2.3. Market Analysis & Emergency Food Security Assessment

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Oct 28, 2013 (3 years and 10 months ago)

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2.3. Market Analysis &
Emergency Food
Security Assessment

Food Security Cluster Needs Assessment Workshop

Dhaka, Bangladesh

19


20 February 2012

Session Objectives

After this session, participants should be able to:


Define a number of market analysis concepts


Explain how market assessment can inform an
emergency food security assessment


Identify the key aims and components of a
market assessment survey

Food Security Assessments:
Phases & Tools

Why?

Market Analysis: to inform FS response decisions

Facilitates:


food
assistance
intervention planning with assurance
that
impact on
domestic food production and food markets is not
negative


decision whether
cash or food aid is the best
option
to
address
food
insecurity


local
or regional food
purchase planning and ensure these
are implemented at
the best time
with maximum effect on
producers and markets

Why

are markets important for food availability?


Markets, or better,
traders

ensure that:


Food moves from food surplus zones to food
deficit zones


Food is stored during surplus times for use
during deficit times

If markets don’t function well, they do not perform
these functions
-

or only at large transaction cost

Why

are markets important for food access?



HHs buy, sell, barter on markets, influencing their food
availability, while prices they pay & receive, & their use
of credit, influence HH income & expenditure


Each HH is confronted with price variation, influencing its
ability to acquire food, & buying, selling, bartering
patterns of HHs throughout the year & between years


HH food access influences individual food intake

markets
and the
food
security
&
nutrition
framework

What?

Purpose
of Market Analysis in FSA

1.
Estimate national/regional/local food supply capacities
against domestic requirements

2.
Gauge HH dependency on markets for food

3.
Gauge HH capabilities to access food through
markets

4.
Determine market response capacities to cover food
demand gaps

5.
Formulate early warnings if domestic production &
markets cannot cover food demand gaps

6.
Inform food security response strategies

Macro
-
level
analysis
of food availability


conducted through
analysis of secondary market data


Market vulnerability to
macro
-
economic
conditions:

economic
growth
& price
volatility, international
reserves


Policy environment

: trade
policies, regulations,
institutions, food policy and interaction of grain reserves
with markets,
governance

What?

Markets and food availability

Meso
-
level
analysis of food availability


conducted through trader surveys & community interviews


Seeks to understand market structure, conduct and
performance


Micro
-
level analysis of food availability


conducted through HH
-
level surveys


Seeks to understand HH
-
level food availabilities


What?

Markets and food availability



Evidence suggests very few, if any, HHs are
“autarkic” (or “
self
-
sufficient”) in terms of
food



Majority of HHs buy more than they sell on
markets


What?

HH participation in markets and
food
security


Households Dependence on Markets for Food

Country

% of HH food obtained

at m
arket

WFP Household Surveys

Mali

70%

Niger

70%

Lao,

PDR

40%

Tanzania

66%

Timor

Leste

59%

What?

Market Structure


Identifying critical
marketing chains that
may have been
disrupted by the
shock

What?

Market
Conduct

Identifying patterns
of behaviour
that
traders
follow to
affect or adjust
to changing market
conditions:


Price
-
setting
behaviour


Level of competition


Buying and selling practices


Weights and measures


Grades and standards

What?

Market
Performance

Identifying extent
to which markets
produce outcomes deemed
good or preferred by society:
regular, predictable
availability of
basic
foods
at affordable
prices


Price levels and
stability over time and space (market
integration)


Margins and costs


Volumes


Profits: excessive or not


Product
quality


Food distribution within market

Market Performance: Example

Real millet prices in regions of Niger and Nigeria, 1995 to 2006


What
?

Market

Integration
?

Identifing

the existence of
trade

flows
: the
movement

of
food

in
response

to
supply
/
demand

imbalances

Market integration allows price signals to be transmitted from
one market to another

Impact on HH Food Security of market integration?


When markets are integrated, prices become more stable:
then HH FS is likely to be improved, as poor HHs can obtain
food at more affordable prices


How?

Using market
-
based interventions to address food
insecurity

Improve market functioning / reduction of transaction cost,
often with partners, to:


reduce (informal) taxes


improve infrastructure


broaden the number of traders


enhance trade credit provisioning, etc
.

Distribute cash or vouchers

Local and regional procurement


How?

Market Analysis tools for FSA

Price analysis tools
(e.g. CPI, seasonality analysis, volatility
analysis, terms of trade analysis) to understand:


How shocks may have disrupted or added to “normal”
prices fluctuations

Market survey tools
(e.g. Trader Survey) to understand:


Current price and sales conditions


6 month outlook for price and sales conditions


Market constraints


Market response

Examples

Generic Trader Survey


Sidr Cyclone Trader Survey

Useful Resource


WFP VAM’s


“Market Analysis Tool:

How to conduct a trader survey”

To summarise, markets:


Influence food availability, co
-
determine
purchasing and selling conditions, have an
impact on food access and, subsequently, an
indirect influence on individual food intake


Play a role in addressing food insecurity,
through market interventions, local
procurement and cash/voucher programmes


Wrap
-
up

Markets & Food Security Analysis