TACOMA, Washington — The COVID-19 pandemic is challenging longstanding systems and highlighting the need to bolster these practices to safeguard against future economic shocks and stresses. Agricultural market resiliency is one such system that can boost economic resiliency and act as a buffer against crises.
Within the world of international development, a robust agricultural market system is typically believed to hold up well against shocks and stresses, being flexible enough to adapt to intensified needs and continue to supply goods, services and employment, among others. With the on-set of COVID-19, this theory is being put to the test, allowing economists and other market analysts to examine the efficacy and failings of the current system and determine how to help market actors improve resiliency for the future.
What is Market Resiliency?
Resiliency is defined as the capacity to handle adversity and change sustainably without sacrificing future well-being. Resilience also implies that adapting to and recovering from stresses and shocks can promote growth. Market resiliency is done by allocating resources from social capital, social safety nets, the financial system or government assistance to facilitate the innovation needed to respond to shocks and stresses.
Resiliency includes using resources from the public and private spheres, at the community and national level, to respond to any kind of crisis. Because shocks can be economic, social, environmental or health-related in nature, it is important to understand the connections between as well as the independence of certain systems. Developing resiliency benefits the entire system, from the individual level to the community or national level and even the business level.
USAID Building Market Systems Resiliency During COVID-19
During COVID-19, USAID has worked extensively to build market systems resilience by increasing the ability of markets to absorb, adapt and adjust to shocks and stresses. While big businesses have been affected by COVID-19, USAID efforts have primarily focused on small and medium-sized businesses who often do not have the resources to withstand shocks at all. By developing adaptive management, they have worked with the private sector to build flexible frameworks that can continue to adjust to the COVID-altered world.
Somalia’s Growth, Enterprise, Employment and Livelihoods (GEEL) Project
When COVID-19 hit Somalia, USAID quickly pivoted efforts to adjust agricultural growth activities to prevent too much disruption in Somalia’s markets. Through local partnerships, the Somalia GEEL Project is working to expand financing for impacted businesses in order to scale-up domestic food production. GEEL has focused on keeping essential market functions open and operating to the best of their ability. In this way, they are able to maintain relative financial stability, feed families and maintain continuity in business operations. By studying which market activities are the most integral to the Somalian way of life, the GEEL Project was able to heavily focus on maintaining continuity within these sectors, which in turns helps businesses build market resiliency.
Additionally, GEEL has provided 500,000 marks, gloves and other PPE to enable food processors to remain open and producing. They have also worked alongside bankers to craft new loan payment terms for banana exporters to maintain their workforce and assets, allowing for continued critical agricultural production.
USAID’s prior work in Somalia provided a well-developed understanding and expertise of its agriculture market system. In part due to pre-existing private sector partnerships, businesses have been able to adapt to the widespread economic impact of COVID-19 with the GEEL Project’s help.
Feed the Future’s Senegal Naatal Mbay Program
Meaning “flourishing agriculture,” the Senegal Naatal Mbay Program is a USAID sponsored effort working to expand agricultural market resiliency, increase farmers’ income—particularly for women—and meet consumer demand. By increasing the use of successful technologies, skills and techniques for cereal production chains, Naatal Mbay efforts have furthered the Senegalese government’s goal of rice self-sufficiency and bolstered the value of maize and millet.
The program is inherently founded on building resilience. Through inclusive marketing of irrigated maize, millet and rice, Naatal Mbay leverages private-public investments and improves the productivity of local farmers. This lays the foundation for long-lasting, sustainable transformation and improvement of the agricultural market system in Senegal, particularly in the face of crises.
Amid COVID-19, RTI International, a nonprofit research group, has analyzed Senegalese farmer networks’ adaptation and response to COVID-19, with particular attention on the networks created through the Feed the Future program pre-pandemic. Findings have determined that farmer networks have been successful in adapting to the stress of COVID-19. By utilizing strong market relationships, finance, technologies and data, these farmers have demonstrated robust resilience capacities. Rather than waiting to receive assistance, farmers have used the tools provided to them through the Naatal Mbay program to rise to the occasion. This signals an enhanced capacity to respond to unexpected stressors, both now and in the future
COVID-19 has shone the spotlight on the efficacy of market structures to respond to shocks and stresses. Agricultural market systems, though not immune to these changes, provide hope for building resiliency to buffer against future challenges. With the proper focus on adaptive management, establishing networks and building partnerships and analyzing essential services, programs like GEEL and the Naatal Mbay Program can promote agricultural market resiliency. Creating sustainable transformations within agricultural market systems will benefit entire communities, even during crises.