market forces reducing poverty impact of monitoring and evaluation efforts on design, implementation...

market forces reducing poverty

Impact of Monitoring and Evaluation Efforts on Design, Implementation & Resource Allocation (Dec 2-3, 2008)

Measuring and Designing for Smallholder Poverty Impact

The Industrial Bamboo Market System in North West Viet Nam

By John Marsh, Executive DirectorProsperity Initiative C.I.C.


• Part 1 – About PI and its approach to indicators• Part 2 – The NW Viet Nam Bamboo Market Project• Part 3 – What we know, have done/measured• Part 4 – Roll out and more on PI’s ROI/business case

approach to poverty impact

“Right now we do not know how to make effective investments in private sector development as well as we should…

“The IFC, GMF, and GTZ (and others …) are committed to advancing prosperity , stability and opportunity for the poor and those affected by shifts in the global economy…

This PresentationHow analysis and M&E are part of one cycle in resource allocation for impact


• Value chain projects are systemic interventions. • Toolkits, standardised corporate approaches useful but risk missing the

constraints/opportunities in each context, market system• How to find these leverage points, thought leaders /change agents in a system and

enable them? (PI People not PI Approaches)• What impact is feasible? What will be done? What will it cost? ROI?• Working with markets – can the project address the real world of market risks and

opportunities?

Part 1

Challenges In Smallholder Market Based ApproachesWhat PI does to deal with them


PI has several bottomline performance indicators (which can be aggregated at corporate level)

• People lifted across the poverty line • Poverty gap reduction (income for people below the poverty line)

– Income for others too• Jobs for people below the poverty line

– Jobs for others too• We track/estimate costs against these for development ROI, and ‘business case’

decision making on what we should and shouldn’t do

Should we try to measure poverty impact…? It’s a challenge to do well but we think this is what the development business is ultimately about.

PI’s IndicatorsFocusing on our corporate mission (not simple, but fundamental)

Part 1


The NW Viet Nam Industrial Bamboo Market System Project

PART 2

IFC linkages project started 2005, PI 2006

NW Viet Nam Industrial bamboo system

PI/Mekong Bamboo managed project


What We Know - Market and impact potential

PART 3

Global Bamboo Mkts - $ M (% share) Selected Global Markets - $ M

Bamboo Shoots

1,5001,500 (100%)

Blinds & Mats

500 (17%)

Bamboo/RattanHandicrafts 6,0003,000 (50%)

Chop sticks 390300 (75%)

Bamboo/Rattan

Furniture

1,500 (50%) 3,000

3,000Conventional products ~$6-8 B

Activated Carbon

1,20020 (2%)

Charcoal 3,10060 (2%)

#Builders Joinery

& Carpentry

5 (<0.05%)

#Wood Flooring

#Wood Panels200 (<1%)

#Wood Furniture

50 (<0.1%)

200 (1.5%)

New products ~$0.5 B

# Premium Value/kg High Poverty Impact

Bamboo is competitive against timber products

14,000

13,000

27,000

57,000


2007World > $12 B pa

China ~ $9 B paMekong ~ $0.28 B pa

2020 (mid-level scenario)

World ~ $15-20 B paMekong ~ $1 B pa

2005World >$7 B pa

China ~ $5.5 B paMekong ~ $0.25 B pa

What We Know – Market and impact potential

PART 3


Premium Value - Bamboo laminated flooring and panels

Low value bulk processing eg paper, charcoal

Medium value processing eg chopsticks, panels

Premium value productseg flooring, laminate furniture

Paper + pulp VN

Charcoal, briquettes, China

Charcoal, briquettes, Lao PDR

Mat board VN

Woven mat VN

Chopsticks VN

Flooring VN, high value/kg product

Raw Culms for construction

Raw culms VNJOBS

PER

HA

(FAR

MER

S W

ORK

ERS

FTE)

0.2

0.4

0.6

0.8

1.0

1.2

500 1.500 2.000 2.500 3.000

LOCAL PRO-POOR FINANCIAL IMPACT PER HA (USD)

What We Know – Market and impact potentialKey impact factor - 60% of sector output is raw material input to industry system

PART 3


Mekong ModelWaste rates 50 to 70%

Farmers/Traders

China ModelWaste Rates 5 to 10%

Pre-Processing

Blinds

Flooring

Panels

Chopsticks

Charcoal

What We Tested With Businesses Industry utilisation rates are the key to smallholder income creation

PART 3

The preprocessor step enables all parts of the plant to be used.

