The Institutional Structure
Ensuring Sustainability
Analysing the Marketing System and its Information Needs
Products and Markets
Market Information for Consumers
Who Should Collect Market Information?
How Often and When to Collect Market Information?
Product Varieties
Product Quality
Weights and Measures
Quantity, Stock and Other Information
Data Accuracy
Data Transmission and Processing
Dissemination
Utilisation of Data
On the basis of the discussion in Chapter 3, it must be clear that developing an efficient, relevant and sustainable MIS is far from easy. While the benefits of such services appear unarguable, the failure of many countries to operate reliable, accurate and lasting services does question the wisdom of FAO and other agencies in promoting MIS in all circumstances. Attention needs to be paid to the capacity of the country and the counterpart organization to operate a service, both in terms of technical capacity and in terms of ability to meet recurrent costs. Institutional arrangements need to be closely examined and the potential for private-sector involvement should be investigated. Basic steps can be taken to avoid some of the obvious problems. The greater the level of research at the beginning, the more likely is the MIS to prove valuable to its target users. Tailoring the size and scope of the service to available budgetary resources is likely to result in greater sustainability. Ensuring that all operatives are fully trained should result in a more accurate MIS.
The following pages are not designed to be a manual for MIS establishment and operation. Rather, the Chapter aims to discuss those issues which need to be addressed at the outset if an efficient and sustainable MIS is to function.
The most sensible institutional setting for an MIS will vary from country to country. In some, it may be preferable to utilise the Statistics Service because such services tend to have in place a network of trained data collectors. Against this, it must be said that government statistics agencies are not generally known for the speed with which they publish their data and may not, therefore, be too efficient at daily price dissemination. Agricultural ministries also usually have extensive field networks, but such staff may neither be well qualified for price-collection work nor be particularly motivated to do it. When agriculture ministries operate MIS, it is often the case that statistics ministries continue to collect market price information for their own purposes, thus duplicating scarce resources. Such a situation clearly needs to be avoided, and requires a willingness to collaborate on the part of the respective ministries.
An economic solution to the problems of sustainability many MIS face would be to oblige users to bear the costs by charging for the information. However, particularly in most developing countries, produce is mainly offered by farmers in small quantities. Such farmers lack information and are in a relatively weak bargaining position. It is neither feasible nor necessarily desirable to charge them for information. Thus, the vast majority of Market Information Services world-wide are run as free public services. Market information is seen as a public good, i.e. something like roads or clean water, which should be made available to all, not just those willing and able to pay.
While public services can, to a certain extent, go commercial by attracting advertisements and sponsorship, it is unlikely that many will be able to fully cover their costs, let alone make a profit. Thus opportunities for private provision of market information, of the type described in this paper, are probably few. Private Market Information Services appear to work best when they are able to use already available information; dissemination costs being usually a good deal less than collection costs. Thus, as already mentioned, private services in South Africa can access the databases of the wholesale markets. A similar operation is carried out in Beijing, with private distribution of information gathered from public wholesale markets.
It may be preferable for governments to aim to steer a path between an MIS fully operated by the state sector and one left to a private sector which provides information only to those who can afford it. An autonomous, semi-governmental organization offers this possibility. Such organizations can have a number of advantages. For example, revenue generated by government departments often has to be paid to the Treasury or Ministry of Finance whereas autonomous bodies can generate and retain revenue. This gives them the incentive to seek commercial support for an MIS, which would be lacking in a Ministry. Such organizations can also often be free of restrictive public-service employment regulations, which gives them management flexibility and the opportunity to be more cost effective. An alternative approach may be for a government to finance the service, but for the work of data collection and dissemination to be done by the private sector.
The FAO survey found numerous Market Information Services that had been established by donors, but had subsequently run into problems once the donors had left. Several existing services presently operated with donor support would appear likely to follow the same route. Free computers, fax machines, cars and motorbikes can be very attractive, until they have to be replaced. Recognising the very real problem of low Government salaries in many countries, donors have also often paid salary supplements to MIS staff. Unfortunately, when the donors leave so, if they can, do the staff who are unwilling to return to lower government salaries. Thus an efficient, donor-supported MIS can often be illusive, as salary supplements and other benefits are often the main reason for maintaining staff morale. Housing an MIS in an autonomous body not subject to government salary controls may avoid this, although the problem would still remain of how to generate sufficient funds to pay for its operation.
