Local Sourcing for Domestic FFV Markets 1. Research Objective and Findings: Objective: Enhanced small farm participation in domestic FFV markets Key Question: Is there evidence of market solutions to recent changes in domestic FFV markets? -Instability in FFV markets -Problem solving by different market actors Key Question: Does the pattern of economic growth influence the market structure and demand for FFV? -income growth for whom? -macro sources of income -urbanization and emulation 2. Feedback and Exchange: Your feedback on research findings Exchange views on the way forward ROUNDTABLE AGENDA:

Understanding Farm to Market Interface QuestionsFindings Imports? Substitution for locally available supply Small. Complements local supply -- products not grown; fills gaps in seasonal supply. Large Supermarkets? Trends elsewhere and in Africa. Interesting. Small share in overall domestic FFV supply. Sources what it can locally to meet customer needs. Impact on retail structure & competition. Problem solving? Adapt to FFV instability and market change. Most interesting. Experiments by different players in search for solutions to market problems.

Market Solutions to Problems in Domestic FFV Sector The Main Problem: How to offset the inherent instability in quantity and quality in the FFV sector? A Market Solution: Intermediate between different motivations and constraints and make a profit by satisfying both consumers and producers. Solution strategies: 1.Sourcing across agro-ecological zones 2.Vertical relationships between retail and farmers

Solutions Available to Market Players Agro- zones Market Farm Price

Market Players Solving FFV Instability in Uganda Capacities Extensive Intensive Brokers Farmers Large Supermkts manage relationships with farmers; embed services – info, finance, etc farm direct fewer the better arms length relationship search for product at low prices Organize other farmers; stabilize water to grow year round; increase productivity expand search to many agro-zones, efficient price discovery for low cost product; mix of farm & broker more now Build relationships

Local Sourcing in Domestic FFV Markets? NOW: Domestic FFV market small and competitive Aggregate demand is growing -- More FFV sold today than five years ago Exotic niche -- foreigners, Asians -- growing fast Greater product range than before -- Nakasero vendors now offer broader range than 5 years ago Open-air kiosks at busy intersections, local markets Expansion of farm to market interface -- Many more market based relationships than before Experimentation with different market solutions -- Intensive, extensive and combinations. Other characteristics of market efficiency Efficient transmitter of price Underlying marketing costs are high but probably falling due to low cost communication and improved security Marketing margins probably lowered Effects of crop-wise perishability has augmenting affect on margins Future????

Demand Features in Domestic FFV Market Period of recovery growth must be replaced by increasing productivity. Will remittance and aid flows continue? (who receives) Will export market be strong? What will replace growth in demand by foreign and Asian consumers? Will upper incomes grow rapidly? (emulation trend) Will lower and middle incomes grow rapidly?

Future of Domestic FFV Market: Driving Factors Income transition: NB: Numbers = Expenditure Elasticity

Implications of Changing Retail Structure Horizontal/Extensive Bias: Will wet markets continue to dominate retail trade? (NB: Kenya large supermarket sales of FFV, even now, are 4% or less of total retail FFV) Will FFV open air kiosks grow rapidly? Vertical/Intensive Bias: Will large supermarket grow to dominate sale of higher value FFV? Will FFV sales inside smaller supermarkets grow rapidly?

Retail structure impact on market structure Intensive Expansion Extension Expansion Wet Markets Restaurants & Large Kiosks Large Supermarkets

Making FFV Market Work Better for Small Farm Participation: Role of Local and International Support Agencies Build on dynamism already in the market Public to Private: Lack of interface between public and private on market research -reduce cost of exploratory studies -lower costs of research encourages innovation Private to Private: Build on willingness of market players to engage -lessons on effective forums where market players come together Awareness Building: Understanding how the FFV market works -profiles on effective relationship building of actors in the value chain