ARD Workshop on Using ICTs to Support Rural Livelihoods: Evidence, Strategies,

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Access to Market Information Enterprise
Development
Does it work, is it important, what can be done?
ARD Workshop on Using ICTs to Support Rural
Livelihoods Evidence, Strategies, Tools. June
5, 2007 Grahame Dixie, Agribusiness Marketing
Specialist South Asia Agriculture Rural
Development
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Farmers incomes extremely sensitive to marketing
issues i.e. price, quantity sold or switching to
more profitable enterprises
15400 10
18000 29
23000 64
14000
5000 - 64
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Money Happiness, at least at the lower levels
of income
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Access to Market Information
Case Studies
Market Information Instant
Message
Uses
Medium
Issues
Enterprise Development
Market IQ Strategic Longer Term
Market product Knowledge
Identification of Support Services
Business Oriented Market IQ
Market Mobilizers Top Down/ Bottom Up
Sales Platforms
Combined Package of Mkt Info, IQ sales
Lessons Learned
MIS Project Design
Discuss of Needs Next Steps
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No consensus on the real impact of Agricultural
Market Information Systems on producers,
meanwhile the technology changes apace
Believers
Radio/Newspapers
User Groups
Technology
Cell Phones
Sales Platforms
Land Lines
SMS
Internet
Government
Operators
PPP/ Private Sector
Non- Believers
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What Market Information do producers need ?

• In Uttah Pradesh farmers priorities from
  information technology were
• market prices, (on phones internet),
• transport arrangements (on phones),
• selling details (on phones),
• weather forecasts, (internet),
• technical queries (internet),
• And, input supply. (on phones),

A good starting point is to ask
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The Marketing Information

• The Message
• Prices - typical range
• Volumes supply/demand
• Locations experience shows just few majors Mkts
  needed
• Timely frequency product dependent
• The Lessons
• Accuracy frequent criticisms of system
• Simple relevant
• Local languages
• Less perishable crops - Initially most useful
• Comparable products - can be an issue in terms of
  weights, qualities and grades

Information is not on its own enough verified
by farmers
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Radio the most effective means for disseminating
simple Market information
Uganda Local language stations effective. gt US
2 cents/ household. 50 impact. When 2 store,
mainly non-perishable crops. Where 2 sell.
Improved bargaining . Mkt education? Planting
decisions PH/VA activities.
Issues Difficult interaction with radio
stations. Costs can be v high (50 MIS budget)
distorted by Aid , one way flow of information.
Sponsored Mkts info broadcasts
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Great Interest around Internet and Web based
information
Indian ITC E choupal. Costly 4-6 K, Mkt
info, weather info plus selling interface. Info
channeled few thru gatekeepers. Two way
communication. Distance to collect info. Moving
into inputs sales.
Issue Dissemination 2 producers. Skeptical
about effectiveness of web based Mkt info. More
relevant for accessing Mkt IQ Agri-Biz
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The Cell phone the most powerful marketing tool.
SMS Market Information is taking off
Potential to deliver Mkt Info, weather forecast
limited Mkt IQ act as a sales platform in the
field through either subscriptions or pay by
use. Provides income stream potential 4
sustainability incentive for info provider 2 B
accurate. Low unit cost 20 -40/ handsets
Issues around literacy, new texting skills,
vernacular scripts, coding costs
sustainability.
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Text messages cost a fraction of US 1 cents _at_,
industry standard 5050 split between phone
content provider. Phone companys key driver is
revenue manager discretion whether to forgo
short term SMS income for long term talk time.
Regulator v. important
Phone Co 5 cents, Content provider 2.5 cents, MIS
service 2.5 cents
MNET, US1 cent TNS/Tradenet US 3 cents
Subsidy
5050 Split Phone MIS
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Case Study REUTERS SMS in India, v positive
test marketing results, now rolling out 5 States,
seen as Social Investment
Service 5 SMS/day in local languages, across
all phone networks 1. Mkt Prices supply 4
Markets nearest handset High, Low and Average
price impression of price initially for
range of field crops (legumes) x 2 day 2.
Weather forecast 3. Market Overview Issues
Cost s circa 1/month, or US cents 2.5
_at_ Financial Sustainability indication need to be
millions of subscribers Info gathered by paid,
knowledgeable local observers who phone in daily
Issue is limited availability of vernacular
handsets (3), and handsets 7 of landowners, 2
of landless.
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Farmers liked the REUTERS SMS service because

• SMS perceived as an enhancing livelihood product
• the farmers feel empowered greater control
• receiving the message in the field in local
  languages
• Weather info for crop activity planning, better
  yields harvest timing
• Mkt info for decisions of when to store/sell
  where to sell
• 90 of the farmers are willing to buy, No
  differences between crop land holding size
• concern on authenticity of source/data called
  Mkt to verify

