon around servces. Abu & 0rffLh, 2005. Mappng The MarkeL 5 For parLcpaLon Lo be effecLve a Lhree sLage procedure s hepfu. . PreIiminary mapping. n whch an ouLne MarkeL Map s produced by a facLaLng agency, usng nformaLon gaLhered from key nformanLs or an 'nLeresL group` of sLakehoders . Participatory market-chain anaIysis. n whch specfc acLors n Lhe markeL-chan Lsef are broughL LogeLher Lo eaboraLe Lhe MarkeL Map, expore key ssues n deLa and bud reaLonshps. . Moving from anaIysis to action. n whch Lhe reaLonshps, knowedge and LrusL generaLed above s used Lo effecL changes n Lhe busness envronmenL and access Lo servces. In premnary mappng, Lhe mosL mporLanL aspecLs are managng mmedaLe expecLaLons of sLakehoders and esLabshng mechansms for workng wLh markeL-chan acLors. The formaLon of markeL-chan nLeresL groups has been an mporLanL LacLc for engagng Lhose wLh a sLake n markeL- chan performance e.g., as servce provders, or wLh nfuence n shapng Lhe busness envronmenL. ParLcpaLory markeL-chan anayss (PMCA) s a key approach Lo operaLonasng Lhe MarkeL Map framework - converLng an oLherwse absLracL framework nLo a pracLca Loo whch can facLaLe effcency, mprove co-ordnaLon, sLmuaLe nnovaLon and bosLer LrusL wLhn Lhe markeL-chan. Fndng a 'hook` Lo engage commerca acLors s crLca. The premnary MarkeL Map can hep facLaLors denLfy very specfc ssues common Lo a markeL acLors, and Lurn Lhese nLo an 'offer` LhaL w draw acLors nLo Lhe process. AcLua and perceved mbaances of power wLhn Lhe markeL-chan can however mpede parLcpaLory anayss. Budng up LrusL s Lherefore mporLanL Lo facLaLe open sharng of nformaLon, and reduce LransacLon cosLs. 0ne souLon s for facLaLors Lo orenLaLe weaker parLcpanLs n advance, so Lhey undersLand Lher roe n Lhese evenLs, and have reasLc expecLaLons of PMCA process ouLcomes. To a mLed exLenL, PMCA processes can be an end n Lher own rghL. |usLfed smpy n Lerms of esLabshng nkages, mprovng co-ordnaLon and bosLerng LrusL among Lhe markeL-chan acLors Lhemseves. However, more sgnfcanL mprovemenLs n markeL-chan performance sLem from a more enabng busness envronmenL or from beLLer access and use of busness and exLenson servces by Lhese acLors. Achevng Lhese wder changes requres onger-Lerm nLervenLons for whch PMCA s a sLarLng ponL. Tackng consLranLs and brngng abouL sysLemc changes n parLcuar markeL-chans, may requre facLaLng agences Lo adopL sLraLeges LhaL LargeL decson-makers wLh nfuence aL oca, naLona, and n some cases, nLernaLona eves. The MarkeL Map can hep provde a bass for common undersLandng and acLon, and PMCA processes can encourage more powerfu acLors n Lhe markeL chan Lo engage wLh ssues LhaL negaLvey mpacL on weaker payers. PMCA processes can aso nLaLe formaLon of groups or assocaLons LhaL represenL and arLcuaLe more coherenLy Lhe coecLve ssues facng weaker acLors n Lhe markeL-chan. PMCA processes are aso abouL dagnosng probems n access Lo specfc servces. They can conLrbuLe vauaby Lo accuraLe nformaLon abouL Lhe shape of demand, parLcuary where Lhere s a hgh ncdence of ess vsbe embedded servce provson. By kck-sLarLng enhanced coordnaLon, PMCA can aso hep aggregaLe demand from many sma producers for specfc servces. Producer organsaLons wLh effecLve organsaLona and negoLaLng capabLes have an mporLanL roe Lo pay n enabng such coordnaLon. Ths makes servce provson more commercay vabe, and Lhus encourages beLLer suppy. !mpIications for deveIopment agencies 0rgansaLons wLh a sLrong poverLy-focus are used Lo focusng on Lhe mosL mmedaLe needs of poor communLes. They ofLen 'ouL- source` markeL anayss and more commerca aspecLs of pro|ecL pannng and mpemenLaLon. Ths Lendency shoud be chaenged. EffecLve PMCA requres Lhe sorL of parLcpaLory and facLaLory sks LhaL many communLy-deveopmenL pracLLoners have we honed, abeL n a dfferenL conLexL. Unke busness consuLanLs accusLomed Lo probem sovng on behaf of Abu & 0rffLh, 2005. Mappng The MarkeL 6 Lher cenLs, such sLaff are more comforLabe wLh Lhe premse LhaL parLcpanLs Lhemseves can mosL appropraLey deveop souLons and nnovaLons. NaLuray, communLy-deveopmenL pracLLoners may aso ack confdence deang wLh more commerca payers. The MarkeL Map framework and PMCA approaches do need adequaLe nvesLmenL n re-orenLaLng sLaff sks Lowards a more sysLemc markeL-LeraLe perspecLve. However by empoyng Lhe Loos and sLraLeges descrbed here, msconcepLons abouL 'markeLs` can be overcome, and Lhe confdence n whaL Lhey have Lo offer and posLve reaLonshps can be buL ncremenLay. 0oncIusions The forLunes of poor rura producers and oLher economc acLors n markeL-chans, are bound up wLh Lhe capabLy of Lhe whoe markeL-chan Lo respond sysLemcay n a pro-acLve manner Lo changes n Lhe compeLLve envronmenL and emergng markeL sgnas. Successfu markeL-chans LhaL susLan, grow and generaLe ncome for producers w be ones LhaL fnd effecLve mechansms for. InvesLng n markeL nLegence capabLes. CoaboraLng n producLon, markeLng and procuremenL of npuLs and servces. Infuencng Lhe agences LhaL provde supporL servces and nfrasLrucLure, or LhaL can mprove Lhe busness envronmenL. In Lhs conLexL, poces based on genera anayss of Lhe busness envronmenL and nvesLmenL cmaLe may be nsuffcenL Lo sLmuaLe pro-poor growLh. Focussed anayss s necessary Lo undersLand Lhe specfc consLranLs n channes LhaL are boLh mporLanL n Lhe vehoods of Lhe poor, and have reasLc prospecLs for susLanabe economc growLh. Donors, governmenLs and oLher deveopmenL agences seekng Lo Lacke rura poverLy need Lo acqure and promoLe 'markeL-Leracy`. knowedge and undersLandng of Lhe nsLLuLons, compeLences and reaLonshps LhaL make markeL sysLems work for poor rura producers n specfc channes. The mpcaLons can be consdered aL Lwo eves. Lhe sLraLeges and operaLona sLrucLures of rura deveopmenL agences such as agrcuLura research nsLLuLons, governmenL deparLmenLs and N00s, and Lhe broad agrcuLura and rura deveopmenL poces, and operaLona approaches, of muLnaLona agences and naLona mnsLres. A markeL-LeraLe approach requres nsLLuLonasng a new way of Lhnkng. Many agences wLh rura deveopmenL ob|ecLves are shfLng from a agrcuLura producLon focus Lo a markeL focus and Lhs requres a new seL of prorLes. Ths change needs Lo be refecLed n aocaLon of resources. Equppng sLaff Lo adapL Lo a markeL orenLaLon s a process LhaL w Lake Lme and needs a commLmenL aL a eves of an organsaLon. ProrLes ncude. AdopL a sysLemc framework and approach Use parLcpaLory Lechnques InvesL n markeL-Leracy. orenLaLon, sks and earnng Use nfuence Lo communcaLe ssues Lo macro-eve decson-makers Donors and naLona pocy-makers need Lo emphasse 'markeL-Leracy` n rura poverLy-reducLon pocy. - makng markeL anayss a prerequsLe for rura deveopmenL programme desgn (so LhaL Lhe such anayses become as common-pace as envronmenLa and soca mpacL assessmenLs). Ths mpes a shfL n Lhnkng n rura deveopmenL more broady, ncudng agrcuLura research for exampe, LhaL s smar Lo LhaL acheved n Lhe enLerprse deveopmenL fed of BDS n recenL years Donors aso need Lo nvesL n processes of anayss and capacLy budng. Embeddng a markeL-LeraLe approach n rura deveopmenL programmes, requres nvesLmenL and aocaLon of resources Lo deveop Lhe necessary sks and orenLaLon. MarkeL Leracy requres LhaL dfferenL payers n markeL sysLems know Lher respecLve roes and commL Lhemseves Lo underLakng Lhese effecLvey. Joned up workng and conssLency of approach s mporLanL. InvesLmenL n Lhe anayLca sLage and n PMCA s mporLanL n enabng subsequenL nLervenLons Lo be more sLraLegc and LargeLed. Donor shoud encourage, raLher Lhan dscourage, programmes whch pan for and nvesL n Lhs Lype of anayss. Abu & 0rffLh, 2005. Mappng The MarkeL 7 Mapping The Market: A framework for ruraI enterprise deveIopment poIicy and practice Mke AIbu and AIscn CrIIth, PractcaI Actcn (IcrmerIy caIIed !TDC) T
1 !ntroduction MarkeLs maLLer Lo Lhe rura poor. IL s ncreasngy cear LhaL n Lackng rura poverLy, markeL-reaLed ssues ncudng access Lo nformaLon, nsLLuLons, nkages and Lrade rues are vLa consderaLons. Faure Lo address Lhese ssues means LhaL Lhe benefLs of oLher deveopmenLs, such as growLh n economc demand, mproved Lechnooges, beLLer nfrasLrucLure and beLLer poLca governance, LhreaLen Lo by-pass Lhe rura poor. Ths has noL escaped Lhe deveopmenL communLy`s aLLenLon. Researchers and pracLLoners n agrcuLura economcs, naLura resource managemenL and rura vehoods, as we as prvaLe-secLor and sma enLerprse deveopmenL, are a now Lakng greaLer nLeresL n 'makng markeL sysLems work for Lhe rura poor`. However, our dverse professona dscourses ofLen make L dffcuL Lo esLabsh whaL Lhs aspraLon means n pracLce. 0ne ob|ecLve of Lhs paper s Lo hep bud a beLLer consensus around Lhe anguage and concepLs we need Lo work LogeLher. In recenL years, beLLer undersLandng of rura vehoods has unveed Lhe compexLy of reaLonshps beLween agrcuLura acLvLes, changes n Lhe rura economy and poverLy. we know LhaL ncreasngy rura househods rey on earnngs from ouLsde prmary agrcuLura producLon. YeL sL many non-farm economc acLvLes are nLrcaLey nked Lo agrcuLure, wheLher Lhrough vaue addng and processng of raw maLera, suppy of npuLs and servces, or Lhe use of surpus abour. In facL, Lhe dsLncLon beLween agrcuLura and rura non-agrcuLura empoymenL per se, may be ess usefu Lhan a recognLon of Lhe dfferenL reLurns and prospecLs LhaL arse n dverse agrcuLura markeL-chans and fna markeLs. Market chans are a key concepL n Lhs paper. They comprse Lhe economc acLors who produce and LransacL a parLcuar producL as L moves from prmary producer Lo fna consumer. They ncude smahoders and arger-scae producers, npuL suppers, Lraders, processors, LransporLers, whoesaers, reLaers eLc Because of Lhe wde vareLy of facLors LhaL nfuence poor rura peope`s drecL or ndrecL earnngs from agrcuLure, Lhere s necessary a debaLe abouL where Lhe prorLes for rura pocy and deveopmenL nLervenLons shoud e. In Lhs compex conLexL, Lhe someLmes bewdered pracLLoner or pocy-maker s proffered a range of souLons or pocy prescrpLons ncudng. Lrade berasaLon e.g. Lhrough remova of Lrade Larffs and barrers n agrcuLura producLs more producLve agrcuLure e.g. Lhrough beLLer seeds and breeds, buL aso Lhrough beLLer dssemnaLon of so and waLer managemenL Lechnooges more effecLve supporL servces and resources e.g. Lhrough deveopng commercay vabe souLons for busness servces, nformaLon eLc. beLLer oca governance e.g. Lhrough budng processes, sLrucLures and decson-makng LhaL address oca needs farer Lerms of Lrade e.g. Lhrough more prveged access Lo nLernaLona markeLs for poor counLres
T PracLca AcLon (formery caed ITD0) s an nLernaLona N00 LhaL works wLh peope n poor communLes Lo mprove Lher quaLy of fe Loday and for generaLons Lo come, Lhrough nnovaLve pracLca souLons, whch address Lher rea needs Abu & 0rffLh, 2005. Mappng The MarkeL 8 coecLve acLon and coaboraLon e.g. Lhrough assocaLons and organsaLons LhaL represenL Lhe rura poor, and empower specfc margnased groups. greaLer pubc nvesLmenL n nfrasLrucLure e.g. rura LransporL, roads and communcaLons a more aLLracLve nvesLmenL cmaLe and busness envronmenL e.g. Lhrough more conssLenL poces and LransparenL ega and fnanca nsLLuLons Ceary n dfferenL sLuaLons, Lhese generc pocy prescrpLons can a have mporLanL, or even essenLa, parLs Lo pay n makng markeL sysLems work for Lhe poor. The probem s LhaL, wLh mLed resources, L s rarey possbe Lo have Lhe uxury of addressng a such facLors smuLaneousy n pracLce. Ths paper w argue LhaL efforLs Lo secure or mprove Lhe ncome of poor rura producers and workers ofLen requre mproved overa performance of specfc economc channes or markeL-chans. !mprcved market-chan perIcrmance may mean, varousy. greaLer effcency, ower LransacLon cosLs LhroughouL Lhe markeL-chan enhanced capabLy Lo pre-empL and respond Lo changes n demand greaLer ncuson and earnngs for Lhe rura poor, especay women ways are needed Lherefore of denLfyng and mpemenLng a few seecL poces or nLervenLons whch are mosL key Lo sLmuaLe pro-poor growLh n specfc channes. These channes (wheLher ndvdua markeL-chans or enLre producL subsecLors) need Lo be boLh mporLanL n Lhe vehoods of Lhe poor, and have reasLc prospecLs for susLanabe economc growLh. NaLuray, resource-poor rura nhabLanLs Lhemseves sedom have a good undersLandng of how Lhe markeL sysLems, LhaL Lhey operaLe wLhn, work. Typcay Lhey have LLe nformaLon on markeL condLons, prces and quaLy of goods, mLed experence of markeL negoLaLon and LLe apprecaLon of Lher capacLy Lo nfuence Lhe Lerms and condLons of Lher engagemenL wLh Lhe markeL 2 . More surprsng perhaps, Lhere s ofLen LLe emphass on markeL sysLems and Lher roes n poverLy reducLon wLhn Lhe concepLuasaLon and appcaLon of vehood frameworks 3 , or n professona feds such as agrcuLura research LhaL seek Lo promoLe rura deveopmenL. Even n Lhe fed of sma enLerprse deveopmenL, where markeL surveys are a popuar Loo for anaysng poLenLa demand for servces, Lhe absence of wder examnaLon of Lhe nsLLuLona envronmenL for markeL deveopmenL has been noLed. 4
The am of Lhs paper s Lo hep address Lhs defcency, and n parLcuar Lo provde a framework for encouragng an ouLook whch we ca 'market-Iteracy'. Market-Iteracy, n Lhs conLexL, means knowedge and undersLandng of Lhe nsLLuLons 5 , compeLences and reaLonshps necessary Lo make markeL sysLems work for poor rura producers n specfc channes. In Lhe nexL secLon we seL ouL a basc Lhree-Lered approach caed Lhe MarkeL Map. Ths s a framework for represenLng knowedge, anaysng opporLunLes and pannng nLervenLons n markeL sysLems, LhaL embodes a market-Iterate approach. In secLon Lhree we descrbe some exampes of markeL-Leracy and Lhe MarkeL Map framework apped n Lhe rea word. These usLraLe Lhe benefLs n Lerms of communcaLng knowedge and budng nkages and coordnaLon among dverse parLcpanLs aong acLua markeL-chans.
