Market-led Interventions for Seed Security Response
This post is written by Stephen Walsh, Jules Keane, Louise Sperling, Dina Brick and Kate Longley
Markets are pivotal in helping farmers to access seed, both in normal times and also in emergency and chronic stress contexts. Market-led approaches in humanitarian assistance are gaining recognition, with the aid sector showing an increased recognition of the potential importance of both the formal private sector and more informal markets as a means to deliver assistance.
There is great potential for donors and implementors to be more innovative and impact-oriented with market-led approaches to address seed security for smallholder farmers which leverages existing market actors (informal as well as formal) and integrates lesson learned from both supply-side and demand-side interventions.
Understanding the seed market (both formal and informal seed sectors) functioning during stress periods is a critical precursor to developing more effective market-led interventions which address the seed security of smallholder farmers. A second precursor is to build in much more data collection to facilitate collaborative learning and socializing of best practices around what is actually being tested and implemented in terms of market-led approaches to address seed security for smallholder farmers.
Two recent reviews of market-led seed approaches in emergency and chronic stress contexts — one on the demand side and one on the supply side — provide an overview of the current landscape as well as key lessons learned and recommendations.
A recent review of market-led seed security interventions by Stephen Walsh and Louise Sperling found that supply-side interventions tend to focus on formal sector market support to ensure seed availability, particularly for improved or modern varieties. The review could not document any in-depth cases of supply-side interventions oriented towards the informal seed sector. For the interventions reviewed, seed is typically produced through contract multiplication and then bought back by the implementing partner for free distribution to farmers, often over two or three consecutive years. Other interventions involve giving credit to agro-dealers who themselves procure and sell subsidized seed directly to farmers, a direct interface which would appear to have elements of sustainability but only include modern varieties, rarely land races or farmer varieties.
Support to informal seed traders
There is considerable potential for both donors and implementors to expand market-led interventions aimed at seed security for smallholder farmers by supporting informal seed markets and seed traders and seed sellers. Informal seed traders (or seed/grain traders, as they deal in both commodities) are often portrayed negatively, but they can be highly innovative in linking seed supply and seed demand across diverse markets, responding to local farmer needs in terms of both variety adaptability and physiological seed quality, and functioning over years even in remote and conflict-ridden environments. Informal seed markets are a primary source of seed for many small holder farmers and can potentially bolster all aspects of farmers’ seed security — whether that be through availability, access, quality, or information in acute and chronic stress contexts.
Enabling features for future market-led, supply-side interventions
The following features are essential to framing further market-led seed security interventions:
- Understand local market functioning (both formal and informal markets): This includes mapping the different actors such as producers, small traders, transporters, and large traders and identifying how they address seed access, availability, and seed quality and key opportunities for improvement.
- Understand market demand: Focus not only on seed availability but on understanding existing market demand and developing conscious and pragmatic marketing strategies to avail seed and varieties based on male and female farmer demand profiles and their respective seed sourcing strategies. Avoid ending up with project supported and dependent seed vendors and/or seed producers reliant on project subsidies.
- Establish communication systems: Establish two-way information and communication systems which strengthen feedback loops in the seed value chain between farmers, seed producers, and seed traders and are gender-sensitive and take into consideration the information and knowledge seeking behaviors of male and female farmers with respect to seed.
- Promote market pluralism: Promote market pluralism and look for opportunities to engage and support existing informal seed sector actors and strengthen their linkages with the formal seed sector. Ensure that market-led supply interventions are not restricted to formal sector project dependent traders, vendors, and seed producers. Look for opportunities to expand crops and varieties adapted to stresses faced by farmers.
- Encourage more critical analysis, data, documentation, and socialization (regarding lessons learned with market led supply side approaches): Most learning is frozen in the time of the project and within the perspective of self-reported work of the implementing agency.
Demand-side interventions: Cash transfers in humanitarian settings
From the demand side, cash transfers offer flexible market-led interventions to support farmers’ access to seed in emergency contexts. A study by Jules Keane, Dina Brick and Louise Sperling found that the use of cash transfers specifically for emergency seed security interventions is limited but growing in prevalence. Available evidence suggests that cash offers promise for seed security interventions, particularly when combined with complementary programming such as technical or business training. Mixed modalities (cash and vouchers, or cash and direct seed distribution) can broaden crop choices. Cash can prepare the way for farmers to continue true market engagement post-relief, spur business development in subsequent seasons, and offer opportunities for financial inclusion. Good needs assessments, response analysis and program design can help ensure that farmers spend cash on what implementers anticipate they will. Investment in preparedness provides a better foundation to implement impactful cash for seed security response.
Enabling features for effective cash transfers for seed security
- Seed-linked markets functioning at some level: Whether both informal and formal markets are able to meet farmers’ demand for seed in terms of quantities and desired varieties are essential in determining an appropriate seed response. Conducting a Seed System Security Assessment (SSSA) will provide invaluable information about the market.
- Supply-side support to ensure/promote array of crop and varieties that are adapted to the area: Support for markets may need to be programmed, depending on the program goals and interest in longer-term investment. For example, traders may need support to help them understand the seed needs of farmers (crop/varietal diversity, small packs, recognition of male/female preferences, importance of having options).
- Government policies and support for cash for seed initiatives: In many countries, there are specific laws that govern seed: who can sell it, and even what is considered seed. Often only certified seed from the formal sector is considered ‘seed’. However, more openness to other qualities of seed is beginning to emerge.
- Quality information/screening services (informal and formal channels): As it is important to monitor the seed quality on offer, implementing organizations need to have an explicit strategy for quality assurance when seeds are purchased with cash transfers.
- Strong feedback/accountability channels: With a cash-based response which gives project participants choice and flexibility, it is essential to build in feedback mechanisms for farmers to share their ratings on the type of crop and varieties, and the quality of the seed both pre and post-harvest.
- Key stakeholders’ preferences taken into account: Do project participants prefer a cash-based response for seed, or would they rather receive vouchers or in-kind seed? The answer should not be based on assumptions or organizational orientation, but rather on what participants say best meets their needs. Other important stakeholders are host government and donors, as their support of the choice of cash for this particular project/objective is essential.
- Acceptable risk levels: Every modality carries risks. Determining what potential risks associated with cash transfers exist in the specific context should be an integral part of the assessment process. A clear strategy for mitigating or avoiding risks associated with cash for seed (e.g. diversion, security of project participants/staff, etc.) should be developed.
- Preparedness activities to assess the context-specific financial service providers landscape: The investment in preparedness—especially in contexts of chronic stress—enables a more robust assessment of modality choice. Knowing the local financial services context in advance, conducting due diligence of market providers, and assessing internal policies, and staffing skills can lead to more rapid response. Signing pre-agreements with financial service providers can ensure a timelier and more efficient start up.
- Organizational mindset and staff capacity: The normalization of cash transfers within an organization enables it to be a possible choice, if appropriate based on response analysis, and increases organizations’ and staff comfort level with the option. It is both an open mindset to cash response and the capacity to implement a cash program that enable a successful response.
- Timeliness: Cash can often provide a timelier response than in -kind or vouchers, but this is not always the case. There are examples of cash being distributed too late to allow for farmers to purchase the crop and variety they preferred, just as there are examples of direct distribution and vouchers arriving too late for the season. Having sufficient lead time/preparation time for a cash response is critical to ensuring farmers receive cash on time to plan and procure their selected seeds.