Different market sectors represent different opportunities to create poverty reduction. PI identifies and then follows up with projects targeting the best market sector opportunities to create jobs and income for the poor.
Some sectors such as the bamboo, tourism and coconut sectors which PI works on have particular features which qualify them as important candidates for collaboration projects with businesses, governments and communities. These features include:
- Market growth opportunity. Are the relevant global markets - including substitution markets - growing? Is there the opportunity for the target sectors to gain new sustainable market share?
- Supply chain structures which incorporate poor farmers and workers. Will new market share and the resulting new value creation flowing into the supply chain reach the poorest communities? The poorest are often marginalised from new economic prosperity, because few sectors more naturally support engagement of the poor in broader economic growth. Raw material and labour inputs - the value contributions to market chains by the poor - are sometimes sourced for sustainable, market based reasons from the poorest areas. Market sectors for which the inputs by the poor are unlikely to be naturally competitive into the long term are not good candidates for cost effective project support.
- Displacement concerns - Do no harm. Will local increases in market share avoid displacement of producers and workers elsewhere? For example, bamboo products displace hardwood products globally. But most raw bamboo making its way into high value global markets is sourced almost exclusely from areas where farmers have rights over resources . At the same time >90% of hardwood comes from government and corporate owned plantations and forests.* The displacement of hardwood by bamboo in the global USD100Bn/yr hardwood market directly benefits the poor globally. With current Bamboo products less than 0.5% of this hardwood market, it is a viable trend to support in the long term. Sometimes, project design does not factor in the likely outcome that local success of a value chain project will risk displacing poor suppliers in other countries.
*FAO 2005. Global Forest Resource Assessment, 2005.
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