2 IFAD, 200T 3 Dorward, Pooe, Morrson, Kydd & Urey, 2002 4 Bear, 0bson & HLchns, 2003 5 'InsLLuLons` comprse Lhe aws and processes LhaL deLermne Lhe 'rues of Lhe game` (as descrbed by NorLh, T990) They hep deLermne access Lo basc facLors ke nformaLon, fnance and conLracL enforcemenL eLc., wLhouL whch parLcpaLon n markeLs s consLraned (Kydd, 2002) Abu & 0rffLh, 2005. Mappng The MarkeL 9 2 The Market Map: making market systems work for the poor The MarkeL Map s nLended Lo serve Lwo purposes. . For Lhe pocy maker and rura deveopmenL panner, L s a concepLua framework for Lhnkng abouL Lhe commerca and nsLLuLona envronmenL n whch sma-scae producers (ncudng smahoder farmers) operaLe. v. For Lhe pracLLoner, L s a pracLca and poLenLay a parLcpaLory Loo, LhaL can be used Lo represenL and communcaLe knowedge abouL specfc producers, Lher markeL-chans, nsLLuLona envronmenLs and servce needs. As we w see aLer, processes of eaboraLng Lhe MarkeL Map, f conducLed n a parLcpaLory way, can aso be mporLanL nLervenLons n Lhemseves - drecLy mprovng nkages and reaLonshps beLween markeL-chan acLors, and preparng Lhe ground for nLroducng or generaLng nnovaLon n producLs, processes and markeL access. 2.1 !ntroduction to the Market Map The MarkeL Map s Lhe producL of an nLer-dscpnary nLaLve nvovng pracLLoners from severa feds, ncudng sma enLerprse deveopmenL, naLura resource managemenL, far Lrade, agrcuLura markeLng and communLy deveopmenL. IL s nLended Lo be parLcuary reevanL n broad-based muLdscpnary programmes, where wnnng adherence Lo a coherenL shared concepLua framework can ofLen be very dffcuL. PracLca AcLon (formery as ITD0) conceved Lhe MarkeL Map nLay durng 2002 aL an nLernaLona workshop nvovng sLaff from Afrca, LaLn Amerca and SouLh Asa. Snce Lhen Lhe framework has been adopLed and adapLed as Lranng Loo by oLher organsaLons such TradcrafL and 0xfam. These, and oLher experences, w be dscussed furLher n Lhe Lhrd secLon. Many readers w amosL cerLany recognse aspecLs of oLher Loos and approaches n Lhs work. The formaLve deas LhaL have conLrbuLed Lo our Lhnkng ncude. subsecLor anayss, as orgnay conceved n Lhe 0EMINI programme 6 and Ls subsequenL eaboraLons by AcLon for EnLerprse (AFE) for exampe 7 . Lhe susLanabe vehoods framework 8
vaue-chan anayss 9 , and parLcuary parLcpaLory approaches Lo Lhs anayss T0
Lhe LerrLora approach Lo rura agro-enLerprse deveopmenL used by Lhe CenLro InLernaLona de AgrcuLura Tropca (CIAT) TT
experences capLured by Swss Agency for DeveopmenL and CooperaLon`s communLy of pracLce on 'vaue-chans n rura deveopmenL` T2
The MarkeL Map framework aso shares many feaLures wLh oLher frameworks and approaches conceved broady Lo fosLer sysLems of oca economc deveopmenL. A good exampe s Lhe Rura Economc and EnLerprse DeveopmenL (REED) framework descrbed by 0TZ, whose 'Len cornersLones` descrbe Lhe core funcLons necessary for successfu, sef-susLanng deveopmenL processes T3 .
6 Haggbade and 0amser, T99T 7 Lusby and PanbuLon, 2004 8 For exampe DFID`s verson aL Lvehoods ConnecL websLe www.vehoods.org 9 Kapnsky and Morrs, 2005 T0 Mayoux, 2003 TT CIAT s one of Lhe C0IAR funded neLwork of nLernaLona agrcuLura research nsLLuLons. More nformaLon on Lher Rura AgroenLerprse DeveopmenL approach s found aL www.caL.cgar.org T2 See Lhe \CRD communLy of pracLce websLe aL www.sdc-vauechans.ch T3 0TZ, 2003 Abu & 0rffLh, 2005. Mappng The MarkeL T0 The MarkeL Map framework dffers n scope from more broad-reachng approaches such as REED, n LhaL L concenLraLes on anayss and pracLca nLervenLon n specIc market channeIs. Ceary Lherefore, Lhe MarkeL Map s nLended Lo be used ony afLer premnary work has aready been conducLed Lo denLfy specfc producL groups (Lrade subsecLors or crops), LhaL appear Lo offer growLh poLenLa for rura producers. There s LLe ponL n LargeLng resources or Lryng Lo effecL changes n channes LhaL are noL mporLanL Lo Lhe vehoods of Lhe rura poor, and do noL have reasLc prospecLs for susLanabe growLh. MarkeL Mappng shoud, n oLher words, be grounded n research LhaL has aready denLfed Lhe dfferenL markeL channes wLhn an overa subsecLor and Lhe compeLLve reaLonshps beLween Lhose channes. The processes and crLera LhaL can be used for seecLng appropraLe crops, producLs or subsecLors have been descrbed exLensvey by oLhers, for exampe by CIAT T4 and AFE T5 . The MarkeL Map s made up of Lhree T6 nLer-nked componenLs cenLred around Lhe markeL-chan Lsef (see Fgure T). Figure 1: Dverview of the Market Map
2.2 The market-chain actors The cenLra componenL of Lhe framework s consLrucLed by mappng Lhe economc acLors who acLuay own and LransacL a parLcuar producL as L moves Lhrough Lhe markeL-chan from prmary producer Lo fna consumer. smahoders and arger-scae producers, Lraders, processors, LransporLers, whoesaers, reLaers eLc. Defyng convenLon, Lhe schemaLc used (see Fgure 2) reverses Lhe 'norma` drecLon of Lhe chan. IL shows Lhe fow of nccme from markeLs aong Lhe chan Lo prmary producers, raLher Lhan (as s convenLona) Lhe fow of gccds n Lhe opposLe drecLon.
T4 Lundy eL a. 2005 T5 AFE`s subsecLor seecLon approach s descrbed aL www.acLonforenLerprse.org/approach.hLm T6 SDC`s VCFD communLy of pracLce ca Lhe dfferenL sLakehoders n Lhese Lhree componenLs nIIuencers, pIayers and suppcrters respecLvey Abu & 0rffLh, 2005. Mappng The MarkeL TT Figure 2: The market-chain actors and Iinkages
Ths counLer-nLuLvsm s nLroduced deberaLey Lo encourage a demand-ed perspecLve. IL provokes users of Lhe map Lo consder how markeL-chan nkages and funcLons can be mproved so as Lo facLaLe Lhe fow of ncome Lo LargeL producers who are perhaps furLhesL from end-markeLs. InsLead of askng "how can Lhese smahoder farmers geL more ncome for Lhs crop!, L suggesLs we ask "how mghL a greaLer share of, say, urban expendLure on Lhs producL reach Lhese farmers! Ths mndseL can hep precude negaLve presumpLons abouL Lhe roe of nLermedares, and ncrease undersLandng of compeLLve pressures from oLher channes. In some cases, Lhe markeL-chan comprses more Lhan one channe and can suppy more Lhan one fna markeL. A comprehensve mappng can, f reevanL, Lherefore descrbe nLeracLng and ccmpetng channes (ncudng Lhose LhaL perhaps do noL nvove smahoders aL a) and Lhe vareLy of fna markeLs nLo whch Lhese connecL. As far as possbe, nformaLon abouL producL voumes and vaues, and numbers of enLerprses or vehoods supporLed aL each ponL n Lhe chan s overad on Lhe map as for a sLandard subsecLor anayss T7 . InformaLon abouL paLLerns and Lrends n Lhe daLa s aso ncorporaLed. A crLca eary sLep n appyng Lhe MarkeL Map es n seecLng whch markeLs and channes offer Lhe besL prospecLs for enhancng poor producers` vehoods. Ths decson nformed by an overvew of Lhe prospecLs and reaLonshps beLween compeLng channes deLermnes Lhe focus apped Lo deveopng Lhe MarkeL Map furLher. AL Lhs sLage, Lhe poLenLa for esLabshng new nkages n Lhe markeL-chan may aso be consdered. 0nce Lhe poLenLa of a specfc markeL channe (or a number of aLernaLve channes) has been denLfed Lhe anayss moves nLo a more deLaed consderaLon of how vaue accumuaLes aong Lhe markeL-chan. By beLLer undersLandng Lhe conLrbuLon each acLor n Lhe chan brngs Lo Lhe producL, Lhe am s Lo denLfy neffcences, nequLes and osses whch coud be remeded, or added-vaue whch coud be capLured by poor producers parLcuary.
