Stakeholder-led strategy development and implementation: lessons from the EU-AAACP. Jamie Morrison Senior Economist Trade and Markets Division

Transcription

1 Stakeholder-led strategy development and implementation: lessons from the EU-AAACP Jamie Morrison Senior Economist Trade and Markets Division

2 Outline The AAACP approach to strategy development Lessons Process Content Focus on insights for public sector support to smallholder inclusion in sectoral/value chain development

3 EU AAACP process Regional Stakeholder Kick-off Workshop (KOW) Regional sector development priorities Participatorysector strategy& implementationplans readyfor implementation? No R 1: Develop sector strategies & Implementation Plans R1: translation of strategies into national & regional development plans & policies R 2: Implementation R3: Implementation Preparatory information, baseline data Yes Category1 sectors& countries Category2 sectors& countries Consultation & briefing meeting - I/O s & sector stakeholders Situation & needs update, stakeholder mapping & data collection R2: Implementation R3: Implementation R1: Formulation of Commodity strategies and implementation plans R2:Improved access to and use of markets, production factors and services R3: Market-based risk management instruments to reduce producers income vulnerability

4 How it AAACP Sector Diagnosis and Strategy it Formulation - Result 1 Consultation: markets & environment Workshop 1 Diagnose the sector Examine options Workshop 2 Finalise strategy & plan implementation Implementation Step 1: Identify sector stakeholders & key issues Prepare & train for implementation Step 2: Assess markets, institutional environment incl. risk, policy etc Step 3: Step 4: Step 5: Develop strategic options with stakeholders Define success factors Evaluate & optimise value chain performance Draft strategy & action plan Working groups: Validate information & data used Contact potential implementing partners Improve quality of solutions Feasibility analyses Scenario analyses Formulate strategy Prioritise activities & implementation plans Finalise strategy Establish implementation framework Develop & implement projects Monitor progress & environment Evaluate impact Refine strategy Sector level Enterprises or communities define market options & value chains Examine options & scenarios Research solutions & potential partners Groups of Enterprises or Communities Develop & finalise elements of business linkage & cluster or community plans Business/Community development: Training & coaching Contract formulation/r negotiation Market approaches & Business planning Business linkages

5 Lessons - process Time: 4 to 6 months planned was unrealistic for completion of participatory process Information, data, analysis Embedding national coordination committee Composition and relative roles of different stakeholders Representative? Relative roles of private and public sector Management of expectations Relationship with broader national development processes

6 Lessons - process Need to identify critical constraints to improved performance and to prioritize interventions Similar constraints to sector development with suboptimal performance visible in production, marketing, trade But multiple, differing reasons: limited market intelligence, expensive financing, small scale, weak coordination... Too often find disjointed interventions fixing noncritical constraints too much focus on one component of chain sequential alleviation of constraints needed

7 Lessons content Reliability of increased supply Smallholder participation Critical role for the public sector Where, what, how? New insights on PPP Evidence based decision making

8 Reliability of supply Essential, but often neglected, requirement for commercialization Insufficient attention to extent to which smallholders are able and willing to generate and sell marketable surplus Food security concerns Zambia Cassava - Propensity to supply Limited private sector support services Pacific F&V Insufficient attention to smallholder heterogeneity in determining the key constraints to participation in the identification of appropriate solutions Patterns of participation increasingly well documented, BUT not well understood

9 Critical role for the public sector in facilitating smallholder commercialization Relative merits and sustainability of alternative interventions Donor/NGO subsidization of a link that would not otherwise happen/ be sustained? Capacity of government to configure and monitor interventions Sequencing and stage of development Picking winners region, sector, individuals New insights on PPPs for facilitating smallholder market integration Service delivery (public goods vs. demand stimulation) New product delivery (to remote, high transaction cost customers) Deliberative fora

10 Sources of Failure in Agricultural Markets Source of market failure: 1. Lack of enabling environment 2. Public goods 3. Merit goods 4. Barriers to entry 5. High transaction costs/risks 6. Coordination failures (complementary investment) What is the constraint to private sector involvement? Unstable macro-economic environment; Inadequate physical infrastructure; Weak property rights and/or contract enforcement Non-excludability, non-subtractability Lack of effective demand, hence market under-provides Lack of access to: Capital, Training (technical information) Market information Imperfect information about attributes or actions of other actors and/or attributes of goods being sold Asymmetric information, no mechanism to enforce commitments; hence lack of trust Possible PPP Solutions PPPs for provision and/or maintenance of infrastructure Contracting out for service delivery; Facilitate private coordination Contracting out for service delivery; Subsidies - Certification; Publicly supported assurance schemes; Risk sharing schemes Deliberative fora

11 Importance of Deliberative Fora Often key to increasing levels of trust and coordination along the chain Facilitate increased levels of investment, possibility of contracting etc Example - ESA grains markets Ad hoc market interventions limiting private sector engagement, but food security concerns paramount for governments. Improved evidence on costs and benefits of market interventions being used as a basis for bridging private public sector understanding and decision making

12 Getting the incentives right State trying to harness capacity of private sector to deliver public goods/social objectives Private sector will only enter PPP if there will be a furthering of their objectives Will look at opportunity cost of their investment May maximise profit through increased efficiency and/or expanded service coverage But could increase margins, reduce quality, displace competitors Rents from PPP can be used either way

13 Final point: Evidence based decision making Data availability to inform design of strategies in general and of public sector interventions is often very weak But critical to understanding domestic market impacts of different strategy development options, alternative policy instruments, etc. Limited knowledge on alternatives, best practices etc But limited public sector capacity to evaluate alternative models of intervention constrains demand for evidence Example: FAO/SPC Evidence based decision making in the Pacific