Electronic copy available at: http://ssrn.com/abstract=2618963
AGRO MARKET INFORMATION AND FARMERS MARKET LINKAGE: WAY FORWARD
K.C.Siva balan, Jayalakshmi Umadikar, Suma Prashant, U.Sangeetha,
Archana.K. Prasad IITMs Rural Technology and Business Incubator (
RTBI), Chennai, India Introduction In India, 70 percent of the
population resides in rural areas and around 56 percent of
workforceisengaginginagricultureandalliedsector(CensusofIndia,2011).
Thoughfarmersareadoptingthelatestcropproductiontechnologiestobringout
best yield levels, the profitability is decided by the market
forces only. Many earlier
studies(AparajitaGoyal,2013;Jensen2010;Ferris,2004;RATESCenter,2003)
documentedthatfarmersrarelyselldirectlytoconsumersandtherearesignificant
pricevariationsinthevillagemarkets.Thisinformationasymmtricitywillfoster
opportunistic behavior of other market actors which in turn traps
farmers in vicious cycle of poverty .Since farmers seldom sell
their output on the main district markets, the sellers generally
have less or little information about current prices while buyers
are often well-informed, at least about the price in the district
market where they are active (RATES Center, 2003). For farmers to
take timely selling decisions and also supply the commodities at
markets where they could get better prices, the right kind of
market information has to reach them in time. Pierre Courtois and
Julie Subervie
(2014)estimatedthatduetothemobile-basedMarketInformationServices(MIS)
program,farmersreceivedsignificantlyhigherpricesformaizeandgroundnutsto
the tune of about 10 percent 7 percent for maize and groundnut
respectively. IITMs RTBI along with IIT Madras, have successfully
developed a system mobile based advisory system for Krishi,
hereafter referred to as mASK- which has
beenfunctioningtoserveasmallgroupoffarmersbyprovidingthenwith
personalizedagriculturaladvisories,throughacallcenterapproach.This
Agricultural Advisory System leverages the power of two-way
communication over mobile phones and helps bridge the information
gaps existing between farmers and experts. An integral feature of
the system forms the farmers dashboard that hosts a Electronic copy
available at: http://ssrn.com/abstract=2618963
completefarmerandfarmprofilealongwiththecrophistoryandadvisories
provided from time to time. This enables tracking the stages of the
crop and the time
ofharvest.Duringarecentsurveyconductedwithfarmersregisteredintothe
system,itisobservedthatalargenumberoffarmerswereinterestedinreceiving
market and commodity price related information.In this context a
research study was carried out to understand the information
seeking behavior, market advisory preference of farmers and
suitable approaches for
enhancingthefarmprofitability.Moreimportantly,recommendationshavebeen
made which can be utilized by the system such as mASK very
effectively to provide market information at the right time to
registered farmers.Methodology The study was conducted in the
Trichy district of Tamil Nadu state. Out of 9
taluksofTrichyDistrict,threetaluksnamelyManachanallur,Lalkudiand
SrirangamwereselectedbasedontheCropcoverageareaandCroppingpattern
(Fig.1). From the fourteen blocks, Manachanallur, Lalkudi and
Manigandam blocks
wererandomlyselected.Twovillagesarerandomlyselectedfromeachblock
namelyEdumalai,Kiliyanallur,Anbil,Nagar,ThayanoorandManigandam(6
villages/3blocks/10respondentsfromeachvillage).Thesocioeconomic
variablesviz.Age,Educationstatus,Farmsize,farmingexperience,Annual
income,Socialparticipation,Innovativeness,Informationseekingbehavior,
PreferenceofAdvisory,awarenessone-mediatools,Modeofpreferenceof
Advisoryservices,Preferenceofmarketadvisoryservices,WillingnesstoPay
behaviorweremeasuredbyusingappropriatescalesandscoringtechniques.The
constraintsfacedbytheusersandsuggestionstoovercomethehurdleswerealso
discussed and documented after in depth interviews and Focused
group discussions ( FGD) conducted among the crop growers of Trichy
district.
