Download Market Information (Data) Collection - Punjab Institute of Agriculture

Market information can be regarded as a
commodity the prices go so down that
public good, particularly where there are
farmers can not cover its cost of production.
numerous small farmers who are unable to
The next year, keeping in view the previous
pay for information. The availability of
bad experience farmer left the production
timely and accurate information to all
of that commodity. Demand remains the
interested parties is therefore essential,
same but due to less production the supply
whether it be provided by the government
will be limited which results in high prices.
itself or by the private sector. Countries in
Less supply and high prices create problems
which the private sector has always played
for the consumers.
a thriving role in agricultural marketing are
Market information is a basic tool to inform
increasingly coming to recognize the need
the farmers about current and previous
for a greater measure of official assistance
trends of prices of agricultural commodities
in areas such as legislation, infrastructure
which will help to break this vicious circle of
provision, marketing extension and Market
production.
Information Services.
Vicious Circle of Prices
Role of Market Information
Efficient market information provision can
be shown to have positive benefits for
farmers, traders and policymakers. For
example;
Up-to-date or current market information
enables farmers to negotiate with traders
from a position of greater strength.
It also facilitates spatial distribution of
products from rural areas to towns and
between markets.
Well-analyzed
historical
market
Pakistani farmer is tied up in a vicious circle
information enables farmers to make
of prices and production. Whenever there is
planting decisions, including those related
a high production of any agricultural
to new crops.
It also permits traders to make better
more in line with market demand, schedule
decisions regarding the viability of intra,
their harvests at the most profitable times
and inter-seasonal storage.
decide to which markets they should send
Information
of
this
type
assists
their produce and negotiate on a more even
agricultural planners and researchers.
footing with traders. Improved information
Important contribution to early warning of
should enable traders to move produce
impending food security problems.
profitably from a surplus to a deficit market
While a large number of countries do
and to make decisions about the viability of
operate some type of market information
carrying out storage, where technically
service, the vast majority of services cannot
possible.
be considered to provide commercially
Definition: Market information service may
useful information for farmers and traders.
be defined as follows:
A large percentage of market information
“A service, usually operated by the
service is primarily data-gathering exercises,
public sector, which involves the collection
and even this is done inadequately. Market
on a regular basis of information on prices
information service suffers because they are
and, in some cases, quantities of widely
frequently operated by government officials
traded agricultural products from rural
who lack a commercial approach. More
assembly markets, wholesale and retail
importantly, the majority face significant
markets, as appropriate, and dissemination
resource constraints. The emphasis here is
of this information on a timely and regular
on market information for both grain and
basis through various media to farmers,
fruit and vegetable markets.
traders, government officials, policymakers
Market Information Service
and others, including consumers.”
A Market Information Service is seen as
The establishment of Market Information
providing:
Services (MIS) is being advocated as a
Transparency: Full awareness of all parties
means of increasing the efficiency of
of prevailing market prices and other
marketing systems and promoting improved
relevant information.
price formation.
Improved information
Arbitrage: The act of buying at a lower price
enables farmers to plan their production
and selling at a higher price. In theory, when
a marketing system functions efficiently
reducing risks. Farmers with timely and
prices at different markets are influenced by
reliable information and the ability to
arbitrage activities of traders.
interpret it can decide to which market
they should send their produce to
maximize returns or, indeed, whether to
send their produce to market at all.
IV.
Lack of information is an entry barrier
to both production and trade. Where
farmers have had access to information,
shifts in cropping patterns to higher value
produce have been noted. In the area of
trade, individuals find it difficult to begin
trading without information, so reducing
competition within markets.
V.
Market information can be particularly
valuable where countries are changing
over from a state-controlled marketing
system to one of private enterprise, in
that farmers and small traders are made
more aware of market opportunities.
Market Information Services can
VI.
marketing, particularly improved spatial
have the Following Impacts
I.
II.
distribution, market information should
They can facilitate efficient allocation
be beneficial for consumers as well as
of productive resources to improve the
farmers and traders. Information on retail
productivity of agricultural farms.
prices
The bargaining position of farmers with
Information reduces transaction costs
(i.e. the costs of selling the produce) by
may
circumstances,
traders can be improved.
III.
By contributing to more efficient
also,
under
certain
assist
consumers
to
bargain.
VII.
The
essence
of
a
good
Market
Information Service is that it should
provide commercially useful information
information
on a timely basis. Information produced
conditions
by an MIS is, however, also useful to
accessible to all.
policy makers. This should, in the long run,
improve
policy
formulation
as
b) Markets
must
be
should
on
market
available
supply
and
food
the
corresponding to consumer preferences.
functioning of markets comes to be better
c) Prices that consumers are willing to pay
understood.
VIII.
a) Correct
Market
for different commodities and grades
information
is
also
an
should be transferred to the producers
important component of Early Warning
in order to encourage production of
systems for food security as it can assist in
those
identifying areas of possible shortage and
demand.
can highlight whether prices are above or
below normal seasonal trends.
decision-making
which
are
in
d) Price differences over time and between
market locations should correspond to
the
Role of Markets
Correct
commodities
marketing
(transaction)
costs
incurred, notably those for storage and
and
planning
transport.
depend on reliable information on variable
Prices are the result of the functioning of
market conditions, which are expressed by
the market and are determined by supply
changing prices.
and demand which, in turn, is influenced by
costs of production, the costs of marketing
and by consumer preferences, among other
things. Prices act as signals for the allocation
of productive resources in the agricultural
sector by the farmers.
