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

2. 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 WFP Markets Learning Programme 2 Conducting a Trader Survey

3. From 12 to 4 to 1 (Workbook Reading 2.1.1.) WFP Markets Learning Programme Conducting a Trader Survey 3

4. 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 WFP Markets Learning Programme 4 Conducting a Trader Survey The 12

5. How does a trader survey help decision-making? Food access Food security dimension Purchase and sales conditions Prices of food items & cash crops/products Access to credit Opportunities 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 WFP Markets Learning Programme 5 Conducting a Trader Survey The 12

6. How does a trader survey help decision-making? 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 WFP Markets Learning Programme 6 Conducting a Trader Survey The 12

7. How does a trader survey help decision-making? “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 The 12 WFP Markets Learning Programme 7 Conducting a Trader Survey

8. How does a trader survey help decision-making? “ 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. WFP Markets Learning Programme 8 Conducting a Trader Survey 1 the 4 the 12

9. How does a trader survey help decision-making? 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 WFP Markets Learning Programme 9 Conducting a Trader Survey the 4

10. WFP Markets Learning Programme 10 Conducting a Trader Survey How does a trader survey help decision-making? 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 the 4

11. How does a trader survey help decision-making? 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 WFP Markets Learning Programme 11 Conducting a Trader Survey For example: Repairing a bridge, reducing food import taxes, simplifying import/export regulations or stimulating credit provision to traders could be appropriate. the 4

12. How does a trader survey help decision-making? Market response capacity Assessment of market response capacity, and of market conditions and constraints, enables selection of the right instruments of intervention… WFP Markets Learning Programme 12 Conducting a Trader Survey the 4

13. How does a trader survey help decision-making? Market response capacity Is local procurement or imported food aid the most desirable strategy from a market perspective? WFP Markets Learning Programme 13 Conducting a Trader Survey 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 the 4

14. How does a trader survey help decision-making? Market response capacity Is in-kind food provision or a cash/voucher programmes desirable from a market perspective? WFP Markets Learning Programme 14 Conducting a Trader Survey 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? the 4

15. 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. WFP Markets Learning Programme Conducting a Trader Survey 15

16. 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 WFP Markets Learning Programme Conducting a Trader Survey 16 1 the 4 the 12