JRAM - REACH Resource Centre

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Nov 22, 2017 - This was in sharp contrast to wholesalers, 64% of whom reported that ... All consumer KIs reported that a
Iraq: Joint Rapid Assessment of Markets (JRAM) Ana, Western Anbar - November 2017 Introduction The town of Ana, located in western Anbar governorate, was retaken by Iraqi Security Forces in September 2017, after being controlled by the so-called Islamic State of Iraq and the Levant (ISIL) since June 2014. Following the end of military operations, early reports of the situation in western Anbar indicated limited access to food and a lack of livelihood opportunities.1 To increase understanding of the situation in Ana town, the Cash Working Group (CWG) conducted a Joint Rapid Assessment of Markets (JRAM) from 22-23 November 2017 to assess market health and the feasibility of introducing cash-based programming. The CWG launched the JRAM in April 2017 with the aim of establishing a harmonized, collaborative mechanism for conducting market assessments in newly accessible areas of Iraq. Data collection is conducted jointly by CWG partners, with coordination and technical oversight from REACH. The primary objectives of the JRAM are to understand:

• The impact of the protracted crisis on markets, specifically infrastructure, security and supply; • The price and availability of key goods; • The ability of traders to respond to an increase in demand.

Ana, Western Anbar

1.

REACH, “Western Anbar (Ana, Ru’ua, and Ka’im), Iraq - Rapid Humanitarian Overview,” 22 September 2017.

Key findings

Impact of the crisis • Damages to communication and electricity infrastructure were more widely reported than damages to water and road infrastructure. The first two types of damage were also reported to have the greatest impact on business. Notably, all four types of infrastructure damage were more widely reported by wholesaler than retailer KIs. Moreover, for all four types of damage, a greater percentage of wholesaler KIs reported them as having a severe-to-moderate impact on business than retailer KIs. • Almost all (97% of consumer KIs) reported that they faced no physical barriers – such as issues with transportation or security – to accessing the market place (Ana centre). Likewise, 97% of consumer KIs reported that the security situation did not prevent them from accessing the market place. For traders, the most widely reported security issue - reported by 38% of retailer and 45% of wholesaler KIs - was check points. • For retailer KIs, 71% reported that their number of wholesalers had decreased since before the crisis (June 2014). This was in sharp contrast to wholesalers, 64% of whom reported that their number of suppliers had increased since before the crisis. Overall, the crisis does not appear to have changed the location of suppliers, with the majority of retailers’ wholesalers still located in Ana. Prices and availability of goods • For the items that they sold, neither retailer nor wholesaler KIs reported a shortage of any item in the 30 days preceding data collection. However, none of the trader KIs interviewed sold kerosene and butane, and none of the retailer KIs interviewed sold sanitary napkins. For the two fuel items, these are often sold by mobile vendors not located in the market place.2 For sanitary napkins, retailer KIs indicated that they sold these items in the past, but not at the time of data collection. • Overall prices in Ana were only 7% higher than the average price across northern and central Iraq in November 2017. In terms of items, 8 of 12 – for which there is comparable data – were more expensive in Ana district. • All consumer KIs reported that all assessed items were available in the market place, except butane and kerosene. For these two fuel items, 92% of consumer KIs reported that butane was not available and 72% of consumer KIs reported that kerosene was not available. Response capacity of traders • Across all assessed items, trader KIs were confident in their ability to respond to a 50% increase in demand (100% for retailer and 97% for wholesaler KIs) and 100% increase in demand (97% for retailer and 100% for wholesaler KIs).3 The findings reveal a very high level of confidence among both respondent groups, despite the conflict-related challenges identified in the assessment. • In addition, 86% of retailer and 91% of wholesaler KIs reported that they would not face any barriers to responding to a surge in demand. 2. Therefore, the fact that these items were not available from retailer KIs located in the market place does not necessarily mean there was a shortage in Ana. 3.

This question was asked separately for each assessed item and then the average response was calculated for each trader group.

Methodology Primary data collection was conducted by two CWG partners, IRC and Mercy Corps, and coordinated by REACH. In total, 68 key informant (KI) interviews were conducted across three respondent types:4 36 consumers, 21 retailers, and 11 wholesalers.5 Respondents were identified through purposive sampling. In the assessment, a market was defined as the economic system that exists within the assessed area (Ana), whereas a market place refers to a specific concentration of economic activity. Based on scoping conducted prior to the assessment, only one market place in Ana - named Ana centre - was identified and assessed. As part of the interviews, price data for 17 food and NFIs was collected from trader KIs. For certain items, the quantities were different depending on the respondent type (see Table 3). Limitations Findings should be interpreted as indicative rather than statistically generalisable to the assessed market. Furthermore, KIs often provided estimates rather than exact figures, which should also be taken into consideration when interpreting the findings. Certain items, such as fuel and produce, proved difficult for enumerators to locate within the assessed market place.

