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PDPE economic analysis service

Technical Meeting Report Partnerships in Market Analysis for Food Security

Funded by the German Government

Johannesburg,

South Africa

11-13 December 2007

ODAN

.:: emergency needs assessment service

TECHNICAL MEETING REPORT PARTNERSHIPS IN MARKET ANALYSIS FOR FOOD SECURITY March 2008 United Nations World Food Programme Headquarters: Via C.G. Viola 68, Parco de’ Medici, 00148 Rome, Italy ODAN Emergency Needs Assessment Service Chief: Wolfgang Herbinger Tel: +39 06 6513 3123 PDPE Economic Analysis Service Chief: Henk-Jan Brinkman Tel: +39 06 6513 2062

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Table of Contents

Abbreviations & Acronyms.................................................................................................................................. 4

EXECUTIVE SUMMARY...................................................................................................... 5

A. BACKGROUND, OBJECTIVES AND OVERVIEW OF THE TECHNICAL MEETING................................................................................................................................. 6

Background ........................................................................................................................................................... 6

Objectives............................................................................................................................................................... 7

Overview ................................................................................................................................................................ 7

B. EXPERIENCE WITH DIFFERENT MARKET ANALYSIS TOOLS AND APPROACHES ........................................................................................................................ 9

Key considerations .............................................................................................................................................. 12

Essential elements in any market analysis ........................................................................................................ 13

Practical lessons/issues for market analyses ..................................................................................................... 14

Issues relating to monitoring market conditions .............................................................................................. 15

Expertise and capacity issues ............................................................................................................................. 15

Considerations relating to response options ..................................................................................................... 16

Outstanding issues/challenges ............................................................................................................................ 16

C. THE INFLUENCE OF MARKET ANALYSIS ON DECISION-MAKING............... 19

D. PARTNERSHIPS IN MARKET ANALYSIS ................................................................ 21

E. THE WAY FORWARD.................................................................................................... 23

Outstanding issues: what needs to be followed up ........................................................................................... 23

What should be done during 2008 ..................................................................................................................... 24

ANNEXES............................................................................................................................... 26 Annex 1: Technical meeting Agenda ............................................................................................................... 26 Annex 2: Participants List ................................................................................................................................ 27 Annex 3: Overview of questions to answer and tools to use for different timeframes..................................... 28 Annex 4: Characteristics and Applications of Some ‘Single’ Tools for Market Analysis ............................... 31 Annex 5: Characteristics and Applications of Composite Tools/Approaches.................................................. 36 Annex 6: Notes on some ‘single’ Market Analysis Tools presented................................................................ 38 Annex 7: Key Characteristics of the Composite Tools/Approaches presented ................................................ 41 Annex 8: Notes on the Country Cases presented ............................................................................................. 43 Annex 9: Technical meeting evaluation ........................................................................................................... 46

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Abbreviations & Acronyms CFSAM Crop and Food Supply/Security Assessment Mission (FAO & WFP) CFSVA Comprehensive Food Security and Vulnerability Analysis (WFP) CoP Community of Practice ECHO European Commission Humanitarian Aid Office EFSA Emergency Food Security Assessment EFSNA Emergency Food Security and Nutrition Assessment EMOP Emergency operation (WFP) FAO Food and Agriculture Organization of the United Nations FEWSnet Famine and Early-Warning System Network (USAID) FSM Food Security Monitoring HH Household IPP Import Parity Price MAP Market Assistance Programme NGO Non-Governmental Organization ODAN * Emergency Needs Assessment Service (WFP) ODAV * Vulnerability Analysis and Mapping Branch (WFP) PDPE Economic Analysis Service (WFP) PRRO Protracted Relief and Recovery Operation (WFP) RAO Regional Assessment Officer (WFP) SADC Southern Africa Development Community SENAC Strengthening Emergency Needs Assessment Capacities project (WFP) ToT Terms of Trade USAID United States Agency for International Development VAM Vulnerability Analysis and Mapping WFP World Food Programme * Since the technical meeting, ODAN and ODAV have been merged into the WFP “Food Security Analysis Service”.

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Executive summary Market analysis has been recognized as an important component of food security analysis by all humanitarian stakeholders. In the recent past, WFP has developed and tested in the field a number of tools to analyse markets. CARE is currently testing its decision-making framework and Oxfam is developing a Market Tool(kit) for rapid onset emergency.

The Johannesburg technical meeting, the third in the series organized by WFP, focused on ways to improve “Partnerships in Market Analysis for Food Security”. It was funded by the German government. The meeting was attended by 17 WFP staff (from headquarters and field offices), 20 staff from other UN agencies, donors, NGOs and academic institutions and one government official. The specific objectives of the meeting were to:

1. Present and discuss lessons learned: • on the development, operationalization and application of market analysis tools; • on processes that worked and how decisions were influenced; and • on required capacities and skills;

2. Develop an overview on planned research, field work and capacity building; 3. Identify potential partnerships; and 4. Develop a roster of practitioners.

A range of “single” market analysis tools and “composite” tools or “approaches” were presented and discussed (see Panel 1). Many issues were discussed and practical suggestions agreed, as summarized in sections B, C and D. A number of outstanding issues requiring follow up were identified, as summarized at the end of section B and in section E. Specific conclusions for action in 2008 are to:

Action Responsibility

• Develop virtual connectivity; WFP

• Further develop the matrices in annexes 3 to 5 summarizing the characteristics and use of the various tools and approaches;

WFP & special working group

• Agree on a common analytical framework;

• Further develop tools for use by generalists as well as tools for specialists/economists;

• Provide orientation briefings for decision-makers;

• Establish a joint calendar for market-related assessments and training;

• Invite participation from other agencies in training and assessments;

• Use “champions” within each organization to gain acceptance;

• Develop in-country networks to collect and share information; and

All

(CARE, Catholic Relief Services, ECHO, FAO,

FEWSnet, Michigan State

University, Oxfam, RHVP, USAID, World Vision, World

Bank and WFP)

• Investigate the possibility of organizing a follow-up annual meeting. WFP

The following additional recommendations were agreed for follow up within WFP: include market analysis in the list of aspects that the Programme Review Committee (PRC) assesses when examining project proposals, including EMOPs and PRROs; organize market analysis training targeting WFP country offices but also including NGOs and government staff; organize regional training of trainers, then country-level training of trainers, building on the SENAC experience; and prepare guidance on how to develop and use an analysis plan.

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A. Background, objectives and overview of the technical meeting Background Market analysis has, in the last few years, been recognized as an important component of food security analysis. In 2005 and 2006, WFP prepared a number of country market profiles and commissioned market related-studies in the context of the SENAC project, a comprehensive effort to strengthen emergency food security assessments.1 At the same time, other agencies and institutions were also working on market-related issues and initiatives. In March 2006, WFP (ODAN and ODAV) organized a technical meeting on “Markets and Needs Assessment” in Cairo, bringing together staff from WFP and other partners, including donors. That technical meeting fostered a common understanding of the purpose of market assessment/analytical work and the next steps required to further consolidate and mainstream that knowledge. It concluded that:

”…A remaining challenge will be to integrate this market work, along with other dimensions of food security (nutrition, gender, etc.), into more comprehensive assessment and analytical tools.”2

Building on the Cairo conclusions and insights from additional market studies and desk reviews, a second markets technical meeting was organized by WFP (ODAN and Economic Analysis Service, PDPE) in Subiaco, Italy, in January 2007 to identify and agree on: key market indicators; practical ways to integrate market analysis into food security assessments; baselines and monitoring systems; and priority market-related activities for 2007. That technical meeting highlighted the importance of market analysis for decision-making in relation to response options, food aid, targeting, local procurement possibilities and minimizing possible adverse effects of food aid.3

During 2007, WFP developed a number of market analysis tools and applied them in a number of assessments. WFP also increasingly integrated market into assessments and baselines. WFP has also been revising its guidelines for assessments and strengthening the market analysis components in them. For example, the revised guidelines for the FAO/WFP Crop and Food Security Assessment Mission were to be released in 2008.

Several partners, particularly NGOs, have also been increasingly recognizing the importance of market analysis and have developed tools or decision frameworks to inform decision makers. At the time of the workshop, CARE was testing its decision framework and Oxfam was finalizing the design of its toolkit.

The Johannesburg technical meeting, the third in the series organized by WFP, focused on ways to improve “Partnerships in Market Analysis for Food Security”. It was funded by the German government.

1 SENAC is the “Strengthening Emergency Needs Assessment Capacity” project managed by the WFP Emergency Needs Assessment Service (ODAN) in collaboration with the Vulnerability Analysis and Mapping Branch (ODAV). The “role of markets in emergencies and the effect of food aid on markets” is one of the five key themes of that project. SENAC is largely funded by the European Commission Humanitarian Aid Office (ECHO). The German government supports capacity building activities. For details of the SENAC project, see http://www.wfp.org/operations/Emergency_needs/index.asp?section=5&sub_section=6#senac 2 Cairo Markets Workshop report, p. 24. 3 WFP/ODAN-PDPE, “Food Security and Markets”, Technical Meeting Report, Subiaco, Italy, 10-12 January 2007.

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Objectives The overall goal is to improve food security interventions through market analysis. The specific objectives of the Johannesburg technical meeting were to:

1. Present and discuss lessons learned: • on the development, operationalization and application of market analysis

tools; • on processes that worked and how decisions were influenced; and • on required capacities and skills;

2. Develop an overview on planned research, field work, and capacity building; 3. Identify potential partnerships; and 4. Develop a roster of practitioners.

Overview The technical meeting was attended by 17 WFP staff (from headquarters and field offices), 20 staff from NGOs, academic institutions and donors, and one government official (Mozambique). The agenda, including adjustments made during the technical meeting, is in Annex 1. The list of participants is in Annex 2. Participants’ expectations, expressed during initial introductions, included networking, sharing, learning and collaborating with an emphasis on the need to be practical and realistic. The end-of-technical meeting evaluations indicated a high level of satisfaction – see Annex 9.

Day-1 focussed on Operationalizing Tools to discuss experience and lessons-learned in the development and use of different market analysis tools and approaches. Presentations and plenary discussions covered: 7 WFP tools and their application in different countries; Oxfam’s new, soon-to-be-piloted market tool for rapid-onset assessments; CARE’s Decision Tree Framework and its initial testing in Ethiopia and Malawi; the USAID Bellmon analysis; and the USAID-CARE experience with a Market Assistance Programme (MAP) in Zimbabwe.

Day-2 focussed on Influence on Decision-Making to discuss the extent to which market analyses have, or have not, influenced decision-making on response to food insecurity and the lessons-learned. Presentations and plenary discussions covered: a WFP-FAO assessment (CFSAM) in Zimbabwe and a WFP-partners assessment (EFSNA) in Darfur both of which had been undertaken to determine food security needs and responses; a WFP assessment in Malawi to determine where cash or food responses would be most appropriate; a WFP assessment in Georgia to determine the appropriateness and likely cost-effectiveness of a cash response as part of a phasing-out strategy; a pilot effort to monitor food basket costs in Mauritania; a FEWSNet wheat trader survey in Afghanistan (that also had to consider the situation in neighbouring countries); the Mozambique market information system; WFP experience in assessment and market analysis in Uganda; and the monitoring of informal trade.

