Design

In October of 2011, economists Lasse Brune, Dean Yang, Xavier Giné and Jessica Goldberg published a new study on commitment savings. This study was conducted with the help from the formal bank Opportunity International Bank of Malawi. This study supports some of the earlier findings from a study by professors Pascaline Dupas and Jonathan Robinson and provides interesting additional information. This study focused on male tobacco farmers, who received loans from the Opportunity International Bank of Malawi as part of a 10-15 member group. As David Roodman pointed out in his blog post, “this study was designed to shed light on why commitment savings accounts help people, by measuring impacts on intermediate variables.”

Development projects have been seeking to positively influence complex systems, such as farming systems, small business systems, governance systems, and value chain systems since the advent of international development as a field of practice. Working with these large systems has always been a challenge, and has generated a large number of approaches and models designed to guide development projects. This presentation introduces a model for working in complex systems that has been developed by Human Systems Dynamics based on the science of complexity, and then demonstrates that model using the international development challenge of strengthening a rubber value chain in Indonesia.

The value chain approach aims to achieve economic growth with poverty reduction, but there tends to be a poverty ‘frontier’ beyond which value chain development programs struggle to engage. This briefing paper presents some emerging guidance around how value chain development can explicitly ‘pull’ the very poor into markets in gainful ways. It highlights program design strategies, examples of adapting value chain development principles, the importance of appropriately sequencing program interventions, as well as some key challenges when working with the very poor.

As the development industry reflects on its “value chain” activity over the past five years, we have frequently considered innovative approaches and solutions to market linkage challenges. But what does it mean to “innovate”? Is it incredibly smart people coming up with creative solutions? Is it serendipity? How can a project team aspire to continually innovate in a value chain market challenge?

Design thinking is a systematic, flexible process to adapt and promote iterative solutions while maintaining alignment with a project’s strategic objectives. In the context of a market consolidation and aggregation problem in Ukrainian horticulture market, the presenter will share MEDA’s lessons applying design thinking to generate results. Nick Ramsing of MEDA discusses the analysis and diagnosis of the market problem, the strategic objective, and the iterative process to design, prototype, test, and implement market-driven solutions to link smallholder farmers to higher value markets.

This tool is intended to help donors, implementers and governments develop a strategy for prioritizing and implementing changes in value chains. It outlines a process for analyzing opportunities and constraints in the value chain, identifying underlying causes of those constraints, and determining changes needed to address them. This process results in a set of clearly defined program activities and roles for various stakeholders to implement them.

This guide, developed by USAID's Rural SPEED project in Uganda, provides a step-by-step process for understanding effective product design. The guide includes discussion of demand analysis, determining when agriculture endeavors are bankable, information on how to conduct cash flow analysis, and discussions on risk mitigation, product costing, and product re-evaluation.

Financial access can be critical to reducing hunger and poverty in three ways. First, financial access for agricultural value chain development is needed throughout the value chain to achieve broad-based economic growth for low-income households. Second, diversification out of agriculture is a hallmark of economic growth, but rural entrepreneurs require financial access in order to invest in non-farm enterprises. Third, access to financial services enables rural households to meet regular and unexpected consumption and social demands, without having to divert financing from investment opportunities.

"Rural and Agricultural Finance: Taking Stock of Five Years of Innovations" researches and categorizes the principal challenges facing the agricultural and rural sectors. The report takes stock of the financial services initiatives around the world since 2006 that form part of the “innovations frontiers” in addressing these challenges. The paper’s framework emphasizes the inter-relation between the agricultural value chain, the non-farm enterprise, and the rural household. The presenters discuss findings from this paper, focusing on the ways in which these three areas overlap.