Markets in Fragile Contexts: Lessons from the Seed Market System in Eastern DRC
This post is the first installment of the Feed the Future Enabling Environment for Food Security (EEFS) project’s examination of the Feed the Future Learning Agenda. This series will draw on over four years of lessons learned and consider our pipeline of analytical activities in the year ahead to address key learning questions. We will evaluate and share evidence on the role of the enabling environment in building competitive, inclusive, resilient, nutrition-sensitive agricultural market systems.
Feed the Future Learning Agenda Question:
Market Systems: “How can donors, governments, and other public sector actors most effectively facilitate private sector investment in ways that reduce poverty, hunger, and malnutrition?”
As USAID supports the Journey to Self-Reliance, interventions should aim to support agricultural market systems that attract private sector investment, spurring a virtuous cycle of broad-based growth. For markets in fragile contexts, investment risks are high and disincentives for market entry are ubiquitous. A role for the public sector and development actors is clear — but interventions should build a foundation for private sector investment and avoid disrupting market signals further.
Eastern Democratic Republic of the Congo (DRC) is faced with persistent armed conflict, a scourge of Ebola, limited public sector institutional capacity, and widespread emergency and relief assistance — certainly a market context which Feed the Future Learning Agenda would classify as fragile. The EEFS project recently conducted a comprehensive assessment of the seed market in six provinces across eastern DRC to determine the barriers and opportunities for improving smallholder access to high-quality seed — an imperative for bolstering food security.
Several findings and practical recommendations emerged from the study which speaks to the role of the public sector and development agencies and may help inform this target learning question from the Feed the Future Learning Agenda.
The Enabling Environment for Seed Markets in Eastern DRC
Using the Seed Commercial, Legal, and Institutional Reform (SeedCLIR) analytical methodology, the EEFS’ DRC SeedCLIR Study evaluated the enabling environment for seed markets in six provinces across eastern DRC. The study analyzed seed system actors’ roles, capacities, constraints as well as the system dynamics affecting smallholder access to quality seed. The findings clearly demonstrate how both the Congolese public sector and international development actors explicitly shape the incentives and disincentives for commercial seed investments at both the firm and farm levels.
First, let’s discuss the role of international development actors. In response to chronic food insecurity in many of the most fragile provinces in eastern DRC, development actors often distribute seed of varying quality directly to smallholder farmers as a short-term relief oriented intervention. In the long run, however, this practice has hampered farmer willingness to pay for the input, crowded out commercial seed actors, and ultimately limited farmer choice and access to quality seed.
Now, let’s examine the legal, regulatory, and institutional limitations in the public sector. There is currently no national seed law and none of the systems for ensuring seed quality function appropriately. The national agricultural research institute, the national plant protection service regulating seed imports, and the national seed inspectorate all lack the technical capacity and financial resources to perform the roles that provide a more attractive environment for private sector investments. The absence of a formal enabling environment creates investment uncertainty and encourages the presence of fake seed, unfair competition, corruption, and a market dominated by emergency seed supply.
Practical Recommendations for the Public Sector and Development Actors
EEFS recognizes that the dominance of informality in DRC seed markets is driven in part by myriad underlying factors in social and political systems. Nonetheless, the DRC SeedCLIR assessment team identified a practical, phased road map to put the building blocks in place for private investment in seed market systems.
Phase 1 recommendations focus on establishing a basic foundation essential to seed markets. For the public sector this includes enactment of a national seed law; clarifying institutional mandates and roles within the seed sector; and establishing new seed categories, including emergency seed and quality declared seed where basic seed is not available. For the development sector, improved coordination is essential, including the introduction of a “code of conduct” signed by all development actors engaged in seed importation and distribution. Further, the establishment of private sector-sensitive guidelines for seed tenders can help avoid disrupting markets.
Phase II recommendations focus on strengthening the technical, operational, and financial capacity of national institutions for regulatory enforcement. This includes the testing, registration, and release of new varieties and the breeding and variety maintenance for crops with limited commercial potential but high food security value. Eventually, accreditation of private laboratories will further underpin commercial market potential. For the development sector, working through private extension agents should more effectively promote the adoption of improved seed varieties.
Phase III recommendations focus on more sophisticated requirements of seed market development, such as strengthening intellectual property rights, including the establishment of a Plant Breeders Rights Law. Additionally, the accreditation of third-party seed quality control services will allow the expansion of private seed production, while facilitating registration of Congolese varieties in regional catalogs will present seed export opportunities.
The Way Forward
The Feed the Future Learning Agenda asks what donors and public sector actors can do to facilitate private sector investment for poverty reduction, among other goals. EEFS’ recent SeedCLIR in DRC demonstrates that in fragile market contexts where essential formal rules and institutions are nonfunctional, or where donor activities disrupt private incentives, the emergence of competitive, inclusive, resilient market systems is unlikely.
The Journey to Self-Reliance will unquestionably require increasing private sector engagement; however, there are foundational investments in the public sector and development sector that are first necessary to provide an environment conducive to private investment. Despite the tremendously challenging operating context, there are practical steps that can support a phased transition from short-term emergency interventions to long-term enabling environment reform.
If this topic is relevant to your work, please stay tuned for an upcoming webinar with the DRC SeedCLIR team cohosted by Marketlinks, Agrilinks, and EEFS! And be sure to check out the full DRC SeedCLIR report here.
References
Feed the Future Enabling Environment for Food Security, “SeedCLIR: Democratic Republic of the Congo,” Agrilinks, September 2019, https://www.agrilinks.org/post/seedclir-democratic-republic-congo.
Feed the Future Enabling Environment for Food Security, “Private Sector Voices: Building an Enabling Environment for Investment,” Agrilinks, September 2018, https://www.agrilinks.org/post/private-sector-voices-building-enabling-environment-investment.
Feed the Future Enabling Environment for Food Security, “Spotlight on SeedCLIR: Incorporating a Maturity Model Approach to Seed Sector Development,” Agrilinks, May 11, 2018, https://www.agrilinks.org/post/spotlight-seedclir-incorporating-maturity-model-approach-seed-sector-development.
Feed the Future, “The Feed the Future Learning Agenda,” Agrilinks, September 18, 2018, https://www.agrilinks.org/post/feed-future-learning-agenda-phase-2.
USAID, “The Journey to Self-Reliance,” USAID, https://www.usaid.gov/selfreliance.
USAID, “USAID Policy Framework: Ending the Need for Foreign Assistance,” USAID, April 10, 2019, https://www.usaid.gov/sites/default/files/documents/1870/WEB_PF_Full_Report_FINAL_10Apr2019.pdf.