Day-3 focussed on Partnerships and the Way Forward. Presentations and plenary discussions covered: World Bank-WFP market analyses in Ethiopia and Central America; and an FAO analysis of the role of markets, including cross-border markets, in the food security crisis in Niger.

The separate sub-group continued the development of a matrix summarizing the contexts in which different tools and approaches could be appropriate.

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Although the theme was different for each of the three days, many of the individual presentations and plenary discussions raised issues related to two or even all of the themes. This summary report attempts to synthesize the points made and the conclusions reached in relation to each of the themes. It is not a report of the ‘proceedings’ of the technical meeting and does not follow the sequence of the presentations and discussions during the three days. Brief details of some of the presentations and related discussions are in Annexes 6 and 7. All the presentations can be found at: http://vam.wfp.org/market_analysis_workshop/.

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http://vam.wfp.org/market_analysis_workshop/

B. Experience with different market analysis tools and approaches “It is better to be vaguely right, than precisely wrong!”

Henk-Jan Brinkman, WFP

“We need to answer: what is nice to know, what is it that we need to know? Bob Bell, CARE

“The balance between detailed analysis and the shortness of the bulletin to get it read is crucial.”

Phumzile Mdladla, FEWSnet

It was recognized that a distinction had to be made between “single” market analysis tools and “composite” tools or “approaches” as summarized in Panel 1.

• The tools presented by WFP are single tools for analysing particular aspects.4 Several would be used together in any overall market analysis. Some require considerable expertise. Others are intended to be usable by generalists but a specialist would probably be required to help design the assessment and analyse the data. A framework is needed to help determine which tools would be appropriate to use in a given context.

• Oxfam’s is an approach, or toolkit, that combines a number of different elements, some of which are equivalent to some of the WFP tools, to inform programme response decisions. The 3-step process considers, and can be used for, both food and other food-security-related markets. It is intended for rapid response and is to be pilot-tested and refined. It will be streamlined to enable it to be used in a short time period.

• CARE’s Decision Tree (DT) framework is intended to assist CARE country offices in identifying the most appropriate aid response and to anticipate possible impacts of various food security interventions on local markets and communities. Recognizing that many of its country offices are constrained to delivering one resource type, CARE also believes the Decision Tree framework’s market assessments can support advocacy with donors for greater resource flexibility. A variety of tools appropriate to the local context are included to answer two core questions: Are local food markets functioning well? If not, is there sufficient food available nearby to fill the gap? CARE is working to identify core aspects of market assessments in different contexts to improve the usability of the Decision Tree framework. CARE hopes the framework will be useful to the whole food-security community.

• USAID’s Bellmon analysis is a composite approach to address two specific questions relating to the provision of food aid: Are adequate storage facilities available to prevent spoilage and waste of food aid commodities? Would the distribution of food aid commodities result in a substantial disincentive to or interference with domestic production or marketing in the recipient country? Various market-related analyses are undertaken to address the second question. USAID recognizes that the current guidelines are old (1985) and need up-dating.

4 The WFP tools are available on the WFP Market and Economic Analysis website that is being developed progressively: http://home.wfp.org/organisation/divisions/pd/pdp/index.asp#pdpe

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Panel 1

“Single” and “Composite” Tools/Approaches

Composite tools/approaches

Single tools

Oxfam market analysis tool(kit) for rapid response

CARE decision tree framework

USAID Bellmon analysis

Zambia (partial equilibrium supply-demand) model

Tools listed by WFP on day-1: • elasticities • shock-response

scenarios • import parity

prices • terms of trade • market

integration • response options

Other tools used in case studies presented day-2: • market

functioning & access indices

• alpha value • food basket costs

Others listed by the special working group, some of which are being developed by WFP: • marketing margins • price forecasting • inter-temporal

price analysis • food aid impact • initial assessment

scenario

Panel 2 summarizes some of the key elements of the country case studies presented and the main lessons learned. Annex 4-8 summarizes some key elements of the tools presented on day-1 and in the country case studies. The following paragraphs summarize some of the key points that emerged from the discussions in relation to the different tools.

Panel 2 Country case studies presented and main lessons

Country Nature and main purpose of the activity

Tools/approaches presented

[and others used] Main lessons

Darfur (Sudan)

Market analysis, as part of an EFSNA, including an estimate food aid sales + impact on markets, and determine appropriate responses (4 weeks + 3 for analysis)

Import Parity Price (IPP) Response options (functioning of and access to markets) [Terms of trade] [Market integration]

+ve: Powerful tools; use directly linked with programme needs –ve: data lacking/of poor quality; time constraints; assumptions involved in IPP; pressure for cash responses

Malawi Market/cash assessment as part of an EFSA to determine whether a cash response would be appropriate (3 weeks)

Market functioning index (including HH dependence on markets) Cost-efficiency of food vs cash distributions [Trader survey] [IPP] [Market integration] [Price prediction]

+ve: identified cash-possible areas; integrated into household survey & easy to replicate; household perspectives on markets; importance of local market analysis –ve: difficult to measure supply elasticities, combine different levels of analysis, extrapolate to wider areas; the tools did not perform well, especially price predictions, and the simple market functioning tool; the trader survey did not give good information on market functioning

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Georgia Stand-alone market analysis to determine whether cash transfers might be part of a WFP phasing-out strategy

Market integration Alpha value [Import Parity Price]

+ve: market integration tool gave valuable insights; price data need to be collected regularly –ve: limited data availability; market structure & food availability require additional investigation –ve: α-value not presently account for fixed costs and may be misleading

Mauritania Piloting of a cost-of-food-basket tool in conjunction with a household food consumption survey

Cost-of-food-basket +ve: potentially useful tool –ve: surveys expensive; not clear whether/how food frequency correlates with food intake

Zimbabwe Market analysis as part of a CFSAM to assess food availability and access

Macro-economic situation, imports, prices, wage rates

Price trend data meaningless in situation of hyper inflation and regulated markets. Analysis of imports and commodity flows within the country difficult due to lack of data.

Afghani-stan

Regional wheat market survey to inform decisions on responses

Trader survey Pakistan wheat sub-sector review [Rapid assessments]

+ve: lots of information through varied approaches; assessments can be inexpensive using flexible methods; process can build partnerships; patience is key –ve: security/instability constraints limit coverage and depth; limited local technical capacity; building networks takes time; difficult to get data from neighbouring countries where have no presence

Mozambi-que

Market monitoring and information dissemination

Weekly reporting and bulletin

+ve: meetings with market actors increase mutual understanding; information used by traders and producers –ve: limited budgets; inadequate training and supervision of field personnel; poor communications; difficult to manage for a large number of dispersed districts

Uganda Market analysis (as part of an EFSA) and food security monitoring

Trader survey Trader focus group tool

+ve: analysis informed decision-making & allayed criticism of food response –ve: lengthy tool; lack of sub-office staff interest Time needed for field testing (adapting to supply chain, seasonal calendar and local measures) and training in concepts and techniques Need to coordinate visits with market days and separate transport from household survey team

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Southern Africa

Monitoring informal/ unregistered cross-border flows

Physical counts of numbers of people and sacks

+ve: valuable information, improves understanding of flows and food balance sheet estimates –ve: funding to sustain the activity

Ethiopia & Central America

Market analysis to understand price rises and inform decisions on response measures

Analysis of aggregate supply, demand and price trends Elasticities “Zambia model”

+ve: demonstrated that price rises due to economic factors not market manipulation –ve: uncertainty of supplies Importance of looking at real prices, broad trends (not short-term fluctuations) and what is driving prices, and looking separately at areas where markets are, and are not, integrated

Niger Retrospective analysis of the causes of the food security crisis in 2005

The importance of regional analysis where markets are integrated across borders, and understanding the impact of price changes on households including taking account of the impact of debt on effective demand

Key considerations • Response-neutrality: the need is for an “honest-broker” analysis – an inclusive process

that is not biased towards any particular response options but takes account of constraints and leads to options for follow up by different agencies according to their possibilities. (It was recognized that some agencies have a limited range of response options available to them and that their own assessments are likely to be biased towards what they can do). Moreover, it was suggested that data (including spreadsheets) should be shared to enhance transparency and credibility and enable other parties to do their own analysis.

• Integration: market analysis should be integrated as part of a broader food security assessment, whenever possible. However, it can be difficult to combine household and trader surveys (as found in Malawi).

• Trade-offs and phasing: the trade-offs among rigour, practicality and speed need to be carefully considered and balanced. A good approach may be: (i) a first phase examining the broad picture; and (ii) a second phase going into detail. It was noted that donors fund projects but not assessments and the preparation of projects: an initial project might include provision for a detailed assessment and analysis.

• Context: the analysis must be designed, and tools selected, to fit the context including the type and stage of the emergency and the timeframe within which information is required by decision-makers. Three main contexts were distinguished: a sudden-onset emergency (few relevant data are likely to be available); the early stages of slow-onset crisis (data should be available including patterns and trends); the re-assessment of an ongoing, chronic emergency situation. Some also wanted to distinguish a complex emergency, where insecurity and violence is prevalent.

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• Pre-crisis baseline: an understanding of the pre-crisis situation is essential. Good, in-depth market analyses should be undertaken (and kept up to date, as a part of preparedness) in countries where crises may be anticipated.

• Demand considerations: any analysis of markets needs to be complemented by an analysis of households’ demand, i.e. purchasing power.

• Disaggregation: disaggregated data and analysis are needed of markets in distinct, not-well-integrated geographic areas, e.g. Darfur distinct from the rest of Sudan.

• Monitoring: key market indicators – including but not limited to prices – should be monitored on a regular basis to enable responses to be adapted, when needed, and reduce the need for re-assessments.

• Retrospective analysis: to be able to judge the value of market analyses, retrospective analyses are needed of: (i) the quality of the analysis; and (ii) whether and how the findings were used. It was noted that WFP-ODAN is planning to undertake some retrospective analyses of EFSAs.

• Government ownership: the government must be convinced of the conclusions and recommendations arising from the analysis; for that, the government should be involved in the analytical process.

Essential elements in any market analysis It was agreed that the following would be essential in any market analysis:

• an understanding of the national policy environment (many constraints are government related and can only be addressed through government action); unofficial policies (e.g., road tolls etc.) also need to be considered;

• a food supply (value) chain analysis to identify the key markets and market actors for different geographic areas, and transaction costs, margins and bottlenecks;

• an analysis of prices – both nominal and real prices – including trends, seasonal fluctuations, forecasts, comparison of local prices with import party prices (IPP), and a determination of what is driving food prices – whether simply general inflation (in line with the consumer price index, CPI) or other factors (such as wage rates for example);

• an analysis of market integration and market functioning including food flows. However, some refinement of the WFP market functioning tool used in Darfur and Malawi may be required (especially the market reliability element and whether to use the mean or some other standard to compare markets);

• an analysis of seasonal variations in trading patterns (as well as food consumption, crop production and household income) using a seasonal calendar; and

• in most cases, a trader survey to collect data on prices, traded volumes, stocks and traders’ perceptions/ forecasts using a mixture of open-ended and closed questions.