Types of Market Information
Information of use to those in the marketing
Preconditions for a market economy are
that:
system and to others is basically of two
type’s
current
market
information
&
historical market information as discussed
of the marketing channel. For example,
below:
some farmers have the option of:
A. Current Market Information
However, a maximum value added for the
Access to timely information on prices and
quantities plays a crucial role in reducing
the risk of losing money on a market
transaction.
High
risks
lead
to
high
marketing costs, as high margins are
necessary to compensate for possible
losses. In the extreme case, farmers with
information can decide whether or not to
harvest, so avoiding sending produce to
farmer is not always an optimal solution.
This depends on the costs (e.g. transport,
risk bearing and time) involved when the
farmer decides to sell in a market segment
closer to the final consumer. Availability of
information
on
market
conditions
at
different locations or different points in the
marketing chain is necessary for choosing
where to market?
market in times of glut only to discover that
the price received does not cover harvest,
Market Information and Market
packaging
Competition
and
transport
costs.
It
is
important that the farmer should be able to
sell his or her produce at a convenient stage
In agricultural marketing transactions the
party with more knowledge usually, but not
always, sets the initial price. The other party
precise information can be obtained, it
then decides whether to accept or reject
might be too costly to obtain. This implies
the
limited
that those involved in marketing will always
competition exists, there will be little
have to take decisions based on varying
pressure to set the offered price close to
degrees of imperfect information.
offered
price.
If
only
the actual costs. Competition, however, can
increase the weaker party’s knowledge of
market
conditions
and
trigger
an
Current Market Information and
Spatial Arbitrage by Traders
adjustment in the price, either by direct
Market performance is related to the
negotiation or by the patronizing of
functioning of arbitrage. Spatial arbitrage
alternative dealers. In such a framework of
should equalize supply and demand at
price formation, market knowledge implies
different
market power. One of the main steps
differences are reduced to the level of
governments can take to improve the
transport costs. The higher the level of
fairness of market price formation is thus to
transaction costs between markets, the
ensure that timely and accurate information
smaller the probability that exchange will
about actual market conditions is available
take place between them.
to all.
Spatial Arbitrage between Rural & Urban
market
places
until
price
Areas
Causes of Imperfect Market
When risk or the cost of identifying market
Information
outlets is reduced because of the availability
Accurate and timely information should
of market information, transaction costs will
reduce the costs of food marketing.
go down. Lower transaction costs thus
However, information cannot be perfect:
influence quantities and prices in the
Firstly, prices move too rapidly for available
market. For example, when transaction
information to serve as more than a guide
costs go down, supply to urban areas will
to likely returns.
increase and prices decrease. In rural areas,
improving
prices and quantities traded will also tend
information have to be offset by the
to increase. Urban consumers and rural
additional benefits.
producers will thus benefit from reduced
Secondly,
the
costs
Even
of
when
more
transaction costs, while rural consumers will
information is generally seen as being one
experience higher prices.
of the main reasons, apart from transport
Spatial Arbitrage between Two Markets
costs, for high transaction costs.
The above considers the case when
When no formal Market Information Service
information promotes the flow of produce
exists, information has to be collected by
from rural to urban areas. Availability of
the traders themselves. This is especially
market information will also encourage
costly for small traders. In many cases,
spatial arbitrage between two markets,
information is gathered through personal
especially in cases where information and
networks based on mutual trust and by
transport costs are relatively low. When
personal visits to markets. Due to the time
price differences between the two are
involved, the information received is often
larger than the transaction costs, trade
dated.
relations will be developed if there are no
Large traders, on the other hand, do have
controls to inhibit exchange. The level of
access to telecommunications and have a
transaction costs thus influences trade
scale advantage in that they can spread the
flows and prices in the markets. When
costs of information over much larger
transaction
quantities of produce.
consequence,
costs
for
go
down,
example,
as
of
a
the
availability of price information, efficiency
Current Market Information and
Farmers
gains are achieved.
Farmers often have limited outlets for their
Reasons of High Marketing Margins
produce and are often bound by traditional
Marketing margins are relatively high in
trading relationships, which may include an
developing countries. There can be many
element of credit provision by the trader.
reasons for this. For example, marketing by
Opportunities for most farmers to take
a large number of small traders will be
advantage of spatial arbitrage possibilities
economically less efficient than trading
are therefore restricted. Such opportunities
carried out by a limited number of large
are further hindered by the small quantities
traders, although it may offer other, more
produced
social,
information availability is more valuable for
benefits.
However,
lack
of
by
most.
Current
market
small farmers than the larger ones. Big
farmers with highly developed and modern
agricultural farms have more access to
market information.
