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Markets and Food Security. TST. Session 1.2. WFP Markets Learning Programme. Trader Survey Training - V2. 1.2. 1. Learning objectives. After this session, participants should be able to: Explain the importance and value of market analysis in food security assessment

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Markets and food security

Markets and Food Security

TST

Session 1.2

WFP Markets Learning Programme

Trader Survey Training - V2

1.2. 1


Learning objectives

Learning objectives

After this session, participants should be able to:

  • Explain the importance and value of market analysis in food security assessment

  • Identify the essential links between markets and food availability; and between markets and food access

WFP Markets Learning Programme

Trader Survey Training - V2

1.2. 2


A quick review

A quick review…

Food Security…

Definition?

WFP Markets Learning Programme

Trader Survey Training - V2

1.2. 3


Food security

Food Security

A situation…

…when all people, at all times, have physical & economic access to sufficient, safe & nutritious food to meet their dietary needs & food preferences for active, healthy life

WFP Markets Learning Programme

Trader Survey Training - V2

1.2. 4


Definitions for

Definitions for…

Market: A place where buyers & sellers come together to exchange goods and services

Availability?

Access?

Utilisation?

Market?

WFP Markets Learning Programme

Trader Survey Training - V2

1.2. 5


So why are markets important for food security

So, why are markets important for food security?

Markets

Food Security

As a group: discuss:

What type of products do HHs exchange on markets?

Why are markets important for food access?

Why are markets important for food availability?

How can WFP use market interventions to address food insecurity?

Quickly note responses on flip charts…you have 10 minutes.

WFP Markets Learning Programme

Trader Survey Training - V2

1.2. 6


What type of products do hhs exchange on markets

What type of products do HHs exchange on markets?

Food, cash crops, livestock, labour and other non-food items such as soap, charcoal, etc.

For each HH, the types of product they exchange vary:

  • Pastoralist, cash cropper, subsistence farmer or daily labourer?

  • Rich or poor?

  • Depending on the season and on good year versus bad year

    Therefore, to understand the impact of markets, we have to find out about selling/buying patterns of our target groups

Trader Survey Training - V2


2 why are markets important for food access

2.Why are markets important for food access?

  • HHs buy, sell, barter on markets, influencing their food availability, while prices they pay & receive, & their use of credit, influence HH income & expenditure

  • Each HH is confronted with price variation, influencing its ability to acquire food, & buying, selling, bartering patterns of HHs throughout the year & between years

  • HH food access influences individual food intake

Trader Survey Training - V2


3 why are markets important for food availability

3.Why are markets important for food availability?

Let’s talk definitions first:

  • General food availability vs. local availability

  • Food intake: impacted indirectly by food availability, through food access

    Markets, or better, traders ensure that:

  • Food moves from food surplus zones to food deficit zones

  • Food is stored during surplus times for use during deficit times

Trader Survey Training - V2


3 why are markets important for food availability continued

3.Why are markets important for food availability? (continued)

If markets don’t function well, they do not perform these functions, or only at large transaction cost

Good speculation and bad speculation

  • ‘Good speculation’ if storage contributes to dampening price volatility

  • ‘Bad speculation’ if storage worsens price volatility, or if done at unreasonable profit margins

Trader Survey Training - V2


4 how can wfp use market interventions to address food insecurity

4.How can WFP use market interventions to address food insecurity?

Improve market functioning / reduction of transaction cost, often with partners, to:

  • reduce (informal) taxes

  • improve infrastructure

  • broaden the number of traders

  • enhance trade credit provisioning, etc.

    Distribute cash or vouchers

    Local and regional procurement

    Purchase for Progress

Trader Survey Training - V2


Markets and food security

markets in the food security & nutrition framework

Markets

Food Security

Trader Survey Training - V2


Markets and food security

Markets & Food Security Analysis

  • To summarise, markets:

  • Influence food availability, co-determine purchasing and selling conditions, have an impact on food access and, subsequently, an indirect influence on individual food intake

  • Play a role in addressing food insecurity, through market interventions, local procurement and cash/voucher programmes

Markets

Food Security

WFP Markets Learning Programme

Trader Survey Training - V2

1.2. 13


Quick case exercise 1 2 a government policies in pakistan

Quick Case: Exercise 1.2.a. Government Policies in Pakistan

Task: Read the Quick Case and, with a partner, answer the questions below.

Government wheat policy tries to balance competing interests of producers and consumers. On the production side, policy is aimed at increasing wheat productivity (yields) , output, and support for farmer income. Increased wheat production has also been seen as part of an overall national food security strategy of reducing dependence on food imports for national food supplies.

On the consumption side, the government attempts to enhance HH food security, particularly through ensuring availability of wheat flour at affordable prices and maintaining price stability. Food policy options are constrained, however, by overall fiscal constraints, as well as a desire to minimize fiscal subsidies on food. Moreover, the wheat procurement price has been seen as a major determinant of overall inflation because of its role as a wage good and an indicator of overall government price policy. Thus, wheat policy is somewhat constrained by inflation targets and inflation policy.

  • What is the Government doing to impact availability?

  • What is the Government doing to impact food access?

    Adapted from: Nyberg, Jennifer, “Pakistan Market Assessment – Earthquake Affected Areas”, WFP, 2005, page 10.