It was suggested that:

• a conceptual framework is needed to understand and explain how markets impact on food security and to inform the development of an analysis plan and the selection of the tools to be used, for each situation (the WFP EFSA framework, which combines the UNICEF nutrition framework with livelihood elements, may be useful in this context);

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• analysis should not be limited to cereals/staples but also include other foods especially where there are nutritional (including micronutrient) concerns;

• the focus should be on food markets and closely-related markets and that care is needed not to expand market analyses too much (however, some other markets are critical for livelihoods and at least basic information about them is required: in Darfur, the analysis included millet, sorghum, livestock, wage rates, charcoal prices, and the trading in food aid ration commodities); and

• the most important information for initial assessments during the first days following a sudden-onset emergency may be the extent of physical damage to infrastructure and traders’ access to credit.

Practical lessons/issues for market analyses • Use of secondary data: a lot of data exist in many situations. Effective use must be made

of those data and primary data collection should focus on the additional information that is really needed. That need may be limited in some cases.

• Timing: market assessments should preferably be undertaken at a time when markets are active. (The market analysis conducted by WFP in Malawi in 2007 was part of an EFSA done during the main harvest and it was difficult to draw conclusions because only limited volumes of maize were being traded and prices were at a seasonal low.)

• Time needed: the time needed for a thorough market assessment should not be under-estimated. (As an example, a recent WFP assessment in Guinea Bissau with 9 people took 1 week preparation plus 5-6 weeks in the field.) Time may be saved by having separate teams working simultaneously in the capital and in the field, or by relying on carefully-selected key informants rather than survey teams.

• When and how to talk with traders: need to get a general picture before talking with traders individually or in groups. Individual interviews are needed to get detailed information. Different experiences with trader focus groups were described: they had been found to be useful by WFP in Uganda especially to get information on the overall context and identify key actors to follow up with; interviews with traders helped CARE better understand market activities, supply chains, competition, and constraints but eliciting marginal cost information was challenging.

• Elasticities: elasticities are different for different livelihood groups but reliable data (estimates) are often not available even for aggregate elasticities. It was proposed that, where data are not available, analysts should use guesstimates based on known standard patterns and, taking account of seasonal variations, make projections using high- and low-range figures and examine the difference in the results, e.g. do a crude sensitivity analysis.

• Grains, flour and milling: in some situations it may be important to look at the flows –especially the imports – of grain and flour separately and consider the implications for local milling capacities. In Afghanistan this was found not be an important issue. In Darfur it was concluded that cash transfers would not be appropriate in place of food but that cash might be provided to cover milling costs.

• Measurement units: care is needed when different units are used in different areas and markets (e.g. in Malawi and Darfur). It is important to check what units are being used by informants.

• Data reliability: the reliability of price data may be questionable in some/many cases.

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• Informal community-level markets: information on informal markets within communities may be captured in household food security surveys and community-level interviews.

Issues relating to monitoring market conditions • Regional/cross-border dimension: markets are often integrated across borders and the

analysis and monitoring of market conditions in neighbouring countries can be critical (as in Niger, Afghanistan and Malawi). Monitoring informal/unregistered cross-border flows (as in Southern Africa) can provide important information on the scale of movements and changes in flows even if the data are incomplete, but funding for such monitoring in the long term is a problem.

• How long to continue monitoring: the 2005 evaluation of the cross-border monitoring project in Southern Africa had highlighted the need for extended monitoring before lessons could be drawn. FEWSnet suggested a minimum of 5 years of relative stability.

• Means of dissemination: regular bulletins (e.g. the weekly “Quente-Quente” bulletin in Mozambique) are valuable but websites can also be useful. Graphs can be a useful way of communicating trends especially to non-specialist decision-makers. A balance is needed between detail and conciseness (decision-makers will not read more than a few pages).

• Target information/bulletins to specific users: need to be clear on the intended audience – e.g. producers, traders and/or government economists in Mozambique – and tailor the presentation and the level of detail and analysis accordingly.

• Training and motivation of out-posted staff: staff in sub-offices who are expected to collect monitoring data must understand the reason and the importance of the information. They should be motivated and supervised, recognizing the potential for a conflict of interests when their jobs and local reputation depend on the continuing delivery of food aid.

Expertise and capacity issues • Generalists and market specialists: although some tools are intended for use by

generalists many need market specialist skills and any market assessment and analysis needs a specialist to help with the planning and the data analysis. Ideally, a market specialist should be present throughout the process (recommendation from Malawi). When considering the needs in a particular case, one of the working groups suggested that three aspects should be taken into account:

o Timeliness is a priority: generalists who know the country can save time – but need to be trained by a specialist;

o Data availability: specialists permit in-depth analysis of available data but may provide little added value if data are sparse;

o Complexity of the situation: the more complex the situation, the more expertise is needed.

• Capacity is limited: at present, agencies and partner institutions have limited capacity to undertake detailed market analyses. This can limit the type and range of tools used.

• Capacity building is needed but difficult: CRS highlighted the problem of internal capacity building due to high staff turnover rates, and suggested that organizations may need to bring in people with the necessary skills rather than trying to train existing staff. Another suggestion was to include donors in training events to help them understand the need for market analyses and fund market-related proposals.

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Considerations relating to response options • Clarity on objectives: need to be clear whether the aim is just to protect markets or also to

improve markets. (E.g. the “build-it-back-better” approach and WFP-Gates Foundation “purchase-for-progress” initiative).

• Long-term perspective: need to analyse and select response options taking account of their long-term implications.

• Time lags and flexibility: there is often a time lag between the assessment and the implementation of an intervention and the situation may change in the meantime. Moreover, the situation can change during implementation. There is need for flexibility to adapt the (planned) intervention both before and during implementation. Too often, programmes simply proceed as originally planned!

• Market support options: analyses should identify constraints on markets and consider possibilities of interventions to, for example, reduce transaction costs or increase transporters’ capacities (e.g. by leasing trucks or arranging credit through banks).

• Market assistance: the USAID-supported Market Assistance Programme (MAP) implemented by CARE in Zimbabwe had made a second-choice cereal (sorghum) available through the market (especially in urban areas). It had improved the market and re-created a market for sorghum that had existed previously. It was self-targeting to the less-well-off and there were nutritional benefits as sorghum is more nutritious than maize. There is a need to balance people’s needs and market risks. The price is crucial.

• Transparency: transparency in response planning is essential; keep traders informed but avoid being manipulated by them.

• Price monitoring: prices should be monitored closely before and after transfers are made.

Outstanding issues/challenges • What is core? There is need to distinguish in each situation what we need to know and

what is (only) nice to know. Need to define a core set of information that is needed – and tools that should be used – in all situations, and other, additional items that should be added when feasible and depending on the context.

• Developing an analysis plan: in order to determine what data to collect, and to ensure that market and household data can be linked, which proved difficult in Malawi, it was suggested that:

o an overall analysis plan should be developed at the outset defining how to analyse and integrate macro elements (e.g. IPP and market integration analyses), meso elements (e.g. market functioning analysis), and micro elements (e.g. households food security analyses);

o the catchment areas of markets should be defined – the areas from which households buy; and

o the coding of market data recording sheets should be linked to that of the community and household questionnaires.

Specific guidance on developing an analysis plan would be useful.

• Combining the collection of market and household data: market data is best collected on market days but, in Uganda, this was often not possible when travelling with household

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survey teams. It was suggested that market teams need separate transport. More guidance is needed on combining market and household surveys.

• What level of detail and precision? It was suggested that the level of detail should depend on the expected level of assistance compared to the total food availability in the country or area concerned. For example: if the expected intervention accounts for 1% of availability, market analysis may not be required; if it is >10% of availability, an in-depth analysis may be required. Guidance is required on appropriate levels of detail and precision.

• Adapting the tools and approaches to a conflict/insecure environment: insecurity was the main issue in Darfur, for example, overshadowing consideration of other disincentives. Need to examine the links between prices and insecurity: food prices may rise because insecurity increases transaction costs or fall because the market collapses. Oxfam is doing some work on livelihoods in conflict situations that could be relevant. It was suggested that consideration also be given to defining a few key items on which security officers, who are often the first on the scene, might be able to collect data.

• Understanding how markets recover: needs retrospective studies. (The only study known is the 5-week WFP study in Guinea-Bissau that looked at cashew nut and rice markets).

• How to define, assess and classify market functioning? It was noted that WFP and CARE define “functioning” differently – CARE includes market access, WFP does consider market access seperately – and more work is needed to refine the way in which the proposed market functioning and access indices are used (including whether/when the analysis should be in relation to the mean or another standard).

• Whether and how to use the alpha value tool: (comparing the costs of delivering food aid with local market prices)? This tool had been used in Georgia but the validity of the conclusions is questionable as fixed costs for food aid deliveries are not taken into account.

• Whether and how to use a cost-efficiency tool: (comparing the costs of food and cash transfers)? This tool had been tried in Malawi but it is difficult to take account of fixed costs and the multiplier effects of cash transfers.

• When and how to use the cost-of-food-basket as a monitoring tool, in parallel with the food consumption survey data, to determine how many people may no longer be able to afford the cost of an adequate food basket – how many may fall from adequate to borderline to poor consumption – as tried in Mauritania. (It was emphasized that non-food needs have to be taken into account when examining consumption data).

Group discussions at the end of the first day addressed two sets of questions:

(i) How user-friendly are the tools? How easy is it to apply them in practice? How easy is it to interpret the findings and generate specific recommendations based on them?

(ii) What are the strengths and weaknesses of the various tools and approaches? What’s covered by, needs to be brought together in, or is missing from the existing tools?

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The conclusions of the working groups are summarized in Panel 3. Panel 3

Summary conclusions of working groups on operationalizing market analysis tools

Strengths • Openness among the partners present and a willingness to share methodologies, results and analyses. • The tendency towards convergence of overall basic frameworks (but a typology is needed for different

type of crisis and details of analytical methods need further discussion). • The interest in market analysis within the humanitarian community. • The potential for cross-fertilization.

Weaknesses Challenges

• More testing of the tools is needed. How to roll out is not addressed.

• Not clear when and where the different single (WFP) tools would be used, or at what frequency, or which require a specialist and which are suitable for trained generalists. Tailoring of the tools is needed.

• Frameworks are context specific and lack a division of labour (among partners).

• Excessive data requirements for some of the tools (especially for the composite tools), while resources for assessment are often inadequate.

• No guidance on the accuracy and precision required.

• Not clear how to use some of the tools in recovery or conflict contexts.

• Household coping capacities and dependence on markets are in some tools missing.

• No market analysis guidance for programme implementation and M&E.

• Data availability and quality (both poor). • Time, capacity. • Managers’ lack of awareness of the usefulness

of market analyses (resistance/lack of motivation of some field staff).

• Defining which tools to use when, and ensuring an analysis plan.

