Fresh Insights
User Research Towards a Market Information
Service for Bihari Vegetable Farmers
Matt Ziegler UW Lokesh Garg DG Shailesh Tiwary DG Aditya Vashistha UW Kurtis Heimerl UW
University of Washington + Digital Green

Outline

  1. Market Information Services
  2. Context: Loop
  3. Case Study: Buxar, Bihar
    What is the role of price information?
    What can this teach us about market information services?
Theory

Information Asymmetry


Trader knows the price is ₹100



Farmer thinks the price is ₹70
Theory

Information Scarcity


Jensen 2007: sardine prices stabilized upon the arrival of mobile phones

Mixed Evaluations
Of Market Information Services

Farmers perceived higher pricesIslam & Grönlund 2009, Lokanathan et al 2011
Evidence of increased bargaining powerCourtois & Subervie 2014, NYU CTED 2013, Nakasone 2013
Price increases for some crops but not othersNakasone 2013, NYU CTED 2013, Courtois & Subervie 2014
No observed effect on pricesCamacho & Conover 2010, Fafchamps & Minten 2012
No observed change in marketing behaviorsBaumüller 2015, Islam & Grönlund 2010, Lokanathan et al 2011
"...our informants consistently disclaimed any practice of acquiring market price information for the purpose of comparison between markets (by phone or other means)..."
— Burrell and Oreglia 2015
Market information is highly situational
A market information service for Loop:

What is the role of market information in Buxar, Bihar?


Field Observations • Interviews • Prototypes

Shared transport-to-market
service for farmers

Time Savings • Pooling Transport Costs • Accessing New Markets
Loop already has reliable price data

Vegetable Markets in Buxar

What characteristics affect market information uses?

Heterogeneous structures

  • Bihar abolished APMC state markets
  • Varying sizes and structures
  • Farmers sell in many markets
  • No refrigeration
  • Volatile Prices

Marketplace Actors

  • Farmers
  • Local Traders
  • Long-Distance Traders
  • Farm-gate Traders
  • Commission Agents / Gaddidars

Interviews

  • Semi-structured interviews
    marketing decisions • price information
  • 17 Loop farmers in 6 villages
  • 3 commission agents
Phones widespread around 2015

Frequent calling for prices

Q: If you sell the same agent every time, then why do you bother to check prices?
A: Well when the prices are good then I'm happy, and when the prices are bad then I'm sad!

Price information usage

  • Market choice
  • Arbitrage
  • Negotiation
"We negotiate with farm-gate traders based on the previous day’s market rates. We offer 2 rupees above yesterday’s rate, and then the traders negotiate it down to 1 rupee above yesterday’s rate"
(see paper for greater depth)

Recent market changes

reported after mobile phone arrival
  • More traders (markets + farm-gate)
  • Market activity shifts
    ”the traders from [far-off] Ara market are coming here now, so there is no point in going to Ara market anymore.”
  • Fewer price crashes
  • Concurrent road improvements
    We cannot establish causation • some attributed changes to phones

Usefulness of price information is situational

“I never take any decision on prices. When my volume is low I go to Dumri market, when it’s high I go to Nayabhojpur market."
(details in paper)

Non-price factors

  • Supply gluts, wastage
  • All goes wrong if you keep switching agents.
  • Disparity in marketing skills; Unfamiliarity
  • Danger
  • Convenience: I couldn't manage with everything; I'm growing old.
Ongoing Research

Addressing Market Barriers


Some are well-suited for a market information service, others are not.
Prototypes: Unfamiliarity • Gauging price volatility • Making connections

Other Approaches

Barriers Strategies
  • Time
  • Distance
 →
  • Loop Aggregation
  • Credit
 →
  • Digital Payments
  • Relationships
  • Unfamiliarity
 →
  • Farmer networking
  • Market field trips
  • Marketing Skills
 →
  • Courses
  • Training videos
Loop farmers watch a video about how to cut
cauliflower for different markets

Takeaways

  1. Heavy use of phones in vegetable marketing
    Price checking, negotiation, market choice; location-specific + situational
  2. Phones have substantially changed markets
    Corroborates information scarcity + information asymmetry
  3. Many heterogenous complicating factors
    Some may by addressed by ICT's, some by other media

Thanks!

Matt Ziegler Lokesh Garg Shailesh Tiwary Aditya Vashistha Kurtis Heimerl

Extra Slides

Interviews

  • 11 farmers in 6 villages
  • 6 Loop aggregators (also farmers)
  • 3 Commission agents
  •  
  • All men, ages 20 to 61
  • 18 of 20 had mobile phones
  • All farmers grew vegetables
  • Majority owned farmland
  •  
  • Interviews in Hindi
  • 2-person interview team
  • Tried for private interview locations
  • All recorded except commission agents
  • Questions informed by prior fieldwork
Benefits for farmers

Market Information Services


source source source

Findings corroborate Information Asymmetry and Information Scarcity


But the value of price information is
highly situational

Price Checking

  • Frequently calling market agents
  • Sharing with other farmers
  • Dealing with traders directly
  • Not everyone checked prices

Information sources

  • Calling commission agents
    "Twenty to twenty five farmers call me every day... we never discuss quantities, only prices."
  • Making deals with traders over the phone
    • Market traders + farm-gate traders
  • Other farmers

Consistence with information asymmetry theory:

“Before having mobile phones, traders had better margins because not many people had price information. Now everybody knows the prices.”

Consistence with information scarcity theory:

“Now after mobile phones, prices have become more stable and balanced between markets.”

Choosing Markets

In some cases:
"When the market starts, [I find] out the rates everyday. I go wherever the rate is good."

Arbitrage

Traders buy where prices are low, and sell where prices are high
Production volume and seasonality
“I never take any decision on prices. When my volume is low I go to Dumri market, when it’s high I go to Nayabhojpur market."
Volume varies by season

Supply Gluts & Price Crashes

"Let’s say I have 2 quintal of tomatoes, and if I get to know someone else has 5 quintal then I know that the rate for tomatoes is going to drop."
  • Wastage
  • Seasonal variation

Relationships & Familiarity

“All goes wrong if you keep switching commission agents.”
  • Commission agents expect loyalty
  • Credit from agents
  •  
  • Markets have different operations
  • Disparity in marketing skills

Convenience

“I couldn't manage with everything; I'm growing old.”
  • Selling vegetables is hugely time-consuming
  • Major reason for using Loop service
  •  
  • (more factors in the paper)