Trader Survey Training - V2


Markets and food security

Markets and

food availability

Food sufficiency can be achieved through…

  • Domestic production

  • Imports (commercial and public imports)

  • Public transfers (e.g. food aid)

  • National/regional stocks

    …but market functioning is crucial to food availability

  • Physical access (travel distance, time, seasonal access)

  • Market integration (transaction costs and trade flows)

Markets

Food Security

WFP Markets Learning Programme

Trader Survey Training - V2

1.2. 15


Markets and food security

Markets and food availability:

Two levels of analysis

Understanding food availability is essential to determining likely impact of market on HH food access

Food availability is analyzed at two levels:

  • Macro-level analysis

  • Meso-level analysis

Markets

Food Security

WFP Markets Learning Programme

Trader Survey Training - V2

1.2. 16


Markets and food security

Markets and food availability

Macro-analysis

  • Macro-level analysis of food availability – conducted through secondary data on the market environment

    • Market vulnerability to macro-economic conditions: economic growth & price volatility, international reserves

    • Policy environment : trade policies, regulations, institutions, food policy and interaction of grain reserves with markets, governance

Markets

Food Security

WFP Markets Learning Programme

Trader Survey Training - V2

1.2. 17


Markets and food security

Markets and food availability

Meso-Analysis

Meso-level analysis of food availability

  • conducted through trader surveys & community interviews

  • Seeks to understand market structure, conduct and performance (more on this in Session 1.4)

  • This is the level of food availability analysis that we will conduct via our market visit and survey

Markets

Food Security

WFP Markets Learning Programme

Trader Survey Training - V2

1.2. 18


Markets and food security

Markets and Food Access

The Concept of Entitlement

Food access is determined by HH entitlements:

The means of acquiring food is based on assets (land, labour, livestock, savings), through:

  • Direct entitlement (own production)

  • Trade/market entitlement

Markets

Food Security

entitlement: The set of alternative bundles of goods and services that a person can acquire by converting his/her endowments, such as land and labour, through production, trade or gifts

WFP Markets Learning Programme

Trader Survey Training - V2

1.2. 19


Markets and food security

How do markets determine food access?

Access to food is reduced with entitlement failures

These reductions are likely due to market failures, e.g.,

Markets

fall in wages

rise in food prices

loss of employment

drop in cash crop or livestock prices

HH Food

Access

Food Security

WFP Markets Learning Programme

Trader Survey Training - V2

1.2. 20


Markets and food security

What are the market indicators of “entitlement”?

Many indicators of “entitlement” are asset and market-based:

  • relative prices

  • real incomes

  • market-related shocks

Markets

Food Security

Thus: to understand reductions of HH entitlement – i.e. of food access – we must understand the markets with which those HHs interact

WFP Markets Learning Programme

Trader Survey Training - V2

1.2. 21


Markets and food security

How do markets determine food access?

Effective Demand

Effective demand is key to HH food access

Purchasing Power

Market Dependence

Market Access

Markets

Food Security

Livelihoods Analysis

Effective Demand: the quantity of a good or service that consumers are actually buying at the current market price.

WFP Markets Learning Programme

Trader Survey Training - V2

1.2. 22


Markets and food security

How do markets determine food access?

Effective Demand

HH access to markets

  • Physical (distance)

  • Financial (price, credit…)

  • Social (gender, security…)

Question for Plenary

…and in your country?

Which livelihoods are more/less profoundly integrated into local markets? Which are generally more impacted by severe food price shifts?

Purchasing Power

Market Dependence

Market Access

Markets

Food Security

Market dependence or participation

  • On/in markets for goods (food, non-food, livestock…) & services (labour, credit, capital…)

  • Selling/buying behaviours: net seller/buyer, seasons and reasons of sales and purchases

    Economic access, i.e. incomes and purchasing power

Livelihoods Analysis

WFP Markets Learning Programme

Trader Survey Training - V2

1.2. 23


Markets and food security

Market participation and food security

  • Markets as food source :

  • Evidence suggests very few, if any, HHs are autarkic

  • Majority of HHs buy more than they sell on markets

Markets

Food Security

autarkic: self-sufficient (here in terms of food)

WFP Markets Learning Programme

Trader Survey Training - V2

1.2. 24


Market participation fs urban hhs senegal

Market Participation & FS Urban HHs - Senegal

Markets

Food Security

Urban Food Security Assessment, Analysis of Impact of High Food Prices on FS & Livelihoods of Urban Populations in Senegal (Urban to Semi-urban Centres of Pikine, Kaolack, and Ziguinchor), FAO / UNICEF / WFP, November –2008

WFP Markets Learning Programme

Trader Survey Training - V2

1.2. 25


Market participation fs rural hhs madagascar

Market Participation & FS Rural HHs - Madagascar

Markets

Food Security

Analysis of HH Food Security in Selected Districts of Madagascar

WFP, Madagascar, September 2009

WFP Markets Learning Programme

Trader Survey Training - V2

1.2. 26


Small group work

Small Group Work

Exercise 1.2.b.

  • Food & Nutrition Insecurity in Northern Laos

Trader Survey Training - V2


Wrap up markets food security

Wrap-up: Markets & Food Security

  • Understanding how markets function, and interventions that facilitate trade, helps us identify measures to alleviate negative impacts of shocks

  • Higher food prices make food access more difficult for HHs: most smallholder, low-income farmers are net buyers of food, often selling at low prices at harvest, buying back at high prices during lean season

  • Most vulnerable population groups: those who buy more food than they sell (net buyers), spend large share of income on food, have few coping strategies

  • These groups include urban poor, rural landless, pastoralists (who are particularly vulnerable: they face falling livestock prices at same time as rising food prices, causing steep drop in purchasing power)

Trader Survey Training - V2


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