TST Session 2.1. Trader Surveys and WFP Decision-making An Overview WFP Markets Learning Programme1...

TST

Session 2.1.

Trader Surveys and WFP Decision-making

An Overview

WFP Markets Learning Programme 1Conducting a Trader Survey

Learning Objectives

By the end of this session, participants should be able to:

Identify the 12 key survey questions and the 4 key market conditions that will ultimately help with the key decision about needed interventions


From 12 to 4 to 1

(Workbook Reading 2.1.1.)

WFP Markets Learning Programme Conducting a Trader Survey 3

How does a trader survey help decision-making?

Food availability

Food security

dimension

Food availability

Availability on local markets

Food flows

-----------------

Macro food availability

Survey topics(Topics in italics:

information will come from secondary data or

HH/community data

1. Is sufficient food available on local markets?

2. Will sufficient food be available on a macro-level and on the local markets in the coming 6 months?

3. Will the sources of supply alter in the coming 6 months, with impact on price levels?

Survey questions



Food access

Food security

dimension

Purchase and sales conditions

Prices of food items & cash crops/products

Access to creditOpportunities for HHs to

sell their products-------------------

Physical access to markets

Identification of key products sold and

purchased by HHs & degree of market

dependence Retail and wholesale price

series

Survey topics(Topics in italics: information will

come from secondary data or HH/community data

4. Did HH access to trader credit change?

5. What is outlook for selected purchase & sale prices in next 6 months?

6. Are purchase prices of essential food items & sales prices of key cash crops & products at normal levels?

7. Do HHs have physical access to operational markets?

8. Did HHs change their market behaviour, and to what extent?

Survey questions



Market response

Food security

dimension

Market response

Competition

Co-integration of prices

Constraints to trade

Traders’ capacity to respond to

demand increase

Survey topics(Topics in italics: information

will come from secondary data or HH/community data

9. What are constraints to market functioning?

10. Are markets competitive?

11. How would traders respond to demand increase (from cash/vouchers or increased local purchases)?

12. Are markets integrated?

Survey questions



“The 12” establish “the 4”

Answering the 12 questions, allows us to establish the 4 key findings:

1.an explanation of causes of sale, purchase & availability conditions

2.a picture of the 6 month outlook on purchase/sales conditions & availability

3.an overview of market constraints

4.an overview of the market response capacity



“The 4” inform “the 1’

The 4 findings help to inform:

the key decision on need, type, targeting, timing, & size of food assistance and on market interventions.



Causes of sale, purchase & availability conditions

If food consumption is inadequate: is this because of low food availability, high food prices, low cash crop prices or other reasons?

Understanding causes of inadequate food consumption helps us understand if condition will be temporary, how it can be solved, who might be impacted most/least

Hence, we need to understand current situation, so we can select appropriate solution – i.e. type & targeting of (food?) assistance




6 Month Outlook

How will food consumption change because of expected price & local availability fluctuations?

Outlook adds valuable info re: (e.g.)

Will more or less assistance be needed in the near future?

When will it most be needed?

What livelihoods will be impacted most (by size, timing, targeting of assistance)?

Market analysis including a TS provides dynamic character to FS assessments

Example: If staple food prices are expected to increase substantially and cash crop prices expected to decrease sharply in next 2 months, # of food insecure people from the ‘cash crop livelihood group’ will rise (compared to current situation).

P

P


Market constraints

Is market functioning hindered by, e.g., regulation, taxes, conduct of market actors and/or lack of infrastructure?

This may lead us to conclude that various useful market or other regulatory interventions may alleviate food insecurity


For example:

Repairing a bridge, reducing food import taxes, simplifying import/export regulations or stimulating credit provision to traders could be appropriate.


Market response capacity

Assessment of market response capacity, and of market conditions and constraints, enables selection of the right instruments of intervention…




Is local procurement or imported food aid the most desirable strategy from a market perspective?


Local procurement is preferable if:

1. food is in excess of local requirement

2. harmful imbalances between offer and demand are avoided

3. Purchases take place at competitive ‘commercial’ price

4. purchase prices are near international price levels



Is in-kind food provision or a cash/voucher programmes desirable from a market perspective?


Cash/voucher programmes are preferable if yes is the answer to:

1. Are markets operational & physically accessible by targeted HHs?

2. Is appropriate food available in sufficient quantities & at reasonable prices?

3. Are food markets sufficiently integrated so that food will flow to deficit/target zones?

4. Are food markets sufficiently competitive?

5. Is it likely cash/vouchers will not contribute to rising purchase prices?

Impact on market analysis on decision-making in Darfur

In 2005, the analysis of prices and market functioning led to a change in WFP rations.

In the previous year, large quantities of food had been distributed 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 was not an option, but consideration was given to a pilot to provide complementary cash to food in order to prevent food aid being sold to cover milling costs and repayment of debts.


Wrap-up

The “12 key market questions” help us establish “4 key” conditions that will enable us to take the “1 key” decision about intervention


TST Session 2.1. Trader Surveys and WFP Decision-making An Overview WFP Markets Learning Programme1...

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