USAID Module 2: Have You Heard Activity Answer Key
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1) The document discusses statements that different actors in the rice market system might say and provides analysis of the statements in terms of the degree and effectiveness of cooperation and competition. The actors include farmers, traders, millers, input providers, and importers. 2) Many of the statements indicate a medium or high degree of ineffective cooperation and competition among actors due to informal rules that drive short-term thinking and limit the value of commercial relationships. 3) Formal rules also contribute to ineffective relationships between actors by influencing perceptions that push inaction or unwillingness to upgrade approaches to marketing and investment.
USAID Module 2: Have You Heard Activity Answer Key
- 1. Module 2 Session 2 Have you Heard Answer Key Market System Actors Farmer -Plenary Statements You Might Have Heard Answers “When my neighbor does well it is a reflection on his selfishness and he should act more like the rest of the community” Statement 1: Horizontal. High degree of ineffective competition – negative incentives based on informal rule on limiting individualism 2. “ We have tried to pool our money to buy larger amounts of inputs to get a better deal, but we couldn’t get it to work as many of us could not hold cash long enough to get organized” Statement 2: Horizontal. Medium degree with ineffective cooperation – interest in cooperation but limited success because of informal rule on family access to cash 3. “I try to learn from my neighbor because I know he gets better yields. But he is tight lipped about how. I don’t know anybody else to learn from. 1. “I don’t work in rice. I buy. I sell. I am looking for a quick return. It makes no sense to develop long-term relationships with suppliers.” 2. “When farmers come to sell I know they are desperate so I make them wait until they take lower prices.” 3. Trader --Group 1 1. “I need a reliable supply from a group of farmers, but I have not found enough reliable suppliers. Farmers will always sell to the trader offering the higher price even if you invested in them” Statement 3: Horizontal. Medium degree with neutral to ineffective effective competition – Incentive exists but resistance based on informal rules on sharing information and/or rules effecting other actors that limit their willingness to invest in smallholders Statement 1: Vertical. Low degree with ineffective cooperation –does not want to engage farmers other than to buy from them. Informal rules that drive short-term thinking Statement 2: Vertical. High degree with ineffective competition – actively competing on the outcome of the transaction (i.e., on the negotiation). Formal and informal rules that drive short-term thinking Statement 3: Vertical. Medium degree with ineffective cooperation. Trader knows the importance, but has not been able to frame the relationship in a way to foster more uptake. Informal rules that limit the value of commercial relationships. Module 2 Session 2: Have you Heard Answer Key 1
- 2. Module 2 Session 2 Have you Heard Answer Key Market System Actors Miller --Group 2 Statements You Might Have Heard Answers 1. “I didn’t spend $1M on this milling plant to become a trader -- that is someone else’s job.” Statement 1: Vertical. Low degree and ineffective cooperation – not interested or doesn’t see the importance of working with supply chain. Formal and informal rules that limit the value of investing in their supply chain. Statement 2: Vertical. Medium degree with ineffective cooperation – knows the importance, but does not know how to frame the relationship with the aggregator. Formal and informal rules that drive aggregators to think short-term. 2. “I want to source more paddy from small rice farmers, but I have had trouble with a few aggregators cheating me so I am not sure how to start.” 3. “I buy enough paddy to be a price setter not a price taker, and it is important to let traders know that.” Input Provider -Group 3 1. “I know my future depends on smallholders, but I don’t know how to get to my future and it seems too far away.” 2. “Smallholders do not have money and never will so government or NGOs should buy my inputs for them” Module 2 Session 2: Have you Heard Answer Key Statement 3: High degree with ineffective competition – strong desire to dominate (win/lose) aggregators with little focus on upgrading. Informal rules on social hierarchy and formal and informal rules that drive shortterm thinking Statement 1: Vertical. Medium degree with ineffective cooperation – interested but limited contact or effort to understand market requirements. Formal and informal rules that drive short-term thinking and limit commercial relationships Statement 2: Vertical. Low degree with ineffective cooperation – perceptions push inaction and unwillingness to upgrade marketing approach. Formal rules driving input to be perceived as public good. Formal and informal rules that limit commercial relationships 2
- 3. Module 2 Session 2 Have you Heard Answer Key Market System Actors Answers 3. “Many smallholders can’t read, so I can push outdated products through local stockists” Importer -Group 4 Statements You Might Have Heard Statement 3: Vertical. High degree with ineffective competition – active strategy to take advantage of his consumers. Formal and informal rules that drive short-term thinking Statement 1: Vertical. Medium degree with ineffective cooperation – the incentives and interest is there, but the perceptions limit effective cooperation from taking place. Formal and informal rules that limit the value of commercial relationships. Statement 2: Vertical. High degree of ineffective competition – actively using side selling as a means to compete tends to breakdown upgrading and can foster sharp declines in production. Formal and informal rules that drive short-term thinking Statement 3: Horizontal. Medium degree of ineffective cooperation – they have tried and know they need to work together, but they need a process to learn how and when to cooperate. Formal and informal rules that drive shortterm thinking 1. “I know there are domestic opportunities, but it would require me to work with smallholders investing time and money while my competitors continue to make money on imports.” 2. “I know that if my competitors start investing in smallholder production, I can get the farmers to sell me better and more rice. And the other guy pay is paying to increase and improve my supply!” 3. “As importers we would invest in local smallholder production if we could get some government support. But when we get together to make the case we tend to just accuse each other of things.” Module 2 Session 2: Have you Heard Answer Key 3