Datawerecollectedthroughawell-structuredandpre-testedinterview
schedule. The statistical tools of cumulative frequency, arithmetic
mean, percentage
analysis,simplecorrelation,wereusedtoanalyzethecollecteddatabyusingwith
STRATAsoftwareandSPSS16.0softwarepackagestherebymeaningfully
interpreted and relevant conclusions were drawn. Fig. 1Map Showing
the Study Area Tiruchirappalli District of Tamil Nadu, India
Results and Discussion Agro Market Information seeking behavior of
farmers
Theagriculturalinformationplaysapivotalroleinacceleratingagricultural
productivity,farmprofitabilityandinturnleadstoupscalingofrurallivelihoods.
ThecommunicationsourceswhichfarmersusevariesfromAgriculturalextension
officers to neighbors and relatives. The farmers are using print
media such as News
papersandJournalstoelectronicmediasuchasTelevisionandRadio.The
reliability,reachabilityofeverycommunicationsourceisuniqueandhasitsown
advantagesanddisadvantages.TheNationalSampleSurveyOrganization(NSSO)
hasdocumentedthatattheall-Indialevel,only40%offarmerhouseholdshave
access to one or more sources of information (NSS, 2005). The NSSO
found that of
thesixteendifferentsourcesforaccessinginformationonmoderntechnologyfor
farming about 16.7% of the farmers got their information on a daily
basis from other progressive farmers in their villages.Table.1
Distribution of respondents based on their market information
seeking behavior Figures rounded off / Multiple answers n=60
S.NOParticulars Market Information seeking behavior
RegularlyoccasionallyNever No%no%no% 1.Private farm
consultant183015252745 2.TNAU Scientists--9155185 3. Agricultural
Department officials 274515251830 4.Agro input dealers488081347
5.Neighbors / relatives91525422643 Pluralistic Approach for
Information sharing
Inthepresentstudy,fromtheanalysis(Table.1)itisfoundthatthemajor
sourcesofmarketinformationforfarmersareagroinputdealers(80percent).
Nearly15percentoffarmersobtainedtheirinformationfromneighborsand
relativesregularly.Agriculturaldepartmentofficialscontributetoabout45percent
inprovidingthemarketinformationonregularbasis.Farmersalsogainmarket
information from private farm consultants like executives from
input manufacturing
companies(30percent).Thefarmerswhoseekmarketinformationoccasionally
fromTNAUscientistswere15percentonly.Thefindingswarrantthepluralistic
activities of all stakeholders in transfer of Agro market
information and in line with
findingsofSaravanapriya(2005).Theauthorsopinethatalongwiththepublic
extensionfunctionaries,thepara-extensionworkerssuchasinputdealers,private
farmconsultantshouldalsobeinvolvedindisseminatingpriceinformationtothe
needyfarmers.ForthiseveryvillagecouldhaveaFarmersDiscussionGroup
(FDG)comprisingfarmers,ruralwomen,inputdealer,villageyouthand
progressivefarmersheadedbyappointed/electedconveners.Ithasbeenobserved
thatencouragingtrainedindividualswouldhelpincreatingacompetitive
environment for agricultural information sharing (Global Agri
System 2008). The mASKused by RTBI,enables two waycommunications
where farmers
canclarifytheirdoubtsandthecalloperatorcanreceivethefeedbackandmentor
theclienteleintimelymanner.Duringtheinitialperiodoftheprogram,awareness
ontheadvisoryservicesshouldbecreatedamongthefarmingcommunity.Along
withawarenesscreation,fieldlevelfollowupactivitiesviz.,-conductionof
communitymeetings,advertisementviamassmediashouldbecarriedoutinthe
villages along with the enrollment of subscribers, From the study
it was inferred that local channels of communication (channels
within the social system) like local rural youth and input dealers
are preferred by more than one third of the respondents (38
percent, 37 percent respectively). The formal official
communication likethatwith
extensionofficerswasless(10percent)sincetheclientelemightfeelthatthe
extension officers are from outside the social system (Fig.2). The
finding was in line
withPrabha(2014)whosestudydocumentedthatnoneofthebeneficiaries(100
percent)optedforStateDepartmentofAgricultureasanalternatesourcefore-velanmaiextensionServicesbyTamilNaduAgriculturalUniversity.Hencelocal
convenersshouldbeinvolvedinmassawarenesscampaignandupscalingofthe
program.