REUTERS aim to prove they can supply info to
Master of the Universe Traders in NY/London as
well as to Small scale Farmers in India
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CASE STUDIES Cell phones the most powerful
marketing tool two way information, SMS, real
time market price/supply/demand info, phone
market research, logistics co-ordination.etc.
Backyard Chickens, critical mass to improve sales
price because of Grameen cell phone connection
9 Chickens Tk 14 each 50 chickens Tk 20
each
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Cell Phone emergence of large scale primary
wholesale markets in Assam
Cell Phone Nigerian Catfish Market Queen
running 1.85 million business by phone
Cell Phones Georgian Winter salad growers
collect price in Moscow so that they can take
informed negotiating positions
Cell Phone Delhi wholesalers selling trucks to
other traders on the road diverting to end
market
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Case Study Elegant analysis of the impact of
the Cell phone on Fish Marketing in Kerala, South
Western India by Jenson
Phoning in from off shore
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Mobile phones coverage rolled out in three phases
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With cell phone calls possible off shore -
fishermen call different beach auctions to decide
the best market on that day. Result 1/3 of
fishermen take fish to more distant auctions.
Rapidly learned to the equation of transport cost
viz. likely additional sales price.
Wastage down from 5-8 to 0
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Result was that fishermen and consumer were
winners, as the market become more efficient and
rational.
Price volatility down dramatically
Fishermen prices up by 8, profits improved
Consumer prices down by 5,
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Access to Market Information
Medium
Uses
Case Studies
Market Information Instant
Message
Issues
Enterprise Development
Market IQ Strategic Longer Term
Market product Knowledge
Identification of Support Services
Business Oriented Market IQ
Market Mobilizers Top Down/ Bottom Up
Sales Platforms
Combined Package of Mkt Info, IQ sales
Lessons Learned
MIS Project Design
Discuss of Needs Next Steps
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Market Intelligence Strategic Information,
Longer Terms Decisions

• Medium
• Internet down load
• publications
• combined with cell

• Message (s)
• Market Overview
• Product Mkt. requirement
• Standards, specifications
• Business Contacts

• Uses
• Mkt orientation
• Mkt research
• Mkt knowledge
• Business Linkages
• Enterprise mix Diversification

• Issues
• Whose job?
• Dissemination
• Language/Literacy
• Technology

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ICT can only be part of the package for lifting
rural incomes

• Listing of contacts
• Traders
• Input suppliers
• Transporters
• Agribusinesses
• Service Providers
• Trader/ Agri Biz Associations
• Unit Costs Information/ Benchmarks
• Inputs seeds, fertilizers, packaging
• Transport costs

E.g. South Africa India under the ATMA concept
in Bihar
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Enabling Enterprise Development

• Market Intelligence
• Major products/opportunities (8020)
• Longer term market knowledge
• Standards, specifications
• Businesses, service providers
• Trader Associations

• Top Down
• Business Linkages, marriage broking
• Early dispute resolution
• Buyer seller meets

• Bottom Up
• Experiential Market learning
• Groups, Associations CIG
• Resource audit product options
• Basic economics
• Own market research
• Visit working examples
• Plan program
• Draw down required TA/SP

• Business Mobilizers
• Agribusiness Business advisers
• Marketing Extension
• NGOs
• Skills trainers