At the simplest level, the availability of
market information can enable farmers to:
I. Check on the prices they receive, vis-à-vis
the prevailing market prices
II. If farmers receive prices lower than those
Value of Current Market Information
broadcast they may conclude that they
for Farmers
should seek out other traders in future
While there may be few spatial arbitrage
III. Negotiate more forcefully with traders and
opportunities for small farmers, it cannot be
to use the broadcast prices as a starting
concluded that market information is of
point in negotiations with traders
little value to them. Indeed, while the
opportunities for arbitrage may provide
IV. Try to improve the quality & presentation of
their produce
much of the theoretical justification for the
V. Information on market conditions may
provision of market information, the reality
change farmers’ marketing strategies
is that traders often already have accurate
VI. While, individually, farmers may be unable
and widespread information networks and
to take advantage of spatial arbitrage
the introduction of an official Market
possibilities, collectively they may be able
Information Service may add little to
to organize transport to more distant and
arbitrage
the
profitable markets. Group marketing by
practical benefits to farmers are often
farmers is not, of course, without its
much greater than the arbitrage possibilities
problems
for traders which can result from Market
attractions has not been widely taken up
Information Service.
in practice. Improved availability of
possibilities.
However,
and
while
offering
some
information may, however, encourage
used for production planning, storage
more group marketing initiatives.
decisions, government planning and early
warning. For the sake of simplicity this is
Current Market Information and
referred
Small Traders
to
as
Historical
Market
Information.
In practice there are likely to be few actual
situations where the introduction of a
Historical Market Information and
Market Information Service will open up
Temporal Arbitrage
completely
arbitrage
Storage costs, such as labor, maintenance,
possibilities. While there may be cases
chemicals, depreciation of storage facilities
where no trade presently exists between
and costs of invested capital, can be
two points and such trade can be promoted
considerable. However, price changes over
by market information, the likelihood is that
time depend not so much on storage costs
a Market Information Service will bring new
as on how much of a product is stored for
entrants into existing trading areas rather
subsequent release onto the market and on
than open up new markets. Thus, when the
seasonal production levels.
new
spatial
market is imperfect, market information
 The highest prices during a year do not
may encourage market entry and make the
necessarily correspond with the end of
market
the lean season, as prices in other regions
more
competitive
and
more
efficient. Current market information can be
or
expected to be of greatest value to
conditions.
relatively small traders. Current market
information
helps
small
traders
countries
also
influence
market
 Variable climatic conditions between
regions
to
and
between
neighboring
understand the recent trends and changes
countries can complicate the picture by
in
opening up opportunities for spatial
the
prices
of
specific
agricultural
arbitrage, thus making storage a risky
commodity.
activity.
B. Historical Market Information
It
The use of information which is compiled
concerning spatial price differences, stock
overtime, often several years, and can be
supply conditions and forecasts of the
is
here
that
market
information
coming harvests can play an important role.
beyond subsistence production. Shifts in
But even at the simplest level of market
cropping
information, i.e. prices, knowledge of past
produce have also been noted, especially
price trends can enable traders to form an
in vegetable production.
opinion about the likely viability of storage
and its associated risks.
patterns
to
higher
value
Historical Market Information and
Policymakers
Historical Market Information and
Traders in developing countries are often
Farmers
accused by policymakers of exploitative
Market information can facilitate optimal
behavior because large differences between
decision-making
market
farm-gate and retail prices are observed. It
incentives. A lack of information will
is assumed that the unbalanced relationship
hamper the farmer in taking decisions
between farmers and traders, or between
concerning the crop and the quantity to
traders and consumers, based on:
based
on
produce and concerning the best time to
produce to maximize returns. Information
 Better market and price knowledge of
traders
on price fluctuations will also give insights
 With imperfect competition
into the risks associated with producing
 Abnormally high profits for traders
different crops. Consequently:
Often, it is very difficult to substantiate
Better information should lead to higher
these accusations because of the lack of
profitability although, for most small
clear information. Reliable price information
farmers
is absent and estimates about the costs and
Information services will have to be
risks traders have to bear are difficult to
supplemented by extension services
obtain. Moreover, the
which are able to assist them to interpret
necessary to deal with price fluctuations are
price data
hardly taken into account by policymakers
Lack of information is an entry barrier to
making the accusations. Market information
both trade and production
offers the
Where farmers have had access to
performance of markets for agricultural
information they are able to move
products and to determine micro-economic
risk premiums
opportunity to
judge the
constraints, although additional information
reflect effective or commercial demand and
on, say, marketing costs will be necessary to
tell nothing about families who lack
form a reliable opinion regarding the
resources to purchase food. One approach
efficiency of the market.
to early warning is to monitor prices of
items other than the main food staple. For
Current & Historical Market
example, a likely response of farmers to an
Information and Food Security
emerging food shortage is to sell livestock
Food security refers to the availability of
to raise cash to purchase staples. Thus a
food and one’s access to it. Two areas
developing food security problem can often
where market information is particularly
be indicated by declining livestock prices.
important are the provision of early warning
of food shortages and the management of
food security reserves. In the former case,
price trends can be used to confirm
indications, which are available from other
sources (e.g. rainfall and crop forecast
Food Security Reserve Management
Managers of food security reserves require
detailed current price information and price
forecasts,
together
with
historical
information on seasonal price patterns, in
order to decide when to release stocks onto
data), of possible food shortages.
the market and when it may be opportune
Early Warning
to carry out stock replenishment. While the
Comparison of seasonal price movements in
need for such security reserves perhaps
a particular year with previous years can
increases when grain markets have been
often provide indications of the seriousness
liberalized,
of food deficits. Where extensive price data
operation does not disrupt commercial
collection is undertaken, this can be used to
market operations. Thus reserves need to
identify localized shortages, which may be
be operated on the basis of clear rules
missed by other methods. However, it
governing the purchase and release of
should be realized that open-market prices
stocks. Detailed information on market
are usually rather late indicators since they
prices is essential if these rules are to be
reflect
applied and if arbitrage activities by the
current
Additionally,
supply
open-market
and
demand.
prices
only
it
is
essential
that
private trade are not to be disrupted.
their
few years most of the collectors are
Market Information (Data)
people who have had no training.