Fig.2AlternateextensionpersonnelunderCallcentrebasedAgromarket
advisories n=60
Kind of Mobile Advisories
Morethanhalfoftherespondents(56percent)preferredTextbasedmarket
information services (Fig. 5). The respondents felt that they can
store and share the text message with the fellow farmers. They can
re-use the messages later when need
arises.Buttherespondentsinsistedthatthemessagesshouldbedeliveredinlocal
languagesonly.Ontheotherhandnearlyhalfoftherespondents(44percent)
preferred voice based message services. They felt that there was
difficulty in reading
themessagesincethemobilehandsetshassmallscreensonly.Instead,listeningto
voicemessageswouldbeverymucheasierevenforilliteratefarmers.SinceRTBI
mASKisfunctioningasahelplineservice(callcentremode),thefarmerscan
clarifytheirdoubtsincropproductionatthesametimethemessagedeliveredwill
be reinforced to the farmers in timely manner. Table.2 Mode of
preference of e-Market information services n=60 S. Noe-market
information servicesPreference (in percentage) 1.Call centre38
2.Mobile devices50 3.Conventional(Extension functionaries ) 12
Preference of market
advisoriesAninsightfromthetable3revealedthatvastmajority(92percent)ofthe
respondentsoptedforBuyerandSellerdetailswhichwillbeverymuchusefulto
spotoutandfacilitatethebuyingandsellingpointsnearby.Themiddlemen
interferencewillbeconsiderablyreducedbydirectsellingofcommodities.The
profitmargincanalsobeincreasedifnomiddlemencommissionchargeswere
incurred.Majority(58percent)oftherespondentspreferredmarketintelligence
news.Thedailypriceandforecasting,markettrendsmayhelpthefarmersin
decisionmakingandselectingthemarkets.Theexportmarketdetailswerequoted
as preference by nearly two-fifth of respondents (47 percent) which
showed that the farmers are looking for avenues for more profit and
new market places. Nearly
one-third(30percent)showedpreferenceforGovernmentsubsidyschemessothat
eligible beneficiaries could apply for the appropriate schemes.
Table. 3 Preference of market advisories n=60 S.NoKind of Market
AdvisoriesPreference in percentage 1.Market Intelligence news58
2.Buyer and Seller contact details92 3.Export market details47
4.Government subsidy details30 Willingness To Pay (WTP) for the
Advisories
Thesustainabilityofanyprojectdependsontherevenuecollectionaswellas
numberofbeneficiariessubscribedfortheservices.Thevastmajorityofthe
respondents(90percent)showedinterestinpayingforthemarketadvisoriesif
deliveredintimelyandsitespecificmanner.Alittlemorethanone-third(38
percent) opted for INR 200 as annual subscription charges followed
by 38 percent of the respondents preferred to pay more than INR 200
and up to INR 400 per annum.
Only10percentoftherespondentsexpressedtheirnon-willingnesstopayfor
advisories(Fig.3).Publicsectorextensionserviceshavealwaysbeenfreeforthe
farmers,whichmayhavecreatedaparticularmindsetamongthebeneficiary
respondents. Fig. 3 Willingness To Pay (WTP) for the Advisoriesn=60
Thefivecharacteristicsofthebeneficiaryrespondentsviz.,age,experience,land
holding pattern, income and innovativeness showed significant
relationship with the dependent variable Willingness to Pay, while
education was negatively correlated.
