Market Systems Development (M4P) – A Conceptual Outline Martin Dietz Regional Workshop Bentre, Vietnam 23.9.2013
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Market Systems Development (M4P) – A Conceptual Outline
Martin Dietz
Regional Workshop
Bentre, Vietnam
23.9.2013
Market Systems and the Poor
Smallholders often know little about market demands and opportunities
They often live in inaccessible places
No access to services – technical, financial
Traders / processors find it too expensive and time consuming to work with many small suppliers
Institutions are weak not providing or enforcing rules and regulations for market actors, the environment is not condusive for doing business
Markets are often not working for the poor
Market Systems and the Poor
Due to
Limited or no access to information
Weak institutional environment
High transaction cost
Monopoly or non-competitive markets
Market relations do not establish themselves due to factors listed above
Market failures
Market Systems: Players and Functions
Infra-structure
Advisory services
Market information Financial
services
Skills and capacities
Regulations
Standards Laws
Informal rules and
norms
Supporting Functions
Rules
Core Market Function: Value Chain
Sourcing Production Marketing
M4P – Key Features of Interventions
1. Context-specific: understanding where systems are failing to serve the needs of the poor and acting to correct those failings; understand causes rather than only symptoms
2. Facilitative role: Sustainable change: catalytic role of development agent to stimulate systemic change. Facilitate creation of incentives and capacities
3. Large-scale impact: explicitly aims to reach large numbers of poor by harnessing the dynamism of the market system- seeks leverage points, co-investment and ‘crowding’ in of market players
4. Learning & Adaptability: systems are dynamic: interventions need to be Iterative process of change needs built-in learning to support flexible decision-making and seize windows of opportunity.
Steps and Elements of the M4P Approach
• Market Analysis
• Developing a strategic framework – results chains
• Develop a vision for a sustainable market system
• Take a facilitative role as development organisation
• Identify leverage points – interventions to obtain scale and impact
Steps and Elements of the M4P Approach
Market Analysis
• Developing a strategic framework – results chains
• Develop a vision for a sustainable market system
• Take a facilitative role as development organisation
• Identify leverage points – interventions to obtain scale and impact
Steps and Elements of the M4P Approach
Gain a sound understanding of the market system and the underlying reasons why poor people often fail in markets.
The analysis includes
The relevance of the sub-sector to poor people
Mapping of main actors in the sub-sector
Identification of constraints and opportunities for poor producers
A sound analysis of why markets may fail the poor
Market Analysis
Level 1:
The poor and their context
Level 2:
Specific market system
Level 3:
Systemic constraints
Level 1: Market system selection
Level 1:
The poor and their context
Level 2:
Specific market system
Level 3:
Systemic constraints
Intervention focus
Relevance to the poor?
High numbers of disadvantaged groups (as producers, employees, consumers)
Pro-.poor access or growth potential?
M4P Intervention potential
Feasibility of stimulating market systemic change
Criteria
Size
Relevance
Prospects
Considerations
agency priorities
agency capacity
feasibility
Level 2: Assessing specific market systems
Level 1:
The poor and their context
Level 2:
Specific market system
Level 3:
Systemic constraints
Intervention focus
Level 2: Assessing specific market systems
How does the market system work?
What are its key functions,
Who are the key players
What is the overall effectiveness of the market
Competitiveness
Productivity
How does the market fail the poor?
Where are potential opportunities for the poor?
Dynamics of the system
What changes have been taking place?
What are the drivers of change?
What are the opportunities for the poor in the market system?
Level 3: Identify specific systemic constraints
Identify the specific causes of underperformance
What are the reasons why market systems underperform? Assess interconnected markets
How can these impediments to performance be overcome?
Set your focus on:
Incentives of players
Capacity of players
Relationships between players
Level 1:
The poor and their context
Level 2:
Specific market system
Level 3:
Systemic constraints
Intervention focus
Four steps to designing interventions
1. Understand
Assessment of market systems
Opportunities, constraints
Why does it not work?
Who could trigger change, and how?
Four steps to designing interventions
2. Identify Collaboration Partners
Who in the market system is most able, most interested?
Who may have most incentives?
Why are they not making use of the opportunity?
What are the impediments?
Solution to the cause of constraint:
What can be the business model?
What should collaborating partners do to make it work?
What should be our role to make it work?