T7 Haggbade and 0amser, T99T Abu & 0rffLh, 2005. Mappng The MarkeL T2 A comprehensve markeL-chan anayss w expore how Lhe chan s 'governed`
snce Lhs nfuences how profL margns are dvded up Lhrough Lhe chan
. IL asks n oLher words, whch acLors or oLher nsLLuLons, a) defne Lhe condLons for parLcpaLon n Lhe chan! b) ensure compance wLh Lhese rues! c) provde asssLance wLh meeLng Lhese rues! T8 . whe many markeL-chans are characLersed by nequLabe reaLonshps beLween acLors, a cear ob|ecLve of Lhe MarkeL Map approach s Lo hep sLakehoders rease muLua benefLs by mprovng Lhe 'sysLemc effcency` of Lhe chan. Hepng sLakehoders become more aware of Lhe funcLons and processes LhaL are needed aong Lhe chan n order Lo saLsfy more ucraLve or reabe markeLs s key Lo Lhs. The advanLages and chaenges of parLcpaLory approaches - n a aspecLs of consLrucLng Lhe MarkeL Map w be dscussed furLher beow. 2.3 The enabIing business environment The second componenL of Lhe MarkeL Map s a charLng of Lhe crLca facLors and Lrends LhaL are shapng Lhe markeL-chan envronmenL and operaLng condLons, buL may be amenabe Lo change. These 'enabng busness envronmenL` facLors are generaLed by sLrucLures (naLona and oca auLhorLes, research agences eLc.), and nsLLuLons (poces, reguaLons and pracLces) LhaL are beyond Lhe mmedaLe drecL conLro of economc acLors n Lhe markeL-chan. The purpose of charLng Lhs busness envronmenL s noL smpy Lo record Lhe sLaLus quo, buL Lo undersLand Lhe Lrends LhaL are affecLng Lhe enLre markeL-chan, and examne Lhe powers and nLeresLs LhaL are drvng change. Ths knowedge can hep deLermne avenues and opporLunLes for reasLc acLon, obbyng and pocy enLrepreneurshp. In Lhnkng abouL Lhe very wde range of facLors, L s usefu Lo dsLngush Lhose LhaL reaLe Lo market demand .e. prces, quanLLes, quaLes and Lmeness of suppes requred by buyers, Lhose LhaL bear on transIcrmatcn acLvLes .e. cosLs of producng, processng, sLorng and movng produce, and Lhose LhaL affecL transactcns acLvLes .e. cosLs of dong busness T9 . The asL seL ncude Lhe cosLs assocaLed wLh. ConLracLng. budng nkages, agreeng Lerms, monLorng performance and enforcng conLracLs Securng fnance. cosLs of provdng (or noL beng abe Lo provde) coaLera Lega recognLon. censng and busness formaLes 0uaLy assurance. nformaLon and sks needed Lo undersLand, monLor and cerLfy adherence Lo buyer`s sLandards TransformaLon cosLs are naLuray a promnenL Lheme n currenL pocy nLaLves on rura poverLy. IL s wdey hoped LhaL agrcuLura producLvLy coud be sgnfcanLy mproved by Lechnoogca deveopmenL n seeds, vesLock breeds, farmng npuLs, sLorage and processng Lechnques and nfrasLrucLure nvesLmenL n roads, eecLrcLy, rrgaLon for exampe. However n markeL-chans based on smahoder agrcuLure, LransacLons cosLs can easy ouLwegh Lhe poLenLa benefLs of parLcpaLon n Lhe markeL and Lhus render rreevanL Lhe producLvLy ncreases acheved by nvesLmenL n nfrasLrucLure and Lechnoogca deveopmenL. The cosLs of LransacLons n markeL-chans n rura economes Lend Lo be adversey hgh due Lo dseconomes of dspersed ow-nLensLy producLon, naccessbe ega sysLems, uncear LLe Lo properLy, and ow eves of LrusL generay. In conLrasL Lo more deveoped economes, LransacLons-cosL- reducng nsLLuLons and sLrucLures (e.g. conLracL enforcemenL mechansms, communcaLons nfrasLrucLure, and-regsLres, Lradng sLandards, organsaLons of producer coaboraLon) are very weak.
T8 Kapnsky, 2000, usefuy refers Lo Lhese Lhree Lypes of governance needed n markeL-chans as IegsIatve, judcaI and executve respecLvey Abu & 0rffLh, 2005. Mappng The MarkeL T3 Even more probemaLcay, many of Lhe nsLLuLons LhaL do exsL ofLen hnder and bock raLher Lhan facLaLe peope`s own efforLs Lo move ouL of poverLy - beng smpy msused Lo exLracL admnsLraLve renLs from producers, processors and Lraders. Some of Lhese bockages are egay sancLoned, such as by-aws, censng reguaLons and oca eve Laxes, and oLhers Lake Lhe form of arbLrary sma-scae abuses of power by peope n auLhorLy roes 20 . IL s common Lo fnd abuse of procedures from auLhorLes responsbe for pocng LransporL, ensurng pubc heaLh, censng busness premses, proLecLng Lhe naLura envronmenL, Lo denLfy |usL a few. As a resuL Lhe oca eve pocy envronmenL ofLen remans nmca Lo sef-empoymenL and sLarL-up busness. Loca enLerprse ofLen arses 'ouLsde` Lhe reguaLons, .e. as an unrecognsed nforma secLor acLvLy, and depends on payng off oca offcas Lo aow conLnued operaLon 2T . A parLcuary pervasve nsLLuLona facLor LhaL needs Lo be consdered more frequenLy Lakes Lhe form of socay-enforced gender roes. In many communLes, Lhese roes obsLrucL women smahoder farmers and enLrepreneurs from parLcpaLng n cerLan knds of fnanca LransacLons, bock Lher access Lo markeLs, deny Lhem ownershp of properLy or conLro of ncome. To reLeraLe Lhen, Lhe facLors LhaL are key Lo be mporLanL n Lhe enabng envronmenL for specfc agrcuLura markeL-chans ncude. FeIatng tc Market Demand ConsumpLon Lrends (voumes, prces and quaLy expecLaLons) Tax and Larff regmes FeIatng tc TransIcrmatcn Actvtes InfrasLrucLure (consLranLs and nvesLmenL poces) Technoogca deveopmenL (seeds, breeds, npuLs, processng eLc.) TransporL censng and reguaLon FeIatng tc Transactcns Actvtes SysLems for agrcuLura fnance 0ender roes n busness and fnanca affars RegsLraLon of and and properLy Commerca aw and pracLces (ncudng conLracL enforcemenL) Busness censng and reguaLon ProducL sLandards and quaLy assurance In usng Lhe MarkeL Map specfc facLors, ssues and Lrends LhaL are denLfed as sgnfcanL nfuences on Lhe markeL-chan operaLons are recorded above Lhe markeL-chan Lsef. ProrLy s gven Lo denLfyng and unpackng ssues LhaL are key Lo cause sgnfcanL mpacL on Lhe markeL-chan operaLons or are reaLvey amenabe Lo change Lhemseves. See Fgure 3. As before, a key ob|ecLve n appyng Lhe MarkeL Map approach s Lo hep markeL-chan sLakehoders become more aware of Lhese facLors and Lrends. AcLon Lo mprove Lhe enabng envronmenL usuay depends on concerLed obbyng, coordnaLed campagns or advocacy. Ceary f Lhe process of charLng Lhe enabng busness envronmenL s parLcpaLory, Lhe process s more key Lo bud Lhe LrusL, coordnaLon and coaboraLon beLween acLors n Lhe markeL-chan needed Lo acheve Lhs. Ths w be dscussed furLher beow.
T9 Kydd, 2002 20 Es and Harrs, 2004 for exampe, sL paymenLs requred n order 'Lo sLay on Lhe rghL sde of auLhorLy` when n busness, fake prohbLons on vesLock movemenLs or fshng boaLs creaLed n order Lo exLracL fees, graLuLes demanded by chefs for rghLs of access cerLan resources and fees requred Lo secure pubc servces LhaL shoud be devered free. 2T Es, T999 Abu & 0rffLh, 2005. Mappng The MarkeL T4 Figure 3: The enabIing business environment
2.4 Business and extension services In mosL effecLve markeL-chans Lhe economc acLors who form Lhe chan (.e. LransacL Lhe man producL) are supporLed by npuLs and servces from oLher enLerprses and supporL organsaLons. 0nce an enLerprse has been esLabshed, Lhere s an on-gong need for L Lo access servces of dfferenL Lypes, boLh markeL and Lechnca, LhaL w aow L Lo grow and manLan Ls compeLLveness. The Lhrd componenL of Lhe MarkeL Map framework s concerned wLh mappng Lhese servces LhaL supporL, or coud poLenLay supporL, Lhe markeL-chan`s overa effcency 22 . The range of servces LhaL can poLenLay add vaue s huge and ncude. InpuL suppes (seeds, vesLock, ferLzers eLc.) MarkeL nformaLon (prces, Lrends, buyers, suppers) Fnanca servces (such as credL, savngs or nsurance) TransporL servces 0uaLy assurance - monLorng and accredLaLon Technca experLse and busness advce \eLernary servces SupporL for producL deveopmenL and dversfcaLon Mechansms of servce devery can dffer subsLanLay. In exporng whaL aready exsLs, L s mporLanL Lo recognse LhaL Lhe opLons are noL confned Lo ony convenLona governmenL extenscn servces and prvaLe Iee-based servces or npuL provders. There are aso embedded servces, where servces are ncorporaLed wLhn a commerca LransacLon for anoLher producL e.g. pesL conLro advce offered by a Lrader Lo a conLracL farmer. And fnay Lhere are nIcrmaIIy-prcvded servces where Lhe servce, such
22 These servces are mosL commony referred Lo as Busness DeveopmenL Servces, aLhough Lerms such as Busness Servces or even Lvehood DeveopmenL Servces are comng nLo use (MehbradL and Mc\ay, 2004) Abu & 0rffLh, 2005. Mappng The MarkeL T5 as nformaLon or advce, s negoLaLed Lhrough soca neLworks and recproca reaLonshps, whch may be 'nvsbe` Lo ouLsders 23 . AL Lhs sLage mappng 'servces ' nvoves denLfyng parLcuar servce needs and Lher ocaLons wLhn Lhe markeL-chan n order Lo geL an overa pcLure of Lhe opporLunLes for usng servces Lo mprove markeL-chan effcency or equLy. Ths mappng s a precursor Lo subsequenLy assessng Lhe mosL appropraLe mechansms for devery of servces, n Lerms of ouLreach, susLanabLy and cosL- effecLveness. See Fgure 4. Figure 4: Business and extension services
where fee-based servce devery ooks broady feasbe, much can be earned from Lhe fed of sma enLerprse deveopmenL. Snce Lhe md-T990s research on 'busness deveopmenL servces (BDS) markeL deveopmenL` has accumuaLed a persuasve body of experence abouL creaLng dverse, susLanabe, cenL-responsve servces even where exsLng markeLs are weak or under-deveoped. The goa of Lhe approach s Lo enabe sma busnesses Lo buy Lhe servces of Lher choce from a wde seecLon of (prmary) unsubsdsed prvaLe-secLor suppers n a compeLLve and evovng markeL 24 . The roe of governmenLs and donors s Lhen seen Lo be facLaLng Lhs process Lhrough nLervenLons LhaL bud susLanabe markeL nsLLuLons and soca sLrucLures buL noL Lo undermne Lhe emergence of Lhese nsLLuLons and sLrucLures by drecLy deverng or subsdsng servces. As a drecL resuL of Lhe emergence of BDS markeL deveopmenL fed, sgnfcanL work has been done Lo eaboraLe pracLca meLhods of assessng Lhe markeL for servces 25 . These meLhods enabe one Lo gauge whaL servces are poLenLay vabe and undersLand Lhe demand or suppy-sde consLranLs LhaL have Lo be addressed Lo deveop a vbranL and susLanabe markeL. BDS markeL deveopmenL approaches were nLay apped mosL successfuy Lo servces needed by sma and medum-szed enLerprses, ofLen urban-based, raLher Lhan rura mcro-enLerprses or smahoder farmers. Larger and more forma enLerprses may, of course, be mporLanL acLors n
23 HLchens eL a. 2004 24 MehbradL and Mc\ay, 2003 25 See for exampe MehbradL, 200T & oLher documenLs on markeL assessmenL aL www.bdsknowedge.org Abu & 0rffLh, 2005. Mappng The MarkeL T6 markeL-chans LhaL nvove smahoder farmers and rura enLerprses. More recenLy however, L has aso been suggesLed LhaL BDS markeL deveopmenL approaches have drecL reevance even Lo rura producers n weak economc envronmenLs 26 . An mporLanL ponL s LhaL even where fee-based servces are noL commercay vabe for exampe because of hgh LransacLons cosLs encounLered n fnancng servces and conLracLng servces aL a mcro-scae, a markeL deveopmenL approach may sL be reevanL. Embeddng servces wLhn oLher commerca LransacLons s a common and effecLve way Lo reduce LransacLon cosLs parLcuary Lhose reaLed Lo fnancng npuLs. Exampes ncude. InpuLs (seeds, ferLzers) provded by buyers of crops Advce on gradng and packagng producLs from Lraders Tranng n pesL-managemenL provded by npuL suppers ConLracL farmng n bananas, cacao and coffee BuL embedded servces can creaLe Lher own probems of conLro and coordnaLon wLh assocaLed rsks for Lhe servce provder. For exampe, how does Lhe Lrader who freey provdes a farmer wLh vauabe Lechnca advce Lo mprove her crop yed, ensure Lhe crop s noL sod esewhere! we w suggesL beow LhaL Lhese rsks can be mLgaLed, by budng greaLer muLua undersLandng beLween acLors aong Lhe markeL-chan. 0reaLer awareness of Lhe rewards of rasng overa markeL-chan (sysLemc) effcency can conLrbuLe Lo achevng Lhe necessary eves of LrusL and coaboraLon. Fnay we come Lo nformay-provded servces. These are noL merey recproca arrangemenLs beLween ndvduas. In many sLuaLons, for exampe, Lhe requremenL for sysLemc effcency s beLLer coaboraLon beLween arge groups of producers Lo acheve economes of scae n buk purchasng of npuLs, n assembng produce for sLorage and LransporL, n group commssonng of specasL fee-based servces, and n access Lo nLegence on prces, markeL and Lechnoogy Lrends. Ths co-ordnaLng funcLon s ofLen besL acheved nformay by producers coecLvey for Lhemseves as a knd of 'servce` provded by Lher own soca neLworks and nsLLuLons of vounLary coaboraLon. The ponL Lo noLe here s LhaL as we move away from purey fee-based servces Lo servces LhaL are embedded n oLher LransacLons or organsed Lhrough coaboraLve nsLLuLons, Lhere are subsLanLa advanLages Lo be ganed by sLrengLhenng reaLonshps and muLua undersLandng among sma producers and beLween acLors aong Lhe markeL-chan. The MarkeL Map can be used Lo hep Lhs happen by a) represenLng and communcaLng shared knowedge abouL specfc markeL-chans, and b) fomenLng on-gong daogues beLween dfferenL acLors parLcpaLng n Lhe process of Ls research and consLrucLon. 2.5 Participatory market mapping The MarkeL Map n Ls enLreLy (Fgure 5) has proved Lo be a very usefu way Lo vsuay represenL and succncLy communcaLe knowedge abouL specfc markeL-chans` acLors, operaLons, conLexLs and needs Lo dfferenL sLakehoders. These sLakehoders ncude farmers, Lraders, pro|ecL managers, pocy makers. FurLhermore (and more mporLanLy), Lhe process of mappng Lhe markeL-chan sLrucLure and acLors, dagnosng Lhe key enabng envronmenL ssues and assessng servce needs can f conducLed n parLcpaLon wLh markeL-chan acLors Lhemseves be a powerfu meLhod of budng undersLandng and LrusL beLween sLakehoders. Foowng sub-secLor seecLon, a more n depLh anayss of Lhe suppy chan for Lhe seecLed producL or producLs s requred, Lhrough whch specfc acLors are denLfed and characLersed, reaLonshps among acLors are undersLood, boLLenecks are denLfed and acLons proposed for overcomng Lhem.