Collection
Market
 Data collectors frequently lack resources
information
data
are
rarely
collected by the persons who design the
information system. Officials have two
major options for collecting their data:
for transport to and from their markets.
 Where donors have provided transport,
e.g. motorcycles, local budgets are often
insufficient
to
meet
fuel
and
maintenance costs.
 Resources restrict the training that can
be carried out and also restrict the
ability of head office to send out
inspectors to check on the work of field
staff.
 Salaries can be very low.
A consequence of all this is that price
reporting can become mechanical, with
In either case data collection involves the
reporters paying little attention to the
use of some kind of field force. The field
accuracy of their work. An additional factor
force may operate in the field or from an
is that the peak time for market trading is
office. The field workers who collect the
often early in the morning, whereas
data
research
government officials usually prefer to work
background or training. Market Information
from nine to five. There is a temptation not
Services stand or fall on the quality of their
to visit the market regularly but to guess
information.
prices.
typically
have
Frequently,
little
however,
this
aspect of the service is given inadequate
attention:
 Training of data collectors, after the
Who Should Collect Market
Information?
initial enthusiasm of setting up a service,
The question arises as to who should be
is often forgotten. With inevitable staff
responsible for collecting the information?
turnover, there is a danger that within a
Ideally, they should be people who are
solely responsible for market information
collection of primary data is sometimes
and have no other job. At the same time,
known as field research.
full-time market information staff puts up
 Experimentation
 Questionnaires
costs and countries are thus often forced to
 Observation
 Market place
use the services of government officers who
 Sampling
 Interviewing
have other responsibilities. Apart from
Experimentation involves the manipulation
having to overcome the natural suspicion of
of a variable to examine its effect on the
government officers, price collectors have
performance of a subject or system.
to face problems such as calculating the
Measurements are taken before and after
weight of the produce They then have to
the
get the price right. How to do this? can be a
comparison made with a suitably matched
problem:
control case in order to isolate the effect of
variable
are
manipulated,
and
the variable. Observation may involve
machines or fieldworks. It may involve
simply recording behavior, or require the
fieldworker to interpret behavior or even
interact.
In agriculture market information collection
most of the information related to the
prices of commodities and trend of the
prices. For market information collection
market is one of the most important places.
Information collector may visit the market
Types of Data
Market information is composed of primary
at the time of buying and selling then report
these prices to the officials for further use in
market information services.
data and secondary data.
Primary Data
Primary data is data collected specifically for
the purpose of marketing research and
Secondary Data
Secondary data is data neither collected
directly by the user nor specifically for the
user. The collection of secondary data for
marketing research is sometimes known as
desk research. Secondary data collected
from internal and external sources. The
sources of secondary data for marketing will
vary according to the needs of the
organization. Main sources of secondary
data may be listed as follows:
Data Collection Process
All fieldwork involves the selection, training
and supervision of persons who collect data.
The validation and the evaluation of field
workers are also parts of the process.
Following figure represents a general
framework for
the
fieldwork /
data
collection process, it should be recognized
a) Records inside the firm, gathered by
that the nature of fieldwork varies with the
another department or section for its own
mode of data collection.
purpose may be useful.
Production
data
about
quantities
produced, materials and labor resources
used.
Data about inventory
Data about sales volumes, analyzed by
sales area, quantity, price, profitability
etc
Data about marketing
All cost and management account data
Financial management data
b) Published information from external
sources
Selection of Field Workers
Publications of market research agencies
The first step in the fieldwork process is the
Government statistics
selection of field workers. The officials
Publications of trade associations
should:
Professional journals
I. Develop job specifications for the project,
Publication of international agencies and
taking into account the mode of data
foreign funded projects
collection.
II. Decide what characteristics the field
workers should avoid.
It is important to evaluate field workers to
III. Recruit appropriate individuals.
provide them with feed back on their
performance as well as to identify the
Training of Field Workers
Training of field workers is critical to the
quality of data collected. Training may be
conducted in person at a central location or
if the interviewers are geographically
dispersed, by mail, video conferencing or by
using the internet. Training ensures that all
interviewers administer the questionnaires
in the same manner so that data can be
collected uniformly.
quality field force. The evaluation criteria
should be clearly communicated to the field
workers during the training.
Data Processing
Delays in transmitting, processing and
disseminating price data can undermine the
credibility of a market information service.
value to market participants. In the days
Supervision of field workers means making
sure that they are following the procedures
and techniques in which they were trained.