• Drawing conclusions for programming. • Making results understandable and credible/

convincing for decision-makers. • Broadening the analysis to include livestock. • Integrating market analysis into existing

processes such as VACs. • Involving governments; making tools

compatible with gov’t assessment approaches. • Developing partnerships and avoiding

duplication. • Getting the balance right between simplicity

and sophistication.

Opportunities • Build on existing cooperation to organize joint piloting and joint assessments. • Increased participation of Governments.

The special working group on tools and approaches prepared preliminary drafts for: (i) a table outlining the questions that markets analyses should seek to answer and the tools that would be appropriate in different time frames – see Annex 3; and (ii) detailed tables summarizing the characteristics and potential uses of 12 different ‘single’ tools and 4 ‘composite’ approaches – see Annexes 4 and 5.

Discussions of the feed back from the special working group highlighted the need to distinguish “tools” and “indicators” and the importance of defining what data should be available and used during “initial” assessments (notably transport constraints including transporters’ access to credit). It was also suggested that it might be useful if the matrix could be adjusted to match the programme planning cycle, and that monitoring and baseline columns should be added.

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C. The Influence of Market Analysis on Decision-Making “There is always room to intervene but understanding what is driving food prices can help

better determine the right intervention.” Paul Dorosh, World Bank

“The issue is not only to ‘get-it-right’ but also how the message was conveyed…” Patricia Bonnard, FEWSnet

The aim of market analysis is to provide evidence-based support to decision-making on response. Understanding markets should lead to better designed social transfers. However, it was felt that, until now, the link to decisions has been weak and the relevance and value of market analyses insufficiently understood by emergency programme decision-makers. But some examples were provided where analysis has influenced decisions:

• In Darfur, in 2005, the analyses of prices and market functioning led to a change in WFP rations. (Large quantities of food had been distributed in 2004 with the deliberate aim of increasing availability and reducing prices). In 2007, market analysis indicated that large-scale replacement of food aid with cash transfers in Darfur was not an option. Cash - complementing food - to prevent food aid sales to cover milling costs and repay debts was considered as a pilot.

• In Burundi, the Bellmon analysis completed in 2005 recommended against the provision of vegetable oil because the government was investing in rehabilitating the palm oil industry.

• In Georgia, the analysis of market integration and flows (imports) showed cash transfers to be appropriate.

• In Afghanistan, WFP rations and the sourcing of the food were reported to have been adjusted in the light of the findings of the FEWSnet market survey as a simple food gap assessment was recognized to be inadequate.

• In Ethiopia, the analysis of market conditions and the causes of food price rises may have helped dissuade the government from imposing (additional) restrictions on traders.

There are also examples of where the absence of an adequate market analysis clearly led to inappropriate decisions. In Sri Lanka, for example, cash-for-work programmes following the tsunami led to a doubling of wage rates and farmers, who could not hire labour, replaced labour by tractors!

Suggestions for reinforcing links with decision-making included the following:

• a constant exchange between food security specialists and market specialists to focus the analysis;

• government and agency programme staff should be involved in the assessment and analysis process to assure the link with decision-making; and

• advocacy to influence government policies (not done in the Darfur EFSNA).

The conclusions of the working groups are summarized in Panel 4. It was also suggested that:

• It is important to determine who the decision-makers are and who influences them. It may be more important (and effective) to explain findings to the key advisers of decision-makers in one-on-one discussions than to try to present recommendations directly to the decision-makers themselves;

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• Avoiding bad decisions can be as important as promoting good decisions (e.g. convincing the Government of Ethiopia that it would not be appropriate to restrict traders’ activities in an effort to control price rises);

• Having good data does not necessarily lead to good market analysis; and

• Ideally, a market specialist should be involved not only in the design and implementation of the market analysis but also in the subsequent programming and evaluation processes.

It was noted in passing that pilot projects need to be closely monitored and should lead to specific recommendations including how, when and where to scale up (if scaling up were found to be feasible and appropriate).

Group discussions at the end of second the day addressed the following questions: What seem to be the crucial factors that determine whether the findings and recommendations from market analyses actually influence decisions? Where market analysis findings and recommendations were not taken into account in decisions, what other tools, analyses or presentations might have had more influence? A separate sub-group met to continue the discussion of which tools and approaches could be appropriate in different contexts. Panel 4

Summary conclusions of working groups on influencing decision-making

The working groups suggested that the following factors would be important to determine whether the findings and recommendations of market analysis actually influence decisions:

• The objectives of the assessment/analysis must be clear, including who wants answers to what questions.

• The analysis must be:

o sound, credible, clear, understandable and practical;

o timely and relevant to the issues that decision-makers want to deal with;

o presented to the right level of decision-making; and

o communicated effectively – clearly and simply (how), by ‘advocacy facilitators’ (by whom), highlighting ‘nuggets’ (what), whenever opportunities arise (when).

• Evidence should be presented. The various methods/tools used should be explained, including the triangulation of information from different sources and findings from different methods.

• The conclusions and recommendation should expose the advantages and disadvantages of a range of possible response options among which decision-makers can choose depending on their organizations’ mandates and capacities.

• Partners and decision-makers should participate in the analysis to enhance ownership.

It was suggested that market analyses integrated in food security/vulnerability assessments would be more likely to be used in decision-making. The question of what would trigger a market analysis was also discussed. The first trigger is a specific demand for particular market-related information, e.g. a requirement to understand abnormal price developments for certain commodities (such as cereals in Ethiopia or cashew nuts and rice in Guinea Bissau).

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D. Partnerships in Market Analysis “Need to do less, but do it together and do it better!”

Henry Josserand, FAO

The importance and potential benefits of partnerships was demonstrated by a number of the cases presented. It was suggested that:

• it is necessary to find a balance between large, inclusive arrangements and small, effective partnerships; and

• at present, partnerships and collaboration in relation to market analysis are ad hoc and depend on personal contacts rather than institutional arrangements.

Examples of successful partnerships include: the Malawi cash assessment, Darfur EFSNA, cross-border trade monitoring in southern Africa, development of the “Zambia model”, the Malawi VAC, the cashew market and food security review in Guinea Bissau, the SIMA monitoring system in Mozambique and, more widely, the SENAC project and joint work of IFPRI and the Ethiopian government. Most of them rely on good personal contacts free from institutional biases.

Unsuccessful partnerships were characterized by inconsistent timeframes and styles, the lack of a shared conceptual framework (e.g. for the ‘joint’ FAO-WFP CFSAMs) and limited government buy-in. The failure of agencies to recognize and agree on the developing famine in Niger in 2005 and the Regional VAC in southern Africa were suggested as examples of unsuccessful partnerships.

It was suggested that the “Purchase for Progress” project might be an opportunity for future partnerships in market analysis.

Group discussions addressed the following questions: What defines success in partnerships in market analysis? Which partnerships were successful in conducting a market analysis and influencing decisions? Why were they successful? Which partnerships were unsuccessful in conducting a market analysis and influencing decisions? Why? What elements seem to be necessary for a successful partnership in market analysis? The conclusions of the working groups are summarized in Panel 5. Panel 5

Summary conclusions of working groups on partnerships in market analysis

The working groups suggested that successful partnerships depend on:

sharing of information, expertise and other resources (financial, human, in-kind, including complementary contributions);

confidence building among partners;

avoidance of duplication;

transparency;

frequent interaction and discussions;

shared understanding of the tool(s) and analysis; mutual confidence in the data and conclusions;

unbiased recommendations free from ‘institutional baggage’;

influence on decisions; and

continuity – or, better, strategic expansion – of the partnership.

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It was noted that partnerships should be formed only when it makes sense (appropriate topic and timing) and that they can be short term, related to a specific activity, or long term (sustained), covering a series of activities over a number of years.

The following were agreed to be critical to a successful partnership in market analysis:

shared understanding of the nature of the crisis and what is important;

clear roles, responsibilities and expectations, written down (a formal memorandum of understanding can be helpful but is not essential);

common or complementary interests and mutual respect;

comparable capacities and technical synergies;

a common timeframe for action (e.g. an analysis plan shared and understood by all partners and to which the whole team is committed);

a conducive political context;

effective communication;

flexibility to integrate partners’ information needs; and

an ability and willingness to set aside institutional biases.

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E. The Way Forward Outstanding issues: what needs to be followed up As noted in section B, additional work is needed and additional guidance would be useful in relation to the following:

• Develop a conceptual framework that clarifies when and where the different single (WFP) tools would be used, or at what frequency, or which require a specialist and which are suitable for trained generalists.

• What is core? Need to define a core set of information and tools that should be used in all situations, and others that should be added when feasible, and depending on the context.

• Developing an analysis plan to determine what data to collect, and to ensure that market and household data can be linked.

• Combining the collection of market and household data.

• What level of detail and precision? Guidance is required on appropriate levels of precision.

• Adapting the tools and approaches to a conflict/insecure environment (and defining data that security officers might be able to collect).

• How to define, assess and classify market functioning (building on the lessons from Darfur and Malawi)?

• Whether and how to use the alpha value tool (as attempted in Georgia).

• Whether and how to use a cost efficiency tool (comparing the costs of food and cash transfers, as attempted in Malawi)?

• When and how to use the cost-of-food-basket as a monitoring tool, in parallel with the food consumption survey data (as tried in Mauritania).

• Retrospective studies of (i) how markets recover and (ii) the accuracy and use of market analyses.

The following additional issues were identified in a quick review of outstanding issues during the final session:

• Tool(s) for price forecasting and training in how to use them.

• How to adapt the tools and analyses to environments of very high inflation.

• Linking market analysis outputs to response options.

• An overview of all the different types of market intervention that should be considered.

• The use of market analysis in developing exit strategies. (This issue might be taken up in collaboration with UNDP).

Participants agreed on the desirability of continuous, regular exchanges on market analysis and proposed that ‘virtual connectivity’ be developed and annual meetings organized to, amongst other things, establish and then check progress against benchmarks.

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What should be done during 2008 It was agreed that, as a follow up to this technical meeting, the following should be done in 2008:

• Develop virtual connectivity. Possibilities include using WFP’s assessors’ community of practice (CoP)5 and/or an existing website (such as the WFP ‘MARKIT’ site) where reports of analyses can be compiled and catalogued and tools and other information structured around topics.

Action: WFP to follow up and advise others.

• Agree on a common analytical framework to be used by all partners, if possible. (In fact, implicitly, everyone has already adopted broadly similar frameworks).

(This may be followed up through the virtual connections proposed above).

• Further develop the matrices of tools and approaches in Panel 4 and Annexes 3-5 and their use.

Action: WFP to develop next – further refined – versions and share with an enlarged special working group, including ideas of how the matrices can be used.

All members of the expanded group – Cynthia, Emmet, Erin, Getachew, Henk-Jan, Henri, Issa, Patricia, Phumzile, Sharon and Shaun – to contribute to clarifying and refining the descriptions of the various tools, how and when the different tools might be used, and how the matrices can be used, e.g. in training and to help plan assessments.

• Further develop tools for use by generalists as well as tools for specialists/economists.

Action: All (using the virtual connections proposed above).