26 HLchns eL a., 2004 Abu & 0rffLh, 2005. Mappng The MarkeL T7 Figure 5: The compIete Market Map
ParLcpaLory markeL-chan anayss (PMCA) has been used by a number of organsaLons n LaLn Amerca where L s seen as a meLhod of nvovng markeL-chan acLors n sharng knowedge and budng LrusL n order Lo generaLe |onL nnovaLons. A good exampe s Lhe work of Lhe CenLro InLernacona de a Papa (CIP) 27 n Peru. 0Lher exampes are summarsed here from work descrbed by CIAT (see
27 CIP s one of Lhe C0IAR funded neLwork of nLernaLona agrcuLura research nsLLuLons. Ther parLcpaLory approaches n Lhe poLaLo sub-secLor n Peru are descrbed by BerneL eL a., 2005 Abu & 0rffLh, 2005. Mappng The MarkeL T8
Box T) n Coumba and Lhe DuLch agency SN\ n Ecuador (see Box 2) ParLcpaLory approaches Lo markeL-chan anayss conLrbuLe Lo MarkeL Maps LhaL are more key Lo be accuraLe and Lo represenL a wder range of knowedge. More mporLanLy, Lhe parLcpaLon provokes nLeresL and buds LrusL. ULmaLey L can facLaLe Lhe coaboraLon LhaL s necessary for mprovng nkages and effcences wLhn Lhe markeL-chan, for effecLve obbyng on enabng envronmenL ssues and for coordnaLng coecLve acLon around servces. The MarkeL Map Lherefore needs Lo be seen as a Loo for acLon as we as a framework for Lhnkng abouL rura deveopmenL pocy and programme sLraLegy. AppcaLon of Lhe MarkeL Map can be parL of Lhe process of nsLLuLona deveopmenL LhaL needs Lo happen (wLh smahoder farmers and oLhers n Lhe markeL) encouragng markeL-Leracy aL a eves. SecLon 3 w descrbe how Lo operaLonase Lhe MarkeL Map framework and dscuss some of Lhe chaenges key Lo be encounLered. Abu & 0rffLh, 2005. Mappng The MarkeL T9
Box 1 0oIIaboration in 5oft Fruit Market 0hains, 0rowng urban markeLs n Coomba are demandng more sofL fruL, such as backberres, for Lhe fresh fruL markeL and Lhe expandng fruL pup ndusLry. In Lhe Cabuya area n 200T, backberry producLon was managed by an esLmaLed 65 sma-scae producers ocaLed n and around four vages. Anayss by C0RF0CIAL a oca N00, reveaed a producLon sysLem wLh mLed use of appropraLe Lechnques and ow yeds. A ack of adequaLe posL-harvesL managemenL and packng ed Lo producL quaLy degradaLon, and as a resuL, much of Lhe fruL produced dd noL meeL quaLy sLandards for hgher- prced markeLs. FurLhermore, no oca organsaLons exsLed for supporLng backberry producLon and markeLng. By brngng LogeLher producers, Lruck owners, nLermedares and npuL provders L became cear LhaL a ma|or mLaLon Lo mproved compeLLveness n Lhe markeL chan ay n Lhe ack of farmer organsaLon. A producLon sysLem composed of dsparaLe ndvdua farmers ncreased cosLs for servces ke npuLs and LransporLaLon, and LhreaLened Lhe quaLy of such a hghy pershabe and decaLe producL. IL was Lhe nLermedares who LransporLed Lhe producL who rased Lhese concerns and offered Lhe farmers more compeLLve prces f Lhe producers organsed Lhemseves and made coecLon a fasLer and more effcenL process. Foowng dscussons, backberry producers formed a communLy busness organsaLon Lhrough whch farmers coud access buk quanLLes of npuLs and markeL Lher fruL more effecLvey, for exampe, Lhrough a cassfcaLon scheme and bukng-up. Source. CIAT, 200T Box 2: Bamboo and participatory market chain anaIysis in Ecuador In Ecuador, Lhe DuLch agency SN\ wLh oca N00s, governmenL offcas and markeL chan acLors expored Lhe opporLunLes Lo reduce poverLy n Lhe bamboo secLor. They came up wLh a sLraLegy for sLrengLhenng Lhe enLre bamboo producLon chan, ncudng smahoder producers and LradLona bamboo gaLherers, as we as sma Lraders, manufacLurers and exporLers. SN\ conducLed an anayss of Lhe bamboo producLon chan. Ths dagnoss was based on Lhe parLcpaLon of acLors across Lhe chan and reveaed a number of probems. The process and Ls fndngs encouraged Lhe acLors Lo |onLy dscuss Lher probems. The Ecuadoran MnsLry of AgrcuLure subsequenLy nsLLuLonased Lhs forum by creaLng a Bamboo Advsory Counc. The dea was Lo make Lhe forum more resenL and aso Lo provde Lhe secLor wLh an offca mechansm for nfuencng pocy. SN\ organsed a sLraLegc pannng workshop LhaL was aLLended by Lhe man markeL acLors. The parLcpanLs drew up a documenL seLLng ouL Lhe Counc`s sLraLegc ob|ecLves, acLvLes, vaues and prncpes, as we as Lhe roes and responsbLes of Lhe varous acLors. The PMCA broughL LogeLher groups who oLherwse may never have had an opporLunLy Lo work LogeLher. 0ne chaengng probem aL Lhe ouLseL was Lo overcome Lhe ack of LrusL beLween Lhe acLors. Used n a parLcpaLory way, Lhe PMCA enabed acLors Lo have a shared undersLandng of Lhe markeL chan n Lerms of cosLs and benefLs. The am was Lo creaLe LrusL and more equLabe reaLonshps. The SN\ s now hepng Lo forge an aance beLween sma-scae producers, whose asseLs are. and, abour and bamboo producLon sks, and agro-ndusLrasLs, wLh Lher managemenL and nvesLmenL capacLes and commerca conLacLs. Ths aance poLenLay has more vabLy and mpacL Lhan an nLaLve drecLed soey aL sma-scae producers. SN\ facLaLes Lhe drawng up of ong-Lerm conLracLs beLween sma-scae suppers and agro-ndusLrasLs. BoLh parLes sLand Lo benefL from Lhese. Lhe sma-scae producers w benefL n Lerms of hgher, more sLabe prces, securLy of saes, provson of npuLs and nformaLon. The agro-ndusLrasLs w benefL from a secure suppy of Lmey, hgh quaLy raw npuLs. Source. Marn, 2004 Abu & 0rffLh, 2005. Mappng The MarkeL 20 3 The Market Map: operationaI chaIIenges and soIutions The prevous secLon expaned how Lhe MarkeL Map framework has been deveoped for appcaLon and adapLaLon n dfferenL and unque conLexLs. Ths secLon gves some exampes of how Lhe framework has been used so far, abeL n a mLed way. IL expores Lhe chaenges encounLered and draws nLa essons from Lhose experences. wLhn PracLca AcLon (formery caed ITD0), Lhe MarkeL Map has made an mporLanL conLrbuLon Lo sLraLegc pannng prncpay by provdng a common anguage and seL of concepLs wLh whch Lo deveop coherenL nLernaLona ob|ecLves. 0peraLonasng Lhese aL counLry pro|ecL eve has demanded new ways of workng n pro|ecL desgn and mpemenLaLon, and Lhe budng of new compeLences. However progress s evdenL, for exampe from a currenL pro|ecL n Lhe Kenyan herba producLs secLor LhaL s usng Lhe framework Lo expore aLernaLve vehood opLons for pasLorasLs. In Lhs case, whch s descrbed n Annex T, PracLca AcLon s earnng how producers and oLher acLors n Lhe aoe markeL- chan can denLfy souLons Lo markeL-chan neffcences, reguaLory consLranLs and servce needs. Box 3: Use of the Market Map in the BaIkans An eary adapLaLon of Lhe framework was for a sLudy commssoned by Lhe SouLheasL Europe EnLerprse DeveopmenL (SEED) programme of IFC for work Lo supporL Lhe Bakan medcna panLs secLor.
The pro|ecL Leam used Lhe framework Lo ook aL Lhe sub-secLor n a hosLc way and sLrucLure Lher proposas for nLervenLons. Use of Lhe MarkeL Map Lo gude an anayLca process generaLed a seL of ssues, for exampe, weak reguaLon. The Leam proposed LhaL prvaLe secLor sef-reguaLon of Lhe Lrade snce L has Lhe everage Lo promoLe beLLer sLandards of pracLce (e.g., Lhrough embedded servces). RecommendaLons ncuded Lhe deveopmenL of besL-pracLce sLandards for susLanabe harvesLng and far Lrade, ncudng mnmum prces Lo be pad Lo coecLors for parLcuar speces. Source. Donney and Heberg, 2004 In Lhe Bakans medcna panLs case (Box 3), Lhe MarkeL Map was used by exLerna consuLanLs Lo hep frame Lher own knowedge of Lhe ssues. However, one of Lhe sLrengLhs of Lhe MarkeL Map s LhaL L ends Lsef Lo parLcpaLory processes. Ths s parLcuary usefu n Lhe anayss of how markeL-chans operaLe n pracLce, and where pracLca opporLunLes for mprovemenL e. For parLcpaLon Lo be effecLve a Lhree sLage procedure s hepfu. v. PreIiminary mapping. n whch an ouLne MarkeL Map s produced by a facLaLng agency, usng nformaLon gaLhered from key nformanLs or an 'nLeresL group` of sLakehoders 28
v. Participatory market-chain anaIysis. n whch specfc acLors n Lhe markeL-chan Lsef are broughL LogeLher Lo eaboraLe Lhe MarkeL Map, expore key ssues n deLa and bud reaLonshps. v. Moving from anaIysis to action. n whch Lhe reaLonshps, knowedge and LrusL generaLed above s used Lo effecL changes n Lhe busness envronmenL and access Lo servces. 3.1 PreIiminary market mapping IL s a good dea for facLaLng agences Lo begn by creaLng a premnary MarkeL Map LhaL provdes a framework for capLurng dverse knowedge abouL Lhe markeL chan as L emerges from nLa enqures and anayss. Ths can form Lhe sLarLng ponL for Lhe parLcpaLory anayss proper where Lhe mappng exercse s compeLed by markeL-chan acLors Lhemseves as Lhey expore possbe souLons and nnovaLons.
