Participatory market mapping and urban sanitation market development Lucy Stevens: Senior Policy Adviser

Sanitation chain Containment Collection / Emptying Transport Treatment   Treatment Reuse / Disposal We’re all familiar with the sanitation chain

Learning from agricultural value chains: what’s different? Agricultural markets have: Large numbers of poor producers Producers the main people we want to benefit Generic steps in the value chain Well established markets for products Practical Action has gained a great deal of experience over the last 15+ years into market system development in agricultural markets aimed at improving the lives of poor producers at scale. That could be e.g. dairy farmers in Nepal. Cow lollipops for better yields in Nepal

The PMSD Roadmap www.pmsdroadmap.org We’ve codified that experience in our toolkit and associated training on ‘Participatory Market System Development’ PMSD roadmap – available online – which takes you through a set of 10 steps in process. Helps identify barriers and opportunities – points of leverage where significant changes can be made. It puts a focus on: Systemic thinking (the whole market system) Changing relationships between different market actors – through a participatory process

A framework to understand market systems & value chains It takes three levels: the value chain itself in the middle, with supporting services, and the enabling environment.

Sanitation chain: interacting market systems Value Chain for faecal sludge Service Chain Containment Collection / Emptying Transport   Treatment Reuse / Disposal So what happens when we apply that thinking to urban sanitation markets? What changes? 1. There are interacting and overlapping market systems along the sanitation chain 2. There are both value chains and service chains Pay as you go Service chain Toilet construction Value chain Compost / biogas Value chain

Value chains for goods Consumer (eats apples) Intermediary trader Producer (grows apples) Simple value chain for agricultural products Money People whose lives we want to improve Product Consumer Householder Artisan builder Differences in Sanitation Value Chains: Generally shorter value chains We are most interested in benefits to the consumer – and a bit less interested in benefits to the producer There are not usually very large numbers of producers Simple value chain for toilets People whose lives we want to improve

Value chain for pit-emptying services Household Pit emptier Transport Treatment Reuse / Disposal Money Product Differences in Sanitation Service chains? (Pit emptying – but could include e.g. maintenance of public toilets, or those at schools / clinics) The thing which is being bought is a service – the physical product is not valued by the consumer / household Treatment / disposal is not valued as part of the service by the consumer / household This is not all private-sector driven – Local Authorities are often active in this service chain So clearly this is why people are chasing the ‘holy grail’ of giving that product a value so that the service providers (pit emptiers) are both providing a service and selling a product. Then money can start flowing to the pit emptiers from the other end of the chain as well. Service Can we create value for the product? Can we get householders to value ‘public goods’ as part of the service?

Sustainable Public-Private Partnership for Human Waste Value Chain Faridpur, Bangladesh What does this mean in practice and what additional insights has it brought us? What are its limitations and challenges?

Four key problems 30% of individual households connect their pits/tanks to storm drains Emptying services are only used by 55% of HHs and 81% of institutions. Services serve less than 30 % of cases where a containment should be emptied Unsafe containment of sludge at source Lack of capacity in collection and transportation of sludge Only 10% of the sludge is safely managed No National Regulatory Framework on FSM What is the situation? Unsafe disposal of sludge Gaps in national capacity and co-ordination

Shit-flow diagram, Faridpur High coverage of on-site sanitation. High proportion left to overflow or abandoned (demand for the service needs to grow- partly a problem of affordability and ease of access to the service – partly a problem of not valuing the ‘public good’ of safe emptying and disposal – partly a problem of poor infrastructure which is hard to empty) Two different types of suppliers – the informal groups are seen as more responsive, and able to access difficult locations Is this the right role for the Conservancy Department? Is supporting this service the best way they could use their money to improve the system?

Lease: ($L): to cover equipment capital ($EC), TPO shortfall subsidy ($TS), transport cost to be passed back through safe transfer incentive ($STI) Contract : Capped transfer to TPO from municipality FS FS compost $P1 $P2 Employed our thinking about Market System Not only value chain, but also necessary services (like equipment and financing), and enabling environment (permissions to operate, rules and regs) Participation – that it makes a significant difference to the outcome if you can bring market actors together to come up with solutions together. That process needs to be facilitated. Facilitation role – trying to act as a facilitator and not as an active market player. So – we are not directly operating the treatment plant. We are not finding / employing new pit emptiers (leaving it to existing market actors) Outcome is here Product flows all the way to disposal / reuse Value comes to pit emptiers from both the households and from the treatment plant. Conclusion of business modelling Looking at all the incentives throughout the system, and doing the business modelling, indicates that there will be an on-going need for the municipality to inject cash into the system. This is in the form of a payment to the treatment plant to cover its costs which will not be fully recovered from sale of compost. Safe transfer incentive Containment Emptying Transport Treatment Disposal-Reuse Safe transfer incentive ($STI)

Urban CLTS: multiple actions Demand creation (behaviour change) Working with artisans Working with pit emptiers Enabling environment (rules & regs) What if you’re in a situation where there isn’t existing good toilet coverage and actually the priority is to work on that as well as on pit emptying? Needing to deal with more of these value and service chains simultaneously? Closest we’ve come to that is in our work in Nakuru to adopt and adapt a CLTS approach with the aim of achieving high levels of coverage. That worked with the toilet construction value chain (Value chain: consumer demand and ability of artisans to respond. Services: financing for households. Enabling environment: rules, community health volunteers, collective behaviour change) It also worked with pit emptiers.

Open Defecation Free status in urban areas: CLTS 1,603 facilities newly constructed 601 facilities renovated 58,260 residents benefitting 4 villages close to declaring ODF status 28 pit emptiers legal & work during the day There have been good results: The difficulty is that we weren’t able to really concentrate on particular elements of each of those value chains, and there was a danger of becoming an active market player. New project (just approved) in Kisumu will also adopt this kind of systemic approach and has components of value chains / systemic thinking – because previous work we did failed to scale up effectively. It will look more systemically at pit empyting as a specific component.

Lessons Insights from applying market systems thinking Systemic thinking helped identify key entry points and new solutions Continuing role for the Municipality and inputs of municipal money – but how best to deploy this Benefit of working with existing market actors, and thinking about the incentives which drive them Practical Action as facilitator, not direct market actor Challenges: Multiple value and service chains: complexity Change of mind-set and ways of working Many actors are highly vulnerable: need for expert facilitation What additional insights has it brought us? Starting point: Systemic change [We want this system to work better to e.g. Increase % waste safely managed, or to increase coverage of access to clean sanitation] – previously would think about just small components of the picture (financing for landlords on its own) It’s not just about making this 100% commercially viable. There can still be a role for municipal money – just thinking about where that is best spent. Importance of change in relationships / building the capacity of permanent actors (before we might have worked with local CBOs who don’t necessarily have a market perspective) Thinking about incentives What are its limitations and challenges? There are overlapping and interacting value and service chains – and it is not easy dealing with that complexity Many of the actors we are working with are highly vulnerable – and this takes additional care and expert facilitation

Thank you lucy.stevens@practicalaction.org.uk @lucykstevens policy.practicalaction.org