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PART II - INFORMATION AS A VALUED FARM INPUT - A PILOT EXPERIENCE IN SONORA, MEXICO

1. SONORA'S FARMERS STRUGGLING TO COMPETE

The State of Sonora, in the northern part of Mexico, is one of the most agriculturally important areas in the country. It is arid and temperatures can reach 50C in the summer but, as in many desert areas, it can produce excellent crops when irrigation is available. It was here that Norman Borlaug, the winner of the Nobel Peace Prize, and his team first grew the high-yielding varieties of wheat that led to the Green Revolution, but Sonora also produces barley, soya, cotton, chickpeas, safflower, forage, vegetables, grapes, citrus, olives, and so on.

Sonora's farmers are being deeply affected by the substantial changes that have taken place in the last decade. Mexico's own economic crises since the early 1980's and the Government's policy of opening markets and reducing its interventions in the agricultural sector, have exposed farmers to harsh competition.

Unfortunately, that competition is unfair. International market prices are distorted by enormous subsidies that are paid to farmers in the industrialised, food-exporting countries. Thus, produce from those countries can be sold at lower prices on world markets than they could be without the subsidies. Farmers in Mexico, affected by increasing costs of production (e.g. higher costs of irrigation water and imported farm inputs) and, at the same time, suffering reductions in subsidies, are being forced to compete on unequal terms in international and national markets.

Another factor militating against Mexican farmers is the North American Free Trade Agreement (NAFTA). Cereals produced in Canada and the United States of America, under rainfed conditions, are bound to be cheaper than Mexico's, which can only be grown under irrigation. But, despite all these problems, it was estimated that in 1995, 60 percent by value of the agricultural production in Sonora would be exported.

The State of Sonora, with technical support from FAO and finance from the UN Development Programme, conducted a study of its agricultural situation in 1993. Among the main findings were that: yields per hectare of the main crops were stagnant; technology was lagging; irrigation water was being inefficiently used; salinity was increasingly affecting the aquifers; and farms were under-capitalized. All of these factors were causing a slow growth in productivity.

In addition, however, producers were not sufficiently organized, especially for the post-harvest handling and marketing of their crops. Farmers in Sonora were found to be much better at producing crops than at selling them, even if they had managed to open some markets in the United States, especially for fruit and vegetables at certain times of year.

The issue of marketing was of particular concern to both the State and Federal Governments. There was little prospect for reducing production costs, but better marketing could do much to improve farm profitability. As an illustration of marketing costs, it was estimated that farmers were receiving at most 33 percent of the wholesale price in the destination market, with 67 percent going to the middlemen, transport, and so on. Furthermore, the producer would typically only receive from 10-15 percent of what the ultimate consumer in the United States would pay.

In fact, much produce from Sonora is exported to the United States. Especially for high value crops such as fruit and vegetables, farmers have to rely on brokers in that country to market their produce. While the brokers do a good job of finding market outlets, their transactions with the Mexican farmers are less than transparent. The farmers are expected to deliver their fruit or vegetables to the broker on the other side of the border, packed and ready for sale, with no prior agreement on the price to be paid. Since the produce is often highly perishable, and since farmers have no idea of prevailing market prices, they are forced to sell at whatever price the broker dictates.

The FAO study recommended obtaining information about other possible markets, such as Canada and Europe but, in addition, it made the practical proposal of setting up a unit to provide information on the production and marketing of agricultural commodities. It suggested that the emphasis should be on the costs of production and marketing, prices and potential outlets, opportunities for export, and likely returns to the producer.

2. THE TECHNICAL INFORMATION AND COMMUNICATION UNIT

CREATING THE UNIT

As a result of the recommendation of the study just described, the decision was taken to set up a computerised information unit within the Sonora State Government, and more specifically within a programme it was running, known as Modernizacion Agropecuaria de Sonora (MAS) [Agricultural Modernization of Sonora] The information unit would be in the nature of a pilot operation, for possible replication in other parts of the country.

