AGRO MARKET INFORMATION AND FARMERS MARKET LINKAGE:

WAY FORWARD
K.C.Siva balan, Jayalakshmi Umadikar, Suma Prashant, U.Sangeetha,
Archana.K. Prasad
IITMs Rural Technology and Business Incubator ( RTBI), Chennai, India
Introduction
In India, 70 percent of the population resides in rural areas and around 56 percent of
work force is engaging in agriculture and allied sector (Census of India, 2011).
Though farmers are adopting the latest crop production technologies to bring out
best yield levels, the profitability is decided by the market forces only. Many earlier
studies (Aparajita Goyal, 2013; Jensen 2010; Ferris, 2004; RATES Center, 2003)
documented that farmers rarely sell directly to consumers and there are significant
price variations in the village markets. This information asymmtricity will foster
opportunistic behavior of other market actors which in turn traps farmers in vicious
cycle of poverty .Since farmers seldom sell their output on the main district markets,
the sellers generally have less or little information about current prices while buyers
are often well-informed, at least about the price in the district market where they are
active (RATES Center, 2003). For farmers to take timely selling decisions and also
supply the commodities at markets where they could get better prices, the right kind
of market information has to reach them in time. Pierre Courtois and Julie Subervie
(2014) estimated that due to the mobile-based Market Information Services (MIS)
program, farmers received significantly higher prices for maize and groundnuts to
the tune of about 10 percent 7 percent for maize and groundnut respectively.
IITMs RTBI along with IIT Madras, have successfully developed a system
mobile based advisory system for Krishi, hereafter referred to as mASK- which has
been functioning to serve a small group of farmers by providing then with
personalized agricultural advisories, through a call center approach. This
Agricultural Advisory System leverages the power of two-way communication over
mobile phones and helps bridge the information gaps existing between farmers and
experts. An integral feature of the system forms the farmers dashboard that hosts a

Electronic copy available at: http://ssrn.com/abstract=2618963

complete farmer and farm profile along with the crop history and advisories
provided from time to time. This enables tracking the stages of the crop and the time
of harvest. During a recent survey conducted with farmers registered into the
system, it is observed that a large number of farmers were interested in receiving
market and commodity price related information.
In this context a research study was carried out to understand the information
seeking behavior, market advisory preference of farmers and suitable approaches for
enhancing the farm profitability. More importantly, recommendations have been
made which can be utilized by the system such as mASK very effectively to provide
market information at the right time to registered farmers.
Methodology
The study was conducted in the Trichy district of Tamil Nadu state. Out of 9
taluks of Trichy District, three taluks namely Manachanallur, Lalkudi and
Srirangam were selected based on the Crop coverage area and Cropping pattern
(Fig.1). From the fourteen blocks, Manachanallur, Lalkudi and Manigandam blocks
were randomly selected. Two villages are randomly selected from each block
namely Edumalai, Kiliyanallur, Anbil, Nagar, Thayanoor and Manigandam (6
villages/ 3 blocks/ 10 respondents from each village). The socio economic
variables viz. Age, Education status, Farm size,

farming experience, Annual

income, Social participation, Innovativeness, Information seeking behavior,

Preference of Advisory, awareness on e- media tools, Mode of preference of
Advisory services, Preference of market advisory services, Willingness to Pay
behavior were measured by using appropriate scales and scoring techniques. The
constraints faced by the users and suggestions to overcome the hurdles were also
discussed and documented after in depth interviews and Focused group discussions (
FGD) conducted among the crop growers of Trichy district.
Data were collected through a well- structured and pre-tested interview
schedule. The statistical tools of cumulative frequency, arithmetic mean, percentage
analysis, simple correlation, were used to analyze the collected data by using with
STRATA software and SPSS 16.0 software packages thereby meaningfully
interpreted and relevant conclusions were drawn.

