Ulrich Kleih and Dr Gideon Onumah, NRI.

IMPROVING AGRICULTURAL MARKET PERFORMANCE:DEVELOPING AGRICULTURAL MARKET INFORMATION SYSTEMS

SELECTED CASE STUDIES FROM OIC COUNTRIESPRESENTED AT 11TH MEETING OF COMCEC AGRICULTURE WORKING GROUP

22nd February 2018, Crowne Plaza Hotel, Ankara, Turkey

Structure of Presentation

• Introduction

• Methodology

• Case study countries: Egypt, Indonesia, Uganda• Introduction

• Mapping of MIS

• Details of MIS structure

• Advantages and challenges of MIS

• Assessment of MIS

• Summary of findings

• Policy recommendations

Methodology• Selection of case study countries

• Egypt

• Member of COMCEC Arab Group

• Major producer of agricultural commodities

• Indonesia

• Member of COMCEC Asia Group

• Major producer of agricultural commodities

• Case study on Improving Agricultural Market Performance – Creation and Development of Market Institutions (COMCEC, Aug 2017)

• Uganda

• Member of COMCEC Africa Group

• Case study on Improving Agricultural Market Performance – Creation and Development of Market Institutions (COMCEC, Aug 2017)

• Is a trailblazer in setting up Market Information Systems (MIS)

• Work carried out

• Literature review

• Internet search

• Field work - Sept/Oct 2017

• Telephone and e-mail communication

Egypt case study - introduction

• Egypt is an important producer, consumer and exporter of agricultural goods. Agricultural production in highly concentrated in irrigable zones along the Nile River and in irrigation schemes.

• Agriculture contributes around 16% to GDP and employs about 34% of all labour.

• By value, vegetables are by far the largest crop followed by wheat, maize, rice and fruits. Sectors considered as strategic, such as wheat, have government support, including maintenance of guaranteed minimum prices and pan-territorial farmgate pricing.

• Recent significant macroeconomic adjustments, including the depreciation of the Egyptian Pound, have encouraged a strong focus on exports.

Egypt – Mapping of Market Information System (MIS)Name of MIS Type of

MISInformation covered Information

users

Agricultural MIS in Egypt is run by the MALR

Public Prices for selected commodities (e.g. wheat, aquaculture)

Farmers,Traders,Policy makers

Bashaier / Knowledge Economy Foundation (KEF)

Private Input supplies prices, crop prices, crop offers, etc

Digital trading by farmer groups

International MIS Private Selected commodities (e.g. strawberries, onions, tomatoes, poultry)

Large-scale farmers in Egypt

AMIS (Agricultural Market Information System)/FAO

Inter-national public

Market monitor (wheat, maize, rice, soybeans)

Policy makers,Large-scale farmers or traders

Egypt – Details of MIS structure

• The main agricultural MIS in Egypt is run by the Ministry of Agriculture and Land Reclamation.

• Much of the existing MIS appears to be derived from projects in different sectors, such as the Market Information Project (MIP), Cotton Sector Promotion Programme (CSPP) and the Agricultural Transfer and Utilisation Project (ATUP).

• Dissemination is done by notices in newspapers and through a ‘banner’ on the Agricultural News TV channel which airs daily. Government-run open markets are expected to display these prices.

• Private sector initiatives (e.g. Bashaier). Knowledge Economy Foundation (KEF) claim that their Bashaier Network (http://www.bashaier.net) is the first of its kind in Egypt with the aim of doing digital trading through farmer groups.

• Large-scale producers use open source international MIS.

• Egypt is a member of the Agricultural Marketing Information System (FAO/AMIS).

Source of Market and Price Information for Horticulture by Governate (%), (Adapted from UNDP, 2011)

Examples of Information Provided by Bashaier(Source: www.bashaier.net)

Advantages and challenges of Egypt Agricultural MIS

Advantages Challenges• Main agricultural MIS in Egypt is run by

the Ministry of Agriculture and Land Reclamation. Influenced by projects (Examples include MIP, CSPP and ATUP).

• Dissemination of information by notices in newspapers and through a ‘banner’ on the Agricultural News TV channel which airs daily. Government-run open markets are expected to display these prices.

• Private sector initiatives (e.g. Bashaier). Knowledge Economy Foundation (KEF) claim that their Bashaier Network is the first in Egypt with the aim of doing digital trading through farmer groups.

• Egypt is a member of the Agricultural Marketing Information System (FAO/AMIS).

• Smallholder farmers have limited access to reliable market information (for example, they often have less information about output prices than local traders or exporters, and they also lack information about timing of planting and marketing of crops).

• To some extent, there is a dual system involving state of the art crop management in the export sub-sector, whereas in the domestic market the situation is different and losses are reported to be high.

• There is no evidence that the existing MIS, either public or private, are linked to the development of market-supporting institutions such as warehouse receipt systems (WRS) or commodity exchanges.

Assessment of MIS in Egypt• A study over six years ago noted that smallholder farmers are held

back by limited access to reliable market information and that this situation hampered planting decisions as well as marketing decisions, especially in terms of choice of trader with whom to trade.

