Women in Trade Strengthen the Resilience of Shock-Prone Markets
Agricultural market systems are a powerful source of resilience to shocks and stresses. RTI International conducted two studies in Somalia and Haiti in order to better understand women’s roles in vulnerable markets. The findings illuminate the extent of women’s current influence on market systems and pathways for enhancing their ability to engage successfully under uncertain conditions.
The results we are sharing highlight the need for development practitioners to engage with women in agriculture as microentrepreneurs, as well as producers and processors. In doing so, development activities can help women grow their businesses while supporting and expanding women’s adaptive strategies for mitigating the effects of shocks and stresses.
In the case of Somalia, female grain traders have enormous potential to thrive in volatile conditions, provided they can access opportunities to grow and de-risk their business activities. In Haiti, female maize producers are involved in market transactions that strengthen their bargaining power at home and provide income for bolstering household resilience.
Female Traders Strengthen Resilience in Homes and Markets
In market systems development, practitioners’ focus on production may sideline the critical role women are playing in processing, sales and small trade. In fragile contexts that are vulnerable to multiple shocks related to conflict and climate change, women are stepping into microentrepreneurship to sustain their families, despite formidable barriers to entry and an unlevel playing field.
As women in Somalia have gotten more involved in markets, they’re changing market systems that have been long controlled by men. For example, female grain traders in Somalia have developed their own informal networks for savings, insurance and credit because they’ve been marginalized in clan-based networks. In addition, they are more likely than predominantly male livestock business owners to use several different adaptive strategies when shocks hit. Study results showed that their adaptive responses as grain traders contributed to rapid recovery, leading to greater resilience for grain producers and consumers as well.
In Haiti, roughly 50% of women in the study who were involved in production and processing on rural maize farms were also involved in the sale and trade of harvests. Furthermore, women involved in trade were more likely to have substantial input into production and income decisions on male-headed farms. Women’s input is key for increased adoption of climate-smart agricultural practices since they are often responsible for labor-intensive production practices.
Women’s dual role in both production and trade contributes to household resilience, as women often use their business earnings to meet household needs during shocks that impact productivity. For these women to continually grow their businesses, they will need access to credit opportunities that can mitigate the impacts of large-scale shocks, often related to climate change and severe weather events, that hit the agricultural sector hard.
Meeting Women’s Business Needs
Our results show that women were willing to take small income gains and accept high risk. This can be a positive thing, as it means they are seizing all available opportunities and are often achieving growth over time. However, we still need to apply the same standards of value, profitability and return on investment for working with women as we do when we’re working with men — even if they’re not demanding it. Opportunities exist for practitioners to help women increase the value, stability and safety of the market activities they currently engage in.
For example, our findings in Somalia suggest that leveraging a market or industry where women can more easily move up, like the grain trade, can improve market development and resilience. Female traders told us they are ready to invest further in the smallholder farmers they source from, when given the opportunity. Downstream investment in suppliers is especially vital in vulnerable market systems, since smallholder producers often bear the brunt of drought, desert locusts, sudden changes in market prices and other climate or conflict-related shocks.
In Haiti, a potential pathway for buyers to engage women on male-owned farms would be to specify quality standards for processing — typically managed by women — and include premiums for meeting those standards in purchase agreements. This provides an opportunity for agents to interact directly with women and premiums could provide a basis for women to access credit and equipment. As women in Haiti expand their market-based relationships, their bargaining power at home and their contribution to the market system are likely to increase.
Making Development Work for Women
Interventions that strengthen the complementary services and support systems currently lacking for female business owners will enable them to move into more profitable and secure market segments. Efforts in Somalia to link existing women-owned businesses to new sources of finance and support services to upgrade and diversify their business activities have proved promising.
While our research provides general principles and practical considerations to use when designing programs, these findings should be ground-truthed and adapted when applied in specific contexts. The best way to do that is to consult with the women who will be involved and impacted.
Solutions should be codeveloped with female producers, processors and traders, based on the transformative changes and business opportunities that are meaningful and relevant to them.
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