Supervision involves quality control and
sampling
better field workers and build a better, high
Out-of-date market information is of little
Supervision of field workers
editing,
Evaluation of Field Workers
control,
control
of
cheating and central office control.
when communication between major cities
and government officers in the “field” was
largely by government radio, transmission
of information for Market Information
Services presented many problems, not
least of which was obtaining access to a
radio, which often had to be shared by all
Validation of Fieldwork
Validation of fieldwork means verifying that
the field workers are submitting authentic
interviews. To validate the study, the
supervision calls 10 to 25 percent of the
respondents to inquire whether the field
workers actually conducted the interviews.
the government departments.
In these days of modern communications
by a senior officer, with a consequent
by phone and fax, computer modem and,
breakdown in the service.
increasingly,
E-Mail,
the
problems
associated with transmitting information
VI. The budgets available to pay for phone
calls or faxes are often limited
from the market where it is collected to a
VII. Some countries still process market
central processing unit should be less.
information data by hand, with the help of
Nevertheless, problems remain.
pocket calculators. While such days are
numbered, the use of computers can be
Problems in Data Processing
Although many countries have sophisticated
communications systems in place but they
are facing following problems:
afford basic equipment, such as fax
machines etc.
setting up information services, donors
of computer specialists who have written
their own software. With the departure of
the specialist, there has often remained
II. In countries where the power supply is
unreliable, equipment often cannot be
used or breaks down quickly.
often
no one to support the software. When
problems are encountered the Market
Information Services does not know how
III. Where donors have provided equipment,
countries
VIII. One problem is the software used. In
have in the past provided the assistance
I. Government departments often cannot
recipient
less than perfect.
to solve them.
experience
problems in replacing it when it breaks
down after, or even before, the donors
have left.
IV. In countries with limited resources, a wellsupplied market information services
could be often better equipped than the
office of the senior civil servant in a town
or district.
V. It is unknown for market information
services equipment to be commandeered
Information Dissemination
In many circumstances, daily information
would appear to be a precondition for a
commercially relevant market information
service. For example, where markets are
held daily for horticultural produce there is
very little relevance for the farmer in prices
of three days earlier. Staples, on the other
hand, are generally far less perishable and
thus prices change more slowly. In these
circumstances, a weekly service would
Problems of Dissemination
appear adequate.
Problems with dissemination are associated
with guaranteeing that:
a. The information is accessible to the
target audience
And
b. Ensuring that the information is in a
To disseminate information in Punjab
government has established many sources
for dissemination of information like:
Electronic rate boards in major wholesale
markets of Punjab
form in which it can be understood.
Lack of Resources: Lack of resources is the
major constraint to effective dissemination.
Many services find that they do not have
the resources to finance price broadcasts on
the radio which, in most countries, is by far
the most effective way of accessing small
farmers. Radio stations, on the whole, do
not regard market information broadcasts
Internet Website www.amis.pk
Mobilink Service 700
Local market committees
as news services but more as potential paid
advertisements. This problem is growing as,
under structural adjustment reforms, radio
stations
are
being privatized
or
are
expected to cover an increasing part of their
operating
costs
and
are
demanding
payment to carry broadcasts. However,
Market Information Services have few
opportunities to raise the funds, although
they have tended to be very slow in
exploring the possibility of sponsorship.
Time of Information Broadcast: Other
problems with information dissemination
include ensuring that the broadcasts are at
a time when farmers and traders can listen
gather in one place to sell their produce.
to them.
Where itinerant traders visit villages to buy
 If prices are broadcast when most of the
crops, boards in provincial and district
traders are in the markets or when most
centers are next to useless. A further
of the farmers in the field will useless for
problem is that in order to use price boards
the target groups. Similarly the language
farmers have to be literate.
problem will be there.
A market information service may follow
 If the area is mostly of the illiterate
the following format to provide meaningful
farmers, speaking only local languages
information to its potential users:
and the broadcasts are in English then it

will not be useful for the audience.
The highest price and the volume traded
at the highest price.
Use of Information Boards: In most

The weighted average price for the day.
countries radio ownership is not universal.

The lowest price of the day and the
This has prompted market information
service developers to use notice boards to
volume traded at the lowest price.

The volume traded between the average
publicize price information, with mixed
price and the highest price of the day, and
results. Price boards in producing areas are
the weighted average price of these
used by farmers, although boards in urban
transactions.
markets are consulted much less and in

some producing areas price boards were
poorly utilised. It is also reported that
The volume traded between the average
price and the lowest price of the day.

boards of market information are rarely
The volume on offer at the beginning of
the day.
updated. In some other areas, boards are a

The total quantity sold for the day.
visible indication of the weaknesses of the

The volume unsold and carried forward to
market information service. They are often
the next trading day.
not maintained and prices are rarely
updated. They are frequently sited close to
Utilization
Government offices and far from the
Information needs to be relevant to the
markets. Even where boards are updated
target
regularly, they are useful only when farmers
considerable care must be taken to make
audiences.
