Browsing Category Market Information Systems

What do RCTs of Market Information Systems actually evaluate?

Posted on June 1, 2015 by Jenna Burrell

There are now quite a number of experimental designs and RCTs (randomized controlled trials) of market information systems measuring revenue gained by rural agriculturalists (farmers, fishermen) and traders. While some show improvements to the prices farmers get for their crops, others disappointingly show a lack of impact. There are also studies of agricultural extension services delivered via mobile phone which suggest that crop productivity is boosted by such services. How might these studies guide what actions are taken (i.e. to provide such services) in the real world?

What is ‘ecological validity?’ It is the relationship between controlled, or lab-based experiments and what unfolds in a non-lab, non-controlled environment (aka the ‘real world’). Out in the world multiple variables interact in different ways. So what can we take away as actionable from an RCT that shows a market information system has resulted in boosted revenues for farmers who used it? How do we reconcile the successes with similarly designed studies that showed a failure of impact?

Recent RCTs of MIS have been designed to provide the ideal circumstances for their success. They do so in the following ways:

1) providing the service for free [see Cole and Fernando 2014, Fafchamps and Minten 2012, Nakasone 2013, Hildebrandt et al. 2013]

2) automatically enrolling farmers and pre-customizing information delivery [Nakasone 2013]

3) providing extensive training on the use of the system to overcome literacy limitations [Hildebrandt 2011]

Why do they do this? Because these studies intend to show what impact information (in isolation from other issues) has on markets, farmer profits, and revenues. That does NOT quite make these studies true evaluations of a particular system in real-world use.

So what does this mean for the real-world use of MIS systems such as Esoko, Reuters Market Light, etc?

For item (1) it means that a successful business model will most likely require that it be provided for free, (at least in the short to medium term) if it is to yield the effects measured by recent studies.

For (2) and (3) it means that service adoption and literacy issues remain significant and substantial barriers. Artificially eliminating them for the purpose of an RCT is problematic because it obscures this fact. Fortunately, many programs in this space are finally becoming more attuned to this reality and offering such services through more user-friendly and accessible IVR or call center models (as Esoko now does). For more literacy-demanding services, training (or infomediaries) will be needed. Where training is needed, the scalability of such services is an issue.

Susan Wyche and Chip Steinfield have a paper that’s just come out evaluating the user interface issues around MIS. They look at the affordances of such services and the challenges they pose for farmers. By contrast, RCTs championed by economists fail to address usability and literacy issues when they treat ‘information’ as the only important variable to isolate. It will likely require more interest and support for researchers with different kinds of training (HCI, social science) to make sure this important issue is not trivialized.

Bibliography:

Cole and Fernando (2014) ‘The Value of Advice: Evidence from the Adoption of Agricultural Practices‘ Harvard Business School Working Paper.

Fafchamps and Minten (2012) Impact of SMS-Based Agricultural Information on Indian Farmers. The World Bank Economic Review.

Nakasone, Eduardo (2013) The Role of Price Information in Agricultural Markets: Experimental Evidence from Rural Peru. Selected Paper prepared for presentation at the Agricultural & Applied Economics Association’s 2013 AAEA & CAES Joint Annual Meeting, Washington, DC, August 4-6, 2013.

Hildebrandt, N. (2011). Teach a Man to Text. Esoko, Insights from the Field.

Hildebrandt, N., Y. Nyarko, Romagnoli, and Soldani (2013). Market Information Systems for Rural Farmers: Evaluation of ESOKO MIS – Year 1 Results. New York University: Africa House Blog.

Wyche, S. and C. Steinfield (2015). Why Don’t Farmers Use Cell Phones to Access Market Prices? Technology Affordances and Barriers to Market Information Services Adoption in Rural Kenya. Information Technology for Development

The ‘Myth of Market Price Information’ at the CRS ICT4D conference

Posted on May 27, 2015 by Jenna Burrell

A warm welcome to visitors who’ve found their way to this page from the Catholic Relief Services ICT4D conference.

To know more about the objectives of this 5+ year research project visit our about page.

If you are involved in an ICT4D project in the domain of agricultural, markets, and trade please visit our projects page to see if it is listed.

If your project isn’t listed let us know (or post a comment below) and we’ll add it to our listings!

A very small selection of hundreds of interviews with farmers, fishermen, traders, and others have been written up as profiles. Read these to get a richer sense of how ‘the poor’ and the ‘non-affluent’ manage, survive, and thrive with mobile phones in hand.

