Price Monitoring and Program Flexibility: Lessons and Challenges Dina Brick, Giulia Frontini TOPS Cash Learning Series 15 September 2015

Overview MARKit: Price monitoring experiences to date So what if markets change? Examples of program adjustments Case study from DRC: Designing for program flexibility Challenges 2

MARKit: what it is and experiences to date 3

MARKit Objectives 1. Food assistance program managers are guided to determine whether an intervention is having an adverse impact on markets, or whether external changes to the market environment call for a change in the strategy of the intervention. 2. Price analysis/monitoring is integrated into all types of food assistance programs. 3. Price data is analyzed by project managers in real time, and used to make adjustments to programs.

Why monitor prices? 5

Get Prepared Assess the Risk Gather Data Calculate Price Changes Investigate the Factors Adjust if necessary Key Question What is needed to be successful in implementation of MARKit? What is the risk that the intervention or external market forces will affect prices? How do we collect standard, comparable price data? Are prices changing? Where and how? What factor(s) is (are) causing the price changes? What is the risk of continuing the intervention? How can negative price impacts be mitigated? MARKit Includes Guidance on resources needed, advice on skills and staff time necessary Key criteria for high risk programs, and a checklist for determining risk. Commodity identification guidelines, standard metrics, enumeration processes Guidance for tracking price changes, recommended analyses for Low and High Risk programs Potential factors of price changes, price analysis tools, guiding questions for key informant interviews Adaptation guidelines to respond to market impacts

Step 1: Get Prepared Understand markets Gather information Make a resource plan Prepare team and materials Get Prepared Gather Data Calculate Price Changes Investigate the Factors Assess the Risk Adjust if necessary

Step 2: Assess the Risk Risk factors: 1. Size of intervention(s) relative to size of market: population 2. Size of intervention(s) relative to size of market: volumes 3. Potential external risk 4. Timing of intervention in seasonal calendar 5. Availability of market baseline 6. Market integration 7. Market competition 8. Households reliance on markets for food purchases HIGH RISK LOW RISK

Step 3: Gather Data Type of market# of markets to monitor Central market1-2 Local supply/ wholesale market1-2 for each “marketshed” Intervention markets3-4 for each “marketshed” “Downstream markets” (if any)1 for each “marketshed” Comparison markets (not necessary if you have good secondary data for an area, but likely you’ll need this) 1-2 for each “marketshed”

Step 4: Calculate Price Changes

11 Step 5. Investigate the factors

Niger example: seasonality 12

Turkey example: exchange rate 13

14 So…. How do we know what to do about it?

15 So…. How do we know what to do about it?

The decision to adjust Once the factors contributing to the price change are identified and analyzed: 1.Review the relationship between the intervention and the market system: What is the risk that continuing the intervention will exacerbate the price change or other market distortion? If the cause is external, can our program adjust to help mitigate the price changes? 2.Assess the risk of changing the program: food security objectives, impact on market actors, transparency, and Do No Harm. 3.Assess the feasibility of changing the program: is it worth it?

Contingency planning from the outset 17

Case Study: DRC 18

DRIVE I - Background Project Name: Displaced and Returnee Populations Invite Recovery in Eastern DRC Donors: USAID (OFDA & FFP) Scope: Non-Food-Item, Food Assistance, Cash-for-Work Duration: Phase I: May 2014–July 2015 / Phase II: Aug. 2015–July 2016 Direct beneficiaries: 13,000 HHs (78,000 individuals) Zones of intervention: 4 provinces (North & South Kivu, Katanga, Maniema) Assistance modalities: 3 rounds of vouchers, direct distribution, mixed. Phase I: – 66% of beneficiaries assisted through voucher fairs – $45 food vouchers / half a food basket calculated on a 6 persons HH – $75 NFIs vouchers / standard NFI kit 19

Strong needs, context & market assessments allow for a more tailored response to identified needs on the ground. Humanitarian Crisis & Needs Assessment Feasibility Study & Market Study Direct Distribution Cash Based Assistance (Voucher fairs) Mixed Modality 123 Modality Response Tree MONITORING

Market Tools Market Registration – Size, profile, existence of banking services, cellular coverage, etc. Market Study – Profile of vendors, capacity to meet increase in demand, prices, market integration, competition, etc. Feasibility Study – beneficiaries preferences, access to markets, perception on commodities’ availability and prices, preferred assistance modalities, perceived risks linked to cash based assistance. MARKit (price monitoring) – monitoring of key commodities before, during and after DRIVE intervention 21

22 DRIVE staff carry out food price monitoring in Lubumbashi’s Kenya market. February 2015.

Results – Kato, Katanga Province 23 RICE BEANS Summary of findings: Significant price changes for a few commodities in multiple markets (Scenario C - Seasonality, local supply shocks, global food prices, policies) As per KII results changes are linked to commodities’ low availability due to : Insecurity in the area of production (beans) Planting season (rice) Price change not attributable to DRIVE’s intervention; CRS to consider direct distributions for future activities

Achievements Large scale data collection of market price data in an emergency context Monitoring of 15 markets linked to DRIVE areas of intervention Monitoring of food commodities: beans, rice, maize, cassava, vegetable oil, palm oil and salt Monitoring of non-food-items including child clothing, taurpalins, cover, matress and jerrycan Review of tools, data collection and analysis methodology Integration of ICT4D (Information, Communication and Technologies for Development) Identification and training of market focal points for timely data collection

25 Beneficiaries receive NFIs during Kamango’s direct distribution activities, July 2015.

26 DRIVE’s voucher fairs in Katanga Province, January 2015.

Challenges Scope: multiple markets, multiple areas of intervention, NFI & food commodities DRC’s markets profiles (fair system, external vendors, etc.) Limited human and financial ressources Limited staff capacity (ex.: to carry out real time analysis to inform programmatic changes, regular price monitoring, etc.) Organization’s capacity to respond to MARKit findings and results (ex.: alter program modality mid-course, etc.) Data quality and validity Lack of existing secondary data What is good enough?

Next Steps & Lessons Learned – DRIVE II Increase financial and human resources to carry out market monitoring activities (ex.: hiring of one dedicated market staff, etc.) Continued training of DRIVE II teams on price data collection and analysis Pre-positioning of food and NFIs to ensure timely food distributions / review of internal systems and procedures for eventual modality changes mid-program Carrying out of large scale market assessment to review tools, methodology and ICT4D integration Co-facilitation of Market Working Group (Food Security Cluster) in North Kivu Province for greater information sharing Collecting cost-efficiency/ cost-effectiveness data