This lowers waste, increases profits and lowers end product competitive pricing.

Better margins mean businesses want more.

This in turn drives up both raw material price and volumes.

Impact comes through raw material price x volume2004 $11.7/t2006 $14.1/tBlinds

Flooring

Panels

Chopsticks

Charcoal

End-Processing


-0.5

-0.4

-0.3

-0.2

-0.1

0

0.1 Total Poor HH Poor Bamboo HH Poor Non-Bamboo HH

Pove

rty

Gap

2004

0.238

0.407

0.309

2004 20042006

0.191

0.451

0.274

2006 2006

What We Measured - Prices Drive Poverty Impact Rise from $11.7/t-$14.1/t lifted bamboo smallholders ‘out of poverty’

3,700 people move under poverty line

21,000 people move over poverty line

‘Poverty Gap’ is the average distance (gap) below the poverty line of the poor population [In Viet Nam poverty line is USD150pp/yr]

MDG 1 targets are the headcounts of people moving over this poverty line

PI can determine these measures against any other poverty line $1/day, $2/day etc

$11.9M$9.9M

Our Target - Remaining Poverty Gap ($) for 240,000 poor (of 400,000 population)

PART 3


32.5

4.9

28.2

34.4

28.2

5.2

33.6

33.0

BambooLivestock

CropsOther

20062004

Bamboo can lift people out of poverty because 30%+ of HH income = bamboo income

70% with Bamboo incomes60% with Bamboo incomes

Bamboo has systemic impact because 70% (& growing) have bamboo incomes

(gives scale – industry can be developed)

How Does Price (Income) Impact Poverty?% of income matters; % of people engaged matters

12% median growth

PART 3


Scaling Up – Roll out to the wider NW Viet Nam market system

Target Community:

– Upland, poverty rates >60%, 90% ethnic minority

– Target area 400,000 people (240,000 poor)

– Adjoining area reaches 700,000+ (500,000 poor), cross border to Lao PDR

PART 4


# out of poverty

Our Plan to Reduce The Poverty Gap Developing means to use price as a proxy in this system

125,000

2/5China S/holders $43M

-$2.9 M

2005

2008

2013 $2M/yr

$1M/yrProjectResourcing~$15M

2004 S/holders $11M

-$11.9MPove

rty

Gap

(New

Inco

me

To P

oor)

Viet Nam Farmgate Bamboo Price

-$10M

-$8M-$6M-$4M

-$2M

$0

-$12M

ChinaS/holders $86M

160,000-$1.5 M

$17/t $80/t$13/t $40/t

21,0002006 S/holders $15M

-$9.9M

PART 4

??? (price as poverty impact proxy?)

$24/t today

$??


Scaling Up - What We are Doing (& Measuring) 1. Lead investments 2. Maximise utilisation

and cross industry value

3. Sustainability4. Resource ownership:

farmers must own the bamboo

$75.6M/yrNon-poorsmallholderincome

$10.4M/yr Poverty Gap

160,000Out of Poverty

$86.0M/yrSmallholder Income

PART 4


The NW Viet Nam Industrial Bamboo Market System Project

Strong prices draw other upland bamboo production into the industry

IFC linkages project Thanh Hoa, from 2005

NW Viet Nam Industrial bamboo system (60,000 ha) reaching population of 400,000 and lifting 160,000+ out of poverty

Expansion reaching population of 700,000+ NW Viet Nam (+Lao PDR) (90,000 ha) and lifting ~250,000+ out of poverty

PART 4


• Piloted M&E V1.0 in ‘proving’ phase. Tested methods on ~50% of 2006 production population.

• Helped us understand the impact mechanism (not just baseline!)• Now developing M&E V2.0 (out to 400,000, then 700,000+)

– Revising baselines/midline tools; outcome level impact including:new income to poor (i.e. poverty gap), smallholder income, poverty impact headcount

– Process and outcome proxy indicators:sentinels/proxies (price, etc), investment levels, industry diversification, SME level value creation, efficiency, etc.

