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Resilient Markets in Ethiopia

April 6, 2016
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At home with Sindayo, a GRAD beneficiary in Tigray. Photo credit @ CARE Ethiopia.

Last month I visited Tigray, Northern Ethiopia, to interview farmers and livestock traders faced with the drought effects of one of the most devastating El Niños in 50 years, to learn about their coping strategies in the face of extreme weather patterns.

We wanted to find out how these coping strategies were linked to national and international market systems and how, through these systems, it might be possible to bring about a better deal for those in the supply chain typically made more vulnerable by drought: women.

CARE International, the global NGO and my employer for the last decade, has been operating in Ethiopia since 1984, and works alongside other international and national organisations to bring solutions to those whose livelihoods are invested in agriculture, and who by default are affected by regular market “shocks”.

After 70 years of operations around the world, CARE’s focus within any country programme is to bring about positive changes for women and girls. We do this because of the myriad of existing social and economic injustices faced by women and girls, all over the world, many of which have been described on this blog. At CARE, we talk a lot about “empowering” women and girls, and this encompasses many aspects, including improving access to economic resources for women and, crucially, increasing their control over those resources.      

One of CARE’s USAID funded programmes in Ethiopia is called GRAD and builds on the Government of Ethiopia’s long term “protective safety net” initiative (PSNP) and it was GRAD that I visited in Tigray. GRAD’s objective is to “significantly contribute to sustained food security of chronically and transitory foor insecure households in rural Ethiopia” and to do this CARE partners with other organisations, including a main implementing partner, REST (The Relief Society of Tigray).

In our interviews with GRAD beneficiaries, and seeking out examples of “resilience” building, we asked a set of questions. For example, has the programme intervened in a way that has left farmers with more options to earn income than before? Have farmers been given new skills and capabilities to control how they manage their income, in order to be better prepared for future “shocks”?

And, ultimately, what correlation exists between these market systems and the economic development of farmers? Could it be, in fact, that a more resilient and economically empowered woman operating in a livestock value chain will, through her resilience strategies, contribute to strengthening that value chain, and improve the way the system itself copes with market disruptions?

Borrowing USAID’s language, used in their LEO #6 Report, resilience within a market system takes on different capacities: absorptive; adaptive; and transformative. In Tigray, we met three female headed households, all GRAD beneficiaries, all livestock farmers, and each taking on one of these capacities.

Before I explain the differences in these capacities, it is useful to reference the issue of financial inclusion. Access to loans, and to credit and savings products, are core enablers when it comes to resilience. One of the key interventions around financial inclusion within GRAD has been the establishment of VESAs – Village Economic Savings Associations – providing savings and loans options to beneficiary groups.

Financial associations such as VESAs have become national policy in Ethiopia and are fully embedded in the current PSNP programme, targeting 8 million people. Within GRAD, VESAs have been enhanced to add in “resilience building support,” including: examining climate change adaption techniques; advice on gender issues; and more general agricultural improvements for farmers.

So, let’s turn back to the female headed households interviewed in Tigray…

Sindayo (pictured, above) is a sheep farmer, divorced and supporting six children. In Sindayo’a case, she used the VESA, as well as other loan products, to purchase veterinary inputs and feed, and to grow her stock of sheep. Sindayo can typically make $25 per sheep, once reared and sold, and her particular coping strategy, her resilience, therefore could be said to have taken on an “absorptive” capacity.

Not only have these loans helped consolidate and then grow her livestock wealth, she has also been able to devote time to setting up a new income generating activity, making traditional baby harnesses. These take one month to make, and the profit potential for each is around $50 net. Sindayo told us: “at the beginning, I didn’t know about sheep’s profitability (only cattle). GRAD helped me get knowledge about profitability. Before GRAD, I couldn’t afford to feed my kids properly, and school them. Now I am able to make decisions about their education and their health.”

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GRAD beneficiary, Etalam, talking to us about her drinks business. Photo credit @Tim Bishop

We then met Etalam (pictured, above) who also borrowed loans to support her sheep stocks. She used the first loan to buy inputs (such as feed) and, with the second, along with business training skills received from GRAD, she set up a drinks business.