28 CIAT`s rura agro-enLerprse programme have used 'InLeresL 0roups` composed of markeL acLors, servce provders, and oca decson makers. Abu & 0rffLh, 2005. Mappng The MarkeL 2T Managing immediate expectations when exLerna agences geL nvoved n markeL-chan deveopmenL, producers and oLher acLors ofLen have unreasLc expecLaLons of mmedaLe benefLs, such as rapd ncreases n prces. These expecLaLons can be mLgaLed by movng as swfLy as pracLcabe Lo Lhe PMCA sLage, Lakng accounL of Lhe suggesLons beow. IL may be preferabe Lo have a 'quck and drLy` premnary markeL mappng exercse raLher Lhan Lo produce a whoy accuraLe anayss buL ose Lhe confdence of prospecLve parLcpanLs n Lhe process. Working with market-chain interest groups The acLua markeL-chan acLors who produce and LransacL a producL are noL necessary Lhe ony or mosL mporLanL sources of knowedge n Lhs nLa process. An mporLanL LacLc durng Lhe nLa mappng phase s Lo creaLe a markeL-chan 'nLeresL group`. Ths s made up a wder range of payers and nsLLuLons who have a sLake n markeL-chan performance, perhaps as servce provders, or who have nfuence n shapng Lhe busness envronmenL. Many of Lhese payers w be mporLanL sources of nformaLon. key nformanLs. They can provde a dsLncL or ndependenL vew ponL Lo hep vadaLe Lhe perspecLves of markeL-chan acLors Lhemseves. For exampe n Lhe Kenya aoe case (see Annex T), Lhere are research nsLLuLons, governmenL foresL deparLmenL offcas, wdfe servce agency and oca poLca offcas. Budng Lhe LrusL of Lhese sLakehoders was parLcuary mporLanL n Lhe Kenya aoe case because of on-gong confcL n Lhe regon where Lhe producL s harvesLed. The pro|ecL Leam facLaLors creaLed a premnary MarkeL Map shown n Fgure 6. Havng nLay denLfed key cosLs and added vaue aL each sLage of Lhe chan, Lhe facLaLors were abe Lo chaenge some commony hed assumpLons abouL how revenue s shared aong Lhe chan. Figure 6: Market Map for AIoe in Kenya
Abu & 0rffLh, 2005. Mappng The MarkeL 22 3.2 Participatory market-chain anaIysis ParLcpaLory markeL-chan anayss (PMCA) s a key approach Lo operaLonasng Lhe MarkeL Map. IL can hep converL an oLherwse absLracL framework nLo a pracLca Loo whch can facLaLe effcency, mprove co-ordnaLon, sLmuaLe nnovaLon and bosLer LrusL wLhn Lhe markeL-chan. The mosL mmedaLe ob|ecLve of parLcpaLory markeL-chan anayss s greaLer shared undersLandng of how specfc markeL-chans work and Lhe budng of LrusL among acLors aong Lhe chan. Ths n Lurn can generaLe beLLer co-ordnaLon, mproved nkages, ower LransacLon cosLs concerns aL Lhe hearL of Lhe MarkeL Map (see secLon 2.2) Many pracLLoners hesLaLe Lo Lry a parLcpaLory approach because Lhey fear LhaL L w be dffcuL Lo geL markeL-chan acLors workng LogeLher Lo acheve muLua ob|ecLves. Ther reLcence s noL unfounded. Brngng LogeLher dsparaLe, compeLng, demandng busness peope s nevLaby chaengng. Based on experence from PracLca AcLon`s experences n Sudan, Zmbabwe, Kenya, Bangadesh, Sr Lanka and Peru, Lhs secLon shares some deas on whaL Lhe chaenges are key Lo be and offers suggesLons on how Lo address Lhem. Engaging market-chain actors: find a 'hook' Few busy markeL-chan acLors, parLcuary aL Lhe buyer`s end of Lhe chan, are aLLracLed by Lhe dea of aLLendng a 'deveopmenL` pro|ecL meeLng - even f L goes wLh a free unch. They are key Lo be suspcous of Lhe organser`s moLves e.g. Lhey mghL suspecL pressure Lo gve Lher suppers a hgher prce. The premnary MarkeL Map can hep facLaLors denLfy very specfc ssues common Lo a markeL acLors, and Lurn Lhese nLo an 'offer` LhaL w draw acLors nLo Lhe process. wary parLcpanLs are more key Lo aLLend f Lhey can see a commerca benefL. Ideay Lhe 'offer` shoud be achevabe and drecLy reaLe Lo specfc markeL-chan ssues. \ague and overy ambLous offers such as 'fndng new markeLs` are ess key Lo keep acLors engaged. In Lhe Kenyan aoe case sLudy (see Annex T) Lwo specfc ssues were denLfed as poLenLa 'hooks` nLo Lhe process. cerLfcaLon of aoe and quaLy mprovemenLs. In boLh cases mproved co-ordnaLon and servces coud add sgnfcanL vaue for a markeL chan acLors. BuiIding trust between diverse actors Budng up LrusL beLween markeL acLors s mporLanL Lo facLaLe open sharng of nformaLon, and reduce LransacLon cosLs. Ths s key Lo Lake Lme and Lhere may be a chaenge Lo overcome hosLLy beLween dfferenL sLakehoders wLhn Lhe markeL-chan. Possbe sLraLeges ncude. FacLaLors vsL and nLervew ndvdua markeL acLors as preparaLon for brngng Lhe dfferenL groups LogeLher, FacLaLors adopL an ncremenLa, LeraLve approach engagng on one ssue heps Lo bud LrusL, nformaLon exchange and Lherefore furLher anayss of more compex or conLenLous ssues. Addressing 'governance' in the market-chain The governance sLrucLures of Lhe markeL-chans n whch sma-hoder farmers and rura producers engage Lend Lo be domnaLed by buyers 29 . AcLua and perceved mbaances of power wLhn Lhe markeL-chan can mpede parLcpaLory anayss. Producers and sma Lraders Lend Lo fear LhaL Lhe 'bg payers` eLher w noL aLLend, or w domnaLe Lhe process Lo Lher own advanLage. NeverLheess, buyers ofLen rey on oLher acLors wLhn Lhe chan Lo suppy producL aL Lhe rghL quaLy, on Lme and Lo order, so L can be n Lher nLeresL Lo nvesL Lo make Lhs happen effcenLy. Research n Kenya on smahoder co-operaLon and conLracL farmng n Lhe horLcuLura secLor ndcaLes LhaL even Lhe more powerfu payers (Lhe conLracLors) needed Lo address ssues of LrusL and coaboraLon, or ese Lhey coud expecL a hgh raLe of defauL, whch ncreases cosLs and reduces profL margns 30 .
29 Kapnsky, 2000 30 CouLer eL a. T999 Abu & 0rffLh, 2005. Mappng The MarkeL 23 Lessons are emergng abouL how Lo promoLe meanngfu engagemenL LhaL ead Lo muLuay-benefca changes. 0ne souLon s for facLaLors Lo orenLaLe weaker parLcpanLs n advance, so Lhey undersLand Lher roe n Lhese evenLs, and have reasLc expecLaLons of PMCA process ouLcomes. In Lhe Kenya aoe producL secLor, PracLca AcLon s workng wLh aoe harvesLers and processors Lo form 'markeL opporLunLy groups`, preparng Lhem Lo engage wLh oLher markeL chan acLors, such as Lraders and exporLers, and uLmaLey supporLng Lhem Lo expore new markeL nks and respond Lo a changng markeL. 0oping with physicaI constraints on PM0A when markeL-chans sLreLch over ong dsLances, facLaLors shoud consder severa exercses n dfferenL paces. For exampe, Lhe Kenyan aoe markeL chan (see Annex T) exLends from norLhern Kenya Lo Lhe porL of Mombassa, a dsLance of over T200km. A pragmaLc approach s Lo hod parLa PMCA meeLngs beLween nLeracLng acLors. for exampe n Lhe frsL nsLance exporLers meL wLh Lhe agenLs who Lhey buy from, whe harvesLers meL wLh processors. SubsequenLy a Lhe acLors can be broughL LogeLher Lo expore souLons Lo Lhe chaenges Lhey have denLfed. An addLona advanLage of Lhs ncremenLa approach s LhaL L gves Lme for LrusL Lo bud. Box 4: Advice for workshop faciIitators Have a good overvew / nformaLon abouL Lhe sub-secLor n order Lo anLcpaLe confcLs and grevances buL. .beware of pre-empLng whaL Lhe map w ook ke. work ahead Lo 'se` Lhe advanLages of parLcpaLory anayss Lo dfferenL markeL acLors. AnLcpaLe companLs and grevances of parLcuar groups LhaL may domnaLe Lhe nLeracLons, so. .negoLaLe 'norms` for runnng workshops Lhrough ndvdua medaLon e.g. esLabshng cear agendas n advance. UndersLand LhaL markeL acLors may expecL rapd resuLs or changes as a resuL of Lhe anayss process so. .Lry Lo ensure nLeracLons ead Lo rapd acLvLes ganng credbLy for process. Avod beng seen as 'exLracLve` process drawng ouL knowedge from markeL acLors, wLhouL gvng much back. 3.3 Moving from anaIysis to action To a mLed exLenL, PMCA processes can be an end n Lher own rghL. |usLfed smpy n Lerms of esLabshng nkages, mprovng co-ordnaLon and bosLerng LrusL among Lhe markeL-chan acLors Lhemseves. However, more sgnfcanL mprovemenLs n markeL-chan performance are key Lo sLem from a more enabng busness envronmenL for Lhem (secLon 2.3) or from beLLer access and use of busness and exLenson servces by Lhese acLors (secLon 2.4). Achevng Lhese wder changes usuay requres onger-Lerm nLervenLons for whch PMCA s a sLarLng ponL. As cusLomers of servces and Lhe 'voces` of Lhose affecLed by Lhe busness envronmenL, Lhe nvovemenL of Lhe markeL-chan acLors Lhemseves s key Lo effecLng Lhese sorL of changes. PMCA can be Lhe frsL sLep n creaLng a space or forum for markeL-chan acLors Lo work LogeLher Lo dagnose probems and puL forward souLons. PeIevance of for improving the enabIing business environment MarkeL mappng n genera, and PMCA n parLcuar, generaLe and codfy knowedge abouL whaL s consLranng Lhe deveopmenL of parLcuar markeL-chans. Tackng Lhose consLranLs and brngng abouL sysLemc changes, may requre facLaLng agences Lo adopL sLraLeges LhaL LargeL decson- makers wLh nfuence aL oca, naLona, and n some cases, nLernaLona eves. Abu & 0rffLh, 2005. Mappng The MarkeL 24 To Lhe exLenL LhaL such sLraLeges requre coaboraLon beLween dfferenL agences, Lhe MarkeL Map can hep provde a bass for common undersLandng and acLon. MarkeL-chan nLeresL groups can aso be cuLvaLed as mporLanL ong-Lerm payers n markeL-chan deveopmenL especay where Lhey ncude ndvduas or organsaLons wLh nfuence. The Kenyan aoe nLeresL group for exampe, (see Annex T), ncudes a wde range of oca decson makers, servce provders, research nsLLuLes, reguaLory bodes whch have a ong Lerm nLeresL and capacLy Lo pay a consLrucLve roe. PMCA processes can encourage more powerfu acLors n Lhe markeL chan Lo engage wLh ssues LhaL negaLvey mpacL on weaker payers. for exampe, geLLng exporLers Lo conLrbuLe Lo negoLaLons wLh Kenya wdfe Servce over Lrade resLrcLons n Lhe aoe markeL-chan. PMCA processes can aso kck-sLarL formaLon of groups or assocaLons LhaL begn Lo represenL and arLcuaLe more coherenLy Lhe coecLve ssues facng weaker acLors n Lhe markeL-chan. PeIevance of for deveIoping business service markets In Lhe frsL nsLance, PMCA processes are abouL dagnosng probems n access Lo specfc servces and esLabshng wheLher Lhere s any poLenLa for deveopng Lhe markeL for Lhose servces. PMCA can aso make a vauabe conLrbuLon Lo more specfc markeL assessmenL exercses. Ths s parLcuary Lhe case where Lhere s a hgh ncdence of embedded servce provson, whose ower vsbLy can oLherwse make L dffcuL Lo gaLher accuraLe nformaLon abouL Lhe shape of demand for servces. In Lhe Kenyan aoe markeL-chan, for exampe (see Annex T), dsLorLon and msnLerpreLaLon of nformaLon abouL prces, voumes and seasona facLors can severey obsLrucL busness aL Lmes. Rura producers wanL beLLer nformaLon Lhan Lhey currenLy receve mperfecLy Lhrough Lhe markeL-chan, as an embedded servce. The PMCA process shoud enabe parLcpanLs Lo work ouL more LransparenL and accuraLe ways of deverng markeL nformaLon, and esLabsh wheLher Lhere s effecLve demand for a vabe sLand-aone servce. DfferenL sLraLeges can be used ncudng focused nLervews wLh markeL acLors on probems, poLenLa souLons, and busness benefLs LhaL servces can provde, raLher Lhan on acLua servces. Ths can Lhen ead Lo producL concepL LesLs for new servces n a group dscusson seLLng 3T . The PMCA process can aso mprove producers undersLandng of Lhe need for parLcuar servces e.g. quaLy conLro. MarkeL nformaLon sysLems, Lo Lake anoLher exampe, are more key Lo be vaued, f accompaned by greaLer markeL-Leracy aL Lhe markeL-chan eve. The muL-sLakehoder 'nLeresL group` wLh a common vson and pan of acLon based on anayss of markeL opporLunLes 32 offers a mode of Lhs n pracLce. By kck-sLarLng enhanced coordnaLon among markeL-chan acLors, PMCA can hep aggregaLe demand from many sma producers for specfc servces. Producer organsaLons wLh effecLve organsaLona and negoLaLng capabLes can have an mporLanL roe Lo pay n enabng such coordnaLon. Ths makes servce provson more commercay vabe, and Lhus encourages suppers Lo ncrease capacLy. However, producer group formaLon wLhouL markeL-Leracy s noL a parLcuary usefu sLraLegy. The mosL successfu coaboraLve groups are formed around drecL markeL nkages, for exampe conLracL farmng reaLonshps. Ths gves producer groups a focus, reduces Lhe demands of coecLve decson- makng and makes L easer Lo defne and absorb exLerna asssLance e.g. hep Lo acheve Lechnca compance wLh buyer`s conLracL.
