Significance and Impact of Market Information Service(MIS)

1. Significance and Impact of Market
Information Service(MIS)

2. Market Information Service (MIS)is a means of
increasing the efficiency of marketing systems
and promoting improved price formation
Market Information Service(MIS)

3. Significance of Market Information
Services
• A Market Information Service is seen as providing
transparency in the agricultural marketing system.
i.e. a full awareness of all parties of prevailing market
prices and other relevant information.
• It can contribute to arbitrage, i.e. the act of buying at a
lower price and selling at a higher price.

4. • “spatial arbitrage” takes place while Traders take
advantage of price differences until these differences
decrease to the level of transaction costs.
• “Temporal arbitrage” is the storing of products in order
to take advantage of expected higher prices later in the
season or, in some cases, in subsequent years.

5. Impact of Market Information
Services
1. They can facilitate efficient allocation of productive
resources.
2. The bargaining position of farmers with traders can
be improved. Information reduces transaction costs
(i.e. the costs of selling the produce) by reducing
risks.

6. 3.Farmers with timely and reliable information
and the ability to 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.

7. 4. Lack of information is an entry barrier to both production and
trade. Where farmers have 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

8. 5. 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

9. 6. By contributing to more efficient marketing , particularly
improved spatial distribution, market information should
be beneficial for consumers as well as farmers and
traders. Information on retail prices may also, under
certain circumstances, assist consumers to bargain
7. The essence of a good Market Information Service is that
it should provide commercially useful information on a
timely basis.

10. 8. Information is also useful to policy makers. This
improves policy formulation as the functioning of
markets comes to be better understood
9. Market information is also an important component of
Early Warning systems for food security as it can assist
in identifying areas of possible shortages and can
highlight whether prices are above or below normal
seasonal trends