Despite the difficulties associated with sustainability after donor assistance has ended, there appears to be a strong need for technical, and some financial, assistance to most countries seeking to begin MIS from scratch. However, there is a general trend world-wide towards reduced technical assistance and projects are tending to have a shorter time frame. FAO’s experience bears out the view that few countries can be assisted to establish an MIS on the basis of short-term consultancy input. For most countries a one-year project with full-time technical assistance input is the minimum required.
Funding of information dissemination is in future likely to be one of the main areas which threaten MIS sustainability. Services can no longer take for granted free access to government-owned radio stations and will increasingly have to explore ways of obtaining funding for broadcasts. Many countries have already run into problems because they could not, in the long run, afford to finance dissemination. Thus at the design stage of an MIS, an early port of call should be to the media to find out their charges, and these charges should be budgeted. At the same time, possible sponsors should be identified. There would appear to be no reason why sponsors could not be found for market information broadcasts. Indeed, in Sri Lanka, vegetable wholesale prices are broadcast on a commercial radio station and this programme is sponsored by a private fertilizer company. The possibility that more detailed information than that broadcast on the radio could be sold should also be explored.
In theory, no MIS should be planned without a detailed understanding of how the marketing system works. Developing such an understanding does, of course, assume that there is a marketing system in place to understand, which in the case of some countries undergoing marketing liberalization may not be the case. However, in normal circumstances a detailed survey of the marketing system should be undertaken in order to assess information requirements of each category of participant in the system. These include farmers, traders and commission agents, exporters, retailers, consumers, extension services and government departments. The survey should endeavour to identify the type of information each category requires, the form in which the information should be presented, the frequency the information is required and the times of the day when dissemination should take place.
The role which an MIS can play will depend on the way in which the marketing system functions. Research is essential as there are almost as many marketing systems as there are countries and it is therefore not possible to specify a “model” MIS. It is necessary to have information about the flow of products between farm and market and between markets as well as about the functions of the various intermediaries. It is essential to know how prices are determined at each stage of the marketing chain and the qualities and quantities being traded. It is, of course, vital to know what weights and measures are being used, both to plan accurate data collection and relevant dissemination.
The importance of research is well illustrated by the Indonesian MIS (see Box 6) which was only set up after considerable research into the needs of the potential users. It was this approach which led to the decision to collect price information in the producing areas, although most existing price information services had tended to concentrate on wholesale prices in major markets. Also resulting from this approach was the decision that fruits were not a priority and, initially at least, that the MIS should concentrate on vegetables rather than fruits and on a relatively limited range of vegetables. In Indonesia, traders who buy from farmers have long-standing links with particular traders in the terminal markets. They are rarely interested in selling to other markets and would therefore not wish to use an MIS to identify arbitrage possibilities. In many countries, traders sometimes buy the production from the farmer while it is still in the ground or on the tree. In these circumstances, information on daily prices would appear to be of little utility to the farmer.
One problem with assessing farmers’ information needs is that they often do not, at the outset, appreciate the value of information. Thus the participatory approach adopted in Indonesia provides MIS developers with the chance to explain the implications of an MIS and then discuss with farmers in what form they would like to receive the information.
In researching the marketing system, it should not automatically be assumed that a Market Information Service is required. “Who would benefit?” is an important question to ask. In the UK, for example, there is no publicly provided daily service. A gut reaction may be that setting up one might be a good idea, until it is realised that over 60 per cent of horticultural produce is supplied direct to supermarkets and that farmers supplying wholesale markets tend to get their information by phoning agents in the markets. In the Netherlands almost all farmers are linked by computer to the auction system and thus have “real time” access to prices. A government agency does collect and disseminate prices but the main purpose of this activity is to ensure that EEC price regulations are being complied with and the Government information service is not the prime source of farmers’ information.