This
means
that
sure that the type of price information
Political & other Interference
provided is that which the user finds most
As countries liberalize their agricultural
useful. Small-scale farmers, for example,
markets, price setting by governments
may find data on prices in their local
becomes
assembly markets much more relevant than
countries which have in the past established
major city wholesale market prices. Where
“minimum” or “official” prices, farmers are
governments have in the past or still do set
reported to have difficulty in understanding
official prices, farmers can mistake the
the meaning of prices broadcast by MIS.
prices broadcast for the official price. This
Many still look upon such prices as
implies that the introduction of a market
government imposed. Some MIS have had
information service must be accompanied
difficulties
by an extension and media campaign to
prevailing prices, particularly of staple
explain to farmers the meaning of the prices
crops, because:
less
in
common.
reporting
However,
accurately
in
on
being broadcast, and that such a campaign
 The market prices have been above the
must be repeated on a regular basis. Some
official government price and sections of
services would like to target consumers, but
the government have been reluctant to
they generally only broadcast wholesale,
allow actual prices to be broadcast.
not retail, prices.
 If it is accepted that MIS can increase the
Price information would be much more
bargaining power of farmers then it
useful if it were accompanied by a range of
follows that, at least in this aspect, MIS
other information regarding:
can lead to a reduction in traders’
Quantities available at the market or in
major producing areas,
margins.
 Larger traders may oppose an MIS
Supply-Demand trends, and
because they have invested in obtaining
Problems of transport in the market,
their own information and an MIS will
such as road blockages.
reduce their competitive position in
It must be recognized that it is better to
provide no information than inaccurate or
misleading information.
relation to smaller traders.
 Some traders have in the past adopted
tactics
of
providing
misleading price information.
deliberately
Setting Up a Market Information
continue
Service
the
country and the counterpart
organization to operate a service, both in
terms of technical capacity and in terms of
ability to meet recurrent costs. Institutional
arrangements need to be closely examined
and
the
to
collect
information,
Attention needs to be paid to the capacity
of
is often the case that statistics ministries
potential
for
private-sector
involvement should be investigated. Basic
steps can be taken to avoid some of the
obvious problems. The greater the level of
research at the beginning, the more likely is
the MIS to prove valuable to its target users.
thus
market
duplicating
price
scarce
resources.
It may be preferable for governments to
aim to steer a path between a Market
Information Service fully operated by the
state sector and one left to a private sector
which provides information only to those
who can afford it. An autonomous, semigovernmental
organization
offers
this
possibility. Such organizations can have a
number of advantages. These advantages
are narrated as follows:
 Revenue
generated
by
government
The Institutional Structure
departments often has to be paid to the
It may be preferable to utilize the Statistics
Treasury or Ministry of Finance whereas
Service because such services tend to have
autonomous bodies can generate and
in place a network of trained data
retain revenue.
collectors. Against this, it must be said that
 The
incentive
to
seek
commercial
government statistics agencies are not
support for a Market Information Service,
generally known for the speed with which
which would be lacking in a Ministry.
they publish their data and may not,
 Such organizations can also often be free
therefore, be too efficient at daily price
of restrictive public-service employment
dissemination.
regulations,
Agricultural ministries also usually have
management
extensive field networks, but such staff may
opportunity to be more cost effective.
which
gives
flexibility
them
and
the
neither be well qualified for price-collection
An alternative approach may be for a
work nor be particularly motivated to do it.
government to finance the service, but for
When agriculture ministries operate MIS, it
the
work
of
data
collection
and
dissemination to be done by the private
advertisements and sponsorship, it is
sector.
unlikely that many will be able to fully
cover their costs, let alone make a profit.
Ensuring Sustainability
Private
Numerous Market Information Services that
appear to work best when they are able to
had been established by donors, but had
use
subsequently run into problems once the
dissemination costs being usually a good
donors had left. Several existing services
deal less than collection costs.
Market
already
Information
available
Services
information;
presently operated with donor support
would appear likely to follow the same
Charging for Market
route. Free computers, fax machines, cars
Information
and motorbikes can be very attractive, until
The vast majority of Market Information
they have to be replaced. Recognizing the
Service
very real problem of low Government
emerging economies are public services.
salaries in many countries, donors have also
Obviously, public provision has limitations
often paid salary supplements to MIS staff.
of cost and if users require more than very
Unfortunately, when the donors leave so, if
basic information they should be required
they can, do the staff that is unwilling to
to pay. People who are prepared to pay for
return to lower government salaries.
market information do, by definition,
in
developing
countries
and
An economic solution to the problems of
require more information than is available
sustainability many MIS face would be to
publicly. They also require the information
oblige users to bear the costs by charging
more rapidly. Thus a precondition for a
for the information. However, particularly
commercial service is good and inexpensive
in most developing countries, produce is
telecommunications. In the long term, the
mainly offered by farmers in small
potential
quantities. Such farmers lack information
communications systems, such as the
and are in a relatively weak bargaining
Internet, is enormous. It is unlikely that an
position.
MIS that begins by offering a free service
While public services can, to a certain
will ever
extent, go commercial by attracting
commercial one.
offered
make
the
by
improved
transition
to a
Analyzing the Marketing System
identify:
and its Information Needs
 The type of information each category
No Market Information Service should be
planned without a detailed understanding
of how the marketing system works.
However,
in
normal
circumstances
a
detailed survey of the marketing system
should be undertaken in order to assess
information requirements of each category
of
participant
in
participants include:
the
system.
The detailed survey should endeavor to
These
requires,
 The form in which the information should
be presented,
 The frequency the information is required
And
 The times of the day when dissemination
should take place.
The role which a Market Information
Service can play will depend on the way in
which the marketing system functions.
