Lessons and Insights in Participatory Market System Development

An international study of PMSD applications in Bangladesh, Sri Lanka, Sudan, Peru and Zimbabwe

Between August 2005 and May 2006, the Markets and Livelihoods Programme carried out an international study about the applications of PMSD (Participatory Market Systems Development) in five countries and five different subsectors: milk in Bangladesh, lagoon fisheries in Sri Lanka, hibiscus in Sudan, cheese in Peru and guar bean in Zimbabwe.  Here below you can find some of the key lessons and insights.

This study was possible thanks to funds provided by DFID.

Download the full report: Lessons and Insights in Participatory Market Chain Analysis (PDF, 582k)

Key PMSD Processes and Tools:

  • Preliminary market mapping: it helps the project team to capture and organise preliminary information about the market system gathered from secondary sources and key informants 
  • Hooks: issues that will attract and engage market actors 
  • Market Opportunity Groups: groups that represent and empower target producers to explore more and better business opportunities and engage with other market stakeholders
  • Interest Forums : to convene and engage stakeholders to work together to improve the the market system
  • Participatory Market Mapping (PMM) workshops: to bring together market system actors around joint analysis, relationship, trust-building and negotiation
  • Moving from analysis to action: based on the relationships, knowledge and trust generated throughout the process, concrete actions are agreed by market stakeholders to improve the market system (composed by the business environment, the market chain and the providers of inputs and services)

Context and adaptability of the approach

The five contexts for the research were highly varied in terms of: geographic; stability (e.g. post-disaster context in Sri Lanka and economic crisis in Zimbabwe); product sectors; stage of project development or implementation.

The research indicates that PMSD is adaptable to different contexts but that different outcomes might be expected. For example, in the post-Tsunami Sri Lanka context, the approach was (in the first instance) useful for bringing together a large number of agencies (government and non-government) with some market actors. The focus was largely on the business environment and it capitalised on a window of opportunity to influence policy makers about key issues disabling the market system (e.g. infrastructure).

In Zimbabwe, the economic crisis resulted in a cautious approach by some businesses, and the PMSD process built up confidence and encouraged a largescale buyer to be more proactive with smallscale suppliers.

In some countries the approach was used in existing projects and in others it was used to better understand the opportunities within market systems for pro-poor market development. PMSD had positive outcomes in both these contexts, for example:

On-going project: In the guar bean project the Southern Africa Practical Action team had been struggling to make advances in the project but found that the approach of PMSD was able to address some key issues to "unlock the bottlenecks that had bedevilled the project for the past 4 years"  (Team Leader, Zimbabwe).

Project Development: Hibiscus is a sub-sector that the Practical Action Sudan team identified as having considerable potential for poor farmers. The PMSD approach enabled them to explore key opportunities and bottlenecks with stakeholders, and formed the basis of a successful project development and funding.

Insights and lessons

PMSD is not necessarily resource heavy i.e. it need not involve sophisticated methodologies or long processes; what is important is bringing market actors together to dialogue, gain a collective awareness of the market system, build trust amongst them and create opportunities for joint action. Continuous monitoring and reflection during the facilitation process is critical to make adjustments along the way.

The nature of relationships amongst actors can be very difficult to understand, much more so than determining who is doing what. This fact could explain why some project teams avoided the preliminary mapping (market mapping done by the project team before they engage with market stakeholders) but also why it is precisely one of the most important steps to improve the understanding of the market system.

Reputation of the facilitator is important to convince people to participate in the PMSD process but short-term and concrete results are needed to keep people engaged and enthused and to build trust progressively.

The most versatile "hooks" to engage market actors tended to be around quality and access to new markets; however, the process must try to allow key issues to emerge from participants and use those to keep interest.

Organising and empowering marginalised farmers before they engage with other actors is very important. Some project teams were more emphatic about this than others but all of them tried to create a level playing field for the producers before and during the PMM workshops.

It is important to ensure that the most marginalised farmers are adequately represented in the process through representation on the Market Opportunity Group. Farmers associations will not necessarily represent the poorest farmers adequately.

The Market Opportunity Groups and the Interest Groups are tools to help manage the facilitation process and create basic conditions for long-term cooperation; however, in reality some actors belong to more than one space and have more than one single interest in the market system (e.g. they can be producers and intermediaries at the same time). This can be problematic but some teams found that this increases the possibilities to engage them in the PMSD process in more than one way.

In most cases, it was easier for the project teams to engage with producers and governmental agencies than with private sector actors outside of the immediate realm of the producers (i.e. local small-scale traders and processors). This was problematic in all cases and particularly in market systems that have a national and international scope. The research helped the international team identify this as a future focus of work.

Successful PMSD affects the status quo of power relationships. Facilitators must be aware of this to prevent blockages from actors with vested interests but also to identify existing power structures that could be used as an asset for market development (e.g., farmers associations and chambers of commerce).

A light touch approach is needed so that PMSD participants are enabled to provide their knowledge and validate information given by others. Outside "experts" may be able to fill in information gaps but even this can be taken on by the participants themselves (described in the Bangladesh caselet).

PMSD is a powerful way to promote awareness amongts market stakeholders that they operate in a complex system. When they acquire a more systemic view, they start to recognise that they share problems and opportunities and that they have to act together.

Moving to action is important so that the process is not seen as just analysis.  For example simple and clear "statements of intent" (like an informal contract) between farmers and buyers proved effective to move towards increased levels of trust and commitment (described in the Zimbabwe caselet).

Learning processes

Conceptual and operative models were agreed upon by all the international team involved in the project. The basis of the approach is an understanding of markets as systems which comprise of relationships amongst market chain actors and service providers, within a business environment . The model of operation is based on the short sequence of steps (see box), defined by a preliminary phase that includes studying the market, drawing a preliminary market map, and preparing smallscale producers and the rest of actors to engage in the process; the facilitation of one or more PMM workshops and the participatory drafting of an action plan.

Despite the fact that all the teams begun the process having in mind these models, in practice, each one adapted the process to the context and their capabilities, understandings and experiences. Through these adaptations and the contrast amongst them, this research provided valuable insights, lessons and experiences for Practical Action and for other organisations who are also trying to make market systems work better for the poor.

The teams could adapt the original PMSD methodology to the contexts where it was applied; however, it also highlighted where more work is needed to improve the levels of market literacy within the programme.

The research provided significant "added value" for the Markets and Livelihoods programme and it has pointed to areas for future investigation and investment.

For further information please contact:

Alison Griffith
alison.griffith@practicalaction.org.uk
International Team Leader - Markets and Livelihoods 

Lucho Osorio
luis.osorio@practicalaction.org.uk
International Programme Co-ordinator

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