• It can be reported that the situation has not changed much as at the time of the mission and there is need to improve the system.

• Egypt has under-invested in MIS as a means of improving agricultural productivity. An impact of this in the long term has been that the private sector has invested in and evolved its own MIS, which means that any new public or private systems of information supply have to compete with these sunk costs.

• There is need to build capacity especially at the level of small-scale farmers in using up to date ICT systems which can unlock the huge potential available.

Indonesia case study - introduction

• Indonesia was selected for this study because it has an up and running agricultural MIS, and the existence of a donor-supported MIS has been in place since the 1980s and 1990s. Also, Indonesia was included as a case study in report for COMCEC meeting on Improving Agricultural Market Performance – Creation and Development of Market Institutions (August 2017).

• Main agricultural products: staple foods (e.g. rice, maize), livestock products (e.g. chicken, eggs, beef), horticultural crops (e.g. onions, chillies), estate crops (e.g. palm-oil, rubber, cocoa, coffee).

• State of agricultural policy – liberalisation of the economy, but also existence of state-owned economic enterprises.

• Methodology: Literature review, fieldwork (one week mainly in Jakarta, plus visit to Bogor to meet farmers and traders), telephone interviews, internet search.

Indonesia – Mapping of Market Information System(MIS)

Name of MIS Type of MIS Information covered Information users

Agricultural MIS in Indonesia is run by the MoA/CADIS

Public Farm-gate and wholesale prices for selected commodities (e.g. staple crops, horticulture, estate crops, livestock)

Policy makers, farmers, traders

Ministry of Trade Public Retail prices for selected commodities

Policy makers

BULOG (Bureau of Logistics)

Public Rice prices and stocks, FarmersPolicy makers

BPS / National Office of Statistics

Public Government publications,Coordinating function

Policy makers

World Food Programme

International public

Food Security Monitoring Bulletins

National and intl.Policy makers

E-commerce platforms Private Price data, market demand and supply for selected crops

Producers, buyers (with IT access), platform operators

AMIS (Agricultural Market Information System)/FAO

International public

Market monitor (wheat, maize, rice, soybeans)

Policy makers,Large-scale farmers or traders

Indonesia – Details of MIS structure• Ministry of Agriculture (MoA) - its Centre for Agricultural Data and Information

Systems (CADIS/PUSDATIN) is the main unit.

• Ministry of Trade (retail prices from urban centres for selected commodities)

• Badan Pusat Statistik (BPS or National Office of Statistics) – coordinating function

• BULOG (Bureau of Logistics/Badan Urusan Logistik)

• World Food Programme (WFP) – Food Security Monitoring Bulletins

• Indonesia is member of FAO/AMIS, G20 and ASEAN – provider and user of information

• E-commerce platforms - private MIS: Evolution beyond 2GMIS

Startups often playing intermediary role between producers and buyers

• LimaKilo (http://limakilo.id/ ; https://vibbi.com/limakilo.id)

• 8 villages (http://8villages.com)

• Usahadesa (www.usahadesa.com; www.berdesa.com/)

• TaniHub https://www.youtube.com/watch?v=UpR4V0IpSlg

https://www.tanihub.com/

• Sikumis (www.sikumis.com)

• CI Agriculture (http://ci-agriculture.com/)

• SIPINDO, with NGO Yayasan Bina Tani Sejahtera, (http://www.binatani.or.id)

Agricultural MIS operated by Ministry of Agriculture, CADIS / PUSDATIN(Data flow in CADIS, Source: Nugroho, 2016)

Advantages and challenges of Indonesia Agricultural MIS (run by MoA/CADIS)

Advantages Challenges

• The agricultural MIS is an automated, app based, system which has been up and running for half a decade

• The agricultural MIS currently focuses on price information at farmgate and wholesale market level

• The agricultural MIS covers the entire country, which is vast and consists of many islands

• Selection of relatively large number of strategic crops is covered by system

• People have trust in Government information

• The agricultural MIS has resources allocated on a permanent basis in the budget of the MoA

• Legislative issues regarding data and information are covered by Government Acts

• Data collection in remote areas can be difficult

• More crops and product qualities/varieties could be covered by the MIS, providing farmers with more information for decision making

• More resources are required, to reduce fluctuation of staff (e.g. within MoA), improve IT hardware (e.g. at provincial level), or provide more training (not only in statistics but also on market information system)

• Accuracy and frequency of data collection can be improved

• Dissemination of information can be improved (e.g. more use of local TV or social media)

• In future, the agricultural MIS is planned to include more indicators (e.g. crop inventories where applicable, different qualities/varieties, supply and demand situation, per capita consumption and production)

Ministry of Trade, Republic of IndonesiaRetail food price statistics for selected commodities

Other stakeholders: BPS and BULOG

• Badan Pusat Statistik (BPS or National Office of Statistics) – coordinating role as far as national data sources are concerned

• Bureau of Logistics, that is Badan Urusan Logistik(BULOG) is a government-owned food marketing company

Publishes information on

food (e.g