For a more in-depth treatment of these topics, visit the publications page. In particular see our working paper titled ‘The Myth of Market Price Information.’

Chris Foster on ‘Thinking about market information systems’ in Rwanda’s tea sector

Posted on May 20, 2015 by Jenna Burrell

Reposting this entry from The Connectivity, Inclusion, and Inequality Group blog at the Oxford Internet Institute. (see the original post here and download the full report on connectivity and the tea sector in Rwanda)

by Chris Foster

Market information systems are growing in popularity as an intervention by governments, NGOs and private firms alike. New information provision for farmers, often price infromation over mobile, have been touted as a way of helping farmers improve the price they get for their produce, and reduce their dependency on middlemen. In our research we explored the impacts of connectivity in the tea sector in Rwanda, and we spent much time mapping the actors, information flows and relations that gave us critical insight into the potentials and limitations of market information systems.

What determines price?

Before we come onto talk about market information systems, I want to talk about ‘price’ and I want to problematize the assumption that the low prices that smallholders receive are the result of a ‘lack of information’. Let’s look at the tea sector in Rwanda. In Rwanda it is only recently that smallholder farmers have been paid based upon a market price (as opposed to a flat government-set rate). So, the tea sector provides us with an interesting natural experiment to observe what happens when smallholders are exposed to market prices – do they seek out and use information and knowledge to improve prices?

Not really! In fact we found little evidence in our research that new price-based trading changed farmer’s behaviour. Quality (and hence price of tea) is not really determined by elements that the farmer could influence. Price is more linked to international market fluctuations and to ‘natural’ endowments (location, soil quality, climate). For farmers who looked to increase quantity, the nature of land sub-division in Rwanda means that it is difficult for smallholders to greatly increase yields and new techniques, fertilisers and irrigation are rarely designed for smallholders. Finally, there is little room for smallholder to choose or skip intermediaries – tea leaf from smallholders needs to quickly be processed, so farmers have little choice about which processor they sell to. It has to be the nearest one.

Market information

Even with the above reservations, we explored if smallholders might have some ability to improve their prices through information and knowledge. What types of market information are available and how are they used in the tea sector in Rwanda?

There have been some sectoral efforts to disseminate price information in tea, and there is a price information system available. This market information system was supposedly accessible for tea co-operative associations (which all smallholders are a member of), but when we interviewed co-operatives there was an inconsistency in knowledge of the system: some co-ops had access, but some co-ops didn’t know the system existed, still others used other relationships to find out about price. In short, our feeling was that it was difficult for co-ops and smallholders to trust price information, and how they might use this to improve was unclear.

Social factors

There were also a number of other social factors that meant that efforts to improve tea through market information had been less than successful. The demographics of tea smallholders in Rwanda does not favour innovation. Agriculture in general, and specifically tea is not seen positively, and the backbreaking work of sowing, weeding and harvesting tea is not one to attract dynamic entrepreneurs – the majority of tea producers are male and older, whilst youth tend to prefer to look for work in the informal sector in a local city. In Rwanda policy also works against tea, where certain regions are exclusively assigned to tea growing, and so there is less ability for diverse portfolios or rich inter-cropping approaches for smallholders.

Market information and the bigger picture

In recent years there has been a growth in discussion of ‘pro-poor’ value chains, of poor farmer becoming involved in more commercially-orientated agriculture. Across the board, NGOs, donors and commercial firms have subscribed to this perspective and I think that market information systems is one element in this new paradigm in agriculture. Bringing development through profit, new clever finance, insurance, ICTs, market information and prices. However, pro-poor value chain approaches are often narrowly focussed on the immediate economics and neglect the structural (politics, colonial histories, land ownership), social (diversity of livelihoods, risk and gender) and complexities of production.

Market information does have a place though. From our work in tea we see a number of ways that implementers and developers of market information systems might improve activity. As I hope this outline shows, the value of qualitative research is invaluable to designers. My recommendation would be that all market system designers should spend time seeking to understand the supply chains, the relationships and small holder goals before starting to develop any system. How does price break down in the supply chain? Where might price (or other) be useful and when might it not? In hand with this, our own evidence suggests that more integrated approaches are important for success – in terms information, such as price, farmer information (pests, fertiliser, skills), contacts, market intelligence, and in integrating the diverse communication ecologies of farmers.

