Farmer Bargaining Power and Market Information Services

Abstract

In many Sub-Saharan African countries, farmers typically have a choice between selling their products to traders who travel between villages and markets and transporting their products to the nearest market themselves. Because of communities' remoteness and poor communications with marketplaces, farmers' uncertainty about market prices is usually high. Traders may take advantage of farmers' ignorance of the market price and extract a rent from them by oering very low prices for their products. In this article, we model bargaining interactions between a farmer and a trader who incur dierent transportation costs, and we study how price information aects the bargain and the balance of power. We then estimate the causal eect of a Market Information System (MIS) working through mobile phone networks on Ghanaian farmers' marketing performances. We nd that farmers who have beneted from the MIS program received signicantly higher prices for maize and groundnuts: about 12.7% more for maize and 9.7% more for groundnuts than what they would have received had they not participated in the MIS program. These results suggest that the theoretical conditions for successful farmer use of MIS may be met in eld.

Smallholder farmers' market participation and mobile phone‐based market information services in Lilongwe, Malawi

“…Surprisingly, subscription to mobile phone‐based MIS is not significantly associated with the probability to participate in the market. This is contrary to findings in Ghana where farmers who subscribed to the ESOKO MIS were more likely to participate in the market (Courtois & Subervie, ). However, similar findings were found in Ethiopia (Tadesse & Bahiigwa, ).…”

How Competitive Are Crop Markets in Sub‐Saharan Africa?

“…The positive finding in Courtois and Subervie (2014) is contradicted by the null results for the same crops in Hildebrandt et al (2015), which has a stronger identification strategy. Hildebrandt et al (2015) find three null results and one positive effect that does not last beyond a season.…”

A text message away: ICTs as a tool to improve food security

“…Fafchamps and Minten (2012), who assessed the impact of information in regions of India where cellular phone penetration was higher than 40% but which only provided generic information, do not show any significant results stemming from that information. On the other hand, Nakasone (2016), Courtois and Subervie (2015), and Nyarko et al (2013) show significant results when the information provided was customized to the specific high-value commodities and varieties produced by the farmers studied. Nakasone (2016) also suggests that increased information, no matter how specific the content, is not significant for low-value and less perishable commodities.…”