Once it is clear that there will be beneficiaries, either existing participants in the marketing system or potential new entrants, it is then necessary to clarify their exact needs. For example, it is important to identify the most relevant price to the farmer. In the case of Indonesia, as noted, the local price is considered the most important. Farmers do not attempt to interpret what wholesale market prices mean to them. In Sri Lanka, on the other hand, an FAO project discovered that farmers found broadcasts of the wholesale price in the capital, Colombo, extremely useful, and were well able to translate these prices into farm-gate prices.
Other points, touched on earlier, also need to be reviewed. While an MIS should clearly not be static, and must evolve over time, all of these questions should be addressed at the outset:
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Box 6, Setting Up an MIS - A German-funded Project in Indonesia[26] Between 1978 and 1985, the German Government set up a Horticultural Market Information Service for Indonesia. This Box describes the steps that were taken in preparing for and implementing the project. Project Identification and Needs Assessment Identification of the project started with an assessment of the need for a Market Information Service. Prevailing information dissemination was reviewed and it was concluded that market participants suffered from information deficits concerning current prices and other factors. A pre-feasibility analysis was then carried out. This consisted of checking whether there were constraints to the effective use of improved information and whether the proposed institutional basis was suitable for the MIS. Part of the pre-feasibility analysis was a Cost-Benefit Analysis. Initial Project Planning Initial project planning had the following three components: 1. A Situation Analysis. This was based on a rapid appraisal of the marketing system in order to facilitate decisions on priorities with regard to products, areas and type of information required. Further, a thorough assessment of the strengths and weaknesses of the Ministry of Agriculture was carried out to determine whether institutional strengthening had to be included. Finally, the situation analysis involved an assessment of existing agricultural market information activities;Project Implementation The project introduced a Project Management System (PMS), which consisted of: Organizing assured every provision necessary for sustained, reliable and effective operation while ensuring that this was achieved in the most cost-effective way. This was facilitated by the compilation of a detailed Manual of Operation[27] with all organizational and operational details. Allocating resources for the activities was done bearing in mind that the quality of the data collectors determines the quality of the entire Service. The proper running of the Service depended on the availability of equipment and access to the public telephone system for data transmission and access to mass media for dissemination. The pilot phase had shown that field activities suffered primarily from inadequate management of operational funds. These, therefore, had to be guaranteed to be channelled to the field level. Leading of the Service required a management attitude to sustain or increase the motivation of the officers working in the Service. Linking was achieved as the project management established and maintained good relations with target groups (especially farmers and traders) and with cooperating agencies (e.g. mass media and the extension service). A participatory approach was adopted and good public relations emphasised through meetings, press releases and leaflets. Controlling had to ensure that implementation occurred according to the plan. By monitoring the inputs, activities, assumptions, outputs and effects, mistakes were corrected through re-allocation of resources, changes in procedures and adjustments to the plan of operations. A yearly internal evaluation was carried out and activities were redesigned when required. Handover In the phasing-out period of three to four years provision of
“trouble-shooting” short-term technical assistance was provided when
needed. |
The golden rule should be to start on a small scale and work up as resources permit. For instance, depending on the analysis of the marketing system, it may be desirable to initiate a service with information on prices in a few important wholesale markets, gradually expanding to include other wholesale centres and some assembly markets. When donor assistance is not used it is perhaps easier to avoid the trap of trying to do everything at once. When donor help is available, not only do the donors tend to want to develop impressive services but the recipients also want to take advantage of the assistance while it is available. This is understandable because, if a gradual approach is adopted, the donors may not be around when it is time for expansion.
Tanzania collected data for 27 commodities from 45 centres. Many of these prices were never used. Ghana collected prices from over one hundred markets. In responding to the FAO survey the Ministry of Agriculture reported that it had stopped training field staff in data collection, for lack of funds. It still has over one hundred full-time employees. Thus the more markets covered, the more likely it is that an MIS has an unmanageable amount of data to handle, staff whose salaries cannot be paid and whose training cannot be afforded.