The Rural Communication System was charged with the technical aspects of setting up the information unit in Sonora and supervising its operations, and the necessary computer and modem equipment was installed in late 1993. This was provided under the FAO technical assistance project for communication to support the transfer of irrigation districts to their users. It was installed in the very fine new building of the State Government Administration in Hermosillo.

The Technical Information and Communication Unit (TICU) was set up with four operational objectives in mind:

A detailed survey was conducted with farmers to ascertain their existing sources of information, their opinions of them, their unsatisfied information needs, the form in which they would like to receive information, and their willingness to pay for it. Based on that survey, it was decided to produce a regular bulletin that would be distributed by fax.

The prime recipients would be farmers' associations, who would make the bulletin available to their members. However, individual farmers could also be on the circulation list. A target audience of 200 farmers associations, with about 4000 members, was set for the first year of operation. The pilot phase was planned to run until the end of 1995.

The bulletin would include three principal types of information:

In addition to receiving the bulletin, farmers or their associations could call in with requests for specific information. The TICU would contact appropriate sources and respond as soon as possible.

THE TECHNICAL INFORMATION AND COMMUNICATION UNIT IN ACTION

The TICU was able to set up its working links with a variety of data bases and information sources. Many of these were Mexican. They included, among others: the National Market Information Service (SNIM), Bancomext, (for information on export opportunities), the Comision Nacional del Agua (for details of the state of water reserves in irrigation dams); Pronet of the Agricultural Union of Sonora (for information on horticultural markets in the USA); the Ministry of Agriculture, Livestock and Rural Development (for information from the various states on progress in crop plantings and harvests); the National Meteorological Service; the National Institute for Agricultural and Livestock Research; etc.

Connections were also established with international sources and databases. These included: the US Department of Agriculture's Statistical Service (for monthly and yearly reports on all aspects of US agriculture); DIALOG (for connection to some 450 varied databases worldwide); Reuters (for market and futures information); and FAO's AGROSTAT and State of Food and Agriculture (for historical information on global agricultural production and marketing).

To help access some of these databases, FAO set up a node in its of fice in Mexico City.

The TICU is staffed by three young and dynamic people, two women and a man. The woman in charge is a professional in computer sciences, and her female colleague is a professional in social communication.

Their first bulletin was issued in February 1994. Initially, it was produced daily, but after three months, it was decided to issue it three times a week. This was to reduce distribution costs, but in addition, experience had shown that there was insufficient variation in market prices from one day to the next to justify daily bulletins. By late September 1995, when the authors visited the TICU, a total of 255 bulletins had been issued, and it was being faxed to recipients at 10.00 hours on Mondays, Wednesdays, and Fridays.

The bulletins vary somewhat according to the day of issue. For example, the Monday bulletin, in addition to the price information, has a summary of the previous week's market conditions. Wednesday's bulletin provides information on crop plantings and an article on some technical topic or some economic trend related to agriculture. The latter is often from Reuters or through the FAO network.

There is some frustration among the highly-motivated and enthusiastic staff because one important type of information to which they cannot obtain access, and which would be of great importance to farmers, is the quantity and quality of any given product that is on offer. Of course, this would require an interactive system through which farmers could make known what produce they have ready for the market.

The initial attempts to use the Mexican national meteorological service for the weather forecasts were unsuccessful because the data available were insufficiently detailed and local for Sonora's farmers. The TICU therefore subscribed to the Earth Environment Service of the State of California, USA. This Service, based in San Francisco, wax able to provide detailed forecasts for Sonora, and these were much appreciated by the recipients of the bulletin. In addition, it provided information on weather conditions in Florida, an important issue because that state is in competition with Sonora for horticultural and fruit crops during certain seasons. Weather problems in Florida would influence the same markets in which Sonora was selling.

Sadly, however, budget problems have affected the TICU - like everything else in Mexico - and from April 1995, the US$375 per month needed to pay for this San Francisco-based weather service have been lacking.

