Beyond value chains

Emerging lessons from Market Systems Development approaches in Australia’s aid programme

September 201828 pages Download as PDF (549.3 KB)
Published by
Australian Agricultural & Resource Economics Society

The paper outlines results and lessons learned from global and Australian MSD programmes to date. It provides insights on questions such as:

  • whether poverty impacts are being achieved and at what scale
  • whether MSD ‘works’ in different developing country contexts and with different communities
  • whether ‘systemic change’ is being achieved
  • how the development benefits from MSD programmes might be further strengthened

Many aid donors, including Australia, fund programmes aimed at helping farmers connect better with input and product markets. Some of these adopt the ‘market systems development’ (MSD) approach. A market system has specific value chains at its core, but more broadly encompasses producers, buyers, sellers (including input and service providers) and employers together with key influencing factors such as policies, regulations and cultural practices. MSD programmes seek to reduce poverty by making markets function more effectively, sustainably and beneficially for poor people.

For Australia, MSD was an ambitious departure from more traditional project approaches. ‘Pure’ MSD involves little or no direct delivery of services to target groups, instead working through partnerships with existing market actors – primarily, but not exclusively, in the private sector.

Over the last decade or so Australia has applied and adapted MSD to suit particular objectives and local circumstances. For example, private sector partnerships are sometimes supplemented with community-based, NGO-led activity to help farmers become ‘market-ready’ (including by aggregating output) or to address nutrition or gender concerns.

DFAT programme profiles on the BEAM website:
Market Development Facility (Phase 1)
MDF2: Market Development Facility (Phase 2)
3i Cambodia: Investing in Infrastructure
TOMAK - To’os ba Moris Di’ak (farming for prosperity)