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INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Agricultural marketing and the use of mobile phones: Results from Ghana and Uganda
Nicholas Minot Senior Research Fellow, IFPRI
Presented at the FoodAfrica Mid-term Conference University of Helsinki, Helsinki, 16 June 2014
2
Overview of WP6 “ICT and market access”
Overall objective: Measure the impact of using SMS to improve access
to agricultural market information and other agricultural information
Methods Baseline surveys
• Ghana: 1290 households in northern Ghana
• Uganda: 1440 households in Western, Central, and Eastern regions
Interventions • Ghana: Esoko provides agricultural market information, weather info, and
extension info via SMS to random sub-sample of interviewed farmers
• Uganda: FIT-Uganda provides agricultural market info, weather, and extension info via SMS to random sub-sample of surveyed farmers
Endline surveys • Ghana: Scheduled for 2014
• Uganda: Scheduled for early 2015
3
Methods: Collaborating institutions
MTT Economics branch • Participation in all phases, particularly in planning, analysis, and interpretation • Gender analysis of household survey data
ICRAF • Assistance in dissemination strategy • WP7 Innovative extension approaches
ISSER (Ghana) • Implementation of household surveys in Ghana
Esoko (Ghana) • Provision of agricultural price information via SMS to selected beneficiaries
FIT-Uganda • Provision of agricultural price information to selected beneficiaries
4
Comparison
Ghana Uganda
Population 25 million 36 million
Share urban 48% 13%
GNI per capita US$ 1,410 US$ 510
Life expectancy 64 years 54 years
Agricultural exports Cocoa, cashew nut Coffee, tea
Staple foods Cassava, maize, yams Plantains, maize, cassava, sweet potatoes
Data collection Oct-Dec 2011 Dec 2012-Feb 2013
Regional coverage All districts in northern half
8 districts in west, central, and eastern
Nbr. of villages 130 144
Nbr. of households 1290 1440
5
Agricultural marketing Who do farmers sell their crops to?
• In both countries, close
to 90% of crop sale
transactions are to
traders
• Most of remainder are
to other farmers and
consumers
• Negligible sales via
cooperatives or directly
to processors,
exporters, or
supermarkets
91 87
5 11 4 2
0 %
20 %
40 %
60 %
80 %
100 %
Ghana Uganda
Type of buyer
Other
Consumer
Trader
6
Agricultural marketing Where do farmers sell their crops?
• In Uganda, 84% 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
25
84 26
9
48
4
0 %
20 %
40 %
60 %
80 %
100 %
Ghana Uganda
Location of crop sale
Other
Market elsewhere
Market in village
Farm
7
Agricultural marketing What is the role of farmer organizations?
• In both countries,
about 20% are
members of some type
of farmer organization
and about 10% are ag
coop members
• In both countries, less
than 8% of farms have
ever sold through a
cooperative or farmer
organization 2
4
4
7
10
8
19
22
0 10 20 30
Uganda
Ghana
Role of agricultural cooperatives
Member of coop or farm organization Member of ag coop
Ever sold through a coop/FO
Sold through a coop/FO in past year
8
Agricultural marketing Most important crops in sales
• In northern Ghana,
yams, groundnuts,
and maize are most
important in terms of
crop revenue
• In Uganda, maize,
coffee, and beans are
most important
• Most “cash crops” are
food crops
• Large share of
“other”
17
39
10
14
19
19
45 37
0 %
10 %
20 %
30 %
40 %
50 %
60 %
70 %
80 %
90 %
100 %
Ghana Uganda
Percent of households by most important crop in sales
Other
Groundnut
Yams
Coffee
Beans
Maize
9
Agricultural marketing How much competition?