• Scale of project, scale of impact creates efficiency of scale for M&E

Some More About M&E Measuring poverty impact is difficult but not impossible

PART 4


• NW Viet Nam Industrial Bamboo (PI now seeking full financing from donors for ‘roll out’)– Targeting 250,000 out of poverty– PI Project cost 6-8 years ~$15M; $60/person out of poverty

• Bamboo shoots (in ‘proving’, looking to finance roll-out)– 40,000 people out of poverty (smaller)– PI Project cost 4-6 years ~$2M; $50/person of poverty

• Other sector plans in various stages of identification and proving– Other bamboo subsectors and locations– Tourism, coconuts, tea, and others – choice based on several factors

PI’s Business Case ApproachROI for smallholder poverty impact projects

PART 4


PI’s Corporate Targets and Performance Measures

• Aggregate whole of org target = $200/person out of poverty (pop)• Target in Viet Nam, Lao PDR, Cambodia of 750,000 pop by 2020• Identification stage (3-6months $50k-$400k)

– Up to $5/potential pop. If yes then proceed…• Proving stage (1-3years, $100k-$2M)

– Up to $20/potential pop, Quick wins if lucky. If yes then proceed…• Roll Out and Exit stage. (5-10+ years, $1M+)

– Corporate target of $200/pop as guide. More for difficult targets (or if donors fund us)

Principles of PI’s Corporate PerformancePI’s project cycle and ‘investment principles’ to support the approach

PART 4


Principles of PI’s Corporate PerformanceAchieving Poverty Impact in Market Oriented ProjectsAlways the bottomline and main objectiveEmpower managers to respond to the opportunities and harsh realities of the market place

Napoleon’s campaign on Moscow

PART 4


Thank youwww.prosperityinitiative.org

PI is supported by:• SDC• Oxfam Hong Kong• Oxfam America• AusAID• World Bank• IFC

PI works with donors and development partners committed to a bottom-line business case approach to achieving poverty impact.

PI works with investors and businesses looking to create value for themselves in industries we have shown will create poverty impact.

PI is a partner in the Donor Committee for Enterprise Development project to develop an Impact Management Standard for PSD projects


$TBAMFull current smallholder plantation to market

60,000haAll smallholderplantation into market

PriceScenario 2

4/5China 08 $86M

$TBAMNew plantation is

induced through price effect, gov’t policy support etc

in neighbouring areas inc Lao PDR

PriceScenario 1

2/5 China08 $43M

Viet Nam Bamboo Farmgate Price

Trad

ed V

olum

e

$40/ton(2/5China 08)

$80/ton(4/5China08)

Today2008 $26M

Scaling Up – Bamboo price X volume = smallholder income

Actual2006 $15M

$14/ton(VN06)

PART 3

90,000haFuture VN & Lao plantation

Actual2004 $11M

$11/ton(VN04)

$11M= Smallholder Income from sales

$24/ton(VN08)

Assumption to determine poverty impact

Lifts 160,000 out of povertyin current plantation areaof 400,000 people

53,600haSmallholderarea supplyingmarket (2006)

Price-volume potential for NW Vietnam Bamboo


PriceScenario 2

4/5China 08 $86M

$TBAMNew plantation is

induced through price effect, gov’t policy support etc

in neighbouring areas inc Lao PDR

Viet Nam Bamboo Farmgate Price

Trad

ed V

olum

e

$80/ton(4/5China08)

Today2008 $26M

Scaling Up – Bamboo price X volume = smallholder income

Actual2006 $15M

$14/ton(VN06)

PART 3

90,000haFuture VN & Lao plantation

Actual2004 $11M

$11/ton(VN04)

$11M= Smallholder Income from sales

$24/ton(VN08)

Lifts 160,000 out of povertyin current plantation areaof 400,000 people

53,600haSmallholderarea supplyingmarket (2006)

Price-volume potential for NW Vietnam Bamboo

market forces reducing poverty impact of monitoring and evaluation efforts on design, implementation...

Documents