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The Wheat Straw Market System in the Context of Severe Flooding Badin, Ghotki and Sanghar Districts, Sindh Province, Pakistan

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The Wheat Straw Market System in the Context of Severe Flooding Badin, Ghotki and Sanghar Districts, Sindh Province, Pakistan Pre-Crisis Market Mapping and Analysis: The wheat straw market system in the context of severe flooding Badin, Ghotki and Sanghar Districts, Sindh Province, Pakistan Written by Gregory Matthews and Muzafar Hussain With contributions from Emily Sloane and Muhammad Attiq August 2015 The IRC is indebted to the HWA Foundation, Takhleeq Foundation, Root Work Foundation, Care, ACTED, ACF, Concern Worldwide, WHH and Oxfam for contributing staff and logistical support to this exercise. 2 PCMMA on the Wheat Straw Market System, Sindh Province August 2015 Contents Executive summary ....................................................................................................................................... 4 I. Overview of assessment ............................................................................................................................ 6 Objectives ................................................................................................................................................. 6 Methodology ............................................................................................................................................. 7 II. Crisis scenario............................................................................................................................................ 8 III. Scope of the assessment .......................................................................................................................... 9 Critical market systems ............................................................................................................................. 9 Key Analytical Questions ........................................................................................................................... 9 IV. Focus Population and Locations ............................................................................................................ 10 Seasonal Calendars ................................................................................................................................. 12 V. Market-system maps and Analysis ......................................................................................................... 14 Baseline – August 2014 ........................................................................................................................... 14 Emergency-Affected Situation – September 2010/2011 ........................................................................ 18 How the market will perform in future flood emergencies .................................................................... 21 Key Analytical Question #1: How is the critical market behaving today, and how will it behave during the flood emergency? ............................................................................................................................. 22 VII. Comparing the gap in needs with the market capacity ........................................................................ 23 Sanghar and Ghotki ................................................................................................................................. 23 Badin ....................................................................................................................................................... 24 Key analytical question #2: Will the affected population be able to access the needed volume of wheat straw from the market system during the emergency? .............................................................. 25 VII. Main Findings ........................................................................................................................................ 25 VIII. Main recommendations ...................................................................................................................... 28 This report is made possible by the generous support of the American people through the United States Agency for International Development (USAID). The contents are the responsibility of the IRC and do not necessarily reflect the views of USAID or the United States Government. 3 PCMMA on the Wheat Straw Market System, Sindh Province August 2015 Executive summary Pre-Crisis Market Mapping and Analysis (PCMMA) is a relatively new approach to conducting market assessments prior to emergencies in order to anticipate how markets will respond after a shock occurs. The PCMMA in Pakistan was the first of three pilot PCMMA assessments that the IRC is conducting in 2015 in order to generate learning that can be used to refine the approach and the PCMMA guidance manual, while also providing information to humanitarian actors in Pakistan to feed into strategic and operational emergency planning efforts. In Pakistan, the PCMMA exercise additionally served as a capacity building exercise to enable practitioners to carry out market analysis after emergencies occur. The PCMMA took place from 18 May to 1 June 2015 in Sindh, Pakistan, covering Badin, Ghotki and Sanghar districts. The exercise was hosted by the IRC, with participation from eight other organizations. The analysis team followed the PCMMA guidance to apply an approach similar to that of the Emergency Market Mapping and Analysis (EMMA) Toolkit in a pre-crisis context. For the purpose of this PCMMA assessment, the severe floods of 2010 (for Ghotki) and 2011 (for Sanghar and Badin) were selected as the reference crises. The team examined how the floods impacted the function of four selected critical market systems in order to draw conclusions about the likely impact of future floods on the market systems and to propose appropriate market-based preparedness and response interventions. This report presents the findings and recommendations for the wheat straw critical market system in Badin, Ghotki and Sanghar Districts. The focus population for this assessment are the approximately 359,000 households in the three districts affected by the 2010/2011 floods. The poorest people in this group work as either daily laborers or as sharecroppers, heavily burdened by debt to their landlords. In normal years, the wheat straw market system functions well and provides sufficient volumes of straw to meet the needs of the population. Sanghar and Ghotki are large wheat production areas and produce most of their own straw, as well as sell to other districts, including Badin which does not produce much wheat. If additional straw is needed in any of the districts, traders regularly bring in more supply from neighbouring areas, particularly Punjab. During flood emergencies, straw stored in open fields suffers significant losses, and farmers who keep their own straw for consumption suffer significant damages and rely on markets to meet their needs. Even though livestock are often sold or die during floods, more farmers must resort to purchasing straw on markets because of inundation of grazing land and losses to straw and other types of green fodder. Market actors report being able to provide the necessary amounts of straw during flood emergencies to meet needs, both by purchasing straw at low prices from farmers who sell it as a coping mechanism and by bringing in straw from neighbouring provinces. The markets are likely to remain competitive and integrated with other straw producing areas and able to supply the necessary volumes of straw. Based on an analysis of the 2010/11 floods, the wheat straw market system by and large has the capacity to meet the anticipated demand for straw during future floods. In Sanghar and Ghotki, straw markets will need to increase their volumes supplied in order to meet the high demand, while in Badin markets will need to provide roughly the same supply as before the emergency. Markets will need to scale up to meet these levels of demand for at least 3 to 5 months, from September until green fodder becomes available. 4 PCMMA on the Wheat Straw Market System, Sindh Province August 2015 In all three districts, market actors will likely be able to scale up supply to meet the demand by importing straw from other districts. All straw vendors reported being able to maintain adequate supplies in 2010/2011, and some even reported providing additional straw stocks to NGOs to distribute as humanitarian aid. The major limiting factor for households to access straw after the floods will be purchasing power. Because straw will need to be brought in from other districts or provinces, and roads will be inaccessible in many places, straw prices will increase. Based on this analysis, this report proposes the following recommendations for emergency response during future floods: For the first month of the emergency: In Sanghar and Badin: In-kind distribution of fodder assistance to the affected population, provided that relief efforts can reach the affected households. In Ghotki: Cash or vouchers to the affected population to enable them to purchase wheat straw from the functioning markets to meet their needs. For the 3 to 5 months following the emergency, for all three districts: Cash or voucher assistance for straw should be phased in as soon as transport networks become more open, cash or vouchers redeemable at local straw retailers can be phased-in to replace in- kind straw distributions. Because of the high number of straw losses, assistance will be required for about 3-5 months until green fodder becomes available. In-kind distribution of supplemental nutrition for livestock to help prevent losses from disease and preserve livestock as an asset. Provide assistance for green
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