There is also value is designers thinking of information not only as a top-down exercise. In the tea sector, we saw sporadic online sharing between co-ops relating to tea management and production (horizontal rather than top-down information flows). Indeed, intermediaries such as cooperative were a key node in these information flows. Thus market information systems which consider bottom up information flows and intermediary players more overtly would be useful in improving the ability for market information systems to have impact.

Revisiting the fishers of Kerala: understanding diverse uses of mobile phones and definitions of welfare

Posted on December 29, 2013 by Jenna Burrell

This month Janaki Srinivasan presented at the ICTD conference on her project revisiting the site of a canonical study on mobile phone use by fishermen in north Kerala. The original study (by economist Rob Jensen) showed compelling evidence that fishermen used mobile phones to check prices at different beach landing sites leading to improved efficiency in the market as a whole and welfare gains to small and large-scale fishermen. In our revisit we sought to explore the use of mobile phones in this industry more broadly and to consider the history of the region, the groundwork that made these efficiency and welfare gains possible. In the process we raised issues about the potential to scale ICTD results across politically/historically/economically heterogeneous regions. Our findings also question how policy-makers and technology designers might go about drawing ‘implications’ from such studies.

[reposted from the IMTFI blog.]

Field site and findings
We first encountered our field site through a study that has become canonical in ICTD: economist Robert Jensen’s study of mobile phone use in fishing markets in north Kerala. Very simply put, Jensen found that the use of mobile phones to share market price information made fish markets more efficient while also improving producer and consumer welfare. Our goal with this project was to understand the geographic and political economic conditions in which Jensen’s findings hold and to examine questions of generalizability. In addition, we wanted to expand definitions of welfare to encompass more than an increase in income or savings.

We used a different methodological approach to frame and tackle these questions, constructing an ethnographic case study comparing two sites, one in north Kerala where Jensen’s study was conducted and the other in south Kerala. We conducted three-and-a-half months of participant observation and interviews in 2012 at fish landing centers in Kozhikode district in north Kerala and Thiruvananthapuram district in south Kerala. We spoke with fishers (owners of small and large boats, workers), fish purchasers (wholesale traders, small-scale vendors, including male and female), auctioneers who conducted the ‘auctions’ by which most fish was transacted between fishers and buyers, activists and others involved the fish supply chain. Based on our research, we found that

fish trade in north Kerala is a special case. The region’s geography as well as prevalent investment and credit relationships allowed fishers the flexibility to sell at different markets. In south Kerala, we found that all-season landing centers were farther apart than in the north. Further, boats were bound by a credit relationship to a single investor rather than to several investors as in the north. For these reasons, fishers in the south had less flexibility to sell in different markets.
Moreover, in both regions, only specific categories of actors within a landing center found price information critical in making trading decisions and regularly used phones to ascertain it.
A majority of those at the fish market were using mobile phones in a much wider range of activities related to their livelihoods.
While a majority of these individuals perceived mobile phones as having enhanced their livelihoods and well-being, their implicit definitions of ‘welfare’ were rarely focused on improved incomes alone, emphasizing instead how they used their phones to maintain relations within and outside the market, and protected themselves during times of risk, vulnerability, or emergency.

Describing our first and second conclusions, and the list of differences between fishing in north and south Kerala, is beyond the scope of a short blog post such as this one. Therefore, we focus here on our third and fourth conclusions. We discuss the varied uses of phones and the many definitions of welfare that were emphasized by different actors in the fishing industry. Based on our observations, we argue that the seeking of market price information via mobile phones should not be given an over-privileged role.

Mobile phone use and definitions of welfare in fish landing centers of Kerala

At the time Jensen conducted his research (1997-2002), phones cost Rs. 5000 (around $106) on average, and there was a clear division between those who possessed phones and those who did not. By the time we conducted our study (2012), phones could be purchased for as little as Rs. 700 (around $15) and many owned multiple phones. No boat went out to sea without a phone and most typically had multiple handsets onboard. Nor was this restricted to fishers: an auctioneer told us “There’s no business here without mobiles” and we heard this from almost all categories of actors operating in both north and south Kerala sites. Jensen’s focus on who possessed phones and who did not is therefore less significant today than it was during his study. The more interesting question today is how phones are being used by different categories of users. In addition, we saw that other technologies such as GPS and echo sounders have become popular since Jensen’s study, making it worth asking how phones are being used in conjunction with these technologies.