Crops to be included in an MIS should be those which are commercially important. In some cases this will include more than one variety (e.g. red and white onions). The tendency to want to maximise the number of crops in order to build up a strong statistical database should be resisted. As the number of crops covered increases costs rise, with minimal extra utility, data collection becomes more complex, data transmission and processing becomes slower and information dissemination on the radio takes longer and, for the bulk of non-farming listeners, becomes more boring. Where crops have only a limited demand, those farmers producing them will probably already have good market information and market contacts. In developing countries, crops such as asparagus and salad greens probably fall into this category. While publicising market prices may encourage new producers, the prices will be of little interest to the bulk of producers and thus the benefits of providing the information may well exceed the costs.
The locations in which price information is collected will depend firstly on research about information requirements of the target users of the MIS. For example, if farmers want information on prices as close as possible to the farm gate, it makes little sense to collect retail prices. Ideally, the locations chosen should be those which provide maximum coverage in terms of quantity traded. Again, costs have to be balanced against benefits. It should be realised at the outset that every market chosen for price collection not only increases the number of collectors required but also increases the need for supervision, training and data processing and, where radio broadcasts are paid for, increases the duration of the broadcast. Costs of supervision and training can be particularly high; in large countries travel and subsistence costs for head office staff to supervise field officers could well approach the salaries of the data collectors.
In Indonesia, the research-based decision to collect prices at local assembly markets or close to the farm gate inevitably meant that costs of operating the MIS were going to be high. Indonesia is fortunate in that it has the resources to sustain such a detailed Service. Other countries may not be able to finance the necessary inputs. However, in the case of many countries, price collection at source may not be so relevant nor, indeed, feasible. Where farmers are scattered over a large area and sell to traders at the farm gate or at very small assembly markets on an irregular basis, the local price may be both difficult and prohibitively expensive to collect. Under such circumstances, it may be preferable to broadcast wholesale market prices and, through the extension services, assist farmers to interpret them. However, as noted above, this needs to be considered in detail at the design stage.
Coverage by an MIS should be flexible. Services should periodically review crops and markets covered to take account of changing patterns of demand and production. As was done in Indonesia, this may necessitate introducing new crops into the MIS. In the long run, it may require removal of a market from the list of those covered and replacement with another which is more active and more relevant to producers, traders and consumers.
There is a school of thought that MIS should pay much more attention to the information needs of consumers than has hitherto been the case. Examination of the feasibility of this does need to be carried out but there are several reasons for believing that a consumer-oriented service would experience difficulty in providing useful information. Firstly, an MIS which is oriented to the needs of farmers and traders will concentrate on assembly and wholesale markets. Prices from such markets are of little interest to consumers and thus an MIS seeking to assist consumers would have to carry out parallel price collection activities in retail markets. This would significantly increase costs although, on the other hand, it may be easier to attract sponsors for retail price information provision.
Secondly, information collected from retail markets may not be of much use to the bulk of consumers. In a city of 10 million people, for example, there will be a large number of retail markets. Prices in these markets will vary according to the distance of the market from the source of supply (usually the wholesale market) and according to the quality standards in the particular market which will, in turn, be determined by the purchasing power of the neighbourhood. Moreover, many consumers do not buy at retail markets but make their purchases at local shops, which have different pricing structures to those of markets. Under these circumstances it is difficult to see how an MIS could broadcast useful prices for consumers, who would be far more likely to obtain information by comparing prices among local retailers than by listening to the radio.
Where an MIS could perhaps provide a useful service to both consumers and farmers is by occasionally highlighting products which are in glut and should therefore be good value. Low farmer prices caused by gluts are often fairly slow to translate into low retail prices. Publicity about crops which should be cheap may encourage retailers to reduce prices and thus increase consumption.
Market information should ideally be collected by people who both have the time available to do the job accurately and have an interest in ensuring the success of the service. Price data collectors in Indonesia, for example, are employed full-time on the job and have built up good relationships with the farmers and traders. This is likely to result in better quality data collection than that by a reluctant employee of a Statistics Service who is sent to the market once a week. There would appear to be a strong case for, wherever possible, linking market information collection with officers responsible for marketing extension. Where information is collected daily the officers responsible would be in an ideal position to advise farmers and other extension workers about price trends. Where weekly collection is deemed adequate, using marketing extension workers to do this work would ensure that information was collected by people who appreciated the importance of the MIS and understood the marketing system.
