Making markets work for the poor


January 30th, 2012

I returned from a visit to our Nepal programme last week and so thought I’d use my next couple of blogs to provide some news from there.

Woman selling milk to a collection centre in Nepal

In a previous blog I have talked about our work with dairy farmers in Nepal – helping small farmers increase milk yields through improved animal health and nutrition. In Nepal there is, in theory, a huge opportunity for small farmers to earn income from milk sales as there is a national ‘milk deficit’ with very large quantities of both fresh and powdered milk being imported from India to meet the demand of urban centres.

For increased yields of milk to lead to higher incomes for farmers however, improved technology and technical knowledge is only part of the changes that have to occur. The technical side of ensuring access to improved feedstock, the services of vets, cooling facilities to allow milk from lots of small farms to be bulked up and stored until collection by dairy processors etc is all very important. But often there are other problems in the way market chains work which can prevent small producers from realising the potential value of their produce. That is why Practical Action works not just on the technology but also on making markets work for poor people.

I saw an example of the latter on my first day in Kathmandu, when I attended a seminar on barriers to small holder farmers’ engagement in the dairy market, hosted by Practical Action. It was held under the auspicies of a Practical Action dairy project (funded by UK AID) and was part of the process of bringing key market actors from across the dairy market chain together to discuss policy blockages to further expansion of smallholder dairy production. The seminar was attended by about 100 people including small farmers, private sector dairy processors and government officials. The latter included the Minister for Agriculture, the Permanent Secretary for the Ministry of Agriculture and the Director General of the Livestock Department of the Ministry of Agriculture. A representative of the UK’s Department for International Develoment was also present as a speaker.

The workshop was good evidence of our Nepal office’s convening power, in this case bringing together and facilitating discussion amongst the whole range of different players that make up the dairy market chain in Nepal. The first part of the morning included speeches by the main guests and a key note speech identifying some of the main problems in the dairy market chain today that hamper dairy businesses from operating efficently and which prevent small farmers from obtaining the best value for their milk. The principle problems listed were: limitations on the ability to improve the quality of livestock (because of an embargo on cross border cattle movement from India and very limited artificial insemination facilities), limited access to credit for small holder farmers, and the depressing effect on supply of the price fixing system used by the Government’s Dairy Development Board.

The meeting went on to 4pm in the afternoon, 3 hours after its due closure time, because of the intense interest of the participants in the discussion. One outcome was that government officials agreed to look into the possibility of an official visit to India to, amongst other things, hold discussions on cross border cattle movement.

This sort of meeting is part of a participatory market mapping and facilitation process that Practical Action has developed over the past few years to help all actors in a market chain better understand how a market works and what could be done differently to improve the value to all participants but, in particular, to make markets work for the poor. For more information see our website at: https://practicalaction.org/markets-2

2 responses to “Making markets work for the poor”

  1. Dhattatreya Hosagrahar Says:

    hi

    a small in put, you dont need a cattle from India, you can adopt a AI (artificial insemination) as it is proved to be more success than that of taking the milchy cow from one place to other.By introducing AI you can upgrade the local breed and make most use of it
    regards
    dhatta

  2. Simon Trace Says:

    Hello Dhatta. You are correct to make the point about AI. The problem at the moment is that although AI facilities exist in Nepal, as I said in the blog, they are very limited and not all farmers can get access to them easily. So importing improved breeds of animal from India remains a serious alternative for now, if the restrictions can be overcome.

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