Among the broader uses of the mobile phone, co-ordination work between the different actors in the fish economy constituted an important category of uses. This was important in fish marketing activities, as well as in fish preservation. Boat owners and fishing crew described, and we saw, how they would call their auctioneers a few minutes before they arrived at the shore to ensure someone was on hand to perform the auctions. Fishers in the south also mentioned discussing the timing (rather than site) of landing to optimize pricing. The ice-seller on the shore called the ice company to order ice based on how much fish was being transacted on a given day. Wholesale merchants and export agents also mentioned using the phone to communicate details of the trucks on which they were sending fish to agents at the destination. The perishability of fish, of course, was part of what made this coordination work critical.

Phones were also mentioned in the context of coordinating or balancing work and home concerns, most often by women vendors who operated in south Kerala. With the growth of fish exports, the presence of export company agents on the beach and the entry of cheaper fish from neighboring Tamilnadu, small-scale vendors are increasingly being marginalized in this region. Many small-scale vendors in this region have started traveling to markets in Tamilnadu to buy cheaper fish. Women comprise a part of this population that travels long distances everyday to purchase fish. A woman vendor’s work day, which includes traveling by public or hired transport because she doesn’t own a vehicle, attending an auction, purchasing fish and selling it at a market or at individual houses, can last longer than 12 hours. Since women are also seen as the caretakers of this family in the prevalently patriarchal structure of the region, they worry about their families and their children throughout the day that they spend away from home. Many of them mentioned that having a phone helped them inform their family of their schedules and delays, know what was going on at home, and relieved them of constant worry.

Just as frequently as coordination work, people on the ground mentioned fish-finding as a prime reason for using mobile phones. Fishers used phones at sea and on shore to gauge fishing grounds on a given day. We found, in addition, that phones were often used in conjunction with the Garmin GPS units that all fishing units carried. The GPS was used to mark and specify the exact location where fish had been found. Fishers both used these markers themselves at a later date to look for fish, and also shared them with friends and relatives, a practice also noted by Abraham and Sreekumar. The widespread use of GPS and echo sounder technologies to pinpoint the location of fish and the use of GPS coordinates to share such prime fishing locations with other fishers post-dates Jensen’s study and is another element of the changing industry. While the sharing of fish locations is limited to fishers’ close social networks, it is worth noting that Jensen dismisses the likelihood of such a practice existing at all and as being against fishers’ self interest.

Finally, mobile phones (along with other communication devices) were perceived to be important in times of emergency as others have also noted. Fishers used both phones and wireless sets (the latter were typically installed only on large, mechanized boats) to contact the shore or other fishers in case of emergencies (such as running out of fuel, a damaged engine). Fishers frequently mentioned the dangers of fishing. A fisherman in north Kerala relayed a story of being out at sea when the fuel finished and his eventual rescue following a phone call placed on a satellite phone to a coastguard office, adding “I have great respect for this device because it saved our life.”

Using examples from north and south Kerala, we outlined six primary uses of the mobile phone – (1) price information gathering in combination with (2) arbitrage work (as considered by Jensen), as well as (3) coordination work, (4) balancing work and family (5) fish-finding, and (6) emergency response. We did this to question the often singular attention placed on the first two, and the pithy statement that commonly circulates in the aid sector and the mass media that ‘farmers/fishermen use mobile phones to get a better prices for their goods.’ What we heard from fishing industry actors in the field in both north and south Kerala is that there is no single practice that prevails as the most significant or universally valued use of the phone. It is important here, we argue, not to mistake the focus and priorities of disciplines (such as the concern in economics for how information asymmetries affect market functioning) for the interests and priorities of target populations. There are opportunities in the ICTD space (perhaps underexplored) to support the underlying needs that these alternate practices reflect.

The varied uses of the phone among these actors are matched by almost as many understandings of ‘welfare’ in their lives. People did not define their well-being or welfare primarily in terms of their income, or in terms of optimizing it. Many of them, especially the owners and crew of vallam and gillnet boats, and small-scale vendors, spoke instead in terms of managing or coping. They spoke of their physical and mental well-being, sometimes prioritizing that over an increased income (such as fishers who spoke of wanting to sell quickly and move on to rest, rather than wait to get the best price). The survival of a fishing unit lost at sea or caught in a storm is, of course, critical to fishers’ own long-term welfare and that of their families. Fishers and others in the fishing supply chain spoke also in terms of maintaining relationships, with fellow fishers, their auctioneers, or regular buyers, rather than solely in terms of optimizing their incomes (as reflected in practices of sharing fish-finding locations). These practices may very well eventually lead to improved incomes, but in a longer term and less easily measurable way. They also lead us to ask if Jensen’s definition of the fisherman’s problem as “maximizing profits by choosing where to sell their fish” or concluding with income increases as “welfare benefits” doesn’t narrow our understanding of the reality of the fish market.