By September 1995, the bulletin was being sent free of charge to 63 recipients, well short of the target of 200 farmer associations set for the first year. Of these 63 recipients, 35 were farmer associations or individual farmers, 16 were institutions in the agricultural sector, six were research centres, and six were regional mass-media outlets.

Also by September 1995, the TICU had received 20 requests for specific information. These covered a variety of topics. A particularly original one concerned Psyllium Plantago. The seeds of this plant produce a natural fibre used by the pharmaceutical industry for laxatives. At the time, it was only being grown in India and to a limited extent in Sonora. A farmers' association, on the look-out for alternative crops to help its members who were struggling to make a living from traditional crops, asked the TICU to obtain information about P. Plantago. They wanted to know about the state of production in India and elsewhere and possible markets for the crop.

The TICU obtained the information and contacts were duly made with drug companies in Japan and Germany through the Banco de Comercio Exterior [Bank far Foreign Trade]. At the time of the authors' visit, these had not yet led to purchasing agreements because of price problems, but the P. Plantago issue was still being pursued.

Other requests for information were less exotic but showed concretely some of the needs of farmers in the area. They covered such themes as the use of plastic sheeting in agriculture, cotton futures, prices and potential markets for asparagus, prices for organically produced vegetables, control of insects in stored beans and maize, alternative uses and/or markets for oranges, and water quality and salinity in irrigation.

Of the 20 requests for information, the TICU was able to answer 15 satisfactorily. However, the staff stated that these individual requests for specific information were still very difficult to deal with because the sources they could turn to were still largely unknown to them and limited. Each case called for improvisation.

HOW ARE FARMERS RECEIVING AND USING THE INFORMATION?

The TICU conducted an evaluation of the bulletin with recipients in June 1994. The comments received were almost unanimously favourable. Many recipients commented that it was an important tool and that it was filling a gap. The only mildly negative comments were that the bulletin contained too much information that was not pertinent to a specific user's particular interests: for example, that an association of citrus producers, mainly concerned with marketing, did not need meteorological information. Of course, the contrary might be the case for, say, a cotton producer who might find the weather forecast the most important item of all. It is clearly impossible with a bulletin of this sort to separate and distribute the information in such a way that the interests of each group are met individually.

No further evaluations have been conducted since June 1994, but some interesting impressions emerged from talking at length with representatives of farmers' association and farmers in September 1995.

Firstly, the value given to information as an input in a farming enterprise varies considerably. One association rated the bulletin as being of top importance to its operations, and was actually basing marketing decisions on it. Another gave lip service to the need for market information, but basically continued to market its member's produce as it always had. The representative also said that farmers would not change their cropping patterns or make other decisions because of information in the bulletin.

In the case of the first of these associations, it had noted that wheat futures had been rising quite steadily in 1995. When its members harvested their wheat, the market price was about US$138-140 per ton. Because of the performance of the futures market, which they were following in the bulletin, the association decided to store their wheat and wait for a while. The price continued to rise, so they bought more wheat from another association. After a few months, they sold their own wheat, and the wheat they had purchased, for more than US$170 per ton.

This is in contrast to the second association which sold its members' wheat immediately after harvest, because that was when farmers in Sonora always sell their wheat.

The TICU has also increased the bargaining power of farmers and their associations. One association had malting barley to sell in early 1995, but was being offered the same price for it as in the previous year: Mexican New Pesos 700 per ton. There were two breweries that were potential clients for the barley, but they belonged to the same financial group, therefore the farmers' association could not play one off against the other.

Instead, the association called the TICU and asked it to obtain all the information it could on the market for malting barley in the country at that time. Armed with the information, which indeed showed that the brewery's offer was scandalously low, the association was able to negotiate a price of New Pesos 830 per ton.

