Local and Regional Procurement Learning Alliance

1. Local and Regional Procurement Learning Alliance 7. Market DataMARKET SELECTION

2. Are (some of) the secondary data suitable? • Objective: Identify markets from which to collect primary data • Approach: Compare what secondary data are available with what is needed • Prepare a list of all distribution communities, all source communities, and major markets • Some communities have more than one market • In these cases, monitor the main retail market • Within each market category, determine whether any candidate markets overlap with secondary data

3. Are the data similar (enough) to what the country office needs? • Key requirements for matching secondary data to agency’s data needs: 1st: Check commodity characteristics are the same (or similar) 2nd: Confirm secondary prices are clearly identifiable as retail or wholesale and that you understand what definitions the agency is using 3rd: Understand what sales units or volumes are collected for different trader types (e.g., $/kg; $/bucket; $/sack) 4th: Try to make sure timing of price collection is the same

4. Are the data similar (enough) to what the country office needs cont.? • Commodities with characteristics that do not precisely match your delivered product’s characteristics can perhaps be used as proxy data • Compare • Color and size • Processing / condition • Produced within source country • Quality (focus on observable quality differences, i.e., do prices vary by quality?) • Minor variations in quality, processing, color or size are fine • Note and report the differences between the delivered commodity and the commodity with secondary data

5. Are (some of) the secondary data suitable? cont. • Common errors associated with combining secondary and primary data are: • Comparing retail and wholesale series • Comparing raw commodities and processed products • Failing to convert prices to common currency and common unit of account • Using different frequency data or not matching up periods correctly • Failing to clarify whether prices are day-specific observations or period averages or whether prices are trader-specific or trader averages within a market

6. Part 1: Determine how many markets to monitor

7. Within each market category: take a sentinel site approach • Rarely feasible to monitor all markets • Sentinel sites are composed of a core set of markets, regularly monitored • Markets are selected by country offices, based first on overlap with secondary data and then selected by community type (remote or less remote) • Selected sentinel sites should be representative of communities • How to select sentinel sites within each market category is discussed below

8. How many markets within each market category to monitor? *Most pilots will not have counterfactuals

9. How many markets within each market category to monitor? • The number of markets to monitor will vary by pilot • The number of markets to monitor may vary by commodity • Some commodities have more secondary data than other commodities • Competitively procured commodities will need to be monitored across fewer markets compared to non-competitively procured commodities • The following slides list number of markets by pilot type • The next section discusses how to select markets within each category

10. Regional Procurement Competitive, noncompetitive Recipient Country (up to 10 mkts) Central markets (up to 5): •Capital city consumer market •Major import/export market •Largest market in each distribution area •Urban or regional consumer markets Recipient/destination markets (up to 5): •Remote: 2 - 3 mkts •Less remote: 2 – 3 mkts Source Country (up to 5 mkts) Central markets (up to 5): •Capital city consumer market •Major import/export market •Largest market in area(s) where procurement is most likely to occur •Urban or regional consumer markets Smaller source markets: •No additional markets required

11. Local Procurement Competitive, Non-competitive, Vouchers and Cash • Source/Recipient Country (same) (up to 10 mkts) • Central markets (up to 5): • Capital city • Largest market(s) in each distribution area • Largest market(s) in each source area • Major import / export market • Consumer market in major urban area • Recipient/destination markets (up to 5): • •Remote: 2 - 3 mkts • •Less remote: 2 – 3 mkts

12. Local Procurement Limited Competitive (e.g., contracting with smallholders) • Source/Recipient Country (same) (up to 15 mkts) • Central markets (up to 5): • Consumer market in capital city • Largest market(s) in each distribution area • Largest market(s) in each source area • Major import/export market • Consumer market in major urban area • Source markets (up to 5) Recipient markets (up to 5): • •Remote markets: 2-3 •Remote markets: 2-3 • •Less remote markets: 2-3 •Less remote markets: 2-3 • OR, Ranked by probability of procurement: 5

13. Local or Regional Procurement Competitive, Vouchers and Cash, Limited Competitive with in-depth evaluation Counterfactual Markets (up to 10 mkts / communities) Counterfactual source markets (up to 5 mkts): Markets that share the following attributes with LRP source markets: • Similar agro-ecological zones • Roughly the same population • Same distance to a paved road or same level of access to a primary (daily or weekly) market Counterfactual recipient communities (up to 5 communities): Communities that share the following attributes with LRP recipient communities: • Similar agro-ecological zones • Roughly the same population • Same distance to a paved road or same level of access to a primary (daily or weekly) market • Similar interventions to the matched recipient communities

