Market systems development (MSD) in thin and fragile markets is never straightforward. In places like Timor‑Leste – where private‑sector capacity is limited, formal markets are shallow, and political and social dynamics shift quickly – the usual MSD playbook rarely fits. Markets are small, trust is fragile, and both public and private actors face real constraints in capital, capability, and confidence. Programs that push too hard risk distorting incentives; programs that pull back too early fail to gain traction. Success depends not on textbook models, but on the practical, often overlooked details of implementation: reading the context continuously, backing locally led solutions, and working with the market as it is – not as we wish it to be.

To’os ba Moris Di’ak’s (TOMAK) experience shows what this looks like in practice. TOMAK was the Australian Government’s flagship agriculture and nutrition program in Timor-Leste, delivered by ASI. Over 10 years, the program made markets work in Timor‑Leste by taking a politically aware, socially grounded, and deeply pragmatic approach to facilitation. Rather than waiting for “ideal” partners to emerge, TOMAK worked with the actors that existed or encouraged new, previously overlooked players – smallholder farmers (including women, youth and people with disabilities), emerging youth agripreneurs, local buyers, municipal authorities, and national ministries – tailoring support to their incentives, capacities, and constraints. The program invested early in trust‑building through Farmer Field Schools (FFS), Savings and Loans Groups (SLGs), and local government partnerships, creating the social and institutional foundations that later enabled stronger market linkages, co‑investment, and climate‑smart agribusiness growth. Rolling contextual analysis helped the team navigate shifting incentives and identify partners ready to lead, while flexible, milestone‑based support allowed local businesses and service providers to test ideas, build confidence, and grow sustainably.

Meeting the market where it is

TOMAK worked with the market as it actually functioned in Timor-Leste – not as a textbook system, but as a thin, fragmented network of actors with very different capacities and incentives. This meant engaging large buyers where they could drive demand, while also supporting smaller, emerging actors who played critical roles in connecting rural producers to markets. TOMAK partnered with major supermarkets on a “Produtu Lokal (Buy Local)” campaign to stimulate demand for domestic products, while strengthening the network of collectors and collection points that bridge the gap between remote farmers and urban buyers. Many Private Agriculture Service Providers (PASPs) grew into dual‑role actors, supplying inputs to farmers while aggregating produce for sale, effectively bringing markets closer to communities. Input suppliers such as Agi‑Agriculture expanded rural reach, ensuring farmers could access seeds, fertiliser and tools without costly travel. This calibrated, incremental approach strengthened market functions rather than substituting for them, a core MSD principle.

Reading the political, social and cultural context

In a decentralising system like Timor‑Leste’s, incentives and authority shift quickly. TOMAK kept contextual analysis “live” throughout implementation, enabling the team to adapt as political dynamics evolved. The shift to a direct implementation model strengthened TOMAK’s ability to build relationships, track district‑level changes and respond to emerging opportunities. Rolling contextual analysis informed partner selection – including the decision to work with the Dili Development Company (DDC) and other private sector actors that were well‑positioned to stimulate demand for agricultural careers. TOMAK also supported the Ministry of Agriculture, Livestock, Fisheries, and Forestry – a key partner – to revise its extension manual to reflect decentralised decision‑making and embed good practice, including mainstreaming of gender equality, disability and social inclusion. Regular monthly and quarterly consultations at sub‑municipal level ensured work planning and technical decisions were grounded in local realities. Implementation was carried out alongside municipal officers, reinforcing government ownership and ensuring interventions aligned with local priorities. This adaptive, politically aware approach allowed TOMAK to stay relevant and effective in a shifting environment.

Unlocking demand and supply with catalytic capital

In thin markets, finance is often the missing link between potential and performance. TOMAK used catalytic capital to unlock both supply and demand. On the supply side, co‑investment with agripreneurs, PASPs, the DDC and the National University of Timor-Leste helped businesses expand services, test new business models and reach rural communities with inputs, advisory services and machinery repair. On the demand side, TOMAK strengthened SLGs, enabling farmers to invest in production, adopt new practices and meet buyer requirements. By training SLG members and linking them to collectors and supermarkets, TOMAK stimulated reliable demand for local produce. Crucially, TOMAK’s support was time‑bound and designed to taper as market actors gained confidence and capability. This allowed both sides of the market to engage, transact and eventually operate independently – a hallmark of sustainable MSD practice.

TOMAK’s decade of implementation shows that MSD can work in thin and fragile markets when programs stay close to the context and build around the actors who are already there. In Timor‑Leste, this approach mattered because it strengthened the real foundations of the agricultural economy: local businesses, collectors, PASPs, farmers, and municipal authorities. By helping these actors take on new roles, test new models, and build confidence through co‑investment, TOMAK expanded the reach of essential services, improved market access for rural producers, and created new commercial pathways that did not exist before. The program also demonstrated that when facilitation is adaptive and politically aware, it can keep pace with decentralisation, shifting incentives, and emerging opportunities. Most importantly, TOMAK showed that markets become more resilient when they are driven by Timorese actors themselves – not by external delivery – thus planting the seeds for long‑term, locally led growth.

In a country where markets are thin, shocks are frequent, and formal systems are still maturing, TOMAK proved that MSD principles can translate into real, durable change. By meeting the market where it was, reading the political and social context in real time, and using catalytic capital to unlock both supply and demand, the program helped build a more connected, capable and confident agricultural market system. These shifts did more than improve transactions – they strengthened institutions, expanded opportunity, and positioned Timorese farmers, agripreneurs and private sector actors to lead the next phase of growth. In the end, TOMAK’s decade of work shows that when MSD is done well, it doesn’t just fix market failures; it builds the foundations of a resilient, inclusive and locally owned whole food system.