For any market to succeed it needs to be efficient. Transaction costs in this part of the world in agri markets are very high. It is the information search cost that has caused this. ICT must step in here and reduce the cost of obtaining information; allowing farmers to have more access to information and ultimately enable farmers to participate more actively in market activity.
Many attempts have been made at reducing the info search cost. But the focus of most of these attempts have been on selling. We looked at a strategy of information dissemination.
Consider a farmer who brings produce to the market – His difficulty is figuring out the price. There is no auction per se so he will have to walk around to this out. Prices in this case can differ from one end of the market to the other. We installed a few computers and some people who walked around with PDAs collecting this data. An information board was put up later giving out the price levels of each type of crop. This information is hoped to help him strategize whether he should wait if the prices are on the rise or sell now. To help farmers optimize their income.
The value chain of production and logistics in the case of small scale agri suppliers is linear and disconnected. What we need to look at is connecting it into a circular chain; closing the loop, in essense.
Harsha De Silva, LIRNEasia
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