• Provide orientation briefings for decision-makers on why market analysis is important and what is involved.

Action: All.

• Establish a joint calendar – or share calendars – for assessments and all types/levels of training in relation to market analysis in order to increase awareness of what is being done and identify opportunities for collaboration (see next point).

Action: All (using the virtual connections proposed above).

• Invite participation from other agencies in training and assessments. Include generalists as well as specialists in order to “spread the message”.

Action: All.

• Use “champions” within each organization to gain acceptance; don’t rely on formal structures.

Action: All.

• Develop in-country networks to collect and share information.

Action: All.

• Investigate the possibility of organizing a follow-up annual meeting.

5 Access to the CoP can be provided, by WFP-ODAN, to designated external (non-WFP) participants.

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Action: WFP (with proposals from other partners).

Specific recommendations for follow up within WFP:

• Include market analysis in the list of aspects that the Programme Review Committee (PRC) assesses when examining project proposals, including EMOPs and PRROs.

• Organize market analysis training targeting WFP country offices but also, including NGOs and government staff. Organize regional training of trainers, then country-level training of trainers, building on the SENAC experience.

• Prepare guidance on how to develop and use an analysis plan.

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Annexes

Annex 1: Technical meeting Agenda

Session Time Topics Lead /Presenter

Day 1: Tuesday 11 December 2007: Operationalizing tools

Session 1 09:00 – 10:30 Welcome, expected outcome of the workshop Participants’ introductions, agenda review

Herbinger/BrinkmanOckwell

10:30 – 11:00 Coffee/Tea Session 2 11:00 – 12:30 Market analysis tools 1

- WFP’s tools and their application - Oxfam’s Market Tool for rapid onset emergency

Brinkman et al. Murphy/Mohiddin

12:30 – 14:00 Lunch Session 3 14:00 – 15:30 Market analysis tools 2

- CARE Decision Tree Tool: Ethiopia and Malawi - Bellmon analysis and market assistance programme

Bell/Lentz Rinck/Diskin

15:30 – 16:00 Coffee/Tea Session 4 16:00 – 18:00 Working groups: lessons learned on operationalizing tools All

Day 2: Wednesday 12 December 2007: Information for decision making

08:30 – 09:00 Review of previous day Feed-back from working groups

Ockwell Rapporteurs

Session 5 09:00 – 10:30 Market assessments 1 - Zimbabwe CFSAM - Darfur Emergency Food Security and Nutrition Assessment

Diriba Brinkman/Dradri/ Renk/Subran

10:30 – 11:00 Coffee/Tea Session 6 11:00 – 12:30 Market assessments 2

- Malawi cash option assessment within an EFSA - Georgia stand-alone market assessment - Mauritania food price monitoring (costs of food baskets)

Haller/Subran Beuter Brinkman

12:30 – 13:30 Lunch Session 7 13:30 – 15:30 Monitoring

- Afghanistan wheat trader survey - Mozambique Market Information System - Uganda market analysis in food security monitoring - Cross-border monitoring of informal trade, Southern Africa

Bonnard Paulo & Carrilho Osterloh Mdaldla

15:30 – 16:00 Coffee/Tea Session 8 16:00 – 18:00 Working groups: lessons learned on information for

decision-making All

Day 3: Thursday 13 December 2007: Partnerships

08:30 – 09:30 Review of previous day Feed-back from working groups

Ockwell Rapporteurs

Session 9 09:30 – 10.30 Partnerships going further - Market analysis in Ethiopia and Niger - Markets in the Niger crisis 2005

Dorosh/Subran Josserand

10:30 – 11:00 Coffee/Tea Session 10 11:00 – 12:30 Working groups: lessons learned on partnerships All 12:30 – 13:30 Lunch Session 11 13:30 – 14:30 Reports of working groups

“Purchase for progress” (WFP-Gates project) Rapporteurs Buratto/Subran

15:30 – 16:00 Coffee/Tea Session 12 16:00 – 17:30 Synthesis of lessons learned; Outstanding issues;

Way forward: Planned activities (research, field work, training), partnerships

All All

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Annex 2: Participants List Workshop on Partnerships in Market Analysis for Food Security Johannesburg, South Africa, 11–13 December 2007 Name Organization – Title 1 Bell Bob CARE – Director, Food Resources Coordination Team 2 Beuter Thomas WFP RAO* / Market Specialist, Middle East, Central Asia and Eastern Europe 3 Bonnard Patricia FEWSnet, Washington, D.C. 4 Brinkman Henk-Jan WFP HQ – Chief Economic Analysis Unit 5 Buratto Francois WFP HQ – Senior Procurement Officer 6 Carrilho Lara WFP Mozambique 7 Diriba Getachew WFP HQ – Senior Project Manager, Emergency Needs Assessment Service 8 Diskin Patrick USAID 9 Donovan Cynthia Michigan State University (MSU) 10 Dorosh Paul World Bank, Washington, D.C. 11 Ferris Shaun Catholic Relief Services HQ 12 Freeland Nicholas Regional Hunger and Vulnerability Programme 13 Gegelia George WFP South Africa – Regional Procurement Officer 14 Golebiowski Andrzej WFP South Africa 15 Govereh Jones Michigan State University (MSU) – Food Security Research Project, Zambia 16 Haller Annette WFP HQ – Cash Specialist, Emergency Needs Assessment Service 17 Hendricks Sheryl African Centre for Food Security, University of KwaZulu/Natal, South Africa 18 Herbinger Wolfgang WFP HQ – Chief Emergency Needs Assessment Service 19 Jama Mbuso World Vision International – Lesotho 20 Josserand Henri FAO HQ (Rome) 21 Knips Vivien WFP HQ – Market Specialist 22 Lentz Erin Cornell University, consultant to CARE 23 Luma Joyce WFP HQ – Chief Vulnerability Analysis and Mapping Service 24 Mavuso Bagezile World Vision International – Swaziland 25 Mdladla Phumzile FEWSnet Regional Office in Pretoria 26 Mohiddin Lili Oxfam-UK HQ – Emergency Food Security & Livelihoods 27 Molla Daniel WFP Sudan – Head Vulnerability Analysis and Mapping 28 Murphy Emmet Consultant for Oxfam-UK 29 Mwenga Billy WFP South Sudan – Head Vulnerability Analysis and Mapping 30 Ockwell Ron Consultant, Workshop Facilitator 31 Osterloh Sharon WFP RAO* / Market Specialist, East and Central Africa 32 Paulo Antonio Ministry of Agriculture, Mozambique 33 Renk Simon WFP HQ – Market Specialist 34 Rinck David USAID – Regional Food for Peace Officer 35 Rook John Regional Hunger and Vulnerability Programme 36 Sanogo Issa WFP HQ – Market Specialist 37 Skau Nanna European Commission – DG ECHO 38 Subran Ludovic WFP HQ – Market Specialist 39 Tibbo Karen CARE, South Africa * Regional Assessment Officer

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mailto:[email protected]

Annex 3: Framework for questions to answer and tools to use for different timeframes The attached table is a working draft6 prepared by the special working group on tools and approaches as a basis for further discussion and development. This table provides a draft framework for the questions that should be answered when an area is hit by a shock and which tools could be used for different assessment timeframes allocated for the assessments. This framework emerged at the workshop as a result of comments that the various tools developed by WFP needed a framework to help determine which tools would be appropriate to use in a given context. It should be complemented by a framework for monitoring systems and baselines. Three timeframes were distinguished: an initial assessment (of about three days); a rapid assessment (of about three weeks); and an in-depth assessment (of about three months). The framework can be applied in various contexts, although initial assessments are more likely in rapid-onset crises and more time is likely to be available in slow onset and chronic situations. In an initial assessment, the number of tools used and the extent of the analysis are limited. A rule-of-thumb could be used in an initial assessment to trigger a rapid or an in-depth assessment. A more in-depth one, for example, could be recommended if the size of the shock or the likely interventions in response to the shock as a percentage of traded volumes exceeds a certain threshold, say 10 percent. The rapid and the in-depth assessments differ largely in the depth of the analysis. Most tools developed by WFP could be applied in various degrees of thoroughness. For example, in a rapid assessment, fewer household, communities and traders will be interviewed with a shorter questionnaire. In a rapid assessment, the shock-response tool might be applied only to the national average, while in an in-depth assessment different livelihoods and geographical areas should be distinguished. Finally, an in-depth assessment would produce more market maps, analyse more data (either from secondary sources or monitoring activities established during the earlier assessments) and include a lengthier literature review. The starting point for the framework was the basic questions that need to be answered in an assessment. The most fundamental questions are the impact of the shock on supply, demand, markets and prices. The analysis to answer these questions would provide basic information related to food availability and access and be limited to the three key markets most fundamental for food security. In some situations, this might be limited to two food staple and one cash crop market, but in other context the livestock market or the market for casual daily labour should be included. Information from previous surveys should be used to determine which three markets to focus on. To determine what the impact of the shock on supply, demand, markets and prices was, the various tools should be applied. The WFP tools themselves indicate what data are needed and how they should be analysed. Yet, the fully developed version of this framework could include references to critical data needs for each question. A short plenary discussion of the feed back from the special working group highlighted the need to distinguish “tools” and “indicators”, and the importance of defining what data c/should be available and used during “initial” assessments (notably transport constraints including transporters’ access to credit). It was also suggested that it might be useful if the matrix could be adjusted to match the programme planning cycle, and that monitoring and baseline columns should be added.

6 The attached table also incorporates some comments received at the SENAC Advisory Group meeting on 11-12 February 2008 and on a draft that circulated by e-mail after the workshop.

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Questions to answer and tools to use for different timeframes (Revised version 12 February 2008)

Questions to answer and tools to use for different assessment timeframes

Questions Tools

Timeframes Initial Rapid In-depth

Duration 3 days 3 weeks 3 months

1

Key 3 markets/commodities to analyse?

a

Shares in consumption (national, poor)

VAM/HH survey (secondary data)*



b Shares in incomes (national, poor)




2 What is the impact of the shock?

a On supply?

i Production

Secondary data (e.g. Government estimate)

Basic Food Balance Sheet Food Balance Sheet

ii Imports Key informant interviews Trader survey Trader survey

iii

Traders' response capacity (before/after shock)

Key informant interviews Trader survey Trader survey

b On demand?

i Access (incomes) HH survey HH survey

ii Impact of prices

Shock-response scenarios, super light (ToT)

Shock-response scenarios, light (ToT)

Shock-response scenarios, de luxe

iii Coping HH survey HH survey

c On markets?

i

Physical access, changes in flows

Key informant interviews

Market map (trade directions), trader survey

Market map (trade directions), trader survey

ii Seasonality of production Seasonal calender*

Seasonal calender; trader survey

Seasonal calender; trader survey

iii Supply chain Supply chain analysis, light;

Supply chain analysis, de luxe;

trader survey trader survey

iv Market integration

Market integration assessment, super light

Market integration assessment, light

Market integration assessment, de luxe

d On prices?

i Seasonality Seasonality prices, light Seasonality prices Seasonality prices

ii Real prices

Real price analysis (time-series); Terms of trade

Real price analysis (time-series); Terms of trade

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iii

Do domestic prices deviate from import prices?