Thecorrelationvalueofagewassignificantat0.01percentlevel.Itcanbe
concluded that regardless of the age of the respondents, they were
willingness to pay
fortheadvisoryservices.Thevariablesviz.,experience,landholdingpattern,
income and innovativeness showed significant relationship at 0.05
percent level. It
canbeinferredthathigherthefarmexperience,landownership,incomeand
innovativeness level, higher will be the willingness to pay
behavior. The factors like
higherlandholdingownershipandhighincomelevelmightmakeitaffordablefor
those farmers to opt for pay user market advisory services. Need
for Backward and Forward Linkage
Forsustainingfarmprofitability,itisimportanttodevelopthefarmersaccessto
backward(seed,fertilizer,pesticideandotherinputs)andforward(trading,
wholesaling,export)marketsforimprovingtheirprofitability.Thiscanbedonein
any of the following ways: e-Media Tools (i)Market Information
PortalMarketinformationportalcouldbeaonestopshopforproviding
marketinformation(price,demandandsupplysituation),contact
nameandaddressofserviceprovidersandothervaluechainactors.
Theportalcouldalsoassistinprovidingcriticalcurrentissues
affectingproductionandsalesofcommoditiessuchasfarming
practices,pestinfestationandmeasurestotake,etc.(Policy
FrameworkforAgriculturalExtension,MOA,GovernmentofIndia, 2001). The
portal can seek advertisement from the various commercial
serviceprovidersandvaluechainactorsandcanbecomesustainable.
Thepersonalized-sitespecific,relevantandtimeboundAgro information
will reach the end clientele and makes the innovation and
diffusionprocesseasier.AgromarketAdvisoryservicescanleverage
theforwardandbackwardlinkagesoffarmerswithmarketsand
conglomerationofstakeholdersispossible.Thetimelymarket
informationhelpstocreateawarenesstheaboutmarketprices,
facilitatestradeandinthetimemarketglutsituationtoplanfor
commodities storage decisions. The positive impact of Reuters
Market Light(RML)mobileservicesinMaharashtra,Indiawasdocumented
byFafchampsandMinten(2011).In2014Sivabalanetal.,studied
theforwardlinkageofTomatogrowersandconcludedthatthe
widespreaduseofICTtoolsamongtheagriculturalclusterswould bring out
not only horizontal integration of vegetable growers but also
verticalintegrationofallthemembersofthesupplychainleadingto
bettertheprospectsoffarmprofitability.Theawarenesscreationon
neweradvisoryservicesandtechnologyisimperative.Thefarmers should be
completely clear of the nature and objectives of the services
before subscription of any market advisory services. The training
need ofthefarmersshouldbeidentifiedandnecessarycapacity
strengtheningprogrammeshouldbeinitiated(Khurana,and Satvindarkaur,
1996). (ii) Mobile based Market Advisories
Withincreasingmobileownershipof951.37million,Mobile
technologyhasmanymoreadvantagessuchaspersonalized
informationsharing,instantdeliveryofmessage,mobilityofdevices
andcheapercostfordeploymentthananyotherICTdevicessuchas computers,
Internet etc., The people in rural areas can connect with the
local,regionalandnationalknowledgecentresviamobiletelephony
andareabletoreceivefarmbasedservices,accessmarketsandavail banking/
financial services without any hindrance to their regular farm
activities.Mobiletechnologyensuresdeliveryoftimelyinformation
thathelpsunderstandandanalyzemarketprices,facilitatestradeand
helpsfarmermakeinformedbusinessdecisions;reducestransaction
time,travel,andcostsbybridgingdistancesandallowingforamore
effectiveuseoftime;strengthenscommunicationswhichpromote
socialnetworksandcommunitiesprogressinhealth,safety,
employment,recreation,andotherareas;andfinallyincreaseslevels
ofcommunityparticipation,facilitatinganinformeddecisionmaking
