One vitally important area where I can find very little impact analysis is at the nexus between ICT and distribution costs.   With staple crops in Africa the cost of delivery to urban market is typically in the range of 10 to 20% of the wholesale price.   Nearly half that cost is incurred over the first 25% of the journey. Given the increased issue of keeping food prices down for the urban poor, we need to understand how ICT is impacting on logistic costs. And how through better understanding and/or though specialist applications, ICT can be used to facilitate aggregation, enable more efficient collection routes and the encourage the better utilization of backhauls, as a way of taking out unnecessary transaction costs out of food distribution.   This could be a win: win situation, enabling producer to receive better prices   as well as lowering cost for urban consumers. And yet in the field we are seeing - what IFPRI have described as a ‘quiet revolution’ in agricultural marketing, particularly in Asia.   Powered by cell phones and leveraging the improved rural transport networks we are seeing disintermediation occurring.  Larger scale traders are venturing into the country to buy products directly.   So product instead of cascading through the hands of multiple small traders, it  is being marketed directly, reducing transaction costs.   In both Bangladesh and NE India, we are seeing the emergence of dally primary wholesale markets at some locations which used to be only the sites of weekly consumer markets.  

My own sense is that the development community probably puts too much emphasis on formal market information services, possibly because of a wish to be able to be proactive and to be seen to take direct action.   I believe, at least at present, that the bulk of the benefits are being delivered through informal real time market research that the cell phone enables.    The formal market information services have, in my view, a marginal utility.   They act as a reference point for producers in their negotiations and enable conversation about price to start with a greater degree of confidence.   Ultimately they can only function as background information to multiple individual and specific deals. There is some evidence that the cell phone, again, is a key new conduit for Market Intelligence. This is the information that is used to help better inform diversification strategies into higher value and potentially more profitably enterprises.   Much more knowledge is needed. Specifically around what information are the most important, the preferred medium for communicating market intelligence and stronger evidence of how this longer term market knowledge impacts on diversification and farm profitability. One vitally important area where I can find very little impact analysis is at the nexus between ICT and distribution costs.   With staple crops in Africa the cost of delivery to urban market is typically in the range of 10 to 20% of the wholesale price.   Nearly have that cost is incurred over the first 25% of the journey. Given the increased issue of keeping food prices down for the urban poor, we need to understand how ICT is impacting on logistic costs. And how through better understanding and/or though specialist applications, ICT can be used to facilitate aggregation, enable more efficient collection routes and the encourage the better utilization of backhauls, as a way of taking out unnecessary transaction n costs out of food distribution.   This could be a win: win situation, enabling producer to receive better prices   as well as lowering cost for urban consumers.

In writing the chapter on ICT and agricultural marketing in the source book, we were determined to really focus on results, as to date the sector appeared to be operating on assumption rather than knowledge. We needed to, firstly, better understand whether these technologies were actually delivering the results that their exponents believed, and secondly to provide a sense of what technologies appeared to be the most effective.    As Tim has pointed out earlier,   we did unearth a number of studies which have demonstrated a range of both quantitative and qualitative impact, especially of market information.  My take aways were that the effects were patchy but mainly centered on the use of cell phone for real time market research. In particular, probably the main beneficiaries to date have been traders with cell phones. More recently producers have started to benefit.   But when the level of competition is sufficiently raised, lowering   transaction costs   there is some evidence that the consumer can become the ultimate beneficiary through lower food prices.    The potential positive effect on producer prices is greatest when sales is based on negotiation, but understandably has little impact when the sale is made via public auction.   This explains Fachamp and Minterns' results in India, which showed no effect on prices in a State where the vast majority of produce is sold at public auction, but an 8 to 9% increase in prices when product was sold through negotiation at the farm gate.  There are also strong suggestions that the impact differs across products.   For staple products when the prices is relatively stable and well known, market information probably has little effect.  At the other end of the spectrum with highly perishable products with very rapidly changing prices,  the market price informal systems, whether formal or informal  are not nearly fast and accurately enough to have much effect.   A vivid example were the leaf salad crop traders in Bangladesh who bemoaned that since the advent of the cell phone that price volatility had become further exaggerated because producers would rapidly swap high priced markets with additional supplies, crashing the price.   It does seem that market price information is likely to have a more positive impact on higher priced but less perishable crops, such as onion, potatoes, pulses etc. This is likely to be because improved price transparency coupled with the benefits of a product with an extended shelf life gives producers’ marketing flexibility (e.g. the ability to delay or accelerate sales or shipping to more distant markets).   What we are often seeing on the ground is farmers and producer groups setting up their own market information systems.  IFPRI work in South and South East Asia demonstrated that most farmers with cell phones phoned up multiple traders to establish prices, market opportunities and carry out sales, Farmer groups in as diverse places such as India, Georgia and Ethiopia are paying representatives working in wholesale markets, to phone in price information to better inform their sale strategies and negotiation positions. One of the most intriguing impacts of cell phones reported by farmers was an increase in the level of trust that they held with their traders. Presumably because they now felt that the playing field was flatter and they were far less likely to be duped. It  also seems that the benefits of  using the cell phones were greater with younger farmers, and that it would often take a couple of years for users to really learn how to really use ICT technology as a marketing tool, but that younger people  learned faster