Impact of the crisis To understand the impact that the crisis had on the market, the assessment looked specifically at infrastructure damage, security, and supply. These factors were chosen due to their potential impact on the movement of items and the physical accessibility of the market place. Infrastructure and property damage Retailer and wholesaler KIs were asked to report on damage to communication, electricity, road and water infrastructure. Damage to communication infrastructure was the most widely reported (by 81% of retailer and 91% of wholesaler KIs).

All retailer and wholesaler KIs located in Ana town stated that Zain was the only mobile network available. The second most frequently reported type of infrastructure damage was to electricity, reported by 57% of retailer and 82% of wholesaler KIs. Among retailer KIs, 38% reported it as having a severe impact on business and 5% a moderate impact, with the remaining 14% stating that it had no impact. Among wholesaler KIs, 27% reported a severe impact, 36% a moderate impact and 18% reported damage to electricity infrastructure as having no impact. Figure 2: Proportion of wholesaler and retailer KIs reporting damage to electricity infrastructure and impact of that damage.

18+36+2718B Wholesaler

18+73+9B Wholesaler

2

24+10+143319B Retailer

0% 0% 18% 73% 9%

No impact Slight impact Moderate impact Severe impact No damage reported

24% 10% 14% 33% 19%

No impact Slight impact Moderate impact Severe impact No damage reported

14% 0% 5% 38% 43%

14+5+3843B

The third most reported type of damage was to road infrastructure, identified by 48% of retailer and 73% of wholesaler KIs. Overall, 29% of retailer KIs said the damage had a moderate impact on their business, while 9% said it had a slight impact, with the remaining 10% stating it had no impact. Among wholesaler KIs, 9% reported a severe impact, 46% a moderate impact and 18% a slight impact. Figure 3: Proportion of wholesaler and retailer KIs reporting damage to road infrastructure and impact of damage Wholesaler Retailer

18+46+927B

Overall, 33% of retailer KIs stated damage to communication infrastructure had a severe impact on business, 14% a moderate impact and 10% a slight impact, while 24% stated that this type of damage had no impact on business. Among wholesaler KIs, 73% reported damage to communication infrastructure as having a severe impact on business and 18% a moderate impact. Figure 1: Proportion of wholesaler and retailer KIs reporting damage to communication infrastructure and impact of that damage.

18% 0% 36% 27% 18%

Retailer

0% 18% 46% 9% 27%

No impact Slight impact Moderate impact Severe impact No damage reported

10% 9% 29% 0% 52%

10+9+2952B

Damage to water infrastructure was the least widely reported by trader KIs. Only 13% of retailer and 27% of wholesaler KIs noted damage to water infrastructure. Overall, 4% of retailer KIs cited it as having a moderate impact on business, 4% a slight impact and 4% no impact, while 27% of wholesaler KIs stated it had a moderate impact on business. Notably, all four types of infrastructure damage were more widely reported by wholesaler than retailer KIs. Moreover, a higher proportion of wholesaler KIs reported each type of damage as having a severe-to-moderate impact on business than retailer KI. This indicates that damage has a greater impact on wholesalers than retailers and their ability to do business. This is likely due to wholesalers needing to refrigerate a greater quantity of goods for longer periods of time as well as having to transport goods over greater distances. Traders: Individuals who sell food and non-food consumer items within the selected market. Traders are further divided into retailers, who primarily target sales to consumers, and wholesalers, who primarily target sales to retailers. Consumers: Individuals who rely on the market and market places within it to purchase food and non-food items that are essential to survival. 5. Three wholesaler KIs were not located in Ana town, but traded with retailers based in the market place. 4.

Given the importance of storage capacity to their businesses, wholesaler KIs were also asked what impact the crisis had on this factor. Overall, 55% of wholesaler KIs reported that their storage capacity had been negatively affected. Those who reported a negative impact all stated that their facilities were damaged or destroyed during the recent armed clashes in Ana and its environs.