Given that traders, in particular, are likely to be very suspicious of Government officials of any type, it is important that they understand that the information collected from them will be averaged or aggregated and that no individual records are kept. It is also important that the people collecting the information can be seen as being uninterested in individual information. More than one country has arranged for market information to be collected by officials who also had a tax collecting function.
In some circumstances it may be possible for the trade itself to take responsibility for price collection. It has already been noted that some markets make available information on daily transactions. Such information can either form the basis of an MIS operated by the market itself or used by a governmental, semi-governmental or commercial MIS. It is also feasible for information to be provided by market traders through, e.g., traders’ associations or chambers of commerce or agriculture. However, any MIS using such information from the private sector would need to build in checks for accuracy, given the possibility that some traders would wish to bias information to their perceived advantage. Nevertheless, the lack of resources experienced by many governments suggests that, in future, alternatives to the standard design of an MIS will need to be considered. One of these could be a service which does not collect primary data but receives information from a variety of sources for subsequent dissemination to users.
As previously noted, information on grain markets probably needs to be collected less frequently than information on perishables. While in some countries grain market prices can change quite rapidly in, for example, situations where urban storage is lacking and roads are blocked, the normal pattern appears to be for relatively small daily price fluctuations. This is primarily because grains are harvested, processed and subsequently stored and thus daily supplies to the market are not subject to the vagaries of climate, perishability, etc. Prices of non-grain staples can, however, change more rapidly, particularly those of fresh cassava which is highly perishable.
Horticultural produce prices can change quickly. As quantities of particular varieties handled at a market can be relatively small and as products are perishable, the arrival of a new consignment can often have a significant impact on prices. Moreover, while demand may change little on a day-to-day basis, production levels can fluctuate significantly, depending on the suitability of weather conditions for ripening and harvest or, simply, on how many farmers decide to harvest on a particular day. Thus dissemination of horticultural market prices on a weekly basis is unlikely to make a significant contribution to improving market transparency, other than to indicate the general trend of prices as a result of seasonality and other factors.
Ideally, horticultural prices should be collected and disseminated on every day on which the relevant market functions. In practice, a government-operated MIS will rarely be in a position to collect prices at weekends when government offices are closed, even if the markets are functioning on those days. Thus, in many countries data collection from Monday to Friday is likely to be the norm, while in Arab countries collection from Saturday to Thursday should be possible. Daily collection does, of course, imply the use of more-or-less full-time data collectors. Where resources do not permit this, it may be necessary to reduce the frequency of collection. In making such a decision, the option of lowering costs by reducing the number of markets covered needs to be considered as an alternative to reducing the frequency of collection in all markets.
Data should ideally be collected during the peak trading period for each market. In practice, many MIS will find it difficult to adhere to this rule. For example, paying staff overtime to work very early in the morning may increase costs unacceptably. Also, collecting data at the ideal peak time may cause problems with ensuring timely information dissemination. If the best time for disseminating information is early in the morning it may be preferable to broadcast the previous evening’s market prices rather than the previous morning’s. Where the peak market period varies according to location, it may also be necessary to make compromises with regard to the time of collection in order to accommodate radio schedules.
The peak period is preferable for price collection because that is when both suppliers and buyers are at their maximum and when price formation is most reliable. Markets which operate on a 24-hour basis and receive new supplies regularly (e.g. those in many parts of Asia) may experience very limited daily price fluctuations, as may those which dispose of the produce in a short period at a set time of the day (e.g. those which use the auction system). However, markets which are open to buyers for much of the day but receive most of their supplies at a particular time (e.g. early in the morning) may well see prices decline as the day goes on, the produce becomes less fresh and farmers and traders try to sell old stock in advance of new produce arrivals. While peak-period prices may therefore not be indicative of the average price a farmer is likely to receive, it is not feasible for an MIS to collect prices and quantities traded throughout the day in order to obtain reliable weighted averages. Under these circumstances, the peak-period price provides the target price to which the farmer should aspire. Clearly, however, price broadcasts and newspaper articles must explain to users that the price used is the price at a certain time of the day and not necessarily an indication of the average price over the whole day.
