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COVID-19: Moving From Response to Resilience

Farmer in Ethiopia #COVID19

 

As experts working in market systems for the past 65 years, we have witnessed shocks and stresses before, in countries like Nicaragua, Ukraine, Haiti, Pakistan, Yemen, and Libya. We have worked through environmental, economic, and social challenges such as conflicts, natural disasters, price volatility, political instability, and recessions.

But we have never faced such a disruptive, global market crisis as COVID-19.

Since the pandemic was declared, we have rapidly responded to the economic, health, and social impacts on agribusinesses and the women and men smallholder farmers that supply to them. We have seen how youth, women, and those living in poverty, have been particularly impacted, often shouldering an unequal burden from this devastating virus.

After decades of progress on reducing global poverty and inequalities, the pandemic and its aftershocks are eroding gains made. It has amplified existing challenges and exposed gaps in pandemic planning, research, and prevention.

The impacts are heavy. Between 70 and 100 million people may be pushed into extreme povertyroughly ¾ from South Asia and Sub-Saharan Africa. It could take decades to rebuild.

This crisis has propelled us into an unprecedented era for MEDA – one driven by innovative solutions, adaptable programming, and quick responses.

 

COVID market systems response Jordan

 

Responding Country by Country

 

In the immediate term, MEDA is responding to the crisis quickly, and with compassion. We continue to reach out to our clients to understand the impacts on their lives and businesses. From Asia to Latin America to Africa, we are seeing widespread impacts on marginalized populations and the markets in which they participate. This includes disrupted agri-food supply chains causing food insecurity, negative social impacts, including an alarming global rise in gender-based violence, greatly reduced mobility and market interaction, and reduced farmer and agribusiness revenues and resulting layoffs. But despite the global commonalities, each country in which we work is unique and our response has, and must continue to be, contextual.

In Ukraine, for example, after assessments showed plunging revenues for horticulture businesses, MEDA began supporting them to pivot their business models to online sales. Before the pandemic, many small and medium sized enterprises (SMEs) and entrepreneurs had online platforms but lacked effective promotion or technical know-how to make them commercially viable. Other SMEs in Ukraine did not have an online presence at all, preferring instead to sell through in-person markets. After COVID-19 hit, MEDA provided technical assistance to help these businesses enhance their online marketing or build basic websites. MEDA also rapidly created an online aggregation platform for collective promotion, and increased the frequency of agronomic webinars, which have routinely brought together hundreds of participants.

In Ghana, where MEDA works with SMEs and farmer unions on sustainable supply chains for tree crop seedlings, the situation is different. Since March, staff conducted weekly assessments to monitor changes in production, revenue, and employee health. We found that where MEDA and our partners operate, the impact of COVID has not been as severe as anticipated. But to ensure that markets continue to function safety, MEDA responded by strengthening market linkages and working with radio stations to broadcast to farmers on safety, market information, and good agricultural practices.

In Myanmar, where MEDA’s focus is on women’s economic empowerment, early assessments identified the rapidly deteriorating economic situation for some women producers. Having just harvested vegetable crops, many were unable to sell them, or were selling at a loss due to strict restrictions on movement. MEDA responded by providing small financial grants to women sales agents to support them to continue aggregating vegetable crops and extending credit to other women wanting to buy agricultural inputs.

 

Longer-Term Economic Recovery and Development

 

As we address immediate and short-term needs, we are also focused on longer-term economic recovery and development and the possibilities that will emerge from this crisis. Together with global partners, we have a unique, perhaps once-in-a-lifetime opportunity, to shift agri-food market systems toward greater resiliency for those who are economically marginalized. We want a system that reinforces inclusive, just, and green development, with environmental and human well-being at its core.

We will not, and cannot, return to business as usual.

COVID market systems response Nicaragua

 

The COVID-19 crisis has reinforced for us that our commitment to gender equality, social inclusion, and the environment is more critical than ever. It has also highlighted the need to address resilience and influence the agri-food system enabling environment more systematically in our work. We are committed to helping agri-businesses, individuals and communities emerge from the pandemic better able to respond and adapt when the next shock or crisis hits. Whether it is a health emergency, conflict, or natural disaster, we must assume that a market shock will occur during the lifetime of our projects and carefully plan for different scenarios.

As we learn and evolve our inclusive development approach to incorporate a stronger resilience lens, our work will be shaped by the following priorities.

