2011 Sustainable Rural Market Information Systems - … · 2011 Sustainable Rural Market...
Transcript of 2011 Sustainable Rural Market Information Systems - … · 2011 Sustainable Rural Market...
Investment Centre Division
Food and Agriculture
Organization of the
United Nations ID
s 2
011
Sustainable Rural Market
Information Systems
What is a proper market information system?
Listen to the success stories and think together.
Session moderated by Andriy Yarmak and Inna Punda
Rome, 16 December 2011
Food and Agriculture
Organization of the
United Nations Investment Centre Division
Problem statement
Most TA projects focus on helping
farmers increase production
…which leads to higher supply
…which leads to lower prices
… and even lower income and greater
problems!
Food and Agriculture
Organization of the
United Nations Investment Centre Division
Problem statement
Some TA projects help farmers find
markets but when projects end, these
markets are not sustained, because
farmers still do not know how to find
markets, and market situation itself
changes very rapidly.
Food and Agriculture
Organization of the
United Nations Investment Centre Division
Problem solution
Market Information System (MIS) is the
key element of marketing infrastructure
and the basic element of marketing
… However, it is not always easy to make
MIS sustainable
Food and Agriculture
Organization of the
United Nations Investment Centre Division
Achieving sustainability of MIS is more
difficult in the following situations:
Low-income countries with poor
infrastructure (however, this also means
that costs of MIS will be low, which
makes chances still rather good);
Small countries with small number of
paying customers;
Sectors with a limited number of market
participants (consolidated sectors)
Food and Agriculture
Organization of the
United Nations Investment Centre Division
What’s Market Information System?
Daily & weekly commodity prices?
Offers & Bids?
Market news?
Production, processing & trade
statistics?
Supply and demand balances?
Production & price forecasts?
Food and Agriculture
Organization of the
United Nations Investment Centre Division
Do you want to reach millions?
Market players who can’t or do not want to pay
for MIS usually do not value it & can’t benefit
significantly from MIS, thus, free market
information is not really necessary but making
it affordable is an important challenge
Example of Ukrainian vegetable farmer (costs
of MIS are only about 2% of a revenue from 1
ha or about 0.2% of small farmer’s revenue but
it could help them increase revenue by at least
5%).
Food and Agriculture
Organization of the
United Nations Investment Centre Division
Information exchange before the MIS
Processors Wholesalers
Farmers
Wholesale
markets
Input
Suppliers
Retail
chains
Equipment
suppliers
Importers
and
Exporters
Food and Agriculture
Organization of the
United Nations Investment Centre Division
Information exchange with MIS
Processors Wholesalers
Farmers
Wholesale
markets
Input
Suppliers
Retail
chains
Equipment
suppliers
Importers
and
Exporters
Market Information System
Food and Agriculture
Organization of the
United Nations Investment Centre Division
Delivering information to end users
gets less expensive
Time sensative Analytical Technological Promotional
Phone Consultant x x
Web-portal x x x x
Weekly publications x x x
Manuals x x x
Conferences x x x x
Types of InformationTypes of information
delivery
• New important and inexpensive way in the upcoming years
would be deliver via smartphones when their costs will decline;
• Radio is still good but rather expensive way, which could be
used only with government support
… however, there is more and more harmful information spread
around
Food and Agriculture
Organization of the
United Nations Investment Centre Division
Market Information System Definition
In most cases TA projects limit their
efforts to development of MIS elements,
which, while helpful, do not really
resolve the key problem – do not create
sustainable infrastructure for efficient
marketing
MIS has to include all fundamental
elements in order to provide good
quality information for making marketing
and strategic decisions
Food and Agriculture
Organization of the
United Nations Investment Centre Division
Benefits of MIS
Improves marketing decisions;
Lowers price fluctuations;
Facilitates sales and lowers losses;
Attracts investments;
Improves strategic decisions;
Increases competitiveness.
Food and Agriculture
Organization of the
United Nations Investment Centre Division
Who benefits from MIS?
Farmers (sales, prices, planning, inputs);
Processors (purchases, sales, planning);
Input, machinery and equipment
suppliers (promotion, planning);
Wholesalers, importers/exporters,
retailers (price, buy, sell, planning);
Banks and financial institutions
(evaluation of credits);
Governments (greater budget revenues,
new jobs)
Food and Agriculture
Organization of the
United Nations Investment Centre Division
Key principles of MIS
Independency (provider should not be
involved in trade or sales of anything
besides MI services);
Transparency (users should have access
to detailed methodology of information
gathering and analyses);
Continuity (same principles used over
time make analyses of time series
possible);
Food and Agriculture
Organization of the
United Nations Investment Centre Division
MIS experience
Commercial Polish MIS for Dairy, oilseeds,
grains and meat sectors - still operational, fully
self financed, no donor support (since 1997);
MIS elements in Macedonia (1998-2003) for
meat & dairy – USAID financed – closed down
after the end of the project;
Commercial MIS for grains & oilseeds (APK-
Inform) in Ukraine – still operational, since
2004 extended to Russia and Kazakhstan, no
donor support (since 1996);
Food and Agriculture
Organization of the
United Nations Investment Centre Division
MIS experience (continued)
Initially USAID-funded (2003-2006) and now
commercial MIS for fresh produce sector in Ukraine
(Fruit-Inform) – still operational and fully self-financed
since 2007 (no donor support). Since 2007 it was
expended to include Russia and Poland.
USAID-funded MIS for fresh produce sector in
Georgia (2005-2007), closed down after the end of
the Project
MIS for fresh produce and Moldova AgroInform, 35-
40% self financed, the rest – supported by donors and
other commercial activities of organization
Have seen lots of donor-funded elements of MIS – all
closed down after the end of financing and none has
survived
Food and Agriculture
Organization of the
United Nations Investment Centre Division
Efficiency of MISs in Ukraine
From the user’s point of view • $20-100 per each $ spent in fresh produce and even
more for grains and oilseeds of measurable impact;
• Easy and quick access to high quality evaluation of
new projects (some projects we have saved would
have caused losses of up to US $20mn and the costs
of evaluation are usually less than 0.1% of the
project value);
• Significant savings on marketing costs & great
promotion of produce;
• Access to global knowledge base;
• 70,000 users in Ukraine & Russia
Food and Agriculture
Organization of the
United Nations Investment Centre Division
Marketing of the MIS itself is an
important component to success
Excellent PR tool by itself;
In Ukraine we were not selling
magazines (they do not usually cost
much) or subscriptions, we provided
each client with a fully-staffed 10-
people-strong marketing departments,
which never goes on vacation at about
10% cost of mid-level employee.
Food and Agriculture
Organization of the
United Nations Investment Centre Division
F&V MIS macro- impact in Ukraine
Number of F&V processing companies
increased from 8 in 2003 to 125 in 2005
and to about 150 in 2010;
Modern F&V production has been
created and Ukraine became a large
next exporter of vegetables and a
significant exporter of fruit;
Modern storage infrastructure has been
created (US $600mn in investments)
Modern wholesale markets were built
Food and Agriculture
Organization of the
United Nations Investment Centre Division
F&V MIS macro- impact in Ukraine (continued)
Huge increase in tax revenues from the
sector to the Ukrainian budget;
Significant impact on GDP growth
Significant support to foreign exchange
balance (from net importer to net
exporter)
500 thousand new jobs created