Import parity price analysis*

Import parity price analysis

Import parity price analysis

iv How much will prices rise?

Partial equilibrium analysis (Zambia model light)

Partial equilibrium analysis (Zambia model)

3 Government policies and actions

a Policy backdrop

Literature review (EIU, World Bank, IMF (Art. IV))



b

Policy measures: Effects on supply, demand, markets and prices of 3 key commodities




c Response measures Government information

Government information

Government information

4 Response options

a Vouchers, cash, food (source?), etc.

Response option analysis

Response option analysis

b

If food aid, quantity without market impact Food aid impact

Food aid impact; Zambia model

c Rapid or in-depth assessment needed?

If demand or intervention > thresholds

d Policy and advocacy Note: * base information, assumed to be available [12 February 2008]

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Annex 4: Characteristics and Applications of Some ‘Single’ Tools for Market Analysis The attached tables are a preliminary working draft prepared by the special working group on tools and approaches as a basis for further discussion and development. The table includes 12 ‘single’ tools: The first table provides an overview of questions to answer and tools to use for different timeframes. 1. Initial assessment scenario (quick & dirty) 2. Market integration 3. Import-parity prices 4. Market structure 5. Elasticities 6. Shock-response scenarios 7. Terms of trade 8. Response options 9. Marketing margins 10. Price forecasting 11. Food aid impact 12. Inter-temporal price analysis The working group envisaged that the following might also be added: • HH Survey • Community survey • Trader survey • Food balance sheet • Cross-border informal trade monitoring • Market map (directions of flows)

Characteristics and Applications of Some ‘Single’ Tools for Market Analysis

1 2 3 4 5 6 7 8 9 10 11 12

Initial assessment

scenario (quick& dirty)

Market integration

Import-parity prices

Market structure Elasticities

Shock-response scenarios

Terms of trade

Response options

Marketing margins

Price forecasting

Food aid impact

Inter- temporal

price analysis

Who developed it?

To be developed WFP/PDPE WFP/PDPE To be

developed WFP/PDPE WFP/PDPE WFP/PDPE WFP ODAN-PDPE WFP/ODAN WFP/ODJ WFP/PDPE MSU/PDPE

Who used it? generalist economist economist economist economist economist generalist economist economist economist economist economist

Who is it designed for? generalist economist generalist generalist generalist generalist generalist economist economist economist generalist genralist

Intermediate objectives

Expected market effect of likely intervention in specific area

Determine degree of market integration

Determine private imports based on difference domestic and international prices

Determine basic market structure of main food staples

Analyse how quantities will change as result of price changes (or vice versa)

Determine change in food consumption due to shocks

Determine capacity to purchase food for various livelihood groups

Analyse funtioning of and access to markets to recommend response options

Analyse marketing chain and who controls what.

Predict prices for 6- to 12-months ahead based on seasonal patterns

Assess possible negative effects of food aid on prices

Determine inter and intra-annual patterns and volatility of prices

Specific outputs Are markets likely to be affected

Degree of market integration

Import parity prices

Price or quantity changes. Guesstimate for elasticities.

% change in food consumption by households

Terms of trade

Where cash and/or food is an option

Prices for main staples for 6-12 months

Impact food aid on prices

Abnormal variations

Initial Needed Needed If availablle Needed Nice Needed Nice No No No Yes

Rapid Needed Needed Needed Needed Needed Needed Nice Needed Needed Needed Time-frame

In-depth Needed Needed Needed Needed Needed Needed Needed Needed Needed Needed

Chronic No Needed Needed Needed No Needed Needed Needed Needed Needed Needed Slow onset Maybe Needed Needed Needed Nice Needed Needed Needed Needed Needed Needed

Rapid onset Needed Nice Needed Needed Nice Needed Needed Nice Needed No Needed C

onte

xts

Complex Maybe Needed Needed Needed Maybe Needed Needed Nice Needed Maybe Needed

Monitoring/early warning No Nice Needed No Nice Needed Needed Nice Nice Needed Needed

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1 2 3 4 5 6 7 8 9 10 11 12

Initial assessment


Market integration




Terms of trade

Response options

Marketing margins

Price forecasting

Food aid impact

Inter- temporal

price analysis

Contingency planning No No Needed No Needed Needed Needed Needed Needed Needed

-Darfur EFSNA -Darfur EFSNA -Guinea-Bissau -Central America -Sahel -Guinea-

Bissau -Malawi cash assessment

-Guinea-Bissau

-Southern Africa -Afghanistan -Darfur

EFSNA

-Ethiopia Central America -FAO -Central

America -Darfur EFSNA

-Darfur EFSNA

-Central America -Central

America

-Central America -Guinea-Bissau -Central

America

Where was it applied?

-Malawi

-By author By economists By economists -By economists -By economists -By

economists -By economists

-By economists

- By economists

- By economists

-By economists How was it

operationalized? Guidance

PDPE -Guidance PDPE

Was the tool adjusted? No No No

Yes (weights of cereal food in food consumption)

No

Yes (adapted to specific circumstances)

Yes (changes over time added)

-Data on transport costs

-Data availability

-Elasticities for specific foods

-Data availability -Data quality -Quality of

surveys/data What were the bottlenecks?

-Assumptions on margins + costs

-Cross-price elasticities

-Important tool -Powerful tool -Guesstimate

-Relatively simple

-Simple, yet powerful tool

-Powerful tool -Quick & dirty

-Many outputs

-Quickly implementable

-Based on secondary data

-Rapid -Extend of crisis

-Early warning

-Direct link to programming

-Analysis of market value chain

-Reply to usual criticism

Less

ons l

earn

ed

Positive

-Can be used

before mission -Sensitivity

analysis

-Can be applied to many livelihoods

33

1 2 3 4 5 6 7 8 9 10 11 12

Initial assessment


Market integration




Terms of trade

Response options

Marketing margins

Price forecasting

Food aid impact

Inter- temporal

price analysis

-Important data needs (esp. transport costs)

-Needs context (e.g. focus groups)

-Guesstimate can differ from other sources

-Require ad hoc adjustments

-Need to be combined with more research (e.g. on coping)

-Need buy-in for simple methodology

-Adjusted for evolution of margins overtime

-Projections might be quickly outdated

-Methodology not established

-Less linked to decision-making

-Can draw wrong conclusion

-Transport costs -Only %

change -Data needs -Coordination among surveys

-Less linked to decision-making

-Difficult to mainstream

Negative

-Dependent on USDA method

-Bias for cash

Capacity High Yes Low Medium Low Yes Medium High High Medium

Time Medium-high Yes Low High Medium Yes High Medium High High

Money Medium No Low High (needs for primary data) Medium Yes Medium Low Medium Low

Cons

train

ts

Context Market functioning, programming

Market functioning, best response option

Quick and dirty Piloting? Vulnerability

analysis -Push for cash

Market functioning

Programming (anticipations)

Donors' critique

Market functioning analysis

Way forward:

1. What to do more of (build on positive aspects)

Stress linkages with programming (extent private sector increases availability)

Regular computing of IPP in big country offices

Keep on building knowledge (literature review)

Build capacity on the tool

Mainstream in FSMS, M&E

Analysis of margins over time and develop understanding on relation with price changes and competition.

Use for scenarios

Methodology development

34

35

1 2 3 4 5 6 7 8 9 10 11 12 Inter-

poral price

ysis

Initial assessment


Market integration




Terms of trade

Response options

Marketing margins

Price forecasting

Food aid impact

tem

anal

2. What to do differently (avoid negative aspects)

Make it more universal (less linked to survey data)

Better coordinate it and define the analytical path

3. What to do new (fill gaps)

Look at basin markets for Regional Bureaux

Build knowledge about variation of elasticities over time, across households, etc

Develop method to calculated vulnerable population by livelihood

Ensure country offices maintain data correclty

Annex 5: Characteristics and Applications of Composite Tools/Approaches The attached table is a preliminary working draft prepared by the special working group on tools and approaches as a basis for further discussion and development.

13 14 15 16

Zambia model CARE Decision Tree Framework

Oxfam's Rapid Market Analysis

Toolkit USAID Bellmon

analysis

Who developed it? WB/MSU/WFP Christopher Barrett, Erin Lentz, Daniel Maxwell

Mike Albu, Emmet Murphy (Practical Action Consulting)

USAID

Who used it? economist economist generalist Economist Who is it designed for? economist economist generalist Economist

Intermediate objectives

Determine change in food cons. due to shocks or policy changes

Response analysis links identified need with appropriate response

To identify appropriate response (in-kind, cash, market/ trader, advocacy orientated), based on context and market capacity to respond

1. Adequate storage to prevent spoilage or waste; 2. No disincentive to production or marketing

Specific outputs Change in food consumption by households

Use a variety of analytical tools to answer the following: Q1 Are markets functioning well? Q2 If not, is there sufficient food available nearby to fill the gap?

1 List market systems of importance to vulnerable HH and their risk of market failure; 2 Report forecasting market system response; 3 Report with recommendations to management

1 Assessment of structure of key value chains in each basket order to qualitatively estimate elasticity; 2 Assessment of diets for qualitative estimate of substitution elasticity; 3 Assessment of logistics infrastructure

Initial No Yes Yes Rapid No Yes Yes Timeframe: In-depth Yes No No Chronic Needed No No Slow onset Nice No No Rapid onset Not possible Yes Yes

Contexts

Complex Difficult Yes Yes

Required by law for all US food aid provided under PL 480

Monitoring/early warning No Needed

Will be a monitoring element to the toolkit

No

Contingency planning Nice Nice

-Niger Pre-pilots: Pilots being planned for 2008

-Ethiopia -Ethiopia Where was it applied?

-Central America -Malawi

All US food aid provided under PL 480

How was it operationalized?

Was the tool adjusted?

Yes, simplified (fewer HH, more focused on FBS and real price analysis)

Guidelines are being revised

36

-Data availability -Identifying and accessing secondary data

What were the bottlenecks?

-Adapting to Niger context

-Time and resources

1 Market liberalization has outdated guidelines 2 Lack of clarity on methodology 3 Lack of clarity over ownership 4 Not applicable to WFP 5 Programmatic vs administrative leakage

-Powerful tool –Context important Lessons learned Positive -HH differentiation

not needed at first stage

–Semi-formal interviews extremely insightful

Negative

-Applied only in specific contexts (where food aid large)

–Eliciting marketing margins / marginal costs from traders is difficult

-Complicated

-Data availability Capacity High High Time High High Money High Constraints

Contexts Several Recommendations, way forward:

1. What to do more of (build on positive aspects)

Keep on multiplying examples and support to upcoming problems

Balance flexibility with usability

2. What to do differently (avoid negative aspects)

Simpler analyses may be adequate where programming is already in-place

3. What to do new (fill gaps)

Advocate about WFP's credibility in food policy

Improve price forecasting

37

Annex 6: Notes on some ‘single’ Market Analysis Tools presented

Trader surveys (using focus groups & individual interviews) All country cases presented included a traders’ survey, mainly to collect data on prices and traded volumes. In some cases traders’ surveys where combined with household surveys to provide possibilities of linking the analyses, but this was found to be difficult both during data collection (e.g. household visits not always coinciding with market days in Uganda) and in the analysis (e.g. difficulties in matching the two sets of data in Malawi). It was noted that: a reasonable understanding of the context is necessary before starting to talk with traders; care is needed to check the units of measurement being used by different informants; and the reliability of price information may be questionable in some cases. Focus groups of traders had been found to be useful by WFP in Uganda especially to get information on the overall context and identify key actors to follow up with. Such groups had not been found useful by CARE in Malawi.