 

#1: Stand Firm on Gender Equality and Social Inclusion

 

Vulnerabilities and inequalities are made more visible during shocks and crises such as COVID-19; the impacts on women, youth, minorities, and other marginalized populations are significant. For example, global COVID research has shown a stark increase in gender-based violence during the pandemic. MEDA’s rapid assessments conducted with 75 Kenyan men and women entrepreneurs revealed a worrying increase in gender-based violence (GBV). MEDA immediately responded with information on helpline, shelter and legal aid resources. Similar assessments with 52 women entrepreneurs in in Jordan found that more than 30% had experienced an increase in arguments and fights within their households, indicating tension and potential instances of domestic violence within those households. COVID has also generated some unexpected positive gendered developments; the same assessment in Jordan found that 67% of women experienced more positive communication in their homes and 43% shared that their husbands were stepping into supportive roles.

MEDA’s inclusive market systems approach will employ an intersectional lens to address gender equality and social inclusion, helping us to better understand the complexity of inequalities in every region in which we work. This is a priority now, more than ever, as we witness how a severe shock such as COVID-19 is exacerbating and shifting power imbalances – in households, markets, communities and institutions, and rapidly challenging the gains we have made in inclusive economic growth.

 

#2: Support Agri-food Systems to Embrace the Green Economy

 

The pandemic compels us all to pursue economic recovery and development that recognises the connections between resilient people and a healthy planet. COVID-19 has brought global economies to halt. Entire industries have closed, travel has stopped and people around the world stayed home, but it also gave our environment a moment to breathe. CO2 emissions dropped 2.6Gt (4 - 8%) representing the largest drop in human history. Our behaviour impacts our planet. Choosing a greener path forward, difficult as it may be, is in our long-term socio-economic interest.

MEDA’s response to the pandemic is part of a much larger plan to support marginalized populations to build resilience to risk, including risks associated with climate change and biodiversity collapse. In Jordan, Tanzania, and Ukraine, MEDA’s Green Innovation Grants support entrepreneurs pursuing a more green and inclusive path. These grants encourage the adoption of green technologies and practices such as organic farming, solar powered irrigation and water heating, wastewater management, and use of personal protective equipment to create safer workspaces.

Our work is informed by the Green Economy Principles and our own Environment and Climate Change policy, framework and strategic plan. Together they give us the tools to pursue a, “thriving economy that delivers the linked economic, social and environmental outcomes,” which are of vital importance to MEDA’s work in agri-food systems and to global achievement of the SDGs.

 

#3: Push for Inclusive Private Sector Recovery and Growth

 

In times of shock and stress, MEDA’s role as an inclusive market systems facilitator can help businesses adapt and restart, and reinforce market linkages that maintain revenue, product aggregation, and much-needed services for the economically marginalized. With COVID-19, that has meant providing a range of support, from digital information to technical guidance on adapting business models, and grants and loans for micro and small businesses. In Pakistan, for example, MEDA provided guidance to its partner, Engro, on quickly supplying farmers with timely inputs and to share accurate hygiene and safety information.

Longer term, strengthening agri-food business resilience will mean encouraging the use of methods and tools that may be more shock resistant, such as social media information and sales channels, climate-smart agriculture, green technologies, pivoting business models toward greater digitization, mobilizing capital and establishing blended finance partnerships, and adopting more inclusive approaches within supply chains. It will also mean greater efforts to facilitate stronger local business service providers to better help agri-food market actors build resilience, through tools such as business continuity planning.

For more resilient agri-food labour markets, there will also be a need to facilitate innovation and growth opportunities such as value addition and processing, entrepreneurship, mechanization, and skills upgrading. While generating labour opportunities in the agri-food sector are often closely tied to integrations with global supply chains, the COVID-19 pandemic has also exposed the risks of an overreliance on global agricultural markets.

Lastly, given that business resilience appears to be stronger when businesses are part of networks, MEDA will explore ways to strengthen alliances and associations and to support them in reinforcing with governments the need for market-based programming and prioritizing agriculture and SMEs during shocks and stresses.

 

#4: Promote Greater Diversification

 

In agri-food market systems, crop, market, and income diversification helps to reduce the risk of market shocks and stress. COVID-19 has illuminated the negative impacts of agri-food systems’ reliance on global supply chains as closed borders turned into canceled orders for businesses and smallholder farmers. Economies or businesses that are overly reliant on a select few food markets may be more vulnerable to supply chain disruptions and demand-side shocks than those that are more diversified. High-return, niche products may also be more impacted in times of stress and shock compared to lower-return commodities. While diversification strategies have always been part of MEDA’s inclusive market systems development approach given the inherent risks to smallholder farmers involved in agriculture production, COVID-19 has reinforced the need to elevate this priority within our work.

