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| Developing markets for dairy production in rural Armenia, SDC/Springfield Centre, 2008 |
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| Country(ies) | Armenia |
| Funding agency(ies) | SDC |
| Date completed | December 2008 |
| Geographic setting(s) | Rural |
| Issues/challenges | Post-Soviet transition economies have faced, and continue to face, a huge challenge in moving from centralised, state-controlled economic systems to entrepreneurial and more liberal market systems. The emerging markets inevitably grow from population centres and areas where wealth is concentrated. The losers are often the poorest and most marginalised that are least well served by the emerging private services and markets.
Among those losers are the rural poor who have lost access to agricultural markets and essential services and often lack the know-how to operate effectively as independent farming enterprises. Development intervention to make markets work better for the rural poor are therefore a high priority in transition countries. |
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Description
This case study explores an intervention which focused on creating access to markets and services for remote communities in the mountainous South West of Armenia. The work was funded by the Swiss Agency for Development and Cooperation (SDC) and implemented by a small Armenian development NGO, Strategic Development Agency (SDA).
The case study explains the ‘Making Markets Work for the Poor’ (M4P) approach and illustrates how it can be practically applied in a dynamic way to bring about meaningful and sustainable positive change within markets. The case study demonstrates a number of key elements in the M4P approach and the application of tools to engage in effective market based relationships:
· Understanding markets: The importance of understanding markets and identifying the underlying causes rather than merely the symptoms of weak markets.
· The role of facilitation: The key function of a market facilitator in being a catalyst for positive improvement in markets without becoming a permanent market player.
· Public Private Partnership: The role of public private partnerships (PPPs) in engaging with commercial actors and investing into commercial activities to bring about public development benefits.
· Clustering: The model of clustering small communities to create an economy of scale that can make buying from small and remote communities viable for commercial buyers.
· Developing the culture of paying and charging for services: A model for cushioning the transition from free, state delivered services to full for-fee services by establishing a revolving community managed fund.
Summary of results
By working in a market-oriented manner, avoiding building dependence and effectively focusing on long term sustainability, SDA achieved meaningful change within the rural dairy market in Southern Armenia. Commercial veterinary services have been established for around 2,273 households and commercial buyers have increased buying from 5 villages and started buying from 7 smaller and more remote villages. This has ensured a formal market for milk for around 2000 farmers where often milk was wasted or sold informally.
These preliminary activities are now being built upon and expanded in a second phase of the project which began in late 2008.
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