Four steps to designing interventions
Private interests Public interests
…is based on common interests
Four steps to designing interventions
3. Deal Making
Deal = agreement between facilitator and system actor
Defines activities that enables your partner to trigger changes in the (support) market
Specify:• Why you do this together• How you do this together• What your partner does• What you do as facilitator
Four steps to designing interventions
4. Support / Implement
Curriculum development Advise for curriculum development
Hires new staff
Trainers train extension staff
Provides trainers
Assists in training
Pays 60% of new staff for first 3 months, then 30% for 9
months, then zero
Facilitating training of trainers
Market Actor M4P Project
Steps and Elements of the M4P Approach
• Market Analysis
Developing a strategic framework – results chains
• Develop a vision for a sustainable market system
• Take a facilitative role as development organisation
• Identify leverage points – interventions to obtain scale and impact
Developing a Strategic Framework
Poverty Reduction
Improved growth
and access
Market system change
Systemic interventions
Developing a Strategic Framework
Poverty Reduction
Improved growth
and access
Market system change
Systemic intervention
The poor will benefit
Our interventions contribute to a lasting change in the market system so that poor people can increase their benefits in markets
Market system change so that poor people can make use of opportunities?
Poor people make use of market opportunities?
Steps and Elements of the M4P Approach
• Market Analysis
• Developing a strategic framework – results chains
Develop a vision for a sustainable market system • Take a facilitative role as development organisation
• Identify leverage points – interventions to obtain scale and impact
Vision for a Sustainable Market System
Infra-structure
Research &
development
InformationFinancial services
Skills and capacities
Regulations
Standards Laws
Informal rules and
norms
Supporting Functions
Rules
Supply
Setting and enforcing rules
DemandCore
Function
Informing and communicating
Govern-
ment
Informal networks
Not-for-profit
sector
Private Sector
Membership organisations
Representative bodies
Players
MediaFunctions?
Players?
Who does?
Who pays?
Key questions:
1
2
3
4
Cap
aciti
es a
nd in
cent
ives
Why (incentive)?
5
Vision for a Sustainable Market System
Functions
Players
Who does? Who pays?
CORE
RULES
SUPPORTING FUNCTIONS
Functions
Players
Who will do? Who will pay?
CORE
RULES
SUPPORTING FUNCTIONS
CURRENT SITUATION FUTURE SITUATION
Strategies how to get there
Steps and Elements of the M4P Approach
• Market Analysis
• Developing a strategic framework – results chains
• Develop a vision for a sustainable market system
Take a facilitative role as development organisation
• Identify leverage points – interventions to obtain scale and impact
Facilitating Change
The essence of facilitating change is stimulating market players to do things that they are currently not doing (or not doing well)
Stimulate changes in the market systemSeed companies train local service providers
Market-based, local service providers train poor producers
Local service providers are paid by market actors
Poverty Reduction
Improved growth
and access
Market system change
Systemic intervention
Facilitating Change
Our interventions aim at triggering changes in the market system
Encourage seed companies to provide broad technical training on vegetable cultivation to local service providers
Support companies in developing a curriculum (example)
Project may facilitate training of trainers
Work with innovators and early adopters
Poverty Reduction
Improved growth
and access
Market system change
Systemic intervention
Features of Good Facilitation
Catalysing• Initiating, motivating, linking
Light-touch
• Limited levels of support to players
• Indirect
flexible• Responsive and
opportunistic…• …but guided by strategy
…facilitative
interventions
have to be
Facilitating Change
Start small, work with few actors
Monitor closely (against results chain)
Be flexible, adapt, modify
Test the business model: do market systems changes happen?
When successful:
Make business model known (knowledge management & learning)
Support expansion (scaling up)
Facilitate crowding in
Leveraging for scale
500,000
farmers20,000
farmers2,000
farmers
Prospects for: leverage, scale and sustainability
Market 1
Vegetables
Market 2
Retailer information
Market 3
Retailer trainingSo
urc
e:
Th
e S
prin
gfie
ld C
en
tre
Value Chain / Market Systems Development
Infra-structure
Advisory services
Market information Financial
services
Skills and capacities
Regulations
Standards Laws
Informal rules and
norms
Supporting Functions
Rules
Core Market Function: Value Chain
Sourcing Production Marketing
Value Chain / Market Systems Development
Infra-structure
Advisory services
Market information Financial
services
Skills and capacities
Regulations
Standards Laws
Informal rules and
norms
Supporting Functions
Rules
Value chain approach Market systems approach
Focus on the value chain Focus on the wider market system and interconnected marketsFocus on sub-sector rather individual value chains
No explicit facilitative approach; development organisations may take market actor roles
Explicit facilitative approach
Scale often limited to specific value chains
Aims for large scale through leveraging with selected partners
No explicit focus on ensuring sustainability
Clear focus on sustainability
Take away message
Context is the starting point
Focus on causes not symptoms
Must consider power dynamics, governance systems
Project rationale – results chains
Sustainability = facilitative role of development actor
Aim for inclusiveness – poor men and women will benefit
Flexibility, adaptability is key
Related Documents
