some background is necessary for all those people who have stumbled upon my blog by accident, whether they were stalkers, a detective agency hoping to find clues regarding the slaughterhouse I operate in my backyard, or tourists who wanted some information on Ghana.
I am going to Ghana to work on the AVC (agriculture and Value chain) team with EWB (enigmas without boundaries).
I don’t know all the specifics to my placement, but I do know this tantalizing information: I will be working with the technique of market facilitation. What is that?! you may ask with wonder (or you may not care, but are reading this out of politness and respect). allow me to explain….
Here we have a Standard Value chain. Simply defined, a value chain is the system something goes through to get from resource to good or service. In the case of agriculture, the value chain encompasses everyone from input dealers to exporters.
here is a wonderfully simple value chain that I stole off Mark Brown’s Blog
Now market facilitation is what goes on with the AVC team. Market facilitation can roughly be defined as action that influences or stimulates the market system, but does not become a part of it.
also defined as “a value chain intervention approach that focuses on helping develop relationships between actors as opposed to replacing or overlapping with actors” (Brown, 2010)
I have heard it compared to an art rather than a science. This is a beautiful description and makes me wonder why there isn’t an EWB branch at ACAD (Alberta College of Art and Design).
there are 4 key focuses that differentiate Market facilitation from traditional methods
1. Relationships- between each member of the value chain
2. Ownership- members will see the benefit of the relationships and ideas and will carry on once the facilitators have left
3. Incentives- there’s gotta be a economic reason for doing something
4. light touch and exit strategy- facilitating change without becoming a part of the chain
I found this visual to be very helpful
it’s a pin-wheel. you can blow on it, you can hold it up to the wind, you can brush it with your finger, but if you actually stick your finger inside the wheel, it likely won’t work quite the way you want it to. And if you try too hard to make it work then pull your finger away, you likely damaged the pin-wheel in some way.
if you don’t like toys and consider yourself grown up, think of giving a person a massage instead of cutting them open and pretending your hand is another organ.
There have been many cases in which NGOs have become a part of the market and have played a major role. The unfortunate happens when the NGO pulls out without a solid exit strategy, and the market must make up for a missing link. In this situation it is not uncommon for the entire market to flounder causing undue stress on all players.
Another example of a negative market technique is this: and NGO realizes the subsistence farmers cannot afford to buy appropriate amounts of fertilizer for their maize. This NGO decides to use it’s money to sell fertilizer to these farmers at a subsidized price. The farmers find their yield is increasing. yay! unfortunately, down the road is Marcus O’Neil, the input dealer. He just lost all his business. With much bitterness he packs up his family, his house, and heads to town to look for a different job.
3 months later the NGO runs out of money. They quickly pull out of this project leaving dozens of farmers scrambling for fertilizer. unfortunately Marcus now lives far away desperately trying to find a living somewhere else. these farmers now have no access to any fertilizer, and their yield rapidly diminishes to far less than it was with the inadequate amounts of fertilizer.
Here was an example of poor market intervention.
Had this NGO used Market Facilitation this may have occured:
NGO notices the farmers cannot afford to buy adequate amounts of fertilizer.
NGO goes to local input dealer and asks how much fertilizer costs. turns out Input dealer is importing fertilizer the farmers don’t like to use because it is said to be “low quality” so all the farmers have been trying to pay for the high quality goods but can only afford small amounts.
NGO knows of businesses in town that specifically manufacture this type of fertilizer and deliver is for a fraction of the price. NGO gives Input dealer the phone number.
well that was easy.
Disclaimer: this is a very simplified and hypothetical situation