Yet another example concerns an individual farmer who receives his copy of the bulletin by messenger. He was an enthusiastic supporter of the bulletin, stating that it provided him with the information he needed to negotiate fair prices. He recounted how he had been following cotton futures as his crop approached picking time. He had also asked the TICU for information about possible cotton buyers in Italy, but in the end he began to negotiate with a local buyer. This buyer offered US$70per bale. The farmer told him he was out of court, and produced the bulletin to reinforce his argument. They settled on US$82 per bale.

COSTS OF THE TECHNICAL INFORMATION AND COMMUNICATION UNIT

Precise costs of establishing and running the TICU in Sonora have not been made available. This is mainly because much of the equipment was transferred there from the Central Communication Unit in Cuernavaca and, since it was not new, it was difficult to cost it. However, it is generally accepted that the equipment, and the staffing and running costs for a year of a TICU-type operation, will total about US$100 000 to 120 000. Costs of similar activities in Chile confirm this figure. Obviously, such a sum could quite easily be recovered from commercial farmers using the system; even in developing countries, a thousand farmers paying US$100 to 120 a year should be an easy target.

PROBLEMS OF THE TECHNICAL INFORMATION AND COMMUNICATION UNIT

Episodes of the sort just described show that the TICU has demonstrated its usefulness in a relatively short time. However, it is still far from reaching enough farmers in Sonora.

In theory, and according to the original plan, the associations that receive it would make known its contents to their members. In reality, this does not generally happen. Some of the associations make a few photocopies and leave them on a table in their offices. This is better than nothing, but farmers do not actually visit their associations very often.

In the poorer farming areas of the hills of Sonora, there are ejidos that produce fruit and vegetables. There are about 7 000 small farmers involved. Price information for their produce, which is included in the bulletin, would be extremely valuable, but the bulletin only reaches the Hermosillo office of the Confederacion Nacional Campesina [The National Confederation of Peasants]. The field offices of the Confederaci6n have no fax machines, so the information cannot be sent to where it is needed.

As already mentioned, the first-year target of 200 recipient organizations is still far from being reached. In part this is because there has been very little attempt to promote the TICU with potential users. Those responsible mention shortage of funds as a reason for not promoting the TICU because, if it became too large, the distribution costs would rise proportionately. But both the evaluation of June 1994, and the contacts the authors had with recipients of the service, indicated that they would be willing to pay a reasonable sum for it. One farmer mentioned the figure of Mexican New Pesos 100 per month (about US$ 16) as being reasonable.

There appear to be other and more pervasive reasons for the lack of promotion of the TICU and its general development. These reasons relate to its institutional context. When it was started, as already mentioned, it was located in the State's programme for modernization of Sonora's agriculture (MAS). However, MAS has disappeared, and the TICU, although physically in the State's Secretariat for Agriculture, has few relations with the rest of the Secretariat. Its staff finds itself somewhat isolated, and various proposals and plans it has put forward - including one for promotion of the TICU - have not received responses. It may be a small point, but the fact that the TICU does not appear in the Secretariat's organizational chart is perhaps indicative of its lack of recognition. One gets the impression that, despite its evident importance and the initiative and motivation of its staff, the TICU does not have the active support within the State Government that would help it to develop its full potential.

Fortunately, new horizons were opening for the TICU in the latter part of 1995; it seemed that a marriage of convenience was in the making between the TICU and a national institution called ASERCA. This stands for Apoyos y Servicios a la Comercializacion Agropecuaria [Support and Services for Agricultural and Livestock Marketing]. It was founded in 1991, as a decentralised institution under the umbrella of SARH, and as part of the Government's programme for modernizing the agricultural sector.

ASERCA appears to be a dynamic organization. Its main objectives are: to provide market information to both producers and buyers; carry out market studies; promote better marketing organization among producers, with the ultimate aim in many cases of forming farmer-owned agricultural trading companies; promote the creation of the basic infrastructure for better marketing; organize credit for agro-industrial initiatives and buyers; and so on. ASERCA confines its activities to support and advisory services; it does not purchase any agricultural produce itself.