Different to Sindayo, Etalam chose to “adapt” her livelihood options. She reduced her dependency on livestock sales and, instead, put more time into the drinks business, selling locally brewed beer, as well as a range of soft drinks. Unlike Sindayo, Etalam’s new livelihood, on the one hand, could be argued to be slightly less vulnerable to drought because she has invested more substantially in a non livestock value chain. However, Etalam’s new income sources do remain linked to drought, more so with beer sales, given their reliance on harvesting grain and on customers’ buying power (which tends to go down during a drought).

To highlight a final example of “transformative” resilience, we visited a third female headed household, where the GRAD beneficiary, named Alemtsehay, followed a similar path as Sindayo and Etalam. However, in her case, and again supported by access to financial products, she chose to drop her livestock rearing completely and injected all her resources into setting up a café and a shop.

Her story illustrates a complete change in risk profile, in comparison to Sindayo and Etalam, although Alemtsehay remains indirectly affected by drought, due to the overall impact the drought would continue to have on the country’s/region’s economy. But hers is a case where a complete change in livelihood option carries with it other benefits, in terms of enhancing her social standing within the community, as she grows lines of business more traditionally associated with men.

From examining how access and control over economic resources plays a role in building resilience for these women in Tigray, it became clear that savings and loans provided an important piece of the puzzle.

However, the market “system” (within which the day-to-day transactions of livestock trading are connected) contains many more links to it which also need to address disruptions caused by drought. And, without understanding how these links in the chain cope with drought and market shocks, the end goal for an entity such as CARE – to strengthen that system and the women’s role in it – cannot be fully achieved.

We therefore then met other individuals and organisations connected in the livestock value chain, and learnt how GRAD helps engage them.

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Amanuel, Raya Farm, Tigray. Photo credit @ Tim Bishop.

One livestock trader (pictured) named Amanuel, from Raya Farm, works for an Addis based exporter and he spoke to us about his business model for buying, fattening and exporting livestock.

Raya Farm itself sells livestock onto an international market, in Saudi Arabia, and so bridging the gap in understanding and information between local, national and international levels in these value chains, whilst not always easy to do, is a tangible connection to make, which could stand to benefit both the producers and the distributors in the value chain.

For a livestock producer in Tigray such as Sindayo, the focus on resilience is limited to making a decision about selling supply today, and making assumptions about the weather changes in the short term. A “shock” felt because of a change in global oil prices, which affects the Saudi demand side of the market, and in turn Raya Farm’s purchasing strategy, is not something Sindayo and her peers are yet able to consider.

So where to from here?

To achieve sustainable results, it is an NGO’s duty not to become a long term link in a livestock chain. Instead, by looking at ways of providing access to financial products, by offering business training, facilitating linkages between the different entities up and down a supply chain (and understanding how each copes with drought) the contribution of an NGO can bring about positive changes – for all parties, although in the case of CARE, especially changes for women.

In Ethiopia, there are still many millions of drought affected population groups. And so other innovations and interventions which address the resilience of market systems must be tried and tested. At the same time, the resilience capacities of those women and men beholden to those systems need to be acknowledged.

All organisations and institutions must play a role in this. Micro-finance institutions, for example, can pilot new products responding to shocks. The development sector itself is already sharing learning on resilience “capacities” (as stated above from the USAID report) and other tools already exist which support market systems work, such as the CaLP market mapping tools: EMMA and PCMMA.

A market system is dynamic, prone to changes and flux. There are inherent risks within such dynamism, but also opportunities. For men and for women. And, within these complex contexts of “crisis”, such as is unfolding in Ethiopia right now, a longer term proposition that we at CARE will seek to prove (or disprove) returns us to one of the original questions asked above – is there correlation between resilience at the individual level and resilience of the market system itself? 

My hunch is that there is, and I look forward to writing about this again soon.

If you are interested then check out the Vimeo link (above) which contains some personal footage taken in Tigray during this visit. Password is Coffee

 

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