The broader implication of our work, which we are only able to flag in this post (but is available in more detail here), concerns the importance of situating analyses of technology use in the history and political economy of a region and a sector. Through our conversations and examination of archival material, we found that fish markets in Kerala have been shaped by the regulatory influences of both fishers’ collectives and the government, in particular the creation of fishers’ co-operative societies, the systematization of an auctioning system and the loosening of traditionally coercive credit relations between fishers and those who provided them capital to purchase and operate their fishing craft and gear. We suggest that when studies (such as Jensen’s) omit these features in order to create parsimonious models and explanations, we end up representing particular markets as more “free” than is warranted. In turn, this potentially blinds us to the power dynamics that shape the daily working of such a market, including who uses technology and towards what end.

The Myth of Market Price Information: A Working Paper

Posted on March 8, 2013 by Jenna Burrell

Our first comparative case bringing together findings from fieldwork (by Jenna Burrell and Elisa Oreglia) among rural farmers in Hebei and Shandong provinces in China and fishermen and fish traders at Lake Victoria and Lake Kyoga in Uganda. The working paper is titled “The Myth of Market Price Information: Mobile Phones and Epistemology in ICTD.”

A brief summary of the paper is below:

The notion that farmers use mobile phones to acquire market price information has become a kind of shorthand for the potential of this technology to empower rural, low-income populations in the Global South. We argue that the envisioned consequences of ‘market price information’ to market efficiency with benefits at all income levels is a kind of myth. This myth frequently promulgated by mass media outlets such as the Economist, is also the subject of serious discussion among scholars. The idea has become a kind of boundary object recast within the epistemic cultures of economics, computer science, policy work, and development expertise. We draw from our ethnographic work (among rural agriculturalists in China and Uganda) to offer four alternatives to this myth.

We propose the following four assertions countering this myth, that:

(1) information on prices is not necessarily scarce
(2) market prices are often irrelevant or subordinate to other factors in trade related decision-making
(3) improvements in market efficiency realized by the mobile phone may not stem from the better circulation of market prices
(4) obtaining market prices is often not the most valued application of the mobile phone in trade

For further details please download the paper.

The Institute for Money, Technology & Financial Inclusion Conference 2012

Posted on January 8, 2013 by

Note: Three members of our team (Ishita Ghosh, Jenna Burrell, and Janaki Srinivasan) attended the IMTFI conference Dec 5th-7th at UC-Irvine as recipients of IMTFI research grants.

This year’s annual conference at the Institute of Money, Technology & Financial Inclusion (IMTFI) showcased projects from around the world. While attending the conference, we noticed some salient themes and trends emerging from the corpus of work presented at the IMTFI conference. This work appraised mobile money innovations and interventions in two ways: i) by considering financial behaviours in general in the developing world, and ii) by assessing mobile money culture & practices directly. In this way the projects presented some compelling ethnographic detail about the culture around the use of mobile money, especially around remittances, but at the same time also shed light more broadly on the nature of financial transactions & behavior, across distant, disparate cultures as well as in immediate, delimited spaces.

The Larger Financial & Economic Landscape

It certainly remains important to understand the financial behaviours and cultures in the developing world before the intervention of mobile money can be conceptualized and implemented. Katherine Martineau and Pradeep Baisakh presented work from the state of Orissa in India where they brought up the idea of visibility and invisibility of money. The invisibility or obscurity of money and other financial assets was practiced through hiding money within the house, under rags or elsewhere, and by avoiding trips to the nearest bank (which may still be a substantial distance away). This was practiced to keep theft at bay by avoid outsiders from being able to perceive a households wealth. Any visibility of money was more of a marker within a household, for instance bills may be kept within sight (such as by being suspended from the ceiling) to constantly remind the household members to pay them on time. In this manner, the visibility and invisibility of money and its markers were transformed within and outside the boundaries of a home space. Moreover, it remains important to understand that financial cultures may greatly vary across different contexts. In keeping with the theme of visibility and invisibility of money, Magdalena Villarreal and Isabelle Guèrin provide an example where gold as a financial asset is hidden from public view in Mexico to prevent theft, whereas gold as a social asset is proudly displayed in India, most often as jewelry, to signal wealth and position.