Research is essential as there are almost as
many marketing systems as there are
countries and it is therefore not possible to
specify a “model” Market Information
Service.
It is necessary to have information about:
 The flow of products between farm and
market
 The flow of products between markets as
well
 The
functions
of
the
various
intermediaries
It is essential to know how prices are
determined at each stage of the marketing
chain and the qualities and quantities being
traded. It is, of course, vital to know what
weights and measures are being used both
to plan accurate data collection and
wholesale markets, gradually expanding to
relevant dissemination.
include other wholesale centers and some
assembly markets. When donor assistance
Evaluation of Market
is not used it is perhaps easier to avoid the
Information Services
trap of trying to do everything at once.
While an MIS should clearly not be static,
When donor help is available, not only do
and must evolve over time, all of these
the donors tend to want to develop
questions should be addressed at the
impressive services but the recipients also
outset:
want to take advantage of the assistance
How many products should be covered
while it is available. This is understandable
and which varieties?
because, if a gradual approach is adopted,
What weights and measures will be used?
the donors may not be around when it is
How often do farmers and traders require
time for expansion.
the information and through which
media?
Do all potential beneficiaries have access
farmers
be
Products
Crops
to the media chosen?
Will
Market Information Services &
able
to
use
the
information effectively, or is some sort of
marketing extension service required to
to
be
included
in
a
Market
Information Services should be those which
are commercially important. In some cases
this will include more than one variety (e.g.
red and white onions). The tendency to
assist them?
want to maximize the number of crops in
Market Information Services &
order to build up a strong statistical
Markets
database should be resisted. As the number
The golden rule should be to start on a
of crops covered increases costs rise, with
small scale and work up as resources
minimal
permit. For instance, depending on the
becomes more complex, data transmission
analysis of the marketing system, it may be
and
desirable
with
information dissemination on the radio
information on prices in a few important
takes longer and, for the bulk of non-
to
initiate
a
service
extra
processing
utility,
data
becomes
collection
slower
and
farming listeners, becomes more boring.
Examination of the feasibility of this does
Where crops have only a limited demand?
need to be carried out but there are several
Those farmers producing them will probably
reasons for believing that a consumer-
already have good market information and
oriented service would experience difficulty
market contacts.
in providing useful information.
Firstly, a Market Information Service which
Market Information Services & Users
The locations in which price information is
collected will depend firstly on research
about information requirements of the
target users of the Market Information
Service. For example, if farmers want
information on prices as close as possible to
the farm gate, it makes little sense to collect
retail prices. Ideally, the locations chosen
should be those which provide maximum
coverage in terms of quantity traded. Again,
costs have to be balanced against benefits.
It should be realized at the outset that every
market chosen for price collection not only
increases the number of collectors required
but also increases the need for supervision,
training and data processing.
Market Information for
Consumers
is oriented to the needs of farmers and
traders will concentrate on assembly and
wholesale
markets.
Prices
from
such
markets are of little interest to consumers
and thus a Market Information Service
seeking to assist consumers would have to
carry out parallel price collection activities
in retail markets.
Secondly, information collected from retail
markets may not be of much use to the bulk
of consumers. In a city of 10 million people,
for example, there will be a large number of
retail markets. Prices in these markets will
vary according to:
a) The Distance of the market from the
source of supply (usually the wholesale
market)
b) The quality standards in the particular
market which will be determined by the
purchasing power of the neighborhood.
There is a school of thought that Market
Moreover, many consumers do not buy at
Information Service should pay much more
retail markets but make their purchases at
attention to the information needs of
local shops, which have different pricing
consumers than has hitherto been the case.
structures to those of markets.
Thus dissemination of horticultural market
When to Collect Market
prices on a weekly basis is unlikely to make
Information?
a significant contribution to improving
Staple Food: Information on grain markets
probably needs to be collected less
frequently than information on perishables.
This
is
primarily
because
grains
market transparency, other than to indicate
the general trend of prices as a result of
seasonality and other factors.
are
stored and thus daily supplies to the market
Need of Time
(Present Circumstances)
are not subject to the vagaries of climate,
Ideally, horticultural prices should be
perishability, etc. Prices of non-grain staples
collected and disseminated on every day on
can,
rapidly,
which the relevant market functions. Daily
particularly those of which is highly
collection does, of course, imply the use of
perishable.
more-or-less
harvested, processed and subsequently
however,
change
more
full-time
data
collectors.
Horticultural
Where resources do not permit this, it may
produce prices can change quickly because
be necessary to reduce the frequency of
of:
collection. In making such a decision, the
Horticultural
Produce:
As quantities of particular varieties
option of lowering costs by reducing the
handled at a market can be relatively
number of markets covered needs to be
small.
considered as an alternative to reducing the
The arrival of a new consignment can
often have a significant impact on prices.
Demand may change little on a day-to-
frequency of collection in all markets.