55+45B

Figure 4: Proportion of wholesaler KIs reporting negative impact of the crisis on storage capacity

55%

Negative impact

45%

No impact

Trader KIs were also asked what barriers they faced to rebuilding their businesses.6 For retailer KIs, a lack of access to materials was the most commonly reported overall barrier (either primary or secondary) to rebuilding business facilities (95% of retailer KIs). When the findings are broken down by primary and secondary barriers, the most widely reported primary barriers were a lack of access to materials (71%) and a lack of cash resources (29%). The most frequently reported secondary barriers were regulatory challenges (24%) and a lack of access to materials (24%). Among the wholesaler KIs who reported damaged or destroyed storage facilities (55%), the most widely mentioned primary barrier to rebuilding those facilities was a lack of access to materials (50%), followed by a lack of cash resources (33%). The most common secondary barrier was again a lack of access to materials (33%), followed by regulatory barriers (17%) and traders’ lack of access to their business facilities (17%).7 For both trader respondent groups a lack of access to materials was cited as the main barrier to rebuilding damaged business facilities. Table 1: Most frequently reported barriers to rebuilding business facilities. For wholesaler KIs, only those who reported damage to facilities (55%) provided answers to these questions (see Figure 4, above). Primary Barrrier Retailer

Primary Barrier Wholesaler

Secondary barrier Retailer

Secondary barrier Wholesaler

Lack of funds

29%

33%

10%

0%

Lack of access to materials

71%

50%

24%

33%

Lack of security

0%

17%

0%

0%

Lack access to business facilities

0%

0%

14%

17%

Regulatory barriers

0%

0%

24%

17%

None

0%

0%

19%

33%

Do not know

0%

0%

10%

0%

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Security and physical barriers The security situation was another factor addressed by the assessment to determine the impact the crisis had on the market. As with infrastructural damage, a volatile security context has the potential to restrict the movement of goods and the accessibility of the market place. When asked what impact security issues had on business, 48% of retailer and 27% of wholesaler KIs reported them as having no impact. The most widely reported security issues by both respondent groups was check points: reported by 38% of retailer and 45% of wholesaler KIs. This was followed by fear of violence, reported by 36% of wholesaler KIs, and fear of harassment, reported by 10% of retailer and 9% of wholesaler KIs. Notably, as with infrastructure damage, a greater proportion of wholesaler than retailer KIs reported security issues as impacting on business. This is likely due to them being more vulnerable as their business relies on them moving goods over greater distances. Table 2: Security issues that have an impact on business as reported by retailer and wholesaler KIs. KIs were able to provide more than one answer. Reported Security Reported Security Issues - Retailer Issues - Wholesaler

.

No impact

48%

27%

Check points

38%

45%

Presence of armed actors

0%

0%

Curfews

5%

0%

Fear of violence

0%

36%

Fear of harassment

10%

9%

Among consumer KIs, 97% reported that they faced no physical barriers – such as issues with transportation or damage to road infrastructure – to accessing the market place. Likewise, 97% of consumer KIs reported that the security situation does not prevent them from accessing the market place. Overall, the security situation appears to impact on the movement of goods, as reported by trader KIs, but it does not – on the whole – appear to prevent consumers from being able to access the market place.

6. For retailer KIs, this question referred to business facilities in general, including shops and storage facilities. But, for wholesaler KIs this question referred only to their storage facilities. 7. This answer option refers to both retailers and wholesalers who are unable to access their business facilities.

The supply chain Finally, in terms of the impact the crisis had on the market, trader KIs were asked about change in their number of suppliers and the location of suppliers since before the arrival of ISIL.

Prices and availability of goods

The assessment also examined the prices and availability of goods across the market (see Table 3), as well as the state of financial services and cash access. Specifically, shortages or prohibitively high prices would prevent consumers from being able to access commodities. Likewise, a lack of financial services or access to cash could also prevent both traders and consumers from having liquid assets. These indicators are key to assessing the feasibility of cash-based interventions.

Among retailer KIs, 71% reported that the number of their wholesalers had decreased since before the crisis. This represented a sharp contrast to wholesaler KIs, 64% of whom reported that their suppliers had increased since before the crisis.

Availability

Figure 5: Proportion of wholesaler and retailer KIs reporting that the number of their suppliers had increased, decreased or undergone no change since before the arrival of so-called ISIL Wholesaler

64+9+27B

Neither retailer nor wholesaler KIs reported a shortage of any items that they sold in the 30 days preceding data collection. However, none of the trader KIs interviewed sold kerosene and butane, and none of the retailer KIs interviewed sold sanitary napkins. For butane and kerosene, these two fuel items are usually sold by mobile vendors who are not actually located in the market place.4 Therefore, the fact that these items were unavailable among trader KIs does not necessarily mean that there is a shortage of them in Ana.