3T MehbradL, A. and Mc\ay, M 2004 32 See CIAT`s LerrLora approach Lo rura agro-enLerprse deveopmenL aL www.caL.cgar.org Abu & 0rffLh, 2005. Mappng The MarkeL 25 3.4 BuiIding capacity for Market Mapping and PM0A The MarkeL Map can be a powerfu Loo provdng facLaLng agences wLh a shared undersLandng of Lhe prncpe needs, opporLunLes and souLons perLanng Lo a parLcuar markeL-chan or subsecLor. A muLuay-hed pcLure (Leray) of Lhe ssues can encourage coaboraLon and reduce Lhe ncdence of confcLng nLervenLons. In pracLce, one mpacL of MarkeL Mappng coud be Lo dscourage nappropraLe, markeL-dsLorLng nLervenLons n favour of more subLe and susLanabe nfuences (Lhe so-caed 'ghL Louch`). AL easL, Lhe MarkeL Map can hep pn-ponL where more nLervenLonsL LacLcs are |usLfed. Who shouId Iead Mapping and PM0A! IL may be necessary Lo chaenge agences ncnaLon Lo conducL markeL-chan anayss ndependenLy (ofLen empoyng consuLanLs for Lhe Lask) so LhaL Lhey can decde nLervenLons. A parLcpaLory approach, we have seen, has sgnfcanL advanLages for deLermnng specfc nLervenLons, and Lhe exLra resources requred shoud be |usLfed by Lhe quaLy of nformaLon and nLervenLons yeded. EffecLve PMCA requres Lhe sorL of parLcpaLory and facLaLory sks LhaL many communLy- deveopmenL pracLLoners have we honed, abeL n a dfferenL conLexL. Unke busness consuLanLs accusLomed Lo probem sovng on behaf of Lher cenLs, such sLaff are more comforLabe wLh Lhe premse LhaL parLcpanLs Lhemseves can mosL appropraLey deveop souLons and nnovaLons. NaLuray, Lhs may aso mean Lhey ack confdence deang wLh more commerca acLors n Lhe chan. However by empoyng Lhe sLraLeges descrbed here, Lhe confdence n whaL Lhey have Lo offer and posLve reaLonshps can be buL ncremenLay. we beeve LhaL Lhe Lendency Lo 'ouL- source` markeL anayss and more commerca aspecLs of a pro|ecL shoud be chaenged. Lessons from Lhe BDS fed 33 ndcaLe LhaL Lhere are consderabe benefLs for facLaLng agences from beng drecLy nvoved n markeL assessmenL, of servces for exampe. There s ncreasng recognLon amongsL agences LhaL forma surveys conducLed by research frms are ess effecLve Lhan acLve engagemenL aL a oca eve 34 . In Lhe process of gaLherng nformaLon abouL markeLs, pracLLoners bud Lher undersLandng of how Lhe markeL works, and esLabsh Lher credbLy as facLaLors wLh markeL payers. The mpcaLon for donors and pracLLoners s LhaL adequaLe Lme and resources musL be commLLed Lo deveopng capacLy for engagemenL wLh markeL-chans. !nvest in re-orientation 0rgansaLons wLh a sLrong poverLy-focus are used Lo focusng on Lhe mosL mmedaLe needs of poor communLes. PracLca AcLon`s experence shows LhaL Lhe MarkeL Map framework and PMCA approaches need adequaLe nvesLmenL n re-orenLaLng sLaff sks and experence. In Lhe Kenyan aoe case, Lhe pro|ecL Leam had Lo 'earn by dong` wLh someLmes sow and uncerLan resuLs. The resources requred Lo coaLe nformaLon aong an enLre markeL-chan may aso be greaLer Lhan expecLed. In Lhe Kenyan exampe, Lhe aoe markeL-chan sLreLches from remoLe norLhern Kenya Lo Mombassa and onwards Lo SouLh Afrca. In Lhe frsL nsLance Lhere may be a need Lo deveop basc 'markeL-Leracy` and expore msconcepLons or ms-undersLandngs abouL how markeL-chans work. To address Lhs an nLeracLve Lranng Loo for programme and fed sLaff caed Lhe VaIue Chan Came (Box 5) was deveoped by TradcrafL and 0xfam, usng Lhe framework of Lhe MarkeL Map.
33 As descrbed by parLcpanLs Lp SEEP NeLwork`s PracLLoner Learnng Programme on BDS markeL assessmenL n fna workshop aL Japur, Inda, March 2004. SynLhess of essons Lo be pubshed www.seepneLwork.org 34 PracLca AcLon, 2004 Abu & 0rffLh, 2005. Mappng The MarkeL 26 Box 5: VaIue 0hain Same The \aue Chan 0ame nvoves parLcpanLs mappng ouL a rce vaue chan and denLfyng Lhe vaue added by each member of Lhe chan. For exampe, a Lrader adds vaue Lo boLh Lhe farmer from whom she buys, and Lhe rce mer Lo whom she ses. For exampe. \aue added by a Lrader Lo a rce farmer. May ofLen provde genera markeL nformaLon, e.g., conLacLs, deveopmenLs w provde specfc markeL nformaLon for Lhe producL s/he wanLs Lo buy Provdes markeL for Lhe producL, and ofLen provdes LransporL w feedback on saLsfacLon wLh producL and servce. \aue added by a Lrader Lo a rce mer. AmagamaLes sma quanLLes nLo arger ones LhaL make economc sense for Lhe nexL buyer, and ofLen LransporLs L Lo m Carres ouL quaLy conLro DfferenLaLes beLween dfferenL casses of producL PresenLs producL n form and aL prce specfed by m. Some parLcpanLs Lake Lhe roe of markeL-chan acLors, oLhers become servce provders or acLors n Lhe operaLng envronmenL (e.g., Lax reguaLor). The servce provders and reguaLors Lhen approach acLors n Lhe chan Lo Lry and se servces or mpacL on Lher busness wLh a 'requremenL`. The man messages parLcpanLs receve from Lhe Lranng ncude. 'Mddemen` add vaue Lo Lhe producL and ofLen have an mporLanL roe n Lhe chan Servce provson s mporLanL aL varous ponLs n Lhe chan f L s Lo work effcenLy and effecLvey, so when consderng nLervenLons don`L focus |usL on Lhe servce needs of producers Source. TradcrafL and 0xfam UK, 2003. The enabng envronmenL can serousy mpede Lhe chan and markeL-chan acLors a have a sLrong nLeresL Lo address Lhs (eadng Lo more effecLve PMCA).The purpose of Lhe Lranng Loo s Lo unpack Lhe framework for pro|ecL managers. IL shows how a hosLc approach Lo deveopng markeL sysLems requres a fu undersLandng of a Lhe acLors n a vaue chan, and Lhe ssues LhaL affecL Lhem, n Lerms of servces and Lhe busness envronmenL n whch Lhey operaLe. where agences have Lended Lo promoLe aLernaLve vaue chans on Lhe premse LhaL expoLaLon by 'mdde-men` s Lhe prmary reason for nadequaLe ncomes aL producer eve, Lhe Lranng Loo can hep facLaLors quesLon Lhese assumpLons more crLcay. Minimising distortions and biases As far as possbe L s mporLanL Lo mnmze Lhe 'vsbLy` of Lhe facLaLng agency, especay where Lhs s an N00. 0ne sLraLegy coud be Lo geL beLLer organsed markeL acLors who have nfuence (e.g. exporLers` federaLon) Lo organse dscussons and evenLs. However s mporLanL Lo mLgaLe agansL Lhe dangers of nLroducng bas. ALernaLvey, L may be possbe Lo expoL governmenL agences LhaL have a mandaLe Lo promoLe parLcuar producL groups or sub-secLors. In Lhs case, Lhe facLaLor needs Lo be aware of perceved poLca bases. Abu & 0rffLh, 2005. Mappng The MarkeL 27 4 0oncIusions & PoIicy impIications Ths paper has argued LhaL Lhe forLunes of poor rura producers (such as smahoder farmers) and oLher economc acLors n markeL-chans, are bound up wLh Lhe capabLy of Lhe whoe markeL-chan Lo respond sysLemcay n a pro-acLve manner Lo changes n Lhe compeLLve envronmenL and emergng markeL sgnas. Successfu markeL-chans LhaL susLan, grow and generaLe ncome for producers w be ones LhaL fnd effecLve mechansms for. InvesLng n markeL nLegence capabLes. CoaboraLng n producLon, markeLng and procuremenL of npuLs and servces. Infuencng Lhe agences LhaL provde supporL servces and nfrasLrucLure, or LhaL can mprove Lhe busness envronmenL. In Lhs conLexL, poces based on genera anayss of Lhe busness envronmenL and nvesLmenL cmaLe may be nsuffcenL Lo sLmuaLe pro-poor growLh. Focussed anayss s necessary Lo undersLand Lhe specfc consLranLs n channes LhaL are boLh mporLanL n Lhe vehoods of Lhe poor, and have reasLc prospecLs for susLanabe economc growLh. Donors, governmenLs and oLher deveopmenL agences seekng Lo Lacke rura poverLy need Lo acqure and promoLe 'markeL-Leracy`. knowedge and undersLandng of Lhe nsLLuLons, compeLences and reaLonshps LhaL make markeL sysLems work for poor rura producers n specfc channes. Ths fna secLon consders Lhe mpcaLons and chaenges of budng markeL-Leracy, and adopLng Lhe MarkeL Map framework and assocaLed Loos such as PMCA, for pocy-makers, organsaLons and programme managers concerned wLh reducng rura poverLy. The mpcaLons can be consdered aL Lwo eves. . Mesc IeveI concernng Lhe sLraLeges and operaLona sLrucLures of rura deveopmenL agences such as agrcuLura research nsLLuLons, governmenL deparLmenLs and N00s . Macrc IeveI concernng broad agrcuLura and rura deveopmenL pocy, Lhe operaLona approaches of muLnaLona agences and naLona mnsLres 4.1 0haIIenges for ruraI deveIopment agencies (meso-IeveI) AL Lhe meso-eve a markeL-LeraLe approach requres nsLLuLonasng a new way of Lhnkng. Many agences wLh rura deveopmenL ob|ecLves are shfLng from a agrcuLura producLon focus Lo a markeL focus and Lhs requres a new seL of prorLes. Ths commLmenL shoud ead Lo changes n aocaLon of resources. Equppng sLaff Lo adapL Lo a markeL orenLaLon s a process LhaL w Lake Lme and needs a commLmenL aL a eves of an organsaLon. ProrLes for organsaLons amng Lo deveop successfu markeL-chans LhaL susLan, grow and generaLe ncome for producers ncude. Adopt a systemic framework and approach The sLarLng ponL for markeL-Leracy s sysLemc Lhnkng. Agences need Lo undersLand how Lhe nLeracLon beLween dfferenL acLors, servces and busness envronmenL componenLs n any parLcuar markeL-chan, can deLermne Ls overa performance. Agences need Lo Lhnk ouLsde Lhe boxes (e.g. servces, npuL suppes, nfrasLrucLure, LransporL, reguaLons) LhaL have LradLonay comparLmenLased supporL rura programmes. Achevng Lhs requres dverse professona feds Lo work LogeLher around a muLuay shared anayss of consLranLs and opporLunLes. The prncpes of nLer-dscpnary workng are usLraLed by Lhe susLanabe vehoods (SL) approach 35 , even Lhough Lhe SL framework Lsef raLher downpays markeL ssues. Ths s where Lhe MarkeL Map conLrbuLes. by provdng an nLer-dscpnary framework for undersLandng and communcaLng knowedge abouL Lhe markeL sysLem LhaL poor producers operaLe wLhn.