Many presentations described existing financial practices and outlined relevant lessons which may (or may not) directly impact mobile money innovation. Rosina Nasir described self-help groups in the state of Andhra Pradesh where women’s groups may self-organize to save small amounts of money over time in order to disburse informal loans to its members, as well as to improve the group’s credit-worthiness to qualify for formal bank loans. Nasir noted that trust, shared knowledge, social relationships and reciprocity remained important for the seamless administration of these self-help groups. Eric Osei-Assibey described SUSU, a similar financial model where SUSU operators collected small amounts of money from market women on a daily basis then returned the full amount, less a day’s amount towards commission fees, at the end of each month. In this way, the SUSU operators are able to enforce discipline towards the accumulation of small amounts of money by the market women. Interestingly, Osei-Assibey cited the overdependence on trust (in the SUSU operators) as being one of the main challenges of this traditional financial system. In the event that a SUSU operator decamped with the collected money, there was no legal recourse for those who lost money. Therefore, trust remained an important factor in facilitating these informal, traditional financial systems, but without any real check on potential fraud, distrust could very easily defeat the real objectives of these systems. Allerine Isles did observe specifically during the course of her research that savings among her subjects remained mostly at their homes, and that credit was governed by informal loan histories and systems. However, it must be noted that the prevalence of these informal practices go beyond her case study in the Philippines; if anything these informal modes persist in a large part of the developing world as the earlier examples also demonstrate. Indeed, Mani Nandhi and Deepti KC noted during their presentation that compelling unbanked customers to open and maintain bank accounts may be an uphill task, as existing informal options may be perceived as satisfactory. Persuading unbanked customers about the benefits of banking may be faced with cynicism and a lack of interest.

Eduardo Diniz, Adrian Kemmer Cernev, Charlotte Guy, and Nathalia Moreira’s work in Brazil focused on a semi-formal system where contained communities (known as neighbourhood associations) were encouraged to be self-sufficient through vocational and economic activities, through limiting purchases to local shops and businesses, and in some cases through internal currencies that were specific to a particular neighbourhood association. The researchers emphasized that the formalization of these communities, and consequently of their currencies, bore interesting lessons for mobile money initiatives. Along the same lines, Woldmariam Mesfin Fikre pushed for more research on the physicality of money as currency, rather than on abstract systems of value transfer. Not only did Fikre find his subjects distinguishing currencies based on colour, size and/or the pictures on the notes, he also discovered that his subjects were grappling with the physical environment where they kept and stored money, where theft and fraud were bigger concerns, but where handling money, managing balances and constant budgeting also remained matters of interest.

Steering away from financial practices specifically yet providing a snapshot of an economic setting, were Jenna Burrell, Janaki Srinivasan, and Richa Kumar who presented their work on mobile phones in fisherfolk communities in the state of Kerala, India. More specifically, their work was appraising the position and the value of mobile phones in seeking market price information within a trading context, finding that scholarship and media coverage has tended to overplay the role of this practice of market price acquisition and comparison which is practiced only by a narrow subset of roles in the fishing industry. Their ethnographic work was also able to reveal how the mobile phone may empower women with long working hours to achieve a semblance of work-life balance by keeping in touch with their family back at home. Gender empowerment, especially for women, was a recurring theme in the work of researchers looking at mobile money directly, as we will see later.

Mobile Money Practices & Culture

Much work presented at the conference spoke about mobile money implementations (or the lack thereof) directly. While most of this concentrated specifically on the nature of services offered on the mobile platform, other work looked at the inclusion (and more importantly, exclusion) of patrons, as well as mobile money’s capacity to offer external, organized services (such as the disbursement of conditional cash transfers).

Remittances and payments dominated the conversations about the services offered on the mobile platform. As Sibel Kusimba noted remittance services can be categorized as three types: urgent needs, everyday expense, and social payments. This categorization may also reveal to us the nature of the remitter and the recipient of mobile money payments. For instance, in times of emergencies (urgent needs), receivers may appeal to peers, instead of elders or children in their families to avoid worrying them. Social payments via mobile money, on the other hand, were common although did not substitute for the presence of the remitter during a funeral or coming-of-age ceremonies. It is certainly important to understand who is sending and receiving money, and why they are doing it, in order to better understand the mobile money culture.