Peak Trading Period: Data should ideally be
collected during the peak trading period for
each market. Collecting data at the ideal
day basis.
fluctuate
peak time may cause problems with
significantly, depending on the suitability
ensuring timely information dissemination.
of weather conditions for ripening and
If
harvest.
information is early in the morning it may
Production
levels
can
Simply on how many farmers decide to
harvest on a particular day.
the
best
time
for
disseminating
be preferable to broadcast the previous
evening’s market prices rather than the
previous morning. Where the peak market
considerations limit the number of crops
period varies according to location, it may
that can be reported on, then it is essential
also be necessary to make compromises
to select the most important varieties of
with regard to the time of collection in
each product, to the exclusion of the others,
order to accommodate radio schedules.
and name those varieties when the prices
More
important
than
ensuring
data
collection during the peak trading period is
the need for data to be collected at the
are disseminated.
Product Quality
same time every day. The information
In any market a wide variety of qualities of a
disseminated must be consistent to permit
particular product is likely to be available at
comparison from day to day. This will not be
any one time. Prices for different qualities
the case if prices are collected in the
could well vary widely. In the absence of
morning on one day and in the afternoon of
agreed and widely recognized quality
the following day. Thus a collection time,
standards, which are only available in very
once decided, must be adhered to and the
few countries, product quality could well
MIS needs to arrange for close supervision
cause confusion in the interpretation of
of data collectors to ensure that this is
price information. Producers of relatively
done.
poor quality fruit, for example, might
complain bitterly about the accuracy of an
Product Varieties
MIS which reports prices of the top grades
An MIS needs to decide on the crops to be
without
covered. It also needs to decide on the
broadcasts.
varieties which are to be reported on
Fair
because in many cases there will be
Information Services should aim to collect
significant differences between prices for
and disseminate prices for produce of Fair
different varieties. An MIS which simply
Average Quality (FAQ). This requires a
reported on the daily price of “beans”
considerable amount of training of data
would have no significance for farmers or
collectors in order to arrive at a common
traders and would rapidly come to be
understanding of what constitutes FAQ, as
viewed as irrelevant. If resource and other
there is clearly a need for consistency both
making
Average
this
Quality
clear
on
(FAQ):
radio
Market
between collectors in the same market and
kilograms) then it should be possible to
between markets. It also requires an
disseminate information about prices on a
extension effort to ensure that both farmers
per kilogram basis, although care must be
and traders have a clear idea of the quality
taken to ensure that conversion rates from
which is being referred to in price
trading units to kilograms are accurate.
broadcasts.
Local price collectors will have to verify and
constantly update conversion rates. Where
Weights and Measures
farmers do not have a clear idea of units of
The marketing systems do not use standard
weight then prices should be disseminated
weights expressed in terms of kilograms.
with reference to the standard trading
Farmers sell, and traders trade, by the bag,
measures. Again, any regional variation in
carton, box, bundle or tin. At the retail level,
these measures needs to be pointed out in
sales are often made by the “heap” with
price broadcasts.
supply and demand conditions leading to
changes in the size of the heap rather than
Quantity, Stock and Other
changes
Information
in
its
price.
Under
such
circumstances the provision of accurate and
meaningful market information can be very
risky, particularly where participants in the
marketing system have no concept of
standard weights.
Attempting
to
We have largely concentrated on the role of
a Market Information Service to provide
price information which, in almost all
circumstances, will be the most important
function.
change
time-honored
marketing practices in order to facilitate the
operation of a Market Information Service
would probably be an exercise in futility.
The adoption of weights for trading
Information
Nevertheless,
Service
with
a
Market
adequate
resources does have a legitimate role to
play in providing users with additional
information to enable them to make
necessary marketing decisions.
purposes is only likely to take place when
the participants in the marketing system see
Benefits for Farmers & Traders
a need for it. Where farmers and traders
Quantity information can help farmers and
fully understand units of weight (i.e.
traders to make informed guesses about
likely trends in prices. The main problem
Information of supply availability is of use to
here is that such information can be time-
traders to assist them in locating new
consuming to obtain and accuracy can be
sources of supply, especially if produce is
almost impossible to achieve. While a price
short. In a country where imported staple
collector may be able to collect daily prices
products form a significant component of
by spending about one hour in the market,
the diet, a Market Information Service
the collection of detailed supply information
should also consider providing advice about
can be a full-time job. In some cases
expected arrivals of food shipments at the
markets themselves maintain records of all
country’s
arrivals
this
important in the case of food-aid shipments
information can be accessed by a Market
which can, if handled badly, seriously
Information Service. Detailed information
disrupt marketing arrangements and prices
on quantities supplied to a market would
for various crops.
and
undoubtedly
transactions
be
useful
for
and
port(s).
This
is
particularly
planning
purposes: e.g.
Data Accuracy
 To assess demand for a new market
Where price information has to be collected
 To understand production patterns
from scratch, i.e. where it is not generated
In countries where road communications
daily as a result of the market recording all
are frequently disrupted by bad weather, a
transactions, then considerable attention
Market Information Service can provide a
needs to be paid to making sure that the
useful service by advising farmers and
data collectors are fully trained in price and
traders of the disruptions. This could serve
other data collection techniques. Collectors
two purposes:
should also be issued with data sheets to fill
I. It would alert farmers in some areas to
in, and provided with strict instructions
the fact that their perishable produce is
regarding the quality of produce to which
unlikely to reach the market……. and
prices should refer and the calculation of
II. It would alert farmers and traders in areas
averages.
Where
significant
price
not subject to transport problems that
differences are observed an average price
prices in the market are likely to rise
may have little meaning.