The main theme of the presentation was that traceability increases the value of the produce. This makes the product more marketable. Farmers dealing with the EU market have to deal with increasingly more stringent levels but this has also allowed those engaged in the traceability process to use it as a tool to market their produce.

Are their other users to the farmer?

• Elimination of the middle man and hence a rise in profit margins
• A degree of knowledge flow of the technical aspects of traceability
• Ability to market the product as a differentiated good.

Is there a net benefit? what are the cost? who pays for traceability? is it a purely private good?

• Is it a public good? it can be used to avoid national catastrophic national implications of the meeting safety standards. However, is this not also possible with branding?

Studies show that there have been a number of lost opportunities. sometimes people tend to fall out of the traceability process.

Is this because the incentive structure present is not strong enough?

Also the issues surrounded by payment delays and the problem with dealing with the ‘unbankable’ farmers. Dealing with cash has proven to be unsatisfactory as well.

However, the importance of agriculture seems to be dropping with sectors such as telecom taking the lead.

But even within agriculture the traditional crops are contributing a falling percentage to GDP. Most of the other crops such as spices, vegetables, and fruits seems to have a growth potential, out of which Gherkins seems to be the ‘hot’ favorite . However, these can be propelled by adopting traceability.

What is the vision for agriculture?

To transfer from subsistence agriculture to a commercially oriented and develop a highly productive sector. This would include traceability as well. It hopes to:

• Improve competitiveness
• Facilitate marketing related infarstructure
• Improve exports by five-fold.

Whats are the main issues? Need economies of scale. But also shows that the middle man is needed to facilitate the process. Often the middle-man is who manages the entire process, without whom the structure will fall.

Current status in SL

We dnt have any national standards. The only standards that are present are in place are those set by private parties.

Also the information seems to be running in one direction, which is from the farmer to the exporter. Traceability can help rectify this…. as traceability with ICT can be a dynamic bi-directional information sharing system.

How does the farmer benefit?

Can build an incentive structure that is based on information flows from the exporter to the farmer as well.

Rohan Samarajiva argued that ICT and traceability has to be seen as an end to a mean. The better information flows will result in better quality which will transfer into higher prices. This would be the most effective incentive. The farmer can also reduce can reduce the wastage premium. However, this is not possible for all produce as it is based on reactive time to intervention and mutual trust (level of enforceability of contract).

It also allows for branding. This is caused by high quality and traceable product, reputation, communication, need a traceability system for small-holder farmers. However, this process requires a need for a traceability system.

Helani Galpaya noted saying that having an independant certifier will solve a number of the problems with the existing traceability structure.

The next presentation was on transaction costs

Information is crucial for the efficient functioning of markets. This is the argument under the parento efficiency. Therefore it can be deduced that information is costly and markets are not always efficient.

How can ICT’s be used to reduce information costs? which will increase the efficiencies of the the markets and thereby increase welfare.