Ndunge Kiiti and Jane Mutinda’s research was also able to demonstrate who was not using mobile money services. Their work showed that visually impaired users lacked complete autonomy while conducting mobile money transactions. They had to necessarily part with their PIN numbers in order to complete transactions, thereby exposing them to fraud by the middlemen (typically, the agents). Their work certainly revealed the inadequacies of the mobile money platform for use by persons afflicted with disabilities. Gender was another recurring theme in the discussion of mobile money platforms and use. Sibel Kusimba noted that mobile banking may empower both men as well as women. Simiyu Wandibba, Stevie Nangendo, and Benson Mulemi found that women were typically recipients of money over the mobile platform in Eastern Kenya. Both Kusimba and Wandibba’s team found that mobile money may lead to divorces in certain communities as men could now engage in clandestine transactions, thereby compromising their responsibilities towards their families.

Ishita Ghosh and Kartikeya Bajpai’s research shifted the focus from remittances on the mobile platform, to savings. They outlined the differences between remittance and savings services, and how they may or may not be delivered seamlessly within the mobile money model (the mobile money models will differ from country to country as per the prevailing regulations). They asserted that given remittance’s one-time, discrete nature when compared to the long-term locking in of savings, the mobile money platform seemed more suitable for supporting remittances. Tonny K. Omwansa and Timothy Mwololo Waema’s research demonstrated the capacity of the mobile platform to deliver and recover loans to and from its clients. Safety was cited as a primary motivation for linking credit practices to the mobile phone. But mobile money linkages may not be suitable everywhere and all the time. For instance, when Vivian Afi Dzokoto and Elizabeth Appiah recommended the use of mobile money for church donations, their subjects emphasized the importance of hard cash as a marker for inclusion in rituals and ceremonies.

Can these linkages of financial transactions to the mobile phone replace informal practices, or will they merely act as additive channels in regions that are not served by physical bank branches? Operators of existing informal financial systems may certainly perceive mobile money as a threat as Osei-Assibe observed in his research of the traditional SUSU model. Indeed, this tension between informal practices and mobile money’s semi-formal options exist not only amongst potential users and their uptake, but also amongst the operators of existing informal financial systems.

(Please note that we haven’t referenced all the work presented at the conference. More details can be found about the individual projects on the IMTFI website. Also, Elizabeth Losh from UC San Diego was blogging about the event and has provided a detailed description of each of the presentations up at the IMTFI blog.)

USAID Webinar: Mobile Market Information Systems

Posted on October 18, 2012 by Elisa Oreglia

Mobile market information systems for farmers: demand- or offer-driven?

Market information systems (MIS) have become a very hot topic in development circles, with a wealth of private and public initiatives to bring market prices to farmers in developing regions via mobile phones. I am very intrigued and very curious about them, partly because in my fieldwork with smallhold farmers in rural China I have never encountered anyone using MIS, nor I have really seen a reason for anyone to use them, since prices are widely known, and markets are (or aren’t) accessible for reasons that go well beyond prices. China might be an unusual case, because of its recent history and because of the government’s heavy involvement in agriculture, but still, I did wonder how such systems would be deployed in other countries, what needs they fulfilled, and how they were taken up by farmers.

So it was with great interest that I recently attended (at 6am!) a webinar organized by GSMA – Mobile for Development (GSMA is the global association of mobile phones operators) titled “Mobile Market Information Systems for Farmers: Requirements for Success.” It was a very useful introduction to the state of MIS in a number of African countries, and, as all good presentations, it raised more questions than it answered. The slides used for the webinar are posted on the GSMA website, but here are some of the highlights from my notes.

What exactly are MIS? John Zoltner, director of the Information Technology Applications department at the non-profit organization fhi360, defines them as tools to “increase market transparency to increase revenue for smallholder farmers, lower transaction costs for traders, lower cost of goods for consumers.” The added bonus, especially in countries without efficient data gathering processes, is that it “allows governments to track trends in availability of food commodities to create policies or react to shortages.” (see Zoltner’s slides). Transparency of markets was a common theme, explicitly or implicitly, in all the presentations: the starting point of all these projects is that smallhold farmers often do not have access to information that could help them decide what to grow, where to sell, and whether the price they are getting for their crop is fair or not.