 

COVID market systems response

 

#5: Pursue Locally-Driven Innovations

 

Local market actors and organizations know their context best and most often respond to shocks and stresses with new innovations of their own design, without external assistance. Local actors should be in the driver’s seat of solving their own challenges. Bilforon, a Jordanian food delivery company that works with MEDA, shifted from meal and catering delivery to grocery delivery in response to COVID-19. Shan Maw Myae, an agri-business company in Myanmar, shifted to the production and distribution of sanitizer, augmenting their product line of organic inputs. Woiso, a firm that manufactures leather products in Tanzania, added masks to their product offering.

Better understanding local market actors’ resilience and adaptive capacity to address challenges is critical in market systems where production systems are deeply embedded in the local environment. Local social dialogue and engagement in how best to develop inclusive economic recovery and development responses is also essential.

 

#6: Leverage Investment for Greater Market Resilience and Systems Change

 

Even as global impact investor portfolios face constraints due to the impact of COVID, the overall industry is responding by reaffirming commitments to emerging markets by increasing support. According to the Asian Venture Philanthropy Network, COVID-19 has accelerated investors’ views of the importance of sustainable investment and restructuring business models. The pandemic has created a unique opening for conversations on elevating the importance of investing to address systemic issues, climate change, gender and social inequality, and sectors most impacted by shocks and stresses, including food and agriculture and financial services. Through MEDA’s own investment fund, the MEDA Risk Capital Fund (MRCF), MEDA will adopt a stronger systems and resilience lens and partner with local investment funds and financial institutions to intentionally knit together regional and local ecosystems and networks that can help communities, companies and portfolios weather future market shocks and stresses.

Ultimately, we believe that transforming market systems to be more resilient and equitable will create more stable markets over time, and will attract new capital and yield positive investment returns. Our ability to utilize creative financial instruments, including MRCF, to address market challenges identified in our programming is revolutionary for MEDA. By leveraging local market knowledge, proven gender transformational methodologies, and responsive investment approaches, MEDA is equipped to facilitate inclusive economic growth that is more resilient and sustainable.

 

#7: Learn and Adapt

 

Markets are complex. They shift and adapt in response to stresses and opportunities. Flexibility in our programming is critical to effective inclusive market systems development; it gives us the ability to adapt to market shocks and to support partners as they adapt their own business models.

Timely and ongoing data collection is also essential to understand how markets change, how agribusinesses and farmers are impacted by those changes, and how we can respond. For example, in April and May, MEDA conducted rapid assessments with local partners in Myanmar and found that market linkages between businesses and women farmers were in jeopardy due to reduced demand. Transportation costs were also increasing, export orders were drying up, companies were experiencing cash flow issues, and some expansion and construction projects were put on hold. This type of timely and reliable data helped us analyze and make quick programming decisions, including deciding to provide small grants to micro and small agri-businesses to support continued market linkages with women producers.

Measuring for resilience in systems will also be important, moving beyond income and job measures to gauge such things as income and crop diversification, and the capacity to manage or prepare for market shocks and stresses.

MEDA’s responses to COVID-19 and the local market coping strategies that we are witnessing, gives us a unique opportunity to learn about how markets adapt. Led by local leadership who have the deep contextual knowledge of how shocks and stresses play out, our collective learning will strengthen our approaches to facilitating inclusive market systems change to better resist future shocks.

COVID-19 has confirmed the vital importance of resiliency to inclusive agri-food markets and the market actors whose lives are intertwined with these systems. Yet market systems development and resilience is a long-term strategy which often conflicts with the limitations of short project timelines. But it is exactly a long-term view that will best address the complex root causes of market failures for marginalized populations, increasing the potential for real and sustainable change and the likelihood of mitigating future crises.

We also must recognize the critical need for collaboration between organizations. No one organization can tackle systems change and resiliency alone. Together with local partners and donors, we strive to better understand the trajectory of market systems change and seek relationships with those who understand that lasting change requires strong partnerships and a commitment to learn and adapt.

 

If you would like to know more about MEDA’s ongoing work during COVID-19, how we are approaching market systems resilience, or how you can partner with us to shift agri-food market systems toward greater economic, social and environmental resiliency and sustainability, please reach out to us at info@meda.org.

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