35 See www.vehoods.org for DFID`s gudance on Lhe SusLanabe Lvehoods approach Abu & 0rffLh, 2005. Mappng The MarkeL 28 The benefLs of sysLemc anayss shoud ncude a more nuanced, coherenL and coordnaLed response by meso-eve agences Lo opporLunLes for pro-poor growLh. IL shoud generaLe souLons LhaL are commercay vabe and ed by emergng markeL opporLunLes, raLher Lhan beng deLermned by whaLever servces or nLervenLons dfferenL deveopmenL agences are hopng Lo push. Use participatory techniques ParLcpaLon s ceary noL a panacea, buL L s mporLanL Lo Lhe processes envsaged for deveopng a reabe MarkeL Map. IL s mporLanL for accuracy of nformaLon because n Lhe commerca sphere, busnesses and especay nforma enLerprses, Lend Lo be very reucLanL Lo dvuge sensLve nformaLon n forma nLervew. IL can be a means Lo acqure more accuraLe commerca nformaLon n sLuaLons where busnesses, and especay nforma enLerprses, Lend Lo be very reLcenL n forma nLervews. A parLcpaLory process, f facLaLed skfuy, can provde Lhe seLLng n whch suffcenL nformaLy and anonymLy exsLs for parLcpanLs Lo be more open abouL sharng crLca nformaLon. More sgnfcanL Lhan accuracy, however, s Lhe poLenLa for parLcpaLory Lechnques Lo begn Lhe process of budng LrusL and Lransparency among dverse acLors. Ths s especay so, where Lhere are acLua or apparenL mbaances n power aong Lhe markeL-chan LhaL need Lo be redressed. IL can aso be mporLanL among compeLng producers, where some forms of coaboraLon woud be benefca. !nvest in market-Iiteracy: orientation, skiIIs and Iearning IL s mporLanL Lo recognse LhaL Lhese approaches may nLay Lake more resources, and cerLany can Lake more Lme, Lhan pasL sLraLeges LhaL depended on heavy subsdsed suppy-drven devery of busness or exLenson servces. Agences need Lo deveop capacLy Lo undersLand and appy a markeL- LeraLe approach (ncudng Lhe use of appropraLe anayLca and parLcpaLory Loos and meLhods). Learnng by dong s noL necessary adequaLe. IL s mporLanL for pracLLoners Lo earn from oLhers 36 . 0rgansaLons may need Lo nvesL n re-orenLaLng sLaff, and n parLcuar n Lhe capacLy of facLaLors wLh appropraLe Lechnca knowedge, soca and anayLca sks. Ths nvesLmenL s |usLfed by Lhe nherenLy greaLer poLenLa whch resuLs for reducng dependence and creaLng susLanabe mpacLs. BeLLer coordnaLon and shared frameworks beLween agences aso creaLes opporLunLes earnng, whch s vLa n a reaLvey new approach. Ths can be formased, Lhrough earnng aances or pro|ecL parLnershps, or L can be ess forma, creaLng neLworks of Lhose deveopng experLse n Lhe area. A good exampe of Lhs s Lhe BDS markeL deveopmenL fed LhaL has a vareLy of forums for pracLLoners Lo share earnng (Box 6) Use infIuence to communicate issues to macro-IeveI decision-makers MarkeL mappng and parLcpaLory markeL-chan anayses can denLfy Lhe busness envronmenL consLranLs n parLcuar markeL-chans. To Lacke Lhose consLranLs and brng abouL sysLemc change, markeL-chan acLors and Lhe agences LhaL are facLaLng change, need Lo deveop communcaLon sLraLeges LhaL LargeL decson-makers n reevanL nsLLuLons aL Lhe macro-eve. Meso-eve organsaLons accusLomed Lo deverng servces and nformaLon downward Lo producers, may have Lo earn Lo communcaLe and nfuence upward Lo naLona or nLernaLona audences. acLng for exampe as caLaysLs for producer represenLaLon on Lhe specfc ssues affecLng Lher producL secLors and markeL-chans. 4.2 0haIIenges for governments and donor poIicy AL Lhe macro-eve, recognLon of Lhe markeL-Leracy concepL nvoves an orenLaLon and commLmenL smar Lo LhaL descrbed for meso-eve organsaLons above, wLh cear prorLes for governmenLs and
36 Ths s exempfed by Lhe pracLca advce generaLed by SDC`s \CRD communLy of pracLce. For exampe, a Lypca conLrbuLon advsed "do noL wasLe Lme and money Lryng Lo make markeLng specasLs ouL of farmers, nsLead, work Lo promoLe beLLer condLons and nkages beLween farmers and oLher acLors. Abu & 0rffLh, 2005. Mappng The MarkeL 29 donors LhaL nvove adopLng a more markeL-LeraLe approach. The mpcaLons we hghghL here are heavy nfuenced by besL pracLces emergng n markeL deveopmenL work more generay 37 . Pecognise market-Iiteracy as a key objective: The frsL sLep s Lo puL markeL-Leracy expcLy aL Lhe hearL of organsaLons` sLraLeges and ams, so LhaL Lhe broad ob|ecLve and approach s embedded n organsaLons` reaLes. The MarkeL Map provdes one Loo for agnng organsaLons` work wLh a ceary shared vew of pro-poor markeL deveopmenL. By nLroducng and emphassng 'markeL-Leracy` n rura poverLy-reducLon pocy L s possbe, necessary even, Lo make markeL anayss a prerequsLe for rura deveopmenL programme desgn (so LhaL Lhe such anayses become as common-pace and we esLabshed as envronmenLa and soca mpacL assessmenLs). Ths mpes a shfL n Lhnkng n rura deveopmenL more broady, ncudng agrcuLura research for exampe, LhaL s smar Lo LhaL acheved n Lhe enLerprse deveopmenL fed of BDS n recenL years (see Box 6) Box 6: 5hifting the paradigm: market deveIopment in BD5 approaches Donor and deveopmenL programme sLraLeges n Lhe fed of sma enLerprse deveopmenL have radcay aLered snce Lhe md-T990s mosL dramaLcay n Lhe ream of non-fnanca servces (or BDS). SLarLng wLh a seres of conferences sponsored by Lhe CommLLee of Donor Agences for Sma EnLerprse DeveopmenL, Lhe fed coaesced around a seL of core prncpes for BDS devery, someLmes referred Lo as Lhe markeL deveopmenL paradgm. Ths reversed prevous heavy subsdsed sLraLeges n whch sma enLerprse supporL agences Lypcay Lred Lo push free servces ouL Lo Lher LargeL cenLs. InsLead, L rapdy came Lo be accepLed LhaL Lhe roe of donor-funded agences shoud be Lo acL as facLaLors of Lhe markeL for servces sLmuaLng demand for a vareLy of servces among cusLomers and budng Lhe capacLy of prvaLe servce provders Lo f LhaL demand. The wdespread change n sLraLegy among donors and pracLLoners, nLernaLonay, was acheved Lhrough a vareLy of venLures and acLvLes LhaL buL momenLum and enough consensus Lo supporL a new seL of prncpes. The supporL for nnovaLng and earnng n Lhs fed s consderabe, ndcaLed by Lhe new BDS Knowedge websLe (bdsknowedge.org), whch conLans nformaLon from over T00 agences workng n 70 counLres. The nLa nvesLmenL requred Lo brng abouL such a sgnfcanL change was consderabe and nvoved sgnfcanL, co-ordnaLed and susLaned supporL from donors. Exampes of Lhs supporL ncude Lhe InLernaLona Labour 0rganzaLon (IL0) BDS semnar, whch s an mporLanL annua evenL for pracLLoners from over 90 counLres, pracLLoner earnng programmes such as Lhe SEEP programme on BDS MarkeL AssessmenL funded by USAID, and comprehensve Lranng programmes for decson makers, managers and specasLs such as Lhe Sprngfed CenLre`s nLensve summer courses LhaL have Lraned over 300 pracLLoners from 30 counLres. !nvest in processes of anaIysis and capacity buiIding Embeddng a markeL-LeraLe approach requres nvesLmenL and aocaLon of resources Lo deveop Lhe necessary sks and orenLaLon. InvesLmenL n Lhe anayLca sLage and n PMCA s mporLanL n enabng subsequenL nLervenLons Lo be more sLraLegc and LargeLed. Donor shoud encourage, raLher Lhan dscourage, programmes whch pan for and nvesL n Lhs Lype of anayss. MarkeL Leracy requres LhaL dfferenL payers n markeLs know Lher respecLve roes and commL Lhemseves Lo underLakng Lhese effecLvey. MarkeLs cannoL be buL by one organsaLon aone. Joned up workng and conssLency of approach s mporLanL. To sLmuaLe such processes more generay n Lhe rura deveopmenL secLor mghL nvove some of Lhe foowng acLvLes.
37 See 0bson, ScoLL & Ferrand, 2004 Abu & 0rffLh, 2005. Mappng The MarkeL 30 EsLabsh a supporLng framework from key donors le.g. USAID, DFID, SDC) wLh resources Lo nfuence Lhe fed CuLvaLe an denLfabe communLy of pracLce among pocy makers, donors, researchers and pracLLoners Lo neLwork nnovaLon and experence abouL markeL Leracy n Lhe agrcuLura secLor Bud Lhs communLy around a hgh-profe recognsed annua evenL (e.g. a semnar) AocaLe donor funds for acLon-research LhaL conscousy brngs LogeLher researchers and pracLLoners from around Lhe word Lo share pracLces and sLmuaLe SouLh SouLh earnng EsLabsh a dedcaLed websLe Lo coaLe knowedge, papers and arLces descrbng markeL-Leracy pracLces, pro|ecL experences and LookLs CreaLe hgh-quaLy Lranng course(s) Lo dssemnaLe knowedge among fed pracLLoners and pro|ecL managers, and esLabsh benchmarks for besL-pracLce. FinaI thoughts A conLrbuLor Lo an nLernaLona dscusson on enLerprse deveopmenL, recenLy argued LhaL "More Lhan a framework for undersLandng a markeL deveopmenL approach s abouL how we nLervene. How we puL susLanabLy aL Lhe hearL of our work. How we pursue Lhe genune sysLemc causes of weak markeL performance. How we deveop appropraLe roes for Lhe sLaLe and oLher payers. How we caLayse sysLems raLher Lhan becomng arLfca and dsLorLng parLs of Lhem. 38
Ths senLmenL s one LhaL Lhe auLhors share. The MarkeL Map s more Lhan |usL a framework for undersLandng a parLcuar markeL-chan sLuaLon. L s nLended Lo encourage markeL-Leracy n genera, and L can hep facLaLng agences deveop a shared vew of how specfc markeL sysLems coud work more effecLvey for poor peope n Lhe fuLure. IL can aso hep Le nLervenLon sLraLeges Lo Lhese shared undersLandngs. In Lhs way, Lhe MarkeL Map makes a conLrbuLon, among oLher Loos, Lo Lhe wder reevance of markeL deveopmenL approaches.
38 Aan 0bson, persona communcaLon Lo Defnng EnLerprse DeveopmenL e-dscusson n May 2005 (synLhess avaabe aL hLLp.//www.seepneLwork.org/conLenL/brary/deLa/2384 Abu & 0rffLh, 2005. Mappng The MarkeL 3T Peferences Bear M., 0bson A., HLchns R. 2003. From prncpes Lo pracLce. Len crLca chaenges for BDS markeL deveopmenL, Sma EnLerprse DeveopmenL Journa \o T4 No 4, ITD0 Pubshng, UK BerneL, T., Devaux, A., 0rLz, 0. and Thee, 0. 2005. ParLcpaLory markeL-chan approach. BeraLerInnen News T/2005, Lndau, SwLzerand, avaabe Lhrough www.sfar.ch CIAT (CenLro InLernacona de AgrcuLura Tropca) 200T. InLegraLed agro-enLerprses pro|ecL, CIAT ReporL. Ca, Coomba. CouLer, J., 0oodand, A., TaonLre, A. and SLrngfeow, R. T999. Marryng farmer cooperaLon and conLracL farmng for servce provson n a berasng Sub-Saharan Afrca. NaLura Resource PerspecLves No. 48. 0verseas DeveopmenL InsLLuLe (0DI), London, UK. 64pp Donney, R and Heberg, U. 2004. Bakans Herba DeveopmenL InLaLve Phase T Fna Summary ReporL - Serba and MonLenegro, reporL for IFC SEED pro|ecL, TradCrafL, UK Dorward, A., Pooe, N., Morrson, J., Kydd, J. and Urey, I. 2002. CrLca nkages. vehoods, markeLs and nsLLuLons`. Paper presenLed SupporLng InsLLuLon, Evovng Lvehoods semnar. Bradford CenLre for InLernaLona DeveopmenL, UnversLy of Bradford, Yorkshre, UK, May 2002. Es, F. T999. Rura vehood dversLy n deveopng counLres. evdence and pocy mpcaLons. NaLura Resource PerspecLves No. 40. 0verseas DeveopmenL InsLLuLe (0DI) London, UK. Es, F. and Harrs, N. 2004. New Lhnkng abouL urban and rura deveopmenL. KeynoLe paper for DFID SusLanabe DeveopmenL ReLreaL, UnversLy of Surrey, UK. 0bson, A., ScoLL, H. and Ferrand, D., 2004. 'Makng markeLs work for Lhe poor` an ob|ecLve and an approach for governmenLs and deveopmenL agences. ReporL for ComMark TrusL, woodmead, SouLh Afrca, 36pp 0TZ, 2003. 0ude Lo Rura Economc and EnLerprse DeveopmenL, workng Paper T.0, Eschborn, 0ermany Nov. 2003, 85pp avaabe aL www2.gLz.de/agro-based-deveopmenL Haggbade, S. and 0amser, M. T99T. A Fed Manua for SubsecLor PracLLoners, 0EMINI, washngLon, USA. HLchns, R., EoL, D. and 0bson, A. 2004. Makng busness servce markeLs work for Lhe poor n rura areas. a revew of experence, reporL for DFID. Sprngfed CenLre, Durham, UK. www.sprngfedcenLre.com IFAD, 200T. The chaenge of endng rura poverLy. Rura poverLy reporL 200T. IFAD, Rome, ILay Kapnsky, R. 2000. Spreadng Lhe gans from gobasaLon. whaL an be earned from vaue chan anayss!. IDS workng Paper No. TT0, InsLLuLe for DeveopmenL SLudes, UnversLy of Sussex, BrghLon, UK. Kapnsky, R. and Morrs, M. 2005. A handbook for vaue-chan research. InsLLuLe of DeveopmenL SLudes, UnversLy of Sussex UK Kydd, J. 2002. AgrcuLure and rura vehoods. s gobasaLon openng or bockng paLhs ouL of rura poverLy!. AgrcuLura Research and ExLenson NeLwork (AgREN) Paper No. T2T. 0verseas DeveopmenL InsLLuLe (0DI), London, UK. Kydd, J. and Dorward, A. 200T. The washngLon Consensus on poor counLry agrcuLure. anayss, prescrpLon and nsLLuLona gaps. DeveopmenL Pocy Revew, T9(4), 467-478. Lundy, M., 0oLLreL M.\., BesL R., and Ferrs S. 2005. A gude Lo deveopng parLnershps, LerrLora anayss and pannng LogeLher. Manua T n seres 'TerrLora Approach Lo rura agro-enLerprse deveopmenL`, CIAT, Coumba www.caL.cgar.org Abu & 0rffLh, 2005. Mappng The MarkeL 32 Lusby, F. and PanbuLon H. 2004. PromoLon of commercay vabe souLons Lo subsecLor and busness consLranLs, AcLon for EnLerprse, USAID 0ffce of McroenLerprse DeveopmenL, avaabe aL www.bdsknowedge.org Marn, C. 2004. The bamboo producL chan. creaLng opporLunLes for sma produces n Ecuador, n CapacLy.org newseLLer ssue 22 pp9, Juy 2004, SN\, NeLherands, avaabe from www.capacLy.org Mayoux, L. 2003. Trcke-down, Lrcke-up or pudde. parLcpaLory vaue chan anayss for pro-poor enLerprse deveopmenL, women n SusLanabe EnLerprse (wISE), avaabe aL www.enLerprse- mpacL.org.uk MehbradL, A. 200T. 0ude Lo markeL assessmenL for BDS program desgn, FIT Manua, InLernaLona Labor 0rganzaLon (IL0), washngLon DC, USA. MehbradL, A. and Mc\ay M. 2003. Deveopng Commerca MarkeLs for Busness DeveopmenL Servces a BDS Prmer, InLernaLona Labor 0rganzaLon (IL0) Sma EnLerprse DeveopmenL Program, washngLon DC, USA. avaabe aL www.bdsknowedge.com MehbradL, A. and Mc\ay, M. 2004. Deveopng markeLs for BDS. Poneerng SysLemc Approaches, InLernaLona Labor 0rganzaLon(IL0) Sma EnLerprse DeveopmenL Program, avaabe aL www.bdsknowedge.com NorLh, D.C. T990. InsLLuLons, InsLLuLona Change and Economc Performance. Cambrdge UnversLy Press. Cambrdge, UK PracLca AcLon, 2004. Deveopng neLwork brokers as suppers of BDS n weak markeLs, paper for SEEP NeLwork`s PracLLoner Learnng Programme on BDS MarkeL AssessmenL, unpubshed TradCrafL and 0xfam UK, 2003. How Lo mprove 0XFAM work n markeL-based pro|ecLs, Lranng manua, unpubshed