Import parity price (IPP) analysis The IPP tool was used in most of the country cases presented. Comparing import parity prices with domestic prices provides a basis for determining the likelihood of commercial imports. (IPP is the total cost of delivering imported food, usually to the main port of entry and includes the cost of the commodity at source plus freight, insurance and handling costs.) Used in Darfur, the tool showed that there is no commercial incentive for traders to bring sorghum into Darfur from other parts of the country. A common difficulty is non-availability of current, reliable data on prices and transport costs. In Georgia, IPP was found to be of limited use due to the difference in quality between imported and locally produced wheat and the country’s heavy dependence on imports.

Market integration Use of the market integration tool was described in relation to Georgia and Darfur. It had also been used in Malawi. The tool examines, amongst other things, the extent to which prices move together in different (wholesale) markets. In the case of Darfur, correlation coefficients were used and the table below shows high correlation of sorghum prices, indicating strong co-movements of prices, among markets in El Fasher, Nyala, Ed Daein and El Geneina.

Correlation coefficients among sorghum prices in different markets in Sudan

Kosti El Obeid Jur River El Fasher El Geneina Nyala Ed Daein

Kosti 1.0000

El Obeid 0.9610 1.0000 Jur River 0.3443 0.4649 1.0000 El Fasher 0.6899 0.6447 0.0204 1.0000

El Geneina 0.6280 0.6514 0.5009 0.7528 1.0000

Nyala 0.6466 0.6652 0.2839 0.8282 0.8360 1.0000 Ed Daein 0.8197 0.8928 0.3642 0.8471 0.8169 0.8100 1.0000

Lessons learned: The tool provides valuable insights into the degree of integration over time but needs complementary analyses of market structure and food availability. The primary limitation of this tool is the limited availability of data. To ensure sustainability and comparability, retail and wholesale prices must be collected in a regular and formalized manner by country offices.

38

Market functioning + access indices to inform response options analysis The functioning of markets is an important factor determining whether and when food or non-food transfers might be appropriate, and when food distributions should be phased out, in specific areas. The presentations for Darfur described a composite index built on data collected through traders’ surveys and community/household surveys. It combines:

(i) a market functioning index based on 5 elements: security, local grain share, traders’ access to credit, storage, responsiveness; and

(ii) a market access index based on 5 elements: closeness of consumers to markets, availability of markets (continuity), market reliance, price differential, price stability.

The Darfur analysis team prepared pentagon diagrams showing the “shape” of each index for the different main markets analysed and a scatter diagram (see below) showing how the different markets were distributed about the mean for both ‘functioning’ and ‘access’. The conclusion was that a large-scale cash transfer programme was not an option at that time in Darfur but that some local purchases in the north (Gedaref) would be possible.

In Malawi, a simpler market functioning index was used based on distance to market, reliance on markets, price differentials, and market distortion (purchases from the marketing board). It was not felt to be satisfactory. Amongst other things, the attempt to assess the ‘reliability’ of markets had ended up assessing households’ reliance on markets.

Participants found the Darfur tool to be useful but questioned the appropriateness of taking the mean as the basis for analysis.

Graph1: Functioning of and access to markets in various localities in Darfur

Functioning of and access to markets in various localities in Darfur

Zalingei

Habila

El Geneina

Ed Daein

Kass

Nyala

Kebkabiya

El Fasher

Kutum

-1.0

-0.8

-0.6

-0.4

-0.2

0.0

0.2

0.4

0.6

0.8

1.0

1.2

-0.8 -0.6 -0.4 -0.2 0.0 0.2 0.4 0.6

Access to markets

Mar

ket f

unct

ioni

ng

Alpha value An alpha-value tool was applied in Georgia and Malawi. It compares the cost of imported food aid (cost of commodity at source + freight + insurance + in-country transport, storage and handling costs) with the local market price of a similar item. It can help to determine whether food or cash

39

transfers would be more cost efficient. However, it was recognized that the alpha value, as presently calculated, does not take account of the fixed cost of the importing agency (e.g. WFP) and may therefore lead to wrong conclusions. Further methodological work is needed.

Cost of food baskets A cost-of-food-basket tool was piloted by WFP in Mauritania in parallel with a food consumption survey to determine how many people would no longer be able to afford the cost of an adequate food basket – how may would fall from “adequate consumption” to “borderline consumption” to “poor consumption” as a result of price rises. Commodity substitutions are taken into account in the diet diversity data. This might prove to be a useful monitoring tool but questions were raised about the feasibility and cost of gathering the consumption (and price) data regularly.

It was noted that further work is required to relate food frequency to food intake, and that WFP (ODAV*) is working on this.

___________________________________________________________________________

* Since the technical meeting, ODAN and ODAV have been merged into the WFP “Food Security Analysis Service”.

40

Annex 7: Key Characteristics of the Composite Tools/Approaches presented Oxfam’s Market Tool(kit) for rapid onset emergency The market tool(kit) for rapid emergency situations has been developed by Oxfam-UK in conjunction with InterAction (USA) building on a desk review of existing tools and field needs. It will be field tested in emergency contexts to get feed back and make refinements prior to developing training materials. The market analysis process is composed of three steps – market selection, market analysis per se, and market intervention design – as shown in the slide below. The objective is to understand how critical market systems have been affected by the emergency and hence identify appropriate interventions.

STEP 1Market

Selection

Livelihood Baseline

affected population normal interaction

w/ key markets

Situational Analysisemergency’s

impacts on markets (household/traders)

Selection Decisionmarket

prioritization for rapid analysis

now

STEP 2Market

Analysis

Market Baselinemarket

performance pre emergency

Market Analysis:market performance

post emergency

Diagnosis & Forecastpredict how market

may respond to increased

purchasing power

STEP 3Market

Intervention

Support Options:if poor mkt. response

predicted, market support options

Intervention Analysis:predict performance of

markets systems w/ support, and estimate

impact on gaps

Intervention Decision

select emg. market support measures,

define in-kind.requirements

Market Analysis Process

The analysis (before emergency vs. aftermath) of the actors and institutions is important to prioritize the analysis - the question of the dependency on markets (and on which markets) should be addressed upfront to understand where to go. CARE Decision Tree framework This Decision Tree (DT) framework, in the slide below, is intended to assist CARE country offices identify the most appropriate aid response and to anticipate possible impacts of various food security interventions on local markets and communities. The DT framework is one aspect of a well-designed response analysis. Nutrition, security issues, leakage concerns, and local office resources and capacities are other important considerations not directly addressed by the Framework. The DT (a) explains the importance of response analysis, (b) succinctly frames a set of key market analysis questions, and (c) provides methodological guidance to researchers in the field. However, because local market conditions are highly variable, and the nature and quality of available data are uneven, the authors consciously decided that it would be inappropriate to offer a single standardized

41

method for carrying out market analysis. Instead, the DT informs and guides field researchers who will have to think through a number of study design issues in the field. The main challenge is to improve the framework’s usability through developing simple core tools to answer these framing questions without sacrificing all of the framework’s current flexibility.

1. Are Local Food Markets Functioning Well?

Yes

No

2. Is There Sufficient Food Available Nearby To Fill The Gap?

Yes

No Provide food aid based on transoceanic shipments.

Provide cash transfers or jobs to targeted recipients, not food aid.

Provide food aid based on local purchases/ triangular transactions.

Decision Tree Framework

Bellmon Analysis USAID’s Bellmon analysis is a composite approach to address two specific questions relating to the provision of food aid: • Are adequate storage facilities available to prevent spoilage and waste of food aid commodities? • Would the distribution of food aid commodities result in a substantial disincentive to or

interference with domestic production or marketing in the recipient country? Various market-related analyses are undertaken to address the second question. The Bellmon Analysis is usually supported by crop assessments and vulnerability assessments. The analysis takes between one week and one month. USAID recognizes that the current guidelines are old (1985) and need up-dating.

___________________________________________________________________________

42

Annex 8: Notes on the Country Cases presented Darfur: In 2007, WFP took the lead in the market assessment of the Darfur EFSNA. The main objectives were to assess the functioning of cereal markets in Darfur and to analyse the food availability and access situation in Darfur region. In addition, humanitarian agencies and donors were concerned about the sale of food aid. For the first time, the household, community and trader questionnaires were directly linked, using locality identifiers. Linking these three sources allowed for a more in-depth market analysis. In total, the markets team covered 12 markets and interviewed 72 traders and around 50-60 key-informants. The team used the following market analysis tools: i) market analysis plan; ii) terms of trade; iii) market integration; iv) import parity price; v) inter-temporal price changes; and vi) response options. They were all used by economists. During the presentation is was underlined that all tools were very powerful and supported decision-making. In some cases, market analysis was limited by data availability. The presentation also underlined that, based on the markets assessment, recommendations were made on the level of monitoring, targeting, programming, local procurement and partnerships. The results of the market analysis showed, for example, that general food distribution was an adequate answer for the last three years within all Darfur states. On targeting, households with livestock benefited from an improved terms of trade and that net-buyers of food have benefited from lower prices. On programming, it was suggested that the use of milling vouchers should be explored, for example, in urban areas. On food aid sales, 17% of households sold at least one food aid commodity, mostly to pay off debts, buy agricultural inputs or pay for milling or education.

Malawi: The presentation on “Cash response in Malawi” summarized the experience of a market analysis, within the framework of an EFSA, to whether and where a cash pilot programme might be appropriate. The team underlined the impact of timing of market assessment: the 3-week assessment was conducted directly after harvest in May 2007 and was difficult because of the limited maize volumes being traded and low prices at that time. The team also underlined the difficulties in combining the HH survey and trader survey. The team applied the IPP calculations, analysed the degree of market integration by co-movement & price differentials, assessed cost efficiency using the alpha-value approach, and tried to use some recent price projections. Most importantly, the team tried using a simple market functioning index which, combined with food security data from the EFSA, was used to identify the areas where cash transfers might, and might not, be appropriate and estimate the numbers who risked falling from borderline to poor food consumption. The lessons learned were that some of the tools did not perform well, especially simple market functioning tool and price projections: the price projections turned out to be wrong. The team recommended to code markets data sheets in line with community and HH questionnaires, improve knowledge of the links between households and markets by defining market catchment areas, and prepare a thorough analysis plan at the outset to determine how to link tools with the objectives of the assessment.

