Engagement and Facilitation with the Private Sector in Disaster Affected Markets Tim Stewart & Kanchan Gurung Samarth-NMDP

How far have we come? Cash is now a recognized relief and recovery instrument We have a multitude of analytical tools The recognition and rhetoric of avoidance of undermining markets & early recovery is present It’s been 10 years since Aceh…

But… Capacity is low among responding agencies – especially humanitarian agencies Pressure to deliver quickly and visibly are high (donors, government, agencies) Fall-back to the comfort zone of assessment and direct delivery If we agree that we want to avoid undermining markets, and that cash is a valuable recovery tool: What do we need to do differently?

1.Setting the intention – acknowledging the role of markets in recovery 2.Using a sound diagnostic process to assess impacted markets – evidence base 3.Facilitation with legitimate market players to recover How to avoid it

RULES SUPPORTING FUNCTIONS Transport & comms interrupted Finance is risk-averse Information & power asymmetry: vested interests Donors, INGOs & international community Trust & trust reinforcing mechanisms undermined Risk aversion Informality increases CORE MARKET SupplyDemand Regulations Trust & risk perception Inputs & Services Finance TransportInformation Rule of law INGOs/Donors /UN Ethnicity, caste, gender Fragility affected market

Our interactions and actions with market players either build or undermine markets Building or undermining?

RULES SUPPORTING FUNCTIONS CORE MARKET SupplyDemand Regulations Trust & risk perception Inputs & Services Finance TransportInformation Rule of law INGOs/Donors /UN Ethnicity, caste, gender Cash Transfers If we are providing cash, who will affected people buy inputs and services from? If we are doing and paying for these things, who will be there to do and pay for them in future? If we are not strengthening legitimate institutions, how to we expect them to function in future? Building or undermining?

Systemic intervention Recovery of livelihoods System recovery & resilience Restored access to inputs & markets Improved networks & relationships System recovery & resilience Restored access to inputs & markets Improved networks & relationships Focus on market system recovery Reduced vulnerability Systemic intervention Poverty reduction (Jobs & Income) Poverty reduction (Jobs & Income) Improved growth and access System change e.g. increased access to inputs Setting the Intention Development Recovery Direct interventions ignore the system

Focus of intervention Systemic constraints Specific market system The poor and their context Symptoms Causes Why? Feasibility CORE To fix a problem, one must first understand it In an emergency, the diagnostic process is rapid, & less rigorous But still essential & can involve market players too Diagnostic Process

Samarth is not a relief agency! But: Had an experienced, motivated and capable team for market analysis & facilitation Had well established linkages and networks with private and public sector Samarth Early Diagnosis & Engagement

What Samarth Did Selected Vegetables, Dairy and Inputs to focus on (obvious impact and role in recovery) Identified key business membership organizations to work with – Vegetables: FEVEN (veg traders) – Dairy: CDCAN (dairy cooperatives) – Inputs: PEAN (input wholesalers & retailers) Supported them with logistics and analytical capacity Presented findings to international community Brokered relationships

Outcomes BMOs used research as an advocacy piece for government & NGOs Some uptake of recommended interventions among NGOs But the recovery and response options pursued were direct, & mainly ignored & potentially undermined the private sector… How could it have been done differently?

What is facilitation? “the art of affecting change in the behaviour and performance of market players such that it is sustained and continues to adapt and respond to external influences” “an action that is external to a market system but seeks to bring about change within it, in order to achieve the public benefit objective of systemic change” “any activity that makes tasks for others easy” “the temporary actions of a facilitator to bring about system-level changes and develop market systems for the benefit of the poor”

E.g. Agricultural Inputs Objective: enable farmers to plant staple and cash crops in the monsoon Instead of: Buying seeds and inputs Conducting household surveys Distributing inputs directly to households Try: Engaging with PEAN Assisting them to understand the affect on input retailers (addressing capacity issues) Assisting them in gap analysis for things they don’t normally stock (e.g. seed storage bags) Building relationships with the CASH recovery community Fronting capital for re-stocking retailers (soft loan) This maintains legitimate relationships between farmers and input retailers.

E.g. Livestock Feed Objective: safeguard productive assets (cows and buffalo) Instead of: Buying livestock feed (urea molasses & concentrates) Conducting household surveys And distributing it to affected smallholders Try: Engaging with CDCAN Assisting them to understand the affect on supply-chain for milk (addressing capacity issues) Developing a distribution mechanism via empty milk trucks through dairy cooperatives to farmers (phasing out subsidy over time as milk supply returns) Building better management information systems to monitor (and manage milk supply in future) This maintains legitimate market relationships, and offers the potential for improved feed supply in future

Finally… Understand when you are facilitating, & when you are not: ask who else could or should be doing this? Recognise the facilitation capacity you already have, and cultivate it Develop and invest in relationships and networks with market players

Thanks! Reports are available on