Demand Driven Smallholder Market Participation through WFP Purchase for Progress Capacity Building: Evidence from Mali

Abstract

This chapter analyses the effectiveness of the World Food Programme (WFP) purchase for progress (P4P) capacity building interventions to increase market participation. The chapter uses the framework of the potential outcome to estimate the treatment effects of using agricultural support services on the percentage of commodities sold and in different marketing channels. It also uses the Propensity Score-Difference-in- Difference estimator to estimate the cumulative effect of the P4P capacity building interventions. Results indicate that using agricultural support services is effective in increasing market participation through farmer organizations, suggesting that the P4P-supporting capacity building interventions have the potential to increase the capacity of farmers to aggregate commodities. Agricultural support services also increase the percentage of commodities sold by farmers at the farm gate, highlighting the role of the reduction of transaction costs played by the interventions. Results also indicate that experience in using agricultural support services, throughout the P4P programme, has a positive impact on market participation revealing the accumulative effect of the capacity building interventions. Market participation increases much more when post-harvest and marketing services are used in addition to productivity enhancing services.