INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE

Improving market access and food security with ICT in Ghana and Uganda

Nicholas Minot Senior Research Fellow, IFPRI

Presented at the FoodAfrica Final Seminar University of Helsinki, 12 April 2016

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Objectives of WP6

Overall objective: • Improve food security in rural Africa by using ICT to improve access

to information

Intermediate objectives: • Estimate the impact of access to agricultural information on farm

income and marketing behavior

• Improve market access for participating households in two countries

• Identify best practices for collecting and disseminating market information

•Develop local capacity for impact evaluation and promotion of ICT to improve market access & food security

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Methods: RCT Baseline surveys

•Ghana: 1290 households from stratified random sample of northern Ghana, Oct-Dec 2011

•Uganda: 1440 households from stratified random sample from 8 purposively selected districts, Dec 2012-Jan 2013

Interventions •Provide agricultural market information, weather info, and

extension info via SMS to random sub-sample of surveyed farmers

•Ghana: Esoko Ltd provides service •Uganda: FIT-Uganda provides service

Endline surveys •Ghana: 1158 households from the baseline, Mar-May 2015 •Uganda: 1418 households from the baseline, Nov-Dec 2015

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Methods: Collaborating institutions

IFPRI • Nicholas Minot, Bradley Sawyer, and Samson Dejene • Overall coordination, planning, analysis, & interpretation

LUKE, Economics and society • Mila Sell, Jarkko Niemi, and Jaakko Heikkilä • Planning, analysis, and interpretation • Gender analysis of household survey data • Willingness-to-pay module in endline surveys

ICRAF • Assistance in review of market info systems in Ghana

ISSER (Ghana) • Implementation of baseline and endline household surveys in Ghana

Geoffrey Kiguli (Uganda) • Survey consultant who organized the baseline survey in Uganda

Esoko (Ghana) • Provision of agricultural price information via SMS to selected beneficiaries

FIT-Uganda • Provision of agricultural price information to selected beneficiaries

Most farmers own working mobile phones

•Rapid growth in ownership of mobile phones

• In both countries, 4 out of 5 farmers owns at least one working phone

•Ghana ownership was lower but has almost caught up

Farmers feel uninformed about markets…

.. but don’t use phones for market information

Agricultural market seem relatively competitive

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Agricultural marketing Traders are by far the main buyers • In both countries, close

to 90% of crop sale transactions are to traders

•Negligible sales via cooperatives or directly to processors, exporters, or supermarkets

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Agricultural marketing Place of sale varies between Ghana & Uganda • In Uganda, 83-86% of

sales take place on farm and at markets (usually in same village)

• In Ghana, just 25% take place on farm, 74% take place in market (usually outside village)

•May reflect lower population density in northern Ghana and/or smaller mkt surplus

Agricultural marketing Median market surplus ratio is about 36%

• Fewer farmers with no sales in Uganda (14%) than northern Ghana (28%)

•Median is 38% in Uganda and 34% in Ghana

•No clear distinction between “subsistence” and “commercial” farmers; full range

Use of mobile phones Ownership related to hh size, income, & education

•Households owning mobile phones tend to have more members, higher income, and more education

• Sex of head of household is not significant after controlling for other factors

Probit model Dependent variable = mobile ownership (1=yes, 0=no)

Ghana Uganda

Household size +++ +++

Farm size

Log of per capita income ++ +++

Female headed household

Age of head of household - - -

Education of head + +++

Head can read

Head can write

Frequency of opening and reading SMSs (2015)

• Share of farmers using it every week, most weeks, or at harvest was 85% in both countries

Usefulness of agric. market information (2015)

•Over half of farmers said it was very useful

•Over 79% said it was very useful or somewhat useful

•Higher level of satisfaction in Ghana than Uganda

Reason for saying that market information was useful (2015)

• In both countries, most common response were that info helped farmer negotiate a better price and decide when to sell

• Farmers in Uganda provided more reasons than those in Ghana

Reason for saying that market information was NOT useful (2015)

• Three most important reasons are 1) prices for markets that are not relevant, 2) can’t read or understand SMS messages, and 3) sales were too small

Usefulness of agricultural production information

• 59% or more found it very useful

• Farmers in Ghana rated their information higher than farmers in Uganda did

Usefulness of weather information

•Over 60% of farmers in both countries rated weather information “very useful”

Impact of mkt info on prices received

Ghana •No statistically

significant effect of market information on prices received

Uganda •No effect

overall, but prices of cereals and pulses significantly higher

Ghana prices overall

Uganda prices of cereals & pulses

Impact of mkt info on location of sale

Ghana • Significantly

more likely to sell from farm or home

Ghana location

Uganda •No statistically significant effect

on location of sale overall

Impact of mkt info on marketed surplus

Ghana •No statistically

significant effect of market information on marketed surplus

Uganda •Market info

increases marketed surplus ratio by 7 percentage points

Ghana

Uganda

Summary • Large majority of farmers (80%) own mobile phones in both countries

• Farmers generally do not feel well-informed about prices and markets

• Farmers often have the ability to choose among buyers (traders) and usually select based on price (not debt, monospony, or obligation)

• High level of satisfaction with the market information services in both countries

• Perceived benefits include helping decide where and when to sell and helping the farmer negotiate with traders

• Main limitations of the information service are 1) prices for markets not relevant to farmer and 2) limited ability to understand due to literacy or language issues

Summary (2) • Direct evidence of impact of market information on prices limited to

Uganda in the marketing of cereals (maize) and pulses (beans)

• Some evidence that market information increased likelihood of selling from home or farm among Ugandan farmers

• Market information may have contributed to higher marketed surplus ratio in Uganda

• Willingness to pay results are forthcoming

• Possible explanations for limited of price effect • Measurement error in collecting price data

• Sample smaller than planned because of difficulting finding & recruiting farmers

• Some farmers sell only a small share of their crop production (14/28% have no sales)

• Farmer locations were randomly selected, some far from reported market towns

Implications for programs • Government: Farmers need market information and are pleased with

these services. Could consider subsidizing cost of subscriptions to market info service and/or supporting services with information.

• Development agencies: Farmer satisfaction and (limited) evidence of improved outcomes suggest need for investment in identifying best-practices, supporting information services, and helping information services take advantage of economies of scale

• Wireless providers: Farmer demand for market information and satisfaction with these services suggest that bundling service with wireless contract may offer competitive advantage in competing for customers.

Implications for programs (2) • Market information providers (e.g. Esoko and FIT-Uganda)

• Should target farmers with medium-to-high marketed surplus.

• Need to address problem of relevance of market towns by increase coverage or focusing on farmers near covered towns

• Should address literacy and language issues with pictograms, increased language support, or call-in services

Implications for methods Research on impact of market information on farmers

• Reduce time between collection of baseline survey data and implementation of intervention

• Select farmers near market towns covered by market information service

• Additional effort to get good measurement of market prices and check outliers during interview

Survey methods in general

• Computer-assisted personal interviews (CAPI) greatly increases quality of the data and speed of availability

• Touch-screen tablets more convenient and less costly than laptops with keyboards

Thank you! Comments and suggestions welcome n.minot@cgiar.org