And who wouldn’t want more transparent markets? In many countries, agriculture is still the most important economic sector, and any improvement in this field results in improvements in the quality of life of many people. Early efforts to improve agricultural markets through technology were based on radio, faxes, and email. Current MIS are based on a mix of web platforms and mobile phones, which can provide more timely and sophisticated data and analysis, as well as personalized information. Pilot deployments of MIS are taking places in several countries. For example, Robert Turner from ACDI/VOCA Malawi presented the case study of Esoko Malawi, a private-public partnership started in 2011 with USAid funding. ACDI purchased the Esoko web SMS platform, which provides both the technology and the methodology to run a MIS. ACDI/VOCA targeted smallholders, and selected 13 markets that are important production areas in Malawi. By the end of 2011, about 4,000 farmers were receiving prices of staple crops (ground nuts, maize, beans, important because the project focused primarily on food security). The mechanics of how Esoko works are very interesting: ACDI/VOCA started by gathering information about local units of measure used at each market, the converted them to prices per kilogram. Enumerators collect prices from multiple vendors (at least five in each market) and then use the most quoted price as the price of reference to upload to a web platform via mobile phone. After the prices are uploaded, an administrator looks at them to check for outliers or anything that looks unusual. If everything seems in order, the screen is approved and prices are sent out to subscribers; if there are questions, enumerators are contacted, and if their answers don’t clarify the situation, there are key informants who can double check what is going on in each market.

Assessing the impact of MIS is not easy. Turner recognized that the commercial value of the information they were gathering through Esoko was not clear, and that it was hard to predict whether such systems would be sustainable. Given the cost of running MIS (which vary considerably depending on the type of information, languages used, etc; we heard figures from US $30,000 to 70,000, although it was not clear whether these were running costs, set-up costs, or how they were divided between technology and administration costs, etc), they would have to reach an enormous number of subscribers, each paying very small amounts, to make the service viable. Andrew Kizito, a professor at Makerere University in Uganda, discussed the impact of MIS in Mozambique, pointing out that there are several factors that influence whether people receive market information and how actionable such information is: owning a radio or having a cell phone network in the village are clearly necessary ‘infrastructural’ steps to receiving prices, and having access to roads with public transport is necessary to make such information actionable. He found that receiving market information prices had a positive impact on market participation and on the prices farmers got at the market, but his recommendations focused on targeting farmers associations, NGOs, and government officers (all ‘middlemen’) as clients for MIS, rather than individual farmers. Shaun Ferris of Catholic Relief Services talked about the requisites needed for a successful MIS: it has to be valued by the targeted audience, needs to be well promoted so people understand it and know how to get value from it, can easily scale, and provides a multi-channel approach that is easily up-gradable.

Two points that were raised over and over were that marketing of MIS is not only about letting users know about them, but also educating them on how to get value from the information they receive; and that MIS should be part of a bundle of services, that might include weather information, market intelligence, agricultural advice, etc.

And here is my main question about MIS: prices are relatively easy to gather and to process with existing interfaces. Other information, such as localized weather forecast, or brokerage services, are much more complicated to set up if there isn’t already some kind of infrastructure in place. And yet, what if this is the information that farmers really need, rather than prices? What if in the bundle of services, prices are in fact the least important one? In China, farmers know about prices. What they pay for is a daily SMS with localized weather forecast, which is something that they can act upon immediately. So far, MIS seem very much offer-driven, rather than demand-driven. The presenters didn’t mention farmers’ needs, or even farmers’ lives and practices in a contextualized way. Do traders provide farmers with credit, for example, like fish traders in Uganda? What kind of regulations or state interventions exist in the various countries, that influence farmers, fishermen, traders behaviors? In China, the government sets minimum procurement prices for certain crops. These prices are widely known (through tv, radio, newspapers, word-of-mouth, agricultural extension workers, traders, markets, and – last and least, for farmers anyway – websites), and many farmers prefer to grow crops with a lower but safe income that is guaranteed by the state to those that could give them potentially higher, but certainly riskier, returns. At the end of his presentation on Malawi, Turner mentioned that the government sets prices for certain crops in part to protect from exploitation farmers who wouldn’t know what is a fair price for their crop. He went on to suggest that it might be cheaper for the government to support MIS so that farmers are aware of the going prices, rather than setting prices centrally. But doesn’t this mean that the government switches its indirect support from farmers to Esoko, enumerators, NGOs and all the ‘middlemen’ involved in creating and supporting MIS?

Farmers might end up with more knowledge and information about prices and crops, but also with the added burden of increased risk. Is this the goal? It might be – maybe in a context of ‘modernizing’ agriculture, of supporting economies of scale and collaboration among farmers, and of decreasing the total number of smallholders. But how are risks and benefits redistributed when MIS take the place of existing practices – or do we even know enough about existing practices to invest heavily on MIS rather than, for example, on supporting agricultural extension workers? Maybe the next mAgri webinar will answer some of these questions…

Recent Posts
Recent Comments
Archives
Categories
Meta