Retailers

64% 9% 27% 0%

Increase Decrease No change Do not know

14% 71% 10% 5%

14+71+105B

Regarding sanitary napkins, after following up with data collection partners, it was established that these items were not available from any retailer KIs at the time of data collection. Retailer KIs explained that they normally stocked these items, but that there was a gap in supply at the time of data collection, and that they planned to replenish their stocks as soon as possible.9

In terms of the location of suppliers, the majority of retailer KI’s wholesalers were reportedly still located in Ana town. Overall, 81% of retailer KIs reported that their wholesalers were located in the market place prior to the crisis and 78% reported that their wholesalers continued to be located in the market place at the time of data collection. This very small reduction (three percentage points) suggests that the crisis has not had an impact on the location of wholesalers.

All consumer KIs reported that all assessed items were available in the market place, with the exception of butane and kerosene. For the two fuel items, 92% of consumer KIs reported that butane was not available and 72% of consumer KIs reported that kerosene was not available. As with trader KIs, the fact that these items were not available in the market place does not necessarily indicate a shortage, as they are often sold by mobile vendors. Therefore, it is likely that fuel items are sold in the town but not in the market place.

Among those retailer KIs who reported having wholesalers outside of the market place (19%), they were reportedly located in Haditha and Ramadi, both before the crisis and at the time of data collection. Among wholesaler KIs, the most common current locations of their suppliers were Ramadi (45%), Baghdad (27%) and Haditha (27%). This shows that wholesaler KIs appear to have a range of suppliers located in several different locations. However, these towns and cities all lie to the east of Ana and rely on the same point of road access, along the Euphrates river corridor.

Prices of goods Among consumer KIs, 92% reported that prices had reduced since the departure of ISIL in September 2017. However, overall prices in Ana were 7% higher than the average price across northern and central Iraq in November 2017.10 8 of 12 assessed items for which

Overall, the crisis does not appear to have impacted on the location of suppliers, but it does appear to have reduced the number of wholesalers located in Ana town, as was revealed by the high proportion of retailer KIs reporting that their suppliers had reduced since June 2014.

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Table 3: Food and non-food items assessed for availability and price Item Lentils Rice Dry food Sugar items Vegetable oil Wheat flour Tomatoes Onions Fresh food Cucumbers items Potatoes Eggs Bath soap Toothpaste Non-food Disinfectant items Sanitary napkins Garbage bags Butane 3 Fuel Kerosene

Retail quantity

Wholesale quantity

1 kg 1 kg 1 kg 1L 1 kg 1 kg 1 kg 1 kg 1 kg 30 1 bar (125 g) 1 tube (75 ml) 1L 1 napkin 1 pack 1 canister 1L

50 kg 50 kg 50 kg 1L 50 kg 50 kg 50 kg 50 kg 50 kg 30 6 bars (125 g) 6 tubes (75 ml) 50 L Pack of 12 Pack of 20 1 canister 1L

To supplement incomplete price data for fuel, partner enumerators were instructed to survey retailers in assessed market places to determine the local prices for both butane and kerosene. 9. Retailer KIs did not provide an explanation about what had caused this gap in supply. 10. REACH IRAQ, Dataset: Joint Price Monitoring Initiative (JPMI), November 2017. For both the JRAM and JPMI, price data was collected on the same 12 items using the same quantities, which means that there is comparable data for those items. 8.

there is comparable data (see Table 4) were more expensive in Ana.11 However, for these eight items, prices were on average only 16% higher in Ana. Thus, prices in Ana are not greatly distinct from prices elsewhere in Iraq where price data was collected in November 2017, despite the only recent cessation of armed conflict and the town’s relative isolation from large population centres. Retailer prices showed notable variation among the different respondents with 6 of 16 assessed items (lentils, rice, vegetable, bath soap, shampoo and tomatoes) having a 100% or greater difference between the highest and lowest price recorded. For other items, prices were generally consistent, with eight items having a 50% or less difference between the highest and lowest price recorded (sugar, kerosene, butane, disinfectant solution, eggs, onions, cucumbers and potatoes). Wholesaler prices showed less variation with only one item – disinfectant solution – reporting a 100% or greater difference between the highest and lowest prices recorded. The majority of items reported a 50% or less difference (lentils, rice, sugar, vegetable oil, wheat flour, sanitary napkins, eggs, onions, tomatoes, cucumbers and potatoes). With the exception of sanitary napkins, wholesaler NFI prices showed significantly more variation in price than food items. The pricing of these items is often affected by quality and branding, and therefore is more likely to vary in price.