process,particularlyencouraginggreaterparticipationfromrural
women.Thecropgrown,distanceofmarket,pricevolatilityand
volumeoftradeinthemarket,commoditytobemarketed,socio-economic
characteristics of farmers are playing a role in theintensity
ofmobiletechnologyimpactonthelivelihoodoffarmers(Muto,
MegumiandT.Yamano(2008).AkerandFafchamps(2010)
estimatedtheimpactoftheuseofmobilephonesonfarm-gate
agriculturalpricedispersioninNiger.Themobiletelephonyusage
reducedproducerpricedispersionforcowpeasby6%,andtheeffect
wasstillstrongerinremotemarketsandmarketsthatdonothave
pukkaroadsaccess.Thebettercommunicationwithsocialnetworks
helpsintimesofshockandreducesrisktohouseholds.(Akerand
Mbiti,2010).Jensen(2007)statedthattheintroductionofmobile
phonesdecreasedpricedispersionandwastagebyfacilitatingthe
spreadofinformationforfishermeninKeralastate,India.Abraham (2007)
found that the widespread use of mobile phones among Kerala
fishermenincreasedtheefficiencyofmarkets.Fishermenwhocan afford to
get timely price information wereable to decide on the best markets
to sell their daily fish catch. Mittal and Tripathi, (2010) noted
thatthepotentialbenefitsofthemarketandtechnologyinformation
transferhavebeenobtainedmainlybylargefarmersinthevarious states of
India. Power of Aggregation - Crop
clustersThetrendofmonocroppinghasalwaysshowntheprobabilityof higher
returns and heavy losses. For example in Trichy district, paddy
andSesamumaretwincropsforeveryseasonandleadstoeither market glut or
price jackpots. For an individual, it is hard to find new
marketsandnewbuyers.Atthisjuncture,theCropclusterscanalso
playanactiveroleinsharingandexchangingcriticalbackwardand
forwardlinkageinformationincollaborationwiththevariousvalue
chainactorsandserviceproviders(McCluskeyandDesmond
O,Pourke.,2001).Theycanholdworkshopsordiscussionmeetings
withtheseactorsonweeklybasistoupdateinformationand
knowledge.Thelatestandupdatedlocal,stateandnationallevel
marketinformationcouldbemadeavailabletoproducersbyMarket
CommitteesandMarketingBoardsthroughlargedisplayboardsfor
developingmarketingintelligenceamongfarmers.Villagelevel
procurementcenterscouldbeestablishedinpotentialareas.Farmers
couldbeencouragedtoformtheirownmarketingco-operative
societiesinordertoreapthebenefitofeconomiesofscale(low
handlingcost,transportationcostandstoragecost).Bythisboth
farmersandconsumerswillbebenefited.WithCropclusters becoming
active, post-harvest losses could also be avoided with more
importancebeinggiventoagro-processingopportunitiesforrural
youth.Asthevaluechainmanagementmovesuptoagro-processing sector, the
durability option of sale of produce also improves giving a
filliptomarketefficiency.Moreoverwhenvalueadditionprospects
getrealized,themarketingefficiencypossibilityimprovesaswell.
Thepossibilityofmarketingcontractsnotonlyimprovestheprice
spreadtotheadvantageofthefarmersbutalsoincreasesthechances
ofriseinfarmersshareitself.TheformationofFarmerBased
Organisationsandfarmergroupsisoftenencouragedtoreachthe farmers
(Swanson 2008). Creating of Markets for Producers (M4P)
AccesstoinformationisnomorefarfetchedwhenICTenabled
informationservicesaredominatingthemarket,resultinginthe
infrastructuralbettermentstartingfromthefirstlevelmarketsor village
markets. The digital inclusion has made the buying and selling
processmorecomfortableandeasywithjustamousesclick.The
trendofpurchaseonsourcespecificcommoditiesvaluedby consumers such
as certified products (Eg. Brown rice, Black rice etc.,)
isincreasing.TheDigitalcommercemarketstoodatRs8,146crores
inDecember2007andRs47,349croresbytheendof2012.By
December2013,digitalcommerceinIndiagrewtoRs62,967crores (Internet
and Mobile Association of India (IAMAI) report May 2014).
