“Market transformation is triggered by technologies, brokers, technical assistance, government, and organized producers. We want ideas, more than a particular approach.” With these words the Ambassador of The Kingdom of the Netherlands opened the Market Transformation Workshop in Dhaka. In his keynote address Dr. Madhur Gautam from the World Bank put market transformation within the broader context of transforming value chains in evolving and modernizing food systems across countries. He highlighted the critical importance of competitiveness in driving innovation and efficiency. Food value chains need to evolve in order to meet rapidly growing and changing consumer demand. For this to happen, the drivers of rural growth need to be reinforced: investment in infrastructure, technology and market friendly policy reforms.
The trigger to organize this Market Transformation Workshop is the realization that, agricultural marketing and value chain development may not translate to increased profits or accrue their full benefits to the marginalized and vulnerable population. Enabling smallholders to effectively gain from efficient markets requires a transformation. Innovative approaches are needed, re-defining and re-designing market based approaches – but what and how? The purpose of the workshop was not to provide prescriptive “blueprints” for development but rather seek ideas and approaches that open up the discourse of the concept and approach to market transformation by bringing practitioners, market actors and experts together.
Emerging lessons from value chain development indicate that six issues are important for farmers:
- healthy competition through free entry for competitors (especially among buyers);
- reaching volume (organized and mixed farmer groups become attractive for traders and investors);
- specialization (producing only the right quality can already improve income by 40%);
- density (when production is scattered and individual, the transaction costs ruin profitability);
- connectivity (in too remote areas the market-based approach does not work) unless
- innovation brings a uniqueness to the product and offsets high transportation costs (can be through mechanization, new items or quality).
The Market Transformation Workshop is a result of the MoU between the Dutch Ministry of Foreign Affairs and World Bank Group on transformative change needed for agricultural growth as well as food and nutrition security. Both parties together with the Embassy of Sweden and iDE (a US based NGO) organized the workshop from 11th to 14th of February in Dhaka, Bangladesh, seeking to bring together practitioners, experts and market actors to share ideas, approaches and emerging practices in transformative changes in markets. The first phase of the workshop, focused on field experiential learning in the Southern Coastal Belt of Bangladesh, revealed promising market transformation initiatives on the ground driven by new technologies, business approaches and social inclusion ideas. This was followed by a thematic learning event in Dhaka headlined by experts such as Dr. Prof. Ruerd Ruben (WUR) and Dr. Paul Polak (founder iDE, founder & CEO Windhorse International) along with 150 participants with 6 thematic sessions ranging from Climate Change to Women’s Economic Empowerment and from inclusive financing to market governance. The organizing team emphasized that the learning emerging out of this workshop is not a model or approach but rather a collection and codification of experiences that seeks to define a set of design principles to be further discussed, reflected upon and used to design and improve upon the next generation of market development programs.
Source: Food & Business Knowledge Platform