14. Part 2: Select markets to monitor

15. Frequency of data collection • All data ought to be collected at least monthly • If secondary data are collected… • … monthly: collect primary data at least monthly, ideally on the same day or in the same week • …weekly or biweekly: try to collect primary data on same days as reflected in secondary data • … daily: select certain days of the month (or week) and collect primary data on those days as well • If secondary data are not available, collect primary data at least monthly, preferably weekly or biweekly

16. Selecting central markets for local procurement, vouchers and cash • In pilots where source and recipient countries are the same, several central markets will overlap. Include a total of five: • Consumer market in major capital city • Major import / export market • Largest market(s) in each distribution area • Largest market(s) in each source area • Note: for competitive tenders, tracking additional, smaller markets beyond these five is unnecessary

17. Regional Procurement: selecting central markets in the source country • List up tofive major/central markets in source country, including: • Consumer market in capital city • Major import/export market • Largest market(s) in area where procurement is most likely to occur • Non-competitive tenders: source market • Competitive tenders: major urban market • Other central consumer markets in urban or regional centers

18. Regional Procurement: Selecting central markets in the recipient country • List up tofive major/central markets in recipient country, including: • Central consumer market in capital city • Major import/export market • Largest market(s) in each distribution area • Other central consumer markets in urban or regional centers

19. Comparing selected central markets with secondary data • Compare your list of preferred source- and recipient-country central markets with the central markets reflected in your secondary data • Check whether commodities in secondary data are the commodities to be distributed • Check whether the data are retail and/or wholesale prices • When secondary data are available for markets and commodities of interest: use these data to conserve time & resources

20. Source market selection for competitive and noncompetitive procurement and vouchers and cash • Competitive procurement, noncompetitive procurement, vouchers and cash: monitor central markets only • Traders are likely to operate in major central markets • Central markets capture competitive prices • No need to monitor additional (smaller) source markets

21. Source market selection for limited competitive procurement • Limited competitive procurement: • For each commodity, monitor the markets from where it is likely to be sourced • If different commodities are noncompetitively sourced from different markets, repeat below process for each commodity • Use table on following slide to track information for each commodity

22. Selecting source communities for limited competitive (Check one) • 1st: list all likely source markets in column 1 • 2nd: mark whether secondary retail and wholesale price data exist for each market • 3rd: assess each market’s remoteness: • Use access to paved roads or a daily market as the indicator • Remoteness is a proxy for spatial integration of remote communities with distant markets • Remoteness is a relative and context-specific concept • Greater remoteness often means higher risk of price variability • OR 3rd: when procuring from a subset of pre-identified markets, rank markets by probability of procurement

23. Source market selection for limited competitive procurement cont. • Objective: identify five source markets to monitor by commodity • First, randomly select from those that have secondary data • Randomly select up to 2-3 markets from list of remote markets with secondary data • Randomly select up to 2-3 markets from list of less-remote markets with secondary data • OR, rank by procurement probability, if procuring from a subset of pre-identified source markets • Even incomplete secondary data is a starting point • Next, if more markets are still needed to reach the total, randomly choose among remaining for primary data

24. Selecting recipient (destination) communities (Check one) • Similar approach as selecting source markets for noncompetitive procurement • Will not vary by commodity • Fill in the table above • List all recipient communities • Identify communities as remote or less remote

25. Selecting recipient (destination) communities • From the table, randomly select • 2-3 communities with secondary data and are remote • 2-3 communities with secondary data and are less remote • If there are not enough communities with adequate secondary data, randomly select recipient communities for primary data collection, by category of remoteness • In each community selected, monitor the main retail market

26. Selecting counterfactual source markets • Only required in noncompetitive tendering processes with in-depth evaluation component • Counterfactual source communities should not have other agency programs or projects in place • Using secondary data, identify up to 5 markets that share the following characteristics with LRP source markets: • Similar agro-ecological zones • Roughly same population • Same distance to a paved road or same level of access to a primary (daily or weekly) market • Wherever secondary data are missing, identify communities that have the same characteristics as the source markets, and collect primary data

27. Selecting counterfactual recipient communities • Counterfactual recipient communities receive transoceanic food aid • Should have similar interventions as the matched community (e.g., both distribute in school feeding programs) • Using secondary data, select up to 5 communities with roughly same characteristics as pilot communities • Similar agro-ecological zones • Roughly same population • Same distance to a paved road or same level of access to a primary (daily or weekly) market • Follow same process as for counterfactual source communities to identify secondary data • Primary data collection may be necessary

28. Selecting Markets to Monitor Exercise: • Draw a map of your country • Identify on the map the markets where you are procuring each commodity; write a list of these markets • Identify on the map where you are distributing the commodities; write a list of these communities/markets