More important than ensuring data collection during the peak trading period is the need for data to be collected at the same time every day. The information disseminated must be consistent to permit comparison from day to day. This will not be the case if prices are collected in the morning on one day and in the afternoon of the following day. Thus a collection time, once decided, must be adhered to and the MIS needs to arrange for close supervision of data collectors to ensure that this is done.
It was stated above that an MIS needs, at an early stage, to decide on the crops to be covered. It also needs to decide on the varieties which are to be reported on because in many cases there will be significant differences between prices for different varieties. In much of Africa, for example, there are many different types of bean available, all of which command different prices. An MIS which simply reported on the daily price of “beans” would have no significance for farmers or traders and would rapidly come to be viewed as irrelevant. If resource and other considerations limit the number of crops that can be reported on, then it is essential to select the most important varieties of each product, to the exclusion of the others, and name those varieties when the prices are disseminated.
In any market a wide variety of qualities of a particular product is likely to be available at any one time. Prices for different qualities could well vary widely. In the absence of agreed and widely recognised quality standards, which are only available in very few countries, product quality could well cause confusion in the interpretation of price information. Producers of relatively poor quality fruit, for example, might complain bitterly about the accuracy of an MIS which reports prices of the top grades without making this clear on radio broadcasts.
MIS should aim to collect and disseminate prices for produce of Fair Average Quality (FAQ). This requires a considerable amount of training of data collectors in order to arrive at a common understanding of what constitutes FAQ, as there is clearly a need for consistency both between collectors in the same market and between markets. It also requires an extension effort to ensure that both farmers and traders have a clear idea of the quality which is being referred to in price broadcasts. When produce which does not fit the FAQ description is unavailable on a particular day, it is preferable that no price information is recorded rather than prices of inferior or superior quality.
In a large number of developing countries the marketing systems do not use standard weights expressed in terms of kilograms. Farmers sell, and traders trade, by the bag, carton, box, bundle or tin. At the retail level, sales are often made by the “heap” with supply and demand conditions leading to changes in the size of the heap rather than changes in its price. Under such circumstances the provision of accurate and meaningful market information can be very risky, particularly where participants in the marketing system have no concept of standard weights.
Attempting to change time-honoured marketing practices in order to facilitate the operation of a Market Information Service would probably be an exercise in futility. The adoption of weights for trading purposes is only likely to take place when the participants in the marketing system see a need for it. Where farmers and traders fully understand units of weight (i.e. kilograms) then it should be possible to disseminate information about prices on a per kilogram basis, although care must be taken to ensure that conversion rates from trading units to kilograms are accurate. It should not be assumed, as already indicated in Chapter 3, that a container will have a uniform size throughout a country or from year to year. Local price collectors will have to verify and constantly update conversion rates. Where farmers do not have a clear idea of units of weight then prices should be disseminated with reference to the standard trading measure. Again, any regional variations in these measures need to be pointed out in price broadcasts.
It is preferable that the use of scales to measure the weight of produce on offer at a certain price be avoided. Carrying scales around on a daily basis makes the price collector highly visible and may corrupt the accuracy of prices obtained. Traders are also unlikely to have much patience with collectors who want to “waste their time” by weighing produce without buying any of it. Thus, wherever possible, prices should be collected with reference to the container used, not by weighing the produce. However, when produce is traded, particularly at the retail level, in “heaps” or “tins” then weighing at the time of price collection is probably unavoidable.
We have largely concentrated on the role of an MIS to provide price information which, in almost all circumstances, will be the most important function. Nevertheless, an MIS with adequate resources does have a legitimate role to play in providing users with additional information to enable them to make necessary marketing decisions.