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Tradenet development phases
Phase 1
Phase 2
Phase 3
Phase 4
Central Govt But no accuracy, timeliness,
insight, language
Input on Info Private Traders observers
Central Govt
Groups Associations
Groups Associations v. variable
Peer 2 Peer Sales platform Slow to take off
Peer 2 Peer
Trade Agent Testing now
Internet Based?
Software Platform broad cast SMS?
Sales Platform
License fee 5000 pa
Transaction fees SMS - phone companies
Free Basic License fee for add services
Sponsorship e.g. Banks Insurance
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Cell Phone Based
Phone Calls
Producers, Associations etc
Traders Agribusiness
SMS sales platform
Broadcast SMS
Broadcast SMS
Extension/ NGO - internet
Web Based Platform
Trader Ass Web Site
Line Dept Web Site
Market Information
Market IQ
Govt Sector, Line Depts.
Private Sector Info gatherers
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Public Sector
PPP
Private Sector
Best Practices
Phone Regulator Role
Management of MIS
Sector Studies
Phone Operators
Generation Update Mkt IQ
SMS Broadcast
Mkt Policy Framework
Standards, Specifications
? Cost subsidy SMS
Trading Activities
Producer Mkt Info Needs Assessment
Gathering Mkt Info
Pump Priming Activities
Service provider Contract
Mkt Ext / Biz Mobilizers
Auctions
Grouping/ Common Interest
Commodity Exchanges
Warehouse receipts
ICT Equipment Initial contracts
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Access to Market Information
Medium
Uses
Case Studies
Market Information Instant
Message
Issues
Enterprise Development
Market IQ Strategic Longer Term
Market product Knowledge
Identification of Support Services
Business Oriented Market IQ
Market Mobilizers Top Down/ Bottom Up
Sales Platforms
Combined Package of Mkt Info, IQ sales
Lessons Learned
MIS Project Design
Discuss of Needs Next Steps
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And if you have been . . .
Thanks, for listening Now is the time for talking
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(No Transcript)
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Cell Phone Based
Phone Calls
Producers, Associations etc
Traders Agribusiness
SMS sales platform
Broadcast SMS
Broadcast SMS
Extension/ NGO - internet
Web Based Platform
Trader Ass Web Site
Line Dept Web Site
Market Information
Market IQ
Govt Sector, Line Depts.
Private Sector Info gatherers
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Marketing Extension
Marketing Education Creating a better
understanding of the process, the market its
demand's - terms of products and service
Co-ordinating Mobilising groups, Organising
events, getting things started, hand holding,
injecting energy
Business Linkages Making introductions, between
buyers sellers. Facilitating the start up
process of new trading relationships
It Does Not Mean
Deciding for farmers what they should do or what
products to sell Any active participating in
distribution, marketing sales
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The ME course is a 6 step process, designed to
empower villagers to identify market
opportunities plan how to exploit them.
FO - all Step 1 Task Force Step 2 Step 3 Step
4 FO - all Step 5 Step 6
Resource audit what produced, embedded skills,
resources equipment, existing marketing
arrangements knowledge Selection of target
products, detailed costings, analysis of
alternative markets, selection of location for
markets research Market research task force holds
discussions with traders on potential products in
terms of prices, quantities, quality market
opportunity Analysis of Market Research findings
potential profitability of alternative
products Strategic choice of products for
marketing development Action plan, activities,
responsibilities, timings for the selected
products
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The ME course increased marketing knowledge
amongst CBOs (i.e. 3x) and continued to improve
with practice
M.E. Course
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The average additional cash income per group was
in mainly in the range 2000 - 7000 and per
involved CBO member is 200, but ranges from
about 70 to 325.
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The ME process has generated a diversity of
businesses, the most important of which in terms
of numbers involved are listed below
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ICT can only be part of the package
Business Development Services
Enabling Enterprise Development

• Listing of contacts
• Traders
• Input suppliers
• Transporters
• Agribusinesses
• Service Providers
• traders/ Agri Biz Associations

• Market Intelligence
• Major products/opportunities (8020)
• Longer term market knowledge
• standards, specs

• Top Down
• Business Linkages, marriage broking
• Early dispute resolution

• Bottom Up Processes Experiential Market
  learning
• Groups, Common Interest Groups
• Resource audit product options
• Basic economics
• Own market research
• Visit working examples
• Plan program
• Draw down required TA

• Business Mobilizers
• Marketing Extension
• Skills trainers
• Buyer seller meets
• Business advisers
• Trader Associations

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Believers
Non- Believers
Access to Market Information
Market Information Instant
Market IQ Strategic Longer Term

• Medium
• Radio ?
• Internet ??
• SMS ??
• cell ??

• Message
• Price - accurate
• Supply- timely
• Weather
• Overview

• Medium
• Internet ?
• publications
• combined with cell

• Message
• Market Overview
• Product Mkt. Specs
• Standards
• Contacts (BDS)

• Uses
• Store or sell
• Place to sell
• Negotiation
• Educate

• Issues
• Relevance
• Govt vs Private/NGO
• Dissemination
• Language
• Cost vs.Sustainability
• Accuracy Incentive
• Technology

• Uses
• Mkt orientation
• Mkt research
• Mkt knowledge
• Diversification
• Ent mix.

• Issues
• Whose job?
• Dissemination
• Language
• Technology

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WB Team Leaders

• MIS other instruments developed sequentially
• policy framework, - specific sector studies -
  farmer organizations,
• market information, market IQ - grades
  standards, databases
• Positive approaches to empower producers
  (groups) to engage with market
• legal trading framework, financing for traders,
  
• support for private sectors trade organizations,
  
• warehouse receipts, commodity exchanges, advocacy

• Key technology Radio Mkt Info, SMS, Web for
  Mkt IQ cell phone for everything else. PPP for
  sustainability,
• Service provider contract to provide integrated
  web SMS market information market
  intelligence data
• Provision of cell phones with limited time
  contract to farmer groups, with closed user group
  access to project, technical services
• Subsidy on SMS costs, PPP between phone
  companies, content providers

Using the ICT information to promote enterprises
Livelihoods Mkt IQ - base information, Mkt
Info on going. Business Mobilizers, linkages
support, Marketing Extension
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Harilai Rurally based Farmers supermarket, with
Internet access technical support