In terms of changes in demand for credit, two-thirds of retailer KIs reported that demand for purchasing on credit had decreased since the departure of ISIL, whereas wholesaler KIs presented a more mixed picture, with 27% reporting an increase, 36% a decrease and 27% reporting no change in demand for purchasing on credit. This inconsistency may be due to wholesalers’ customers purchasing in much greater quantities than retailers’ customers and therefore needing to use credit. Figure 7: Wholesaler and retailer KIs reported change in demand for credit among their customers

36+27+9B Wholesaler

Figure 6: Proportion of consumer KIs reporting barriers to accessing cash

92+8B

67 % 19 % 10 % 5%

Item

Average retailer prices in assessed Average retailer prices in Ana (IQD) districts of northern and central Iraq in November 2017 (IQD)

Lentils (1kg)

1,427

1,509

Rice (1kg)

1,077

1,132

Sugar (1 kg)

1,017

969

Vegetable oil (1L)

1,538

1,432

92%

No barrier

Wheat flour (1 kg)

808

730

8%

Barrier

Butane (1 canister)

8,714

7,810

Kerosene (1L)

491

708

Bath soap 1 bar (125g)

336

271

Toothpaste (75ml)

1,154

1,009

Disinfectant solution (1L)

1,167

1,193

Eggs (30)

4,063

3,673

929

630

1,107

No comparable data

Tomatoes (1kg)

750

No comparable data

Potatoes (1kg)

741

No comparable data

The majority of consumer KIs (69%) reported accessing cash through daily cash wages. This finding suggests that people are earning money in the town and that there is work, however no further data relating to this was collected. Other reported means of accessing cash included hawallas12 (11%) and government offices (8%). Traders were asked if they offered their customers the opportunity to make purchases on credit, as well as the level of demand and whether demand had increased or decreased since the departure of ISIL. The large majority of retailer KIs (91%) and wholesaler KIs (90%) indicated that they offered their customers the opportunity to purchase on credit. Of those who offered credit to their customers, retailer KIs estimated that on average 38% of their customers purchased on credit. Wholesaler KIs reported a similar proportion, with an average of 39% of customers estimated to be purchasing on credit. 5

36% Decreased demand 27% Increased demand 27% No change in demand 9% Do not know

Table 4: Average retailer prices in Ana town and average retailer prices in assessment districts of northern and central Iraq in November 2017. There is only comparable price data for 12 of 16 assessed items.

Cash access and credit Consumer KIs were also asked about their means of accessing cash and any barriers they faced when doing so. Overall, 92% reported that they did not face any barriers in accessing cash. Of the 8% who reported barriers, all said that this was due to cash access facilities not being functional.

67+19+104B Retailer

Onions (1kg) Cucumbers (1kg)

The items were sugar, vegetable oil, wheat flour, butane, bath soap, toothpaste, eggs and onions. A hawalla is a system of accessing and transferring money, whereby the money is paid to an agent who then instructs an associate in another area to pay the final recipient. 11.

12..

Response capacity After examining the impact the protracted crisis has had on the market, as well as what goods are available and at what price, the final component of the assessment focused on trader KI’s confidence in their capacity to respond to a potential surge in demand. Retailer and wholesaler KIs were asked if they could respond to a 50% and 100% surge in demand by increasing supply. Across all assessed items, traders were confident in their ability to respond to a 50% increase in demand (100% of retailer and 97% of wholesaler KIs) and a 100% increase in demand (97% of retailer and 100% of wholesaler KIs). This question was asked separately for each assessed item and then the average response was calculated among both retailer and wholesaler KIs.13 The findings reveal a high level of confidence among both trader respondent groups, despite the barriers to rebuilding facilities that were identified previously. Traders were then asked if they would face any barriers to responding to a surge in demand. In response, 86% of retailer and 91% of wholesaler KIs reported that they would not face any barriers. For retailers, the reported barriers were lack of resources to buy additional stocks (10%), infrastructure damage in the market place (10%) and difficulty of transportation (10%). The barriers reported by wholesalers were difficulty of transportation (9%), suppliers having a shortage of stocks (9%) and a lack of storage capacity (9%).

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This is due to 9% of wholesaler KIs reporting that they would not be able to respond to a 50% increase in demand for sugar, but that they would be able to respond to a 100% increase in demand for that item. 13.