• In Uganda, 83% of
respondents said they
had a choice of 2 or
more buyers for their
main commercial
crop
• In Ghana, 72% had 2
or more buyers
20
34
16
10
47
29
17
28
0 % 50 % 100 %
Uganda
Ghana
Percentage of households by number of buyers of main commercialized crop
More than 10
6-10 buyers
2-5 buyers
Just one buyer
1
0
Agricultural marketing Reason for selecting buyer
• In both countries,
+85% of respondent
choose buyer by best
price or quick payment
• Debt obligation or
only-one-buyer is the
reason for <8%
• Competition among
traders for main crop
• There may be less
competition for other
crops
68
55
19
30
7
3
3
5
0 % 50 % 100 %
Uganda
Ghana
Percent of household by reason for selecting buyer
Best price
Immediate payment Location
Obligation
Only one buyer Other
1
1
Agricultural marketing What percentage of crops do farmers sell?
• 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
0 10 20 30 40 50 60 70 80 90
100
0 10 20 30 40 50 60 70 80 90 100
Cro
ps
sale
s as
a p
erce
nta
ge o
f
valu
e o
f cr
op
pro
du
ctio
n
Percentage of households
Distribution of farms by share of production that is sold
Uganda
Ghana
1
2
Use of mobile phones Share of farm households owning mobile phones
• Mobile phones are
more widely owned
in Uganda (72%) than
northern Ghana
(62%)
• Although Ghana is a
higher-income
country, northern
Ghana is the poorest
region of the country
72
62
0 20 40 60 80 100
Uganda
Ghana
Percentage of households owning a mobile phone
1
3
Use of mobile phones Share of farm households owning mobile phones
• Female-headed
farmers are less likely
to own a mobile
phone in both
countries
• Also, medium- and
large-scale farmers
are more likely to
own a mobile phone
than small farmers
0 20 40 60 80
Uganda
Ghana
Percentage of households owning a mobile phone
Female
Male
Use of mobile phones Correlates of mobile phone ownership
• 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
Use of mobile phones How are mobile phones used?
• In both countries, no
more than half of
phone owners have
ever sent an SMS text
message
• Roughly one quarter
of owners use their
phone to get ag
market information 28
23
50
42
51
42
0 20 40 60
Uganda
Ghana
Use of mobile phones (% of households that own a phone)
Know how to use SMS
Have sent an SMS
Use phone for ag market info
Use of mobile phones Do farmers feel well-informed about prices?
• In both countries,
less than half of
farmers fell well
informed about
prices & markets
• Small farmers feel
less informed than
medium or larger
farmers 36
54
27
39
26
34
34
47
0 50 100
Uganda
Ghana
Perception of being well-informed about prices by farm-size category
(% of households)
Overall
Very small farms
Small farms
Medium farms
Large farms
Summary Almost all crop sales are to traders and consumers
• Few farmers sell directly to processors, exporters, or supermarkets
Location of sale varies by country and/or region • Ugandan farmers sell on farm, while those in northern Ghana sell at markets
Coops & farmer organizations play very minor roles in marketing • Less than 8% of farmers have ever sold crops through a coop/farmer organization
Markets are more competitive than sometimes portrayed • More than two-thirds know of at least two buyers willing to buy main crop • Farmers choose buyer based on best price & terms, not obligation or monopsony
No easy distinction between “subsistence” and “commercial” farmers • Whole spectrum of farmers with intermediate sales • Sale of food crops more important than sale of “cash” crops
Most farm households own mobile phones • More in Uganda than northern Ghana; more among larger, higher-income, and
better educated households
.. but less than one-third of owners get market info by phone • Provision of agricultural price information to selected beneficiaries
… and most farmers do not feel well-informed about crop prices • particularly small-scale farmers
1
8
Conclusions
Ghana and Uganda offer apparently favorable conditions for mobile phones to improve market information:
• Large majority of farmers have crop sales • Most farmers sell to traders and have some choice of buyer • Competition means that negotiation with new information is possible • Most farmers already have mobile phones • But few farmers use their phones to get prices and market info • And less than half of farmers feel well-informed about prices and markets
But only empirical analysis can confirm that market information delivered via SMS to mobile phones will be useful to farmers