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

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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

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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

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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

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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

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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

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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

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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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