Quantity information can help farmers and traders to make informed guesses about likely trends in prices. The main problem here is that such information can be time-consuming to obtain and accuracy can be almost impossible to achieve. While a price collector may be able to collect daily prices by spending about one hour in the market, the collection of detailed supply information can, depending on the way in which the market functions, be a full-time job. In some cases markets themselves maintain records of all arrivals and transactions and this information can be accessed by an MIS. However, unless fairly sophisticated monitoring is carried out, as is done, e.g., in wholesale markets in South Africa, or all arrivals are in “standard” packages, the information provided is likely to be relatively unreliable. Monitoring of produce arriving in a market is often complicated by the lack of a weighbridge, and by the difficulty of identifying weights of individual products when several are carried on the same truck.
The data collection task is made easier when deliveries to a market are confined to a relatively short period of each day but, even then, obtaining accurate figures can be difficult. While detailed information on quantities supplied to a market would undoubtedly be useful for planning purposes (e.g. to assess demand for a new market; to understand production patterns), in most circumstances such information is not required by farmers or traders. In practice, a fairly subjective assessment on the part of a trained data collector regarding the supply situation will probably be adequate for short-term commercial uses. MIS should therefore aim to supplement price information with supply information, such as “the market was oversupplied with tomatoes today,” or “stocks of onions are low” or “few watermelons arrived in the market today” rather than attempt to give precise figures.
In countries where road communications are frequently disrupted by bad weather, an MIS can provide a useful service by advising farmers and traders of the disruptions. This could serve two purposes: it would alert farmers in some areas to the fact that their perishable produce is unlikely to reach the market and it would alert farmers and traders in areas not subject to transport problems that prices in the market are likely to rise.
Information of supply availability is of use to traders to assist them in locating new sources of supply, especially if produce is short. In a country where imported staple products form a significant component of the diet, an MIS should also consider providing advice about expected arrivals of food shipments at the country’s port(s). This is particularly important in the case of food-aid shipments which can, if handled badly, seriously disrupt marketing arrangements and prices for various crops. In addition to providing advance notice to the market concerning expected sale or distribution of food aid and the locations where this will take place, an MIS operating in a country with a food security reserve should also make information available concerning planned release of reserve stocks.
Where price information has to be collected from scratch, i.e. where it is not generated daily as a result of the market recording all transactions, then considerable attention needs to be paid to making sure that the data collectors are fully trained in price and other data collection techniques. Repeated “refresher” training will also be required. Information collected must be speedily transmitted from the collector to the processor and on to the user. Collectors should be issued with data sheets to fill in, and provided with strict instructions regarding the quality of produce to which prices should refer and the calculation of averages (it will normally be necessary to collect at least five prices daily for each product covered). Where significant price differences are observed an average price may have little meaning unless it can be weighted. An alternative approach to using averages is to broadcast the “most common” or the high and low prices. Again, these prices should refer to FAQ produce and the low price should not be the price of old and/or damaged produce.
MIS officers should be provided with a timetable which spells out exactly at what time market information should be collected, when it should be put onto the computer and when it should be delivered to the radio station. That this is being done should be monitored by supervisors, who should also listen to radio broadcasts to check that they are going out and to control them for accuracy.
The motto “keep it simple” also applies to data processing. It is necessary to keep computer experts under control or they will tend to design systems so complex that only they can understand them. While the designs should recognise that some expansion of the service may take place, they should not be so complex that those operating the MIS on a day-to-day basis cannot handle them easily and solve any problems that may arise.
Handling the time factor in market data requires careful design of the system, to enable the generation of daily, weekly and monthly reports with meaningful comparisons between the different time periods and markets. The other major problem is the security of data. To protect any cell ranges with formulas from being accidentally over-written, these cell ranges can be locked to prevent unauthorized access. Entire files can also be passworded to prevent unauthorized access. But it is almost impossible to protect the data, which must be routinely manipulated from sheet to sheet or cell range to cell range. It is also difficult to set up automatic checks on the data as it is being entered.
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Box 7, Tips when setting up spreadsheets for market information[28] 1. Keep things very simple Using a relational database management package, such as Access
or dBASE, is probably best for manipulating market information data. Direct
access to data can be more rigidly controlled and data entry routines can be
built in to include error checking features. Reports can also be set up to
extract any subset of data automatically with the minimum of manipulation of the
database by the operator, i.e. any series of commodities, markets, time periods.