Electronic copy available at: http://ssrn.com/abstract=2618963

Fig. 1 Map Showing the Study Area Tiruchirappalli District of Tamil Nadu,
India

Results and Discussion

Agro Market Information seeking behavior of farmers
The agricultural information plays a pivotal role in accelerating agricultural
productivity, farm profitability and in turn leads to up scaling of rural livelihoods.
The communication sources which farmers use varies from Agricultural extension
officers to neighbors and relatives. The farmers are using print media such as News
papers and Journals to electronic media such as Television and Radio. The
reliability, reachability of every communication source is unique and has its own
advantages and disadvantages. The National Sample Survey Organization (NSSO)
has documented that at the all-India level, only 40% of farmer households have
access to one or more sources of information (NSS, 2005). The NSSO found that of
the sixteen different sources for accessing information on modern technology for
farming about 16.7% of the farmers got their information on a daily basis from other
progressive farmers in their villages.
Table.1 Distribution of respondents based on their market information seeking
behavior
Figures rounded off / Multiple answers
n=60
S.NO

Particulars

Market Information seeking behavior

Regularly

1.

Private farm consultant

2.

TNAU Scientists

3.

Agricultural Department
officials

occasionally

Never

No

no

no

18

30

15

25

27

45

15

51

85

27

45

15

25

18

30

4.

Agro input dealers

48

80

13

5.

Neighbors / relatives

15

25

42

26

43

Pluralistic Approach for Information sharing

In the present study, from the analysis (Table.1) it is found that the major
sources of market information for farmers are agro input dealers (80 percent).
Nearly 15 percent of farmers obtained their information from neighbors and
relatives regularly. Agricultural department officials contribute to about 45 percent
in providing the market information on regular basis. Farmers also gain market
information from private farm consultants like executives from input manufacturing
companies (30 percent). The farmers who seek market information occasionally
from TNAU scientists were 15 percent only. The findings warrant the pluralistic
activities of all stakeholders in transfer of Agro market information and in line with
findings of Saravanapriya (2005). The authors opine that along with the public
extension functionaries, the para- extension workers such as input dealers, private
farm consultant should also be involved in disseminating price information to the
needy farmers. For this every village could have a Farmers Discussion Group
(FDG) comprising farmers, rural women, input dealer, village youth and
progressive farmers headed by appointed/elected conveners. It has been observed
that encouraging trained individuals would help in creating a competitive
environment for agricultural information sharing (Global Agri System 2008).
The mASK used by RTBI, enables two way communications where farmers
can clarify their doubts and the call operator can receive the feedback and mentor
the clientele in timely manner. During the initial period of the program, awareness
on the advisory services should be created among the farming community. Along

with awareness creation, field level follow up activities viz., -conduction of

community meetings, advertisement via mass media should be carried out in the
villages along with the enrollment of subscribers, From the study it was inferred that
local channels of communication (channels within the social system) like local rural
youth and input dealers are preferred by more than one third of the respondents (38
percent, 37 percent respectively). The formal official communication like that with
extension officers was less (10 percent) since the clientele might feel that the
extension officers are from outside the social system (Fig.2). The finding was in line
with Prabha (2014) whose study documented that none of the beneficiaries (100
percent) opted for State Department of Agriculture as an alternate source for evelanmai extension Services by Tamil Nadu Agricultural University. Hence local
conveners should be involved in mass awareness campaign and up scaling of the
program.

Fig. 2 Alternate extension personnel under Call centre based Agro market
advisories
n=60

Kind of Mobile Advisories

More than half of the respondents (56 percent) preferred Text based market
information services (Fig. 5). The respondents felt that they can store and share the
text message with the fellow farmers. They can re-use the messages later when need
arises. But the respondents insisted that the messages should be delivered in local
languages only. On the other hand nearly half of the respondents (44 percent)

preferred voice based message services. They felt that there was difficulty in reading
the message since the mobile handsets has small screens only. Instead, listening to
voice messages would be very much easier even for illiterate farmers. Since RTBI
mASK is functioning as a help line service (call centre mode), the farmers can
clarify their doubts in crop production at the same time the message delivered will
be reinforced to the farmers in timely manner.
Table.2 Mode of preference of e-Market information services
n=60
S. No

e-market information services

Preference
(in percentage)

1.