Georgia: The presentation on Georgia described a market analysis aimed at determining whether cash projects might be integrated in a WFP phasing-out strategy to provide social protection and a development orientation. The WFP market integration tool was used to determine food flows, food availability and suitability of cash transfers. Limitations of data availability and structure of markets is needed to further investigate on how markets are supplied. Market functioning was covered using the market integration tool. So far, market

43

assessment tools need to be adapted to cash options. Overall the collaboration with programme officers provided very good insights in understanding the field reality.

Afghanistan - Regional flows & policies and a sub-sector review: In relation to market analysis participants agreed that regional flows & policies as well as sub-sector reviews play a crucial role to understand the integration and functioning of regional trade and markets. It should among others for example provide an overview of national policies affecting trade and more specifically food security. In the case of Afghanistan wheat trader survey conducted by FEWSnet the importance of regional flows and the review of sub-sectors was exemplified while the role and impact of poppy cultivation and the linkages with food aid needed to be addressed to have a full picture of the food security situation. A World Bank publication shows the close integration of the Afghanistan and Pakistan wheat markets and, therefore, the need to look jointly at both countries to have a complete picture of the food markets in this region. The study resulted in revision of the WFP ration.

Mozambique - Reporting systems & bulletins: Reporting systems and mechanisms to disseminate information are important elements of monitoring systems and the Mozambique Market Information System presentation provided important and practical insights. WFP-Mozambique and the Mozambican Ministry of Agriculture joined efforts in 1991 to set up the Agricultural Market Information System (SIMA) which covers 24 markets in 10 provinces. Data on prices, availability, flows and transportation costs are collected and published weekly in the ‘Quente-Quente’ bulletin that is complemented by monthly, annual and ad hoc surveys and analyses. The presenters underlined the importance of timely and wide dissemination. There are two additional market monitoring processes in Mozambique: “Infocom” run by the Ministry of Commerce, and cross-border trade monitoring by FEWSnet. One of the main lessons learned is the importance of “buy-in”, institutional collaboration and consensus. The main constraints are mainly of a logistical nature relating to the size of the country, different market days, and staff capacity. The priority for the future is ensuring wider coverage of markets and dissemination of information, and capacity building at different levels.

Southern Africa Cross-border monitoring of informal trade: Participants agreed on the importance of monitoring informal, unregistered cross-border trade as exemplified in joint FEWSnet and WFP monitoring at borders among a number of Southern African countries. There, data are collected by part-time customs officials and full-time border monitors who try to capture as much as possible of the quantities crossing through the selected border crossing points. Reports provide information on the scale and direction of observed cross-border flows and cross-border price differences at the crossings monitored. No attempt is made to extrapolate to estimate total cross-border flows but even the incomplete data help to refine food balance sheets, provide a regional outlook on trade, and inform public- and private-sector decisions.

The principal lesson learned is that informal (unregistered) cross-border trade flows can be substantial and should be taken into account when analysing market conditions and preparing food balance sheets. A bottleneck is the constant search for funds to sustain the monitoring. Another important challenge is that some governments do not consider this information for legal reasons. The way forward includes expansion of monitored border sites, enhanced analysis of the data (including links between flows and price differentials) and the use of new technologies e.g. PDAs to overcome data recording and transmission/communication constraints. The main challenges are to estimate the percentage of informal flows captured by the monitoring, and to find an institutional home for the monitoring system.

44

45

Ethiopia: The market analysis examined the relationship of real food prices to nominal prices to understand why food prices were increasing in a situation of increasing production. It was emphasized that examining real prices of food is essential to separate the effects of overall, macro-economic inflation. Wholesale market prices were analysed together with medium-term cereal supply and demand. The big issue was supply uncertainties; it was suggest that production data may have been over-estimated by certain sources (the methodology of production estimate had changed). It was considered that demand had not changed much and that cash transfers through the safety net programme would not have had a significant impact on prices. Trends in real prices were broadly consistent with supply and demand and there was no evidence of market manipulation by traders.

Niger: The presentation emphasized the necessity of knowing the background context at national, sub-regional and international levels. The key issues were to understand what drives prices and to distinguish areas where markets are generally well integrated from those that are not. The price analysis was based on real prices. The Nigerien production failure in 2004 was a combination of drought and locusts but not to historical low levels. However, import bans imposed by Nigeria worsened the situation in a context of limited supply in the whole West Africa region. driving up prices in Niger. The price shock was greater than the production failure effect. At that time, the impact of the price shock on households was not sufficiently understood. Moreover, areas in the south, close to Nigeria, are highly populated and land ownership has shifted from smallholders to big ones so that, although these areas benefit from higher rainfall, they are vulnerable to shocks and experienced high malnutrition rates. Another critical factor in the case of Nigeria was the uncertainty of supply, population growth and income growth. Two key issues were missed during the initial analyses: (i) the price transmission effects from Nigeria; and (ii) their implications for households. The WFP cost-of-food basket tool might be used to help answer the second question. The case of Niger also showed the limitations of the food balance sheet. The effective demand on credit was bridged by traders in 2004 but the food borrowed had to be reimbursed at 2 to 3 times the rate in 2005 which was a heavy burden despite the good production that year. These specificities do not show up in the balance sheet. The presenter concluded that market analysis should help to understand the forces driving prices and the implications for household food security. For this it is necessary to connect the market analysis with the household vulnerability analysis.

___________________________________________________________________________

46

Evaluation results of Johannesburg Market’s Technical Meeting Annex 9: Technical meeting evaluation

Question

Please circle to what extent you agree or disagree with the following statements: Strongly agree Agree

Neither agree nor disagree

Disagree Strongly disagree

No answer

1 Agenda was well planned 10% 75% 0% 10% 0% 5%

2 Level of technical discussion was suitable for my background and experience 25% 60% 10% 0% 0% 5%

3 Meeting was well-paced 20% 45% 30% 5% 0% 0%

4 Presentations were informative and led to useful discussions 25% 68% 8% 0% 0% 0%

5 Participants were encouraged to take an active part 35% 60% 5% 0% 0% 0%

6 The meeting met my individual expectations 25% 60% 10% 5% 0% 0%

7 Meeting contributed to my own work 30% 55% 10% 0% 0% 5%

8 Meeting achieved the desired outputs 10% 45% 5% 0% 0% 40%

9 Facilitation team 20% 55% 20% 0% 0% 5%

10 Meeting space 15% 20% 25% 10% 5% 25%

11 Meals/refreshments 15% 45% 25% 15% 0% 0%

12 Overall organization 15% 70% 15% 0% 0% 0%

correct too short too long No answer 13a Was the meeting length:

95% 5% 0% 0% 0% 0%

just enough too few too many No answer 13b Was the number of participants:

95% 0 5% 0 0 0

excellent very good good fair poor No answer 16 What is your overall rating of this workshop?

20% 40% 35% 0% 0% 5%

Question 14 What are the 3 most important things you take back from the workshop?

1st : Learned more about Market Analysis List of Marketing analysis tools (2) Which tools to revise or add Building some consensus about tools Partners are more or less at the same

stage of innovation Contacts Other applications, experience with

MA Appreciated openness Contacts and Network for MA Better understanding of scope of

interest in MA Improve data collection with better

and appropriate tools Lack of clear way forward for WFP Overview of examples from variety of

organizations On-going each discussion Consultation and collaboration with

key partners The need for importance of MA Partnership with other NGOs Understanding of existing available

tools for market analysis A broader understanding of what other

agencies are doing related to market analysis, especially WFP

2nd Concrete partnerships Building some consensus about issues Brains trust matrix Application of MA tools Importance of prices but difficulties

for predicting Insights on perspectives of partners

Disseminate information from this workshop

Interest but no concrete action Beginnings of a set of “success

stories” Relevance of capacity building in MA Coordinated development of key tools Networking with other specialists Need to further link to beneficiaries Networking with contacts involved in

similar fields Some extremely useful info pertaining

to best practices of market analysis in emergencies

3rd

Concrete output for follow up Learning about on-going and previous

assessments CDs and HOSOs demand for a

SAMPLE measure of market function Exposure to ongoing actions Need of capacity building training of

trainers and training material for different levels and players

More best practices (SIMA Mozambique)

Development of analytical tools and training efforts

Partnership as a key for success Agreement on way forward How to integrate some tools to

existing framework Partnership network Feedback during the Q&A session

following our presentation on Oxfam’s Market Analysis tool

47

Question 15: In which specific topics are you particularly interested and would like to have more exchange with partners?

How to make analysis simpler and practical Analytical tools standardization and linkage with overall food security analysis Tools and how to influence decisions Linking MA and Programme response options Adapting tools to specific contexts Supply elasticity and Market Market modelling MA tools Market information suppliers Linking traders survey to household survey Micro and macro level analysis Market functioning index Market tools for integration with Monitoring and In-depth Analysis Specific MA situation and analysis Methodologies Examples of MA in complex situations Tools and training of tools What we need to organize to have a functional market network Participation in a MA Contributions to different food market analysis and vulnerability Operationalization of tools Integrating MA into broad food security analysis Market assessment tools: how to use them under different contexts) Best practices in MA Price monitoring forecast Cash transfer Use of market information in designing policies to reduce chronic hunger and vulnerability. An assessment of whether or not a market analysis’predictions of how a market would behave

following an emergency was accurate. More on the nuts and bolts mechanics of doing a market analysis: how long, what kind of

team, logistics, challenges, etc. A further discussion for the practical aspects of divvying up the market analysis work between

multiple agencies following a rapid or slow onset crisis to avoid duplication efforts. Ideal forums could be FAO Food Security Meetings, UN OCHA, etc.

Access to WFP’s MARKIT website Update on Save the Children’s efforts to incorporate market analysis within institutions such

as VAMs in Southern Africa

48

Please rate the individual workshop sessions: 5 = Excellent 4 = Good 3 = Average 2 = Poor 1 = Unacceptable 0 = Does not apply

Quality

Value to my Work

Session

5 4 3 2 1 0 5 4 3 2 1 0

2&3 Market analysis tools: WFP, Oxfam, CARE, Bellmon 15% 65% 15% 0% 0% 5% 25% 55% 10% 0% 0% 10%

4 Working groups 15% 43% 38% 0% 0% 5% 15% 45% 25% 5% 0% 10%

5&6 Market assessments: Zimbabwe, Darfur, Malawi. Georgia, Mauritania

25% 45% 30% 0% 0% 0% 30% 40% 20% 5% 0% 5%

7

Monitoring: Afghanistan, Mozambique, Uganda, Southern Africa cross border trade monitoring

20% 55% 20% 0% 0% 5% 30% 45% 15% 0% 0% 10%

8 Working groups 15% 35% 45% 0% 0% 5% 15% 30% 45% 0% 0% 10%

9 Partnerships: Niger, Ethiopia 35% 60% 5% 0% 0% 0% 25% 40% 25% 0% 0% 10%

10 Working groups 25% 40% 30% 5% 0% 0% 30% 30% 30% 5% 0% 5%

11 Feedback and synthesis 15% 45% 40% 0% 0% 0% 15% 45% 35% 0% 0% 5%

12 Planned activities 20% 20% 25% 10% 5% 20% 20% 30% 15% 5% 5% 25%

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