Insteadofsearchingfornewmarkets,wecancreatemarketsfor producers
(M4P). The paddy growers could be trained for new paddy varieties,
special varieties suitable for diabetics, children and pregnant
women that could fetch higher price in the markets satisfying
selective group of consumers. For the forward linkage of farmers
with markets, KnowledgeandCommerceStationmodelwouldbeanappropriate
approach.Inthismodel,personalisedextensionserviceslikebuyer
andsellerdetails,priceintelligence,placeintelligence,product
intelligenceandmarketinformationcouldbedeliveredinlocal
languagesviatextandaudiomode.Theregistereduserswillbe grouped as
the producer clusters and can access Online Trade Platform
(OTP)forbuyingandsellingofTraditionalDhanyasviz.,blackrice, Minor
millets, herbals and organic fruits and vegetables. The franchise
retailunitinproducerclusterareasenablesmallholdersandrural women to
step up in the agro value chain by getting involved in value
addition,sellingtobuyers,takingupexportordersandgettinghigh farm
gate prices. Conventional paddy varieties for special consumer
sectors Diabeticpatientsoptforvariousdietmodesskippingricedietsto
controltheirdiabetes.ManyofusarenotawareaboutKarun
Kuruvaipaddywhichcancontrolandkeepdiabeticpatientsoutof
danger.ThevarietyKarunKuruvaialsocalledasKaruvatchi,Panai marathu
samba. Based on the Laboratory studies on physio- chemical
properties and nutrient analysis and assessment of taste and
Glycemic Index(CIKSincollaborationwithEthirajCollegeforWomen,
Chennai),thevarietieslikeKarungkuruvaiandNeelamsambaare rich in
iron and calcium where as protein content is rich in thevarities
likePerungar,KarungkuruvaiandKullakarandverylowglycemic index of 50
55is estimated in Karungkuruvai, Kullakar, Kouni and
Kalanamakvarieties(CIKSquarterlyNewsletter,October2014Vol.
15No.4.www.ciks.org).Thesevarietiesrequirelesswaterand
droughttolerancecharacteristicsmakesthesevarietiesmoresuitable
fordeltaareas.Theaveragepriceof60Kgsofkaruvatchipaddyis from
Rs.1800 Rs. 2000, which is a high return for the paddy growers
(Dinamalardailydated19thJan,2014).Thusidentificationof indigenous
commodities and awareness creation on cultivation aspects can
increase the profit margin. Future thrust and recommendation
.Having enquired among the farmers registered with the mASK on what
could
bethereasonsfarmersdonotcalltoseekinformationwhentheyhadcertainly
mentioned their requirement for market information earlier during
surveys and need assessments, farmersstated that they get to know
the market information from the
middlemen,whowouldalsobuytheirproduceonfarm.Itisfeltthatimmediate
needformoneyandeaseofsellingtheirproduceatfarmgaterestrictsfarmersto
enquire further for better price margins. The authors feel that,
however ensuring the
qualityofinformationandreliabilityofthesourceofinformationcouldprove
dependableforfarmersregisteredunderanysystem.Theservicedeliveryofthe
messageisasimportantasthatofthecontent.Thetimelyinformationismore
valuableindecisionmakingprocess.Themobileadvisoriesalongwithin-person
interactionwhichfarmerscanhavewiththemASKexpertwillhelpreinforcethe
message delivery to farmers.There is a potential for theintegration
of farmerdash board with buyer and seller online platform which
could prove more useful than the individual interventions. Farm
profitability can be increased only when the farmers are linked
directly with the right market
information.ThemarketledextensionapproachwithsuitableICTinterventionswillhelpthe
farmersinreapingbetterreturnsinasustainablemanner.Withthepotential
directions laid out for facilitating relay of market information to
farmers as well as
connectingfarmersdirectlywithsellers,RTBIwilllooktoenablingthemost
appropriate features in the mASK system in the days to come.
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