Competitiveness

30 years

Agriculture Market Information Systems – the new generation

CTA has played an active role in supporting the development of agricultural Market Information Systems (MIS), which collect, process and disseminate information on agricultural markets and their dynamics. The first models, developed in the 1980s, were, in part, designed to fill a gap left by market liberalisation, offering information aimed at helping the state to inform policies and strengthening farmers' negotiating position with buyers.

Second generation MIS, created from the end of the 1990s and in the 2000s, often rely heavily on information and communication technologies (ICTs) to collate and disseminate information, through the Internet and mobile phone networks. The systems have extended their reach, beyond providing simple market prices to offering information on a host of issues, from individual offers and demands (virtual market place) to advice on crops, pests and inputs. Increasingly decentralised, modern agricultural MIS are often interactive, enabling a two-way connection, for example, between farmers and markets or extension agents.

Building on past efforts to support MIS, CTA, in partnership with CIRAD (French Centre of Agricultural Research for Development), INRA (French National Institute for Agricultural Research), AFD (French Development Agency) and Michigan State University (MSU), conducted a two-year research project on MIS in Africa. The initiative, which ended in 2012, set out to explore the main MIS innovations and investigate the impacts of the various models on farmer revenues. In doing so, the research project sought to provide answers to some of the most pressing technical, institutional and financial challenges facing MIS and examine whether innovations ushered in by the second generation systems could help to solve them.

The project proved a valuable experience. Papers published during the initiative, together with discussions during two expert consultations – held in Montpellier in 2009 and in Bamako in 2011 – helped a number of MIS institutions to gain a better understanding of the various models available and how to tackle some of the obstacles they faced.

"We now have a better understanding of how those systems work and the kind of innovations that have been made, not only technological innovations, but also institutional innovations," said Vincent Fautrel, Senior Programme Coordinator for Agricultural Value Chain Development at CTA. "I think this has helped a lot of MIS to better reflect on how they want to position themselves."

A tool for public policies

Recommendations from the research project, summarised in a policy brief, centred on approaches for better informing public policies, improving market transparency and making MIS more efficient and sustainable.

The importance of MIS in providing market information to shape public policies was underscored, especially against the recent backdrop of increased market price instability, which highlighted the need for effective market management and monitoring tools. New ways of ensuring that MIS can supply in-depth analyses of market trends included suggestions for training to develop analytical skills and building partnerships with universities and research centres.

The case of the Rice Observatory (OdR) in Madagascar offers a good example of the important role that MIS can play in helping to develop agricultural policies. It was created in 2004, in response to a crisis that strongly destabilised rice prices. The OdR's reach extended beyond the usual functions of a MIS, being part of an advisory body, which it also feeds with updated market analysis, involving the different actors in the value chain in the process of developing rice policies. As a result, better forecasting of market trends and more timely preparation of state interventions helped to prevent prices escalating on the Malagasy market when world rice prices soared.

Other areas explored by the research project included the need for MIS to adjust the supply of information to meet the needs of market participants, improve access to information for more users and link MIS to other market tools so that users can make better use of the information. In some countries, such as Ethiopia, Malawi and Uganda, market information services have linked up with modern market institutions, such as Warehouse Receipt Systems and Agricultural Commodity Exchanges.

"MIS doesn't work in isolation. You have to package it with other services like weather and crop information and even access to finance," said Fautrel. "Price information may help farmers to better negotiate with buyers, but unless they have direct access to finance, knowing prices will not really help them expand their production. So that is why the second generation MIS are trying to build other services around the price information."


Credible and sustainable

Regular feedback on the end use of information is also crucial, and the project examined ways of making this task more effective, such as integrating MIS with professional organisations representing market participants, harnessing ICTs to track user patterns and soliciting reactions via radio broadcasts, for example through phone-ins.

In order to improve their reach and impact, some MIS may need to rethink the way in which they are organised, including where they are based, who runs them and who funds them. Wherever they are housed, it is important that MIS are autonomous and neutral, to ensure credibility, and that they are financed in a sustainable manner, to ensure their long-term operation.

One strong message to emerge from the CTA-supported research project is that there is no single recipe for market information delivery or other features.

"There is no one-size-fits-all, so channels have to be adapted according to the circumstances," said Fautrel. "In some countries it may be SMS. In others it may be radio or billboards. What is important is to have a combination.

"The findings of the project highlighted the existence of a wide range of different MIS in Africa at national and sub-regional levels, reflecting different contexts and serving the needs of various users," he added. "While this great diversity of systems and associated services may pose some methodological challenges when it comes to comparing data, it does offer a great opportunity in terms of sharing information and best practices and building or strengthening the capacities of the various MIS institutions."

For more information:

MIS2G

Policy Brief: Strengthening the impact of African agricultural MISs on policies and market efficiency