Call centre

38

2.

Mobile devices

50

3.

Conventional

(Extension

12

functionaries )

Preference of market advisories

An insight from the table 3 revealed that vast majority (92 percent) of the
respondents opted for Buyer and Seller details which will be very much useful to
spot out and facilitate the buying and selling points nearby. The middle men
interference will be considerably reduced by direct selling of commodities. The
profit margin can also be increased if no middle men commission charges were
incurred. Majority (58 percent) of the respondents preferred market intelligence
news. The daily price and forecasting, market trends may help the farmers in
decision making and selecting the markets. The export market details were quoted
as preference by nearly two-fifth of respondents (47 percent) which showed that the
farmers are looking for avenues for more profit and new market places. Nearly onethird (30 percent) showed preference for Government subsidy schemes so that
eligible beneficiaries could apply for the appropriate schemes.

Table. 3 Preference of market advisories

S.No

Kind of Market Advisories

n=60
Preference in
percentage

1.

Market Intelligence news

58

2.

Buyer and Seller contact details

92

3.

Export market details

47

4.

Government subsidy details

30

Willingness To Pay (WTP) for the Advisories

The sustainability of any project depends on the revenue collection as well as
number of beneficiaries subscribed for the services. The vast majority of the
respondents (90 percent) showed interest in paying for the market advisories if
delivered in timely and site specific manner. A little more than one-third (38
percent) opted for INR 200 as annual subscription charges followed by 38 percent of
the respondents preferred to pay more than INR 200 and up to INR 400 per annum.
Only 10 percent of the respondents expressed their non-willingness to pay for
advisories (Fig.3). Public sector extension services have always been free for the
farmers, which may have created a particular mindset among the beneficiary
respondents.
Fig. 3 Willingness To Pay (WTP) for the Advisories
n=60

The five characteristics of the beneficiary respondents viz., age, experience, land
holding pattern, income and innovativeness showed significant relationship with the
dependent variable Willingness to Pay, while education was negatively correlated.
The correlation value of age was significant at 0.01 per cent level. It can be
concluded that regardless of the age of the respondents, they were willingness to pay

for the advisory services. The variables viz., experience, land holding pattern,
income and innovativeness showed significant relationship at 0.05 per cent level. It
can be inferred that higher the farm experience, land ownership, income and
innovativeness level, higher will be the willingness to pay behavior. The factors like
higher land holding ownership and high income level might make it affordable for
those farmers to opt for pay user market advisory services.

Need for Backward and Forward Linkage

For sustaining farm profitability, it is important to develop the farmers access to
backward (seed, fertilizer, pesticide and other inputs) and forward (trading,
wholesaling, export) markets for improving their profitability. This can be done in
any of the following ways:

e-Media Tools
(i)

Market Information Portal

Market information portal could be a one stop shop for providing
market information (price, demand and supply situation), contact
name and address of service providers and other value chain actors.
The portal could also assist in providing critical current issues
affecting production and sales of commodities such as farming
practices, pest infestation and measures to take, etc. (Policy
Framework for Agricultural Extension, MOA, Government of India,
2001). The portal can seek advertisement from the various commercial
service providers and value chain actors and can become sustainable.
The personalized-site specific, relevant and time bound Agro
information will reach the end clientele and makes the innovation and
diffusion process easier. Agro market Advisory services can leverage
the forward and backward linkages of farmers with markets and
conglomeration of stakeholders is possible. The timely market
information helps to create awareness the about market prices,
facilitates trade and in the time market glut situation to plan for
commodities storage decisions. The positive impact of Reuters Market

Light (RML) mobile services in Maharashtra, India was documented

by Fafchamps and Minten (2011). In 2014 Siva balan et al., studied
the forward linkage of Tomato growers and concluded that the
widespread use of ICT tools among the agricultural clusters would
bring out not only horizontal integration of vegetable growers but also
vertical integration of all the members of the supply chain leading to
better the prospects of farm profitability. The awareness creation on
newer advisory services and technology is imperative. The farmers
should be completely clear of the nature and objectives of the services
before subscription of any market advisory services. The training need
of the farmers should be identified and necessary capacity
strengthening programme should

be initiated (Khurana, and

Satvindarkaur, 1996).