Abu & 0rffLh, 2005. Mappng The MarkeL 33 Annex 1 Market Mapping in the HerbaI Products sector, Kenya PracLca AcLon has been exporng Lhe appcaLon of Lhe MarkeL Map Lo creaLe knowedge and bud nkages. A pro|ecL n Lhe herba producLs secLor n Kenya s a good exampe of how L can be used. 0ontext - improving IiveIihoods of marginaIised pastoraIists PasLorasLs n NorLhern Kenya have been facng Lhe ong-Lerm eroson of Lher LradLona vehoods as a resuL of decnng vesLock prces, envronmenLa degradaLon and confcL. PracLca AcLon has been workng wLh pasLorasL communLes n Kenya for over T0 years and Lechnoogy-ed souLons were fang Lo mprove vehoods. The areas Lhey nhabL conLan poLenLay vauabe naLura resources, ncudng herba producLs showng ncreasng demand n exporL markeLs. In 2004 a pro|ecL 39
was nLaLed by PracLca AcLon, TradcrafL and Kenya 0aLsby TrusL LhaL ams Lo earn abouL approaches for successfuy nLegraLng margnazed producers nLo vabe markeL chans 40 . 1. !nitiaI mapping of the aIoe market chain The nLa mappng exercse by Lhe pro|ecL Leam hghghLed a number of chaenges and ssues aL each of Lhe Lhree eves of Lhe markeL map. i) !mproving Iinkages in the market chain The pro|ecL Leam carred ouL premnary research, whch denLfed herba producLs as a vabe and growng sub-secLor. FurLher research denLfed a producL group, aoe, as mporLanL Lo Lhe vehoods of communLes, and LhaL Lhere s growng demand on word markeLs. For Lhe frsL phase Lhe pro|ecL focused on wesL PokoL, an area LhaL characLerses Lypca aspecLs of Lhe producL secLor. The pro|ecL approach s Lo. Enabe producers (harvesLers and boers) n wesL PokoL Lo esLabsh a "MarkeL 0pporLunLy 0roup FacLaLe furLher markeL exporaLon Lo seecL Lhe mosL promsng markeL channes ConducL a ParLcpaLory MarkeL Chan Anayss (PMCA) wLh markeL acLors n Lhe seecLed channes Lo denLfy and Lacke boLLenecks and opporLunLes. Chaenges ncude. HarvesLers of aoe are dsparaLe and dsorgansed, HarvesLers have msconcepLons abouL whaL happens Lo Lher producL, Ls vaue, desLnaLon, MarkeL chan acLors are very secreLve abouL Lhe Lrade because of Lhe unresoved reguaLory ssues. ii) 0reating an enabIing business environment FacLors affecLng Lhe enabng envronmenL were denLfed by nLervewng key nformanLs (ncudng markeL chan acLors), producng a premnary anayss of Lhe oca pocy and reguaLng ssues prevenLng effecLve parLcpaLon by Lhe communLes n Lrade n aoe. In addLon research of nLernaLona Lrade ssues (reguaLons, barrers) was nLaLed. Exampes of ssues emergng from Lhe anayss. Trade resLrcLons CITES 4T requremenL on aoe exporL snce T999 has pushed Lhe Lrade "underground and consderaby reduced Lhe earnng poLenLa. A exporLs go, egay, va SouLh Afrca "hdden wLh oLher producLs. The so-caed "PresdenLa Ban, whch never acLuay became aw, has creaLed furLher confuson makng markeL chan acLors even more secreLve.
39 Funded by Ford FoundaLon and Comc Reef 40 The pro|ecL aso ncudes coasLa communLes producng neem, for earnng abouL Lhe approaches n dfferenL conLexLs. 4T CITES s Lhe IUCN ConvenLon on InLernaLona Trade n Endangered Speces of wd Fauna and Fora Abu & 0rffLh, 2005. Mappng The MarkeL 34 CorrupLon s endemc LhroughouL Lhe chan, addng cosLs and creaLng dsLorLons of power and nLeresLs e.g. boers pay brbes Lo oca chefs whch enabes Lhem Lo negoLaLe ower prces (chefs negoLaLe prces on behaf of harvesLers). Pre|udce agansL Soma Lraders causes a hgh degree of msLrusL and a ack of co-operaLon. iii) Access to better business services InLa anayss ndcaLed LhaL some embedded servces exsL n Lhe chan, for exampe. 0uaLy checkng boers have devsed a sysLem Lo LesL Lhe sap before purchase (based on L`s absorpLon), Lhey aso advse on besL harvesLng meLhods. SLorage and bukng urban Lraders buy reguary from many boers, Lakng hgher quanLLes n Lhe rany season. MarkeL nformaLon an order from Lhe exporLer Lrggers acLon n Lhe chan and nformaLon s passed down. TransporL markeL chan acLors absorb Lhe cosL of LransporL. AddLona servces acLors coud requre were aso denLfed. HarvesLer co-ordnaLon Lhe currenL arrangemenL, of reyng on Lhe oca chef, eaves Lhem vunerabe Lo expoLaLon. Technca exLenson servces Lo harvesLers e.g. susLanabe harvesLng Lechnques (Lo proLecL suppy snce Lhe source s geLLng depeLed n many areas), Advce on harvesLng meLhods Lo mprove quaLy e.g. Lechnoogy whch exLracLs sap Lhrough gravLy. Energy effcenL Lechnoogy for bong, Lo reduce fue cosLs. EnvronmenLa mpacL assessmenL s requred by oLher sLakehoders (such as Lhe governmenL envronmenL agency NEMA). CerLfcaLon by Kenya wdfe Servce (KwS) Lo geL CITES appendx II. PoLenLa for servces (assessng poLenLa demand and suppy) coud Lhen be expored durng Lhe PMCA. The MarkeL Map creaLed by Lhs nformaLon gaLherng exercse gave Lhe sLakehoders a pcLure of Lhe markeL sysLem whch Lhey coud furLher deveop n Lhe nexL sLage, PMCA. 2. Participatory Market 0hain AnaIysis Havng compeLed Lhe nLa mappng exercse Lhe Leam Lhen addressed Lhe chaenge of engagng n a parLcpaLory markeL chan anayss exercse. 0eLLng compeLng and dsparaLe markeL chan acLors Lo work LogeLher was noL under-esLmaLed. The pracLcaLes and assocaLed essons of Lhe PMCA exercse ncuded. DeveIoping trust in the aIoe market chain There s a hgh degree of msLrusL n Lhe chan. HarvesLers generay beeve LhaL boers Lake an unreasonaby hgh margn, whereas Lhe reaLy s apparenLy quLe dfferenL. The man ssue affecLng revenue and margns for acLors n Lhe chan s Lrade reguaLon (nked Lo "unsusLanabe suppy ssues). A sLraLegy Lo Lacke Lhs probem s Lo appy for cerLfcaLon of Lhe aoe (see beow), whch requres co-operaLon and co-ordnaLon. In Lhs case L s n Lhe nLeresLs of exporLers and cenLra agenLs Lo work wLh oLher acLors Lo address ssues of susLanabe harvesLng aL Lhe producLon end of Lhe chan, by for exampe, ensurng LhaL harvesLers and processors have access Lo Lhe servces Lhey need Lo produce a cerLfed hgh quaLy aoe. Abu & 0rffLh, 2005. Mappng The MarkeL 35 Engaging aIoe market chain actors: finding a 'hook' The aoe markeL mappng exercse denLfed Lwo ssues Lo aLLracL Lhe markeL chan acLors Lo parLcpaLe n Lhe process. T. Exporng Lhe poLenLa for a specfc markeL chan Lo acqure cerLfcaLon - from susLanabe harvesLng Lo accredLed exporLs. Ths nvoves a acLors from harvesLers n wesL PokoL Lo Lhe exporLer n Mombasa and a number of key sLakehoders, such as Kenya wdfe Servce who manage CITES cerLfcaLon. The "hook n Lhs case s LhaL cerLfed exporLs woud enabe drecL saes Lo fna buyers and Lherefore consderaby more vaue w fow nLo Lhe chan ($T0/kg nsLead of $2/kg pad by Lhe SouLh Afrcan buyers). ExporLers and agenLs cannoL acheve Lhs wLhouL harvesLers and boers foowng susLanabe harvesLng Lechnques. 2. 0uaLy mprovemenLs. a markeL chan acLors are affecLed by quaLy ssues, Lhough Lhere are cerLan sLages n Lhe chan where Lhey may be crLca. The processng sLage (bong) converLs sap Lo bLLers, whch s Lhe sLabe form of Lhe producL for exporL. ImprovemenLs n effcency and subsequenL ncreased revenue n Lhe chan depends on Lhs vLa sLage. PhysicaI Iimitations: the chaIIenge of a Iong distance market chain The aoe markeL chan s dsocaLed wLh acLors spread over T200 km, from remoLe NorLhern Kenya Lo Lhe coasL, so Lhe pro|ecL s addressng Lhs probem by hodng nLa parLa markeL chan parLcpaLory meeLngs beLween nLeracLng acLors. HarvesLers and boers Boers and Lraders/cenLra agenLs CenLra agenLs and exporLers. The segmenLs of Lhe markeL chan overap, so boers for exampe w nLeracL wLh boLh harvesL and urban Lraders. The nexL sLep s Lo brng as many represenLaLves from a groups n a cenLra ocaLon Lo expore souLons and nnovaLons Lo Lhe ssues Lhey have denLfed n Lher markeL chan sub-secLon. Ths ncremenLa approach aso buds up LrusL (see above). Addressing !mbaIances of Power: Preparing producers for a Aoe harvesLers beong Lo pasLorasL communLes (ofLen Lhe women and youLh) who are vng n reaLve soaLon, wLh LLe exposure Lo commerca envronmenLs. The pro|ecL s workng wLh Lhem Lo creaLe "MarkeL 0pporLunLy 0roups whch prepares Lhe harvesLers Lo engage wLh oLher markeL payers n a consLrucLve and nformed way, and n Lme, Lo be proacLve so Lhey can expore new markeL nks and respond Lo a dynamc markeL envronmenL. BaIancing externaI infIuences: AIoe interest groups As Lhe MarkeL Map usLraLes Lhe aoe markeL chan s dependenL on a arge group of sLakehoders. IL s mporLanL LhaL Lhey provde LargeLed supporL Lo markeL chan acLors, buL Lher roe shoud noL be confused wLh Lhe acLors Lhemseves (.e. Lhose n Lhe mdde secLon of Lhe map) who Lake ownershp of Lhe producL. The Aoe InLeresL 0roup has a dfferenL funcLon from Lhe MarkeL 0pporLunLy 0roup (whch s for producers). IL comprses of a wde range of oca decson makers, servce provders, research nsLLuLes, reguaLory bodes e.g. Loca Chefs, Kenya wdfe Servces, ForesL deparLmenL, as we as seecLed markeL chan acLors (boers and represenLaLves from women`s groups nvoved n harvesLng). The wesL PokoL Aoe InLeresL group nks wLh a naLona sLakehoder group Lhe Kenya workng 0roup on Medcna and AromaLc PanL Speces, whch has a specfc workng group on aoe. These groups are dsLncL from buL vLa Lo Lhe successfu aoe PMCA. 3. DeveIoping soIutions The PMCA w ead Lo a beLLer undersLandng of where bockages and consLranLs n Lhe aoe chan are so LhaL sLakehoders can |onLy deveop commercay vabe souLons. An exampe of Lhs process s Lhe nformaLon needs of Lhe aoe chan. Abu & 0rffLh, 2005. Mappng The MarkeL 36 Assessing service needs: market information in the chain MarkeL nformaLon servces n Lhe aoe markeL chan are currenLy embedded .e. each markeL-chan acLor passes down nformaLon Lo Lhe nexL. The whoe chan responds Lo orders from Lhe exporLer, aLhough Lhs becomes more dsocaLed furLher down Lhe chan and s, Lo some exLenL, "smooLhed ouL by Lhe acLors who buk and sLore. The nLa anayss ndcaLes LhaL Lhere s a need Lo mprove markeL nformaLon servces, hghghLed by Lhe exampe of a group of harvesLers who, dscoverng Lhe word markeL prce of aoe bLLers, refused Lo se Lo Lhe boers aL Lher offer prce, even Lhough n reaLy Lhe boers fnd L hard Lo make a profL. The PMCA process w facLaLe Lhe dscovery of new souLons as Lhe markeL-chan acLors consder how nformaLon can be passed down Lhe chan more accuraLey. IL w be mporLanL Lo assess demand for 'sLand aone` servces Lo sLrengLhen or compemenL Lhe embedded ones, and expore how Lhese mghL be deveoped as a commercay vabe servce. Members of Lhe wder 'InLeresL 0roup` are key sLakehoders n assessng Lhe poLenLa for deveopng markeL nformaLon servces.