Setting up a market information service
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CTA. 2002. Setting up a market information service. ICT Update Issue 9. CTA, Wageningen, The Netherlands
Permanent link to this item: http://hdl.handle.net/10568/57514
by Bridget Poon Market information should meet the needs of farmers, in terms of content and format, as well as the frequency and timing of delivery, and the innovative and creative, but most effective means of delivery.
Not so long ago traders could force down off-farm prices and middlemen could pocket huge commissions by gambling on price differences between one market and another. Due to a lack of common references, ACP farmers were in no position to defend their interests. Today, things have changed - ICT-supported market information services are providing farmers with access to information that enables them to make informed marketing decisions. Access to information on prices in nearby markets not only gives farmers greater bargaining power, but allows them to explore alternative market opportunities beyond the farm gate. The benefits do not stop there. Market information services can provide historical price data showing seasonal trends in prices of crops in different markets. Such information is invaluable to farmers in planning their production. It allows them to decide what mix of crops to plant, and when, in order to take advantage of periods when prices are highest. Off-season vegetable production is a good example of getting the market signals right. Many ACP countries are now using ICTs in agricultural market information services to collect, process and disseminate prices, although to varying degrees. In South Africa, there is a well developed wholesale marketing system with enforced grading and standardization of produce, and all transactions on the market floor are computerized, much as in a stock exchange. At the end of the day reports are generated showing the average prices of all transactions along with the volumes traded. This perhaps is the ideal, providing a great deal of transparency in the market. In most other countries, collection of market data is still done manually by individual data collectors who take a representative sample of vendors of a commodity. The ready availability, relative cheapness, and ease of use of computers has meant that processing of market data, however collected, is largely computerized, but the sophistication of processing varies. Some countries, such as Mongolia and Vanuatu, use simple spreadsheet programs, while others use databases or software packages developed specifically for market data management, such as FAO-AgriMarket. With ICTs, market information services can deal with and summarize large quantities of data into potentially useful information in a variety of formats - thereby cutting reporting times and improving the flow of data. Market information may be disseminated through the press, the Internet, radio or TV - the choice depends on the needs of the end users, and the costs. In most ACP countries market information services are publicly funded and cater primarily to the needs of farmers in rural areas. The best means of reaching them is usually carefully timed radio broadcasts in the local language. The major challenge for any market information service is to deliver effective and readily accessible market data. The service should therefore ensure that market reports meet the needs of farmers, in terms of content and format, as well as the frequency and timing of delivery, and the most effective medium. Above all, the service should strive for innovative and creative means of delivery, so that users look forward to receiving the information. Another key challenge is funding. Government funding may be available for a time, but may be reduced as competing programmes are given higher priority. Rather than cut the service, and reduce its effectiveness, market information services should look toward seeking sponsorships. The more effective the service is in reaching farmers, the more likely it is to obtain sponsorship for its broadcasts and press reports. ICT-supported market information services can enable farmers to make the best marketing decisions. They are therefore essential for the transformation of the farming sector, particularly in remote rural areas, from traditional to commercial agriculture. Bridget Poon is an agricultural marketing economist. She is the developer of the http://www.fao.org/ag/ags/AGSM/FAM20/index_E.htm FAO-AgriMarket software package, which is available free of charge from the FAO.