(ii) Mobile based Market Advisories

With increasing mobile ownership of 951.37 million, Mobile
technology has many more advantages such as personalized
information sharing, instant delivery of message, mobility of devices
and cheaper cost for deployment than any other ICT devices such as
computers, Internet etc., The people in rural areas can connect with the
local, regional and national knowledge centres via mobile telephony
and are able to receive farm based services, access markets and avail
banking/ financial services without any hindrance to their regular farm
activities. Mobile technology ensures delivery of timely information
that helps understand and analyze market prices, facilitates trade and
helps farmer make informed business decisions; reduces transaction
time, travel, and costs by bridging distances and allowing for a more
effective use of time; strengthens communications which promote
social networks and communities progress in health, safety,
employment, recreation, and other areas; and finally increases levels
of community participation, facilitating an informed decision making

process, particularly encouraging greater participation from rural

women. The crop grown, distance of market, price volatility and
volume of trade in the market, commodity to be marketed, socioeconomic characteristics of farmers are playing a role in the intensity
of mobile technology impact on the livelihood of farmers (Muto,
Megumi and T. Yamano (2008).

Aker and Fafchamps (2010)

estimated the impact of the use of mobile phones on farm-gate

agricultural price dispersion in Niger. The mobile telephony usage
reduced producer price dispersion for cowpeas by 6%, and the effect
was still stronger in remote markets and markets that do not have
pukka roads access. The better communication with social networks
helps in times of shock and reduces risk to households. (Aker and
Mbiti, 2010). Jensen (2007) stated that the introduction of mobile
phones decreased price dispersion and wastage by facilitating the
spread of information for fishermen in Kerala state, India. Abraham
(2007) found that the widespread use of mobile phones among Kerala
fishermen increased the efficiency of markets. Fishermen who can
afford to get timely price information were able to decide on the best
markets to sell their daily fish catch. Mittal and Tripathi, (2010) noted
that the potential benefits of the market and technology information
transfer have been obtained mainly by large farmers in the various
states of India.

Power of Aggregation - Crop clusters

The trend of mono cropping has always shown the probability of
higher returns and heavy losses. For example in Trichy district, paddy
and Sesamum are twin crops for every season and leads to either
market glut or price jackpots. For an individual, it is hard to find new
markets and new buyers. At this juncture, the Crop clusters can also
play an active role in sharing and exchanging critical backward and
forward linkage information in collaboration with the various value

chain actors and service providers (Mc Cluskey and Desmond

O,Pourke., 2001).They can hold workshops or discussion meetings
with these actors on weekly basis to update information and
knowledge. The latest and updated local, state and national level
market information could be made available to producers by Market
Committees and Marketing Boards through large display boards for
developing marketing intelligence among farmers. Village level
procurement centers could be established in potential areas. Farmers
could be encouraged to form their own marketing co-operative
societies in order to reap the benefit of economies of scale (low
handling cost, transportation cost and storage cost). By this both
farmers and consumers will be benefited. With Crop clusters
becoming active, post-harvest losses could also be avoided with more
importance being given to agro-processing opportunities for rural
youth. As the value chain management moves up to agro-processing
sector, the durability option of sale of produce also improves giving a
fillip to market efficiency. Moreover when value addition prospects
get realized, the marketing efficiency possibility improves as well.
The possibility of marketing contracts not only improves the price
spread to the advantage of the farmers but also increases the chances
of rise in farmers share itself. The formation of Farmer Based
Organisations and farmer groups is often encouraged to reach the
farmers (Swanson 2008).
Creating of Markets for Producers (M4P)
Access to information is no more farfetched when ICT enabled
information services are dominating the market, resulting in the
infrastructural betterment starting from the first level markets or
village markets. The digital inclusion has made the buying and selling
process more comfortable and easy with just a mouses click. The
trend of purchase on source specific commodities valued by
consumers such as certified products (Eg. Brown rice, Black rice etc.,)
is increasing. The Digital commerce market stood at Rs 8,146 crores

