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Food and Nutrition Security in Africa seminar in Helsinki 16 June 2014, Agricultural marketing and the use of mobile phones: Results from Ghana and Uganda, Nicholas Minot, IFPRI
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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
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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
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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
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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
Thank you! Comments and suggestions welcome n.minot@cgiar.org
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