Mobile Phones Catalyst to Agricultural Growth in India

11 March 2010

Surabhi Mittal and Gaurav Tripathi

Presented at ICTs and Development: An International

Workshop for Theory, Practice, & Policy at IIT Delhi

Indian Agriculture

Positive and accelerating TFP

Farmers face threat of

Productivity hampered by

• deficits in physical infrastructure

accelerating TFP growths of 70s and 80s turned

stagnant or decelerated

since early 90s

threat of economic

viability and sustainability in crop production

• shortcomings in availability of necessary products and services

• lack of information about techniques and inputs

LiteraturePrecision Agriculture

• Information-based, decision-making agricultural system is designed to maximise agricultural production and is often described as the next great evolution in agriculture.

Michael, 2008

• The combination of GPS and mobile mapping are supposed to provide the farmers with the information for implementation of decision-based Precision Agriculture

Jensen, 2007; Abraham, 2007

• Found that introduction of mobile phones to Kerala fishermen decreased price dispersion and wastage by facilitating the spread of information which made the markets more efficient of markets by decreasing risk and uncertainty

Sources of growth in productivity

• Research, extension, literacy and infrastructure

• Development of markets improves input-output market interface and it is of crucial importance for growth in productivity.

Present Advantage

• Increasing penetration of mobile networks and handsets presents an opportunity to make useful information more widely available to farmers.

Hypothesis

• by reduction in - transaction costs, search costs, travel cost.

Mobile phones would help to reduce the existing information asymmetry and help in improving farm profitability and productivity

cost.

• would have a better impact than the other one-way information technologies (e.g. radio, television, newspapers etc.)

The crucial idea- Information received through mobile phones could play a complementary role to extension activities

Study sought answers

Are mobile phones used for agricultural purposes? If so how?

Have mobile phones helped drive agricultural productivity? agricultural productivity?

Which agricultural information is most valuable?

What are the constraints to improve agricultural productivity

through mobiles?

Methodology and Data

Case studies

• IFFCO Kisan Sanchar Limited (IKSL)

• Reuters Market Light (RML)

• Fisher Friend (FF)

17 Focus groups -using the standard mobile phones as well as those with

agricultural information

service on mobile

Individual Interviews

• 46 in-depth interviews

• Over 200 people interviewed, of whom 80% were small farmers/ fishermen

Interview and research locations

District Village

Allahabad Saidabad, Bijhayan, Malak

Harhar, Vardaha, Panwar

Agra Medhapur, Mania

Mathura Usfar, Lalpur

Alwar Khairtal

*Dausa Khanvaas

*Bhilwara Lesua

*Baran Himoniya

*Jaipur Murali Papmaanbali

Satara Arphal, Bharatgaon, Indoli

Pune Kumbhar

Pondicherry Veerampattinam, Ponnithittu

Mobile information services for farmers

IFFCO – IKSL Reuters – RML

Began Service June 2007 October 2007 (pilot in January 2007)

Locations of Survey Uttar Pradesh, Rajasthan, Tamil Nadu Maharashtra

Cost Free Voice messages

Helpline service at a cost of Rs. 1/min

Rs. 175 for three months, Rs. 350 for six months

Rs. 650 for an year

Nature of Delivery Voice message (non-customized) SMS-text message for two crops as subscribed

# of Daily Messages 5 4

Information Provided • Weather • WeatherInformation Provided • Weather

• Crop/animal husbandry advisory

• Market Prices

• Fertilizer availability

• Electricity timings

• Government Schemes

• Weather

• Crop-advisory (one crop)

• Market Price (for 2 crops and 3 markets each)

• News (commodity specific and general)

Subscribers (at time of

investigation)

• Uttar Pradesh: 200,000

• Rajasthan: 65,000

• 82,000 (India-wide); 77,000 in Maharashtra

Comments • If message not immediately received by

farmer it can listened to by dialing a

number at a cost of Rs1/ min.

• Messages delivered at unpredictable

times of day

• Revenues are made from the sale of cards

• Message will be retrieved/saved if farmer’s

phone is on within 24 hours of message

delivery

• Messages delivered at preset times of day

• Subscription is only revenue source

Mobile information service for fishermen

FISHER FRIEND

Launch date December 2007 (pilot – still in pilot phase)

Cost Free (handsets and service)

Nature of Delivery Menu-based access (text)

Information Provided • Weather (wave height, wind speed)

• Market Prices• Market Prices

• Optimal Fishing Zone (longitude and latitude)

• Rural Yellow Pages

• Government Schemes

Comments • Estimated range of service at sea is 5 nautical

miles

• Availability of information has been sporadic –

at time of investigation service had not been

functioning every day

Information Needs

Information Sources

What Interviews revealed?

Small farmers prioritized the most

important information

Other requirements

Use of mobile phone

Primarily for social purposes but use it for at least some agricultural activity also.

Traders and commission use it daily in assessing commodity demand/supply situation by contacting commodity demand/supply situation by contacting

farmers and various markets

Maharashtra farmers reported greater use of their mobile phones to access information and also greater use of the mobile-enabled information

services.

Wealthier farmers reported fewer challenges with infrastructure gaps, access to credit or other

potential limitations on leveraging information

Impacts on productivity

Access to better

Improved yields

Adjusting supply to market demand

Access to information

Access to better quality Timely

availability

Fishermen derived safety as well

as economic benefits (decreased

potential losses, increased catch)

from the ability to communicate

and access information while at

sea using their mobile phone.

Drivers of mobile impacts

easy access to

customized

content

• 5-25% increase in earnings, mainly attributable to the adoption of better planting techniques

• Weather forecast prevent losses

• describe plant diseases from the field to experts

Mobility

• describe plant diseases from the field to experts

• Better coordination with their hired laborers

• traders and commission agents- ability to shift supply to markets in response to changing market conditions

time savings

or

convenience

• avoiding local travel saves Rs. 100-200 per trip

• better decisions in choosing market to sell output

But there are binding constraints

Credit constraint-‘Bondedne

ss’

Ability to trust the

informationMarket

inefficiency

Lack of skill and

risk taking

capacity

Physical Infrastruct

ure

Encouragingly the research suggests

Social networks -

role in building the trust to influence the

adoption of new mindsets and actions

by small farmers

Extension services and Extension services and capacity-building efforts

can complement mobile based

information dissemination to

accelerate the adoption by small farmersdissemination to

accelerate the adoption of new techniques.

Policy changes needed to

encourage better access to high-quality

inputs and credit for small farmers

Public and private investment- necessary

to resolve critical infrastructure

gaps

Key Takeaways

Mobile phones and mobile enabled information services can act as catalyst in removing existing information asymmetry

Bridge the gap between the availability and delivery of inputs and infrastructure

Magnitude of economic benefits depends on quality, Magnitude of economic benefits depends on quality, timeliness and trustworthiness of the information

Fishermen- safety benefits, decreased isolation and vulnerability

Small farmers/ fishermen are not able to leverage the benefits as efficiently as the large farmers

Thank YouThank YouThank YouThank You

surabhi@icrier.res.in