in December 2007 and Rs 47,349 crores by the end of 2012. By

December 2013, digital commerce in India grew to Rs 62,967 crores
(Internet and Mobile Association of India (IAMAI) report May 2014).
Instead of searching for new markets, we can create markets for
producers (M4P). The paddy growers could be trained for new paddy
varieties, special varieties suitable for diabetics, children and pregnant
women that could fetch higher price in the markets satisfying selective
group of consumers. For the forward linkage of farmers with markets,
Knowledge and Commerce Station model would be an appropriate
approach. In this model, personalised extension services like buyer
and seller details, price intelligence, place intelligence, product
intelligence and market information could be delivered in local
languages via text and audio mode. The registered users will be
grouped as the producer clusters and can access Online Trade Platform
(OTP) for buying and selling of Traditional Dhanyas viz., black rice,
Minor millets, herbals and organic fruits and vegetables. The franchise
retail unit in producer cluster areas enable small holders and rural
women to step up in the agro value chain by getting involved in value
addition, selling to buyers, taking up export orders and getting high
farm gate prices.
Conventional paddy varieties for special consumer sectors
Diabetic patients opt for various diet modes skipping rice diets to
control their diabetes. Many of us are not aware about Karun
Kuruvai paddy which can control and keep diabetic patients out of
danger. The variety Karun Kuruvai also called as Karuvatchi, Panai
marathu samba. Based on the Laboratory studies on physio- chemical
properties and nutrient analysis and assessment of taste and Glycemic
Index ( CIKS in collaboration with Ethiraj College for Women,
Chennai), the varieties like Karungkuruvai and Neelam samba are
rich in iron and calcium where as protein content is rich in the varities
like Perungar, Karungkuruvai and Kullakar and very low glycemic

index of 50 55 is estimated in Karungkuruvai, Kullakar, Kouni and

Kalanamak varieties (CIKS quarterly Newsletter, October 2014 Vol.
15 No. 4. www.ciks.org ). These varieties require less water and
drought tolerance characteristics makes these varieties more suitable
for delta areas. The average price of 60 Kgs of karuvatchi paddy is
from Rs.1800 Rs. 2000, which is a high return for the paddy growers
(Dinamalar daily dated 19th Jan, 2014). Thus identification of
indigenous commodities and awareness creation on cultivation aspects
can increase the profit margin.
Future thrust and recommendation
.

Having enquired among the farmers registered with the mASK on what could

be the reasons farmers do not call to seek information when they had certainly
mentioned their requirement for market information earlier during surveys and need
assessments, farmers stated that they get to know the market information from the
middle men, who would also buy their produce on farm. It is felt that immediate
need for money and ease of selling their produce at farm gate restricts farmers to
enquire further for better price margins. The authors feel that, however ensuring the
quality of information and reliability of the source of information could prove
dependable for farmers registered under any system. The service delivery of the
message is as important as that of the content. The timely information is more
valuable in decision making process. The mobile advisories along with in-person
interaction which farmers can have with the mASK expert will help reinforce the
message delivery to farmers. There is a potential for the integration of farmer dash
board with buyer and seller online platform which could prove more useful than the
individual interventions. Farm profitability can be increased only when the farmers
are linked directly with the right market information.
The market led extension approach with suitable ICT interventions will help the
farmers in reaping better returns in a sustainable manner. With the potential
directions laid out for facilitating relay of market information to farmers as well as
connecting farmers directly with sellers, RTBI will look to enabling the most
appropriate features in the mASK system in the days to come.

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