Food and Nutrition Security in Africa, Agricultural marketing and the use of mobile phones: Results from Ghana and Uganda, Nicholas Minot

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Food and Nutrition Security in Africa seminar in Helsinki 16 June 2014, Agricultural marketing and the use of mobile phones: Results from Ghana and Uganda, Nicholas Minot, IFPRI

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Food and Nutrition Security in Africa, Agricultural marketing and the use of mobile phones: Results from Ghana and Uganda, Nicholas Minot

  1. 1. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Agricultural marketing and the use of mobile phones: Results from Ghana and Uganda Nicholas Minot Senior Research Fellow, IFPRI Presented at the FoodAfrica Mid-term Conference University of Helsinki, Helsinki, 16 June 2014
  2. 2. 2 Overview of WP6 “ICT and market access” Overall objective: Measure the impact of using SMS to improve access to agricultural market information and other agricultural information Methods  Baseline surveys • Ghana: 1290 households in northern Ghana • Uganda: 1440 households in Western, Central, and Eastern regions  Interventions • Ghana: Esoko provides agricultural market information, weather info, and extension info via SMS to random sub-sample of interviewed farmers • Uganda: FIT-Uganda provides agricultural market info, weather, and extension info via SMS to random sub-sample of surveyed farmers  Endline surveys • Ghana: Scheduled for 2014 • Uganda: Scheduled for early 2015
  3. 3. 3 Methods: Collaborating institutions  MTT Economics branch • Participation in all phases, particularly in planning, analysis, and interpretation • Gender analysis of household survey data  ICRAF • Assistance in dissemination strategy • WP7 Innovative extension approaches  ISSER (Ghana) • Implementation of household surveys in Ghana  Esoko (Ghana) • Provision of agricultural price information via SMS to selected beneficiaries  FIT-Uganda • Provision of agricultural price information to selected beneficiaries
  4. 4. 4 Comparison Ghana Uganda Population 25 million 36 million Share urban 48% 13% GNI per capita US$ 1,410 US$ 510 Life expectancy 64 years 54 years Agricultural exports Cocoa, cashew nut Coffee, tea Staple foods Cassava, maize, yams Plantains, maize, cassava, sweet potatoes Data collection Oct-Dec 2011 Dec 2012-Feb 2013 Regional coverage All districts in northern half 8 districts in west, central, and eastern Nbr. of villages 130 144 Nbr. of households 1290 1440
  5. 5. 5 Agricultural marketing Who do farmers sell their crops to? • In both countries, close to 90% of crop sale transactions are to traders • Most of remainder are to other farmers and consumers • Negligible sales via cooperatives or directly to processors, exporters, or supermarkets 91 87 5 11 4 2 0 % 20 % 40 % 60 % 80 % 100 % Ghana Uganda Type of buyer Other Consumer Trader
  6. 6. 6 Agricultural marketing Where do farmers sell their crops? • In Uganda, 84% of sales take place on farm and at markets (usually in same village) • In Ghana, just 25% take place on farm, 74% take place in market (usually outside village) • May reflect lower population density in northern Ghana and/or smaller mkt surplus 25 84 26 9 48 4 0 % 20 % 40 % 60 % 80 % 100 % Ghana Uganda Location of crop sale Other Market elsewhere Market in village Farm
  7. 7. 7 Agricultural marketing What is the role of farmer organizations? • In both countries, about 20% are members of some type of farmer organization and about 10% are ag coop members • In both countries, less than 8% of farms have ever sold through a cooperative or farmer organization 2 4 4 7 10 8 19 22 0 10 20 30 Uganda Ghana Role of agricultural cooperatives Member of coop or farm organization Member of ag coop Ever sold through a coop/FO Sold through a coop/FO in past year
  8. 8. 8 Agricultural marketing Most important crops in sales • In northern Ghana, yams, groundnuts, and maize are most important in terms of crop revenue • In Uganda, maize, coffee, and beans are most important • Most “cash crops” are food crops • Large share of “other” 17 39 10 14 19 19 45 37 0 % 10 % 20 % 30 % 40 % 50 % 60 % 70 % 80 % 90 % 100 % Ghana Uganda Percent of households by most important crop in sales Other Groundnut Yams Coffee Beans Maize
  9. 9. 9 Agricultural marketing How much competition? • In Uganda, 83% of respondents said they had a choice of 2 or more buyers for their main commercial crop • In Ghana, 72% had 2 or more buyers 20 34 16 10 47 29 17 28 0 % 50 % 100 % Uganda Ghana Percentage of households by number of buyers of main commercialized crop More than 10 6-10 buyers 2-5 buyers Just one buyer