Database solutions, however, require a higher initial investment in terms of
time and skilled manpower than does using spreadsheets. |
The media must be relevant to the user of the information. For example, confining information to newspapers is pointless if many farmers are illiterate. It is insufficient just to arrange for radio or television broadcasts or newspaper columns and then sit back and think dissemination is taken care of. Considerable attention needs to be paid to the way in which the data is presented. In newspapers, the layout is very important, and comprehension can be greatly improved with the use of graphics. On the radio, the reading of long, boring lists of prices can rapidly reduce the audience. Radio broadcasts could concentrate on the most important crops and/or on crops where prices have changed significantly. Newspapers can be used to give more comprehensive information. Price broadcasts should be interspersed with some analysis of market conditions and opportunities, as done, for example, by the MIS cited in Boxes 8 and 9. Admittedly, this may lengthen the programme and increase costs. Finally, and perhaps obviously, it is essential that prices are broadcast in languages which people can understand.
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Box 8, Collection and Dissemination by a Local Radio Station in Cambodia In Cambodia in 1996 market price information was collected by a wide range of Government and semi-Government agencies and there was considerable duplication in their activities. However, very little of the information collected was disseminated in any commercially useful way. The most farmer-relevant market information was provided by a private FM radio station in Phnom Penh which sent a reporter every day to one of ten markets in the city. The reporter identified prices of a list of 49 products which he reported live from the market, compared them with prices from the previous day and then interviewed some of the traders about the market conditions. Transmission from the market to the radio station was by mobile phone and the programme was sponsored by a mobile phone company. At that time the station had a range of around 150 km and claimed that a high proportion of farmers listened to the price information. While providing a very valuable service, this initiative
suffered from some problems which indicated that it could be no substitute for a
more formal MIS. Firstly, the coverage of the country was limited; secondly the
opportunity to develop time series of prices was constrained by the fact that
different markets were visited; thirdly, the station found the exercise to be
expensive and not fully covered by sponsorship. Finally, the programme seemed to
result from the individual initiative and enthusiasm of the station manager and
could not be considered to be institutionalised in any way. Nevertheless,
official steps to improve MIS in Cambodia should be able to build on the
pioneering work of this radio station and incorporate it in any new
MIS. |
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Box 9, A Private-Sector Service in Moldova In the former Soviet Union state of Moldova, USAID funded the establishment of a Market Information Service designed to provide Moldovan exporters with information about markets in Moldova and in neighbouring countries. This was done in the form of a contract with two local entrepreneurs who obtained weekly price information and prepared an innovative ten-minute radio programme which highlighted the main arbitrage possibilities and advised exporters of the costs of exploiting those possibilities. It had been hoped that the MIS would succeed in generating
commercial demand for market information or, alternatively, commercial
sponsorship. Unfortunately this had not been achieved by the time the relatively
short-term USAID funding ran out. A sustainable commercial service thus seemed
unlikely, at least in the short run. While exporters were prepared to pay for
information, the amounts they were prepared to pay were inadequate to cover the
cost of the service. |
Market Information Services rarely conduct studies of the impact and acceptability of the information they broadcast but this should be an ongoing exercise. Studies conducted for FAO, as part of our survey of MIS around the world, carried out interviews with farmers and traders. While some MIS were generally found to be well appreciated by the target audiences, others were either rarely listened to or not understood.
Utilization of MIS information by smaller farmers can be enhanced if extension workers are in a position to advise them on how to interpret the prices and seasonal price trends. For example, if the price in the main city is so much, what would be a realistic price close to the farm, after taking account of marketing costs? At a more sophisticated level, extension workers can plot prices over several years and advise farmers when to plant and harvest to take advantage of high-price periods. FAO has, in recent years, developed a set of training materials aimed at extension workers to help them come to grips with marketing matters.[29] Production not related to market requirements has to be avoided and all extension workers require a basic understanding of marketing if they are to provide meaningful advice to growers.