ASERCA originally planned to reach farmers with market information and prices through a Teletext system. This allows people with a special TV set which includes a decoder to access various information sources. The system is similar in many ways to Videotel, which is in operation in a number of European countries.

Unfortunately, however, there were major changes in the television industry in Mexico, with the result that the preliminary arrangements to use Teletext collapsed. ASERCA had taken most of the necessary steps to gather the market information that farmers need, but then found itself with no way of delivering it to them.

Obviously, the TICU could provide the missing delivery mechanism, at least in Sonora. Talks in September 1995 led to an agreement that ASERCA would take over the salaries and running costs of the TICU which the FAO technical assistance project had been financing. Thus it would become a joint venture between ASERCA and the State Government of Sonora.

At the same time, plans were agreed to set up a proper organizational structure that will group farmers' associations and other interests under a Asociaci6n Estatal de Usuarios) [State Association of Users]. This structure, with a steering committee which will also include public sector representatives, will control the TICU. Ultimately, according to the plan, the Association of Users will take over its financing.

The farmers' associations will form committees for each of the main crops (e.g. wheat, cotton) and for groups of crops (e.g. fruit, vegetables) which will identify the information needs of their producers and provide the necessary linkages with the TICU.

3. SOME LESSONS FROM THE TECHNICAL INFORMATION AND COMMUNICATION UNIT

The TICU is evidently providing a valuable service, but it seems that several things could have been done to develop it and expand its reach and impact more rapidly. For example, if funds to cover distribution costs were really a limitation to expanding the list of recipients, some of the costs of the TICU could have been recovered from existing recipients of the service by beginning to charge for it some time ago. New subscribers could be given a free trial period. There seems to be little reason for further delay in making clients pay for the service. A first step would be a survey of users' opinions on the subject. The bulletin itself could be used for the survey by including a questionnaire in it. This would be cheaper than actually interviewing users on the subject.

In addition, the bulletin could also be used to obtain evaluative feedback on a regular basis. This feedback would provide the information necessary for improvements.

Although several mass media outlets receive the bulletin, greater efforts could be made in the future to use the media to relay the information into areas where it cannot be sent by fax. For example, in the hill areas, radio is the main mass communication channel to farmers. An arrangement could surely be reached with one or more local radio stations to broadcast information about market prices that was pertinent for the farmers in their area. The general opinion expressed in Hermosillo is that radio stations always expect to be paid for their air time, but in the authors' experience, that is not always so. Many commercial radio stations are happy to be seen providing some sort of social or economic service to their communities, at least for some of the time. This is especially so if the information they are asked to broadcast is well prepared and does not involve them in much studio production time. The bulletin falls into that category.

In promoting the TICU, nothing will breed future success faster than past success. The sort of examples that have been provided here, about farmers getting higher prices for their produce because they have market information, need to be widely publicized in the area. Good press features and TV documentaries about the TICU, with interviews with farmers who have benefited from it, could light a fire of interest among other farmers.

The minor criticism from some users that the bulletin contains information that is not specific to their needs could be overcome if users could download only the information they want from the TICU into their own computers. Several of the farmer's associations were interested in doing so in September 1995, but they imagined that the modem they would need to attach to their computers was going to be very expensive. When they were told what a typical modem costs, they became enthusiastic about the possibility.

The prospects for the TICU in Sonara, and for similar ones in other parts of Mexico seem excellent. Plans drawn up with FAO assistance already exist for a similar unit in the State of Veracruz. An attempt will be made there to have farmers associations more closely involved in financing and running the unit from the beginning. This seems to be the best approach for, in reality, the benefits that can be obtained from such an information system should easily convince farmers that it is worth paying for. In fact, information of all types is an essential input for production but whereas many farmers may sometimes be slow to recognize the importance of technical information, the rapid and visible returns from being able to use market information in their dealings could quickly convince them of its value.

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