  10. 10. 1 Agricultural marketing Reason for selecting buyer • In both countries, +85% of respondent choose buyer by best price or quick payment • Debt obligation or only-one-buyer is the reason for <8% • Competition among traders for main crop • There may be less competition for other crops 68 55 19 30 7 3 3 5 0 % 50 % 100 % Uganda Ghana Percent of household by reason for selecting buyer Best price Immediate payment Location Obligation Only one buyer Other
  11. 11. 1 Agricultural marketing What percentage of crops do farmers sell? • Fewer farmers with no sales in Uganda (14%) than northern Ghana (28%) • Median is 38% in Uganda and 34% in Ghana • No clear distinction between “subsistence” and “commercial” farmers; full range 0 10 20 30 40 50 60 70 80 90 100 0 10 20 30 40 50 60 70 80 90 100 Cropssalesasapercentageof valueofcropproduction Percentage of households Distribution of farms by share of production that is sold Uganda Ghana
  12. 12. 1 Use of mobile phones Share of farm households owning mobile phones • Mobile phones are more widely owned in Uganda (72%) than northern Ghana (62%) • Although Ghana is a higher-income country, northern Ghana is the poorest region of the country 72 62 0 20 40 60 80 100 Uganda Ghana Percentage of households owning a mobile phone
  13. 13. 1 Use of mobile phones Share of farm households owning mobile phones • Female-headed farmers are less likely to own a mobile phone in both countries • Also, medium- and large-scale farmers are more likely to own a mobile phone than small farmers 0 20 40 60 80 Uganda Ghana Percentage of households owning a mobile phone Female Male
  14. 14. Use of mobile phones Correlates of mobile phone ownership • Households owning mobile phones tend to have more members, higher income, and more education • Sex of head of household is not significant after controlling for other factors Probit model Dependent variable = mobile ownership (1=yes, 0=no) Ghana Uganda Household size +++ +++ Farm size Log of per capita income ++ +++ Female headed household Age of head of household - - - Education of head + +++ Head can read Head can write
  15. 15. Use of mobile phones How are mobile phones used? • In both countries, no more than half of phone owners have ever sent an SMS text message • Roughly one quarter of owners use their phone to get ag market information 28 23 50 42 51 42 0 20 40 60 Uganda Ghana Use of mobile phones (% of households that own a phone) Know how to use SMS Have sent an SMS Use phone for ag market info
  16. 16. Use of mobile phones Do farmers feel well-informed about prices? • In both countries, less than half of farmers fell well informed about prices & markets • Small farmers feel less informed than medium or larger farmers 36 54 27 39 26 34 34 47 0 50 100 Uganda Ghana Perception of being well-informed about prices by farm-size category (% of households) Overall Very small farms Small farms Medium farms Large farms
  17. 17. Summary  Almost all crop sales are to traders and consumers • Few farmers sell directly to processors, exporters, or supermarkets  Location of sale varies by country and/or region • Ugandan farmers sell on farm, while those in northern Ghana sell at markets  Coops & farmer organizations play very minor roles in marketing • Less than 8% of farmers have ever sold crops through a coop/farmer organization  Markets are more competitive than sometimes portrayed • More than two-thirds know of at least two buyers willing to buy main crop • Farmers choose buyer based on best price & terms, not obligation or monopsony  No easy distinction between “subsistence” and “commercial” farmers • Whole spectrum of farmers with intermediate sales • Sale of food crops more important than sale of “cash” crops  Most farm households own mobile phones • More in Uganda than northern Ghana; more among larger, higher-income, and better educated households  .. but less than one-third of owners get market info by phone • Provision of agricultural price information to selected beneficiaries  … and most farmers do not feel well-informed about crop prices • particularly small-scale farmers
  18. 18. 1 Conclusions  Ghana and Uganda offer apparently favorable conditions for mobile phones to improve market information: • Large majority of farmers have crop sales • Most farmers sell to traders and have some choice of buyer • Competition means that negotiation with new information is possible • Most farmers already have mobile phones • But few farmers use their phones to get prices and market info • And less than half of farmers feel well-informed about prices and markets  But only empirical analysis can confirm that market information delivered via SMS to mobile phones will be useful to farmers
  19. 19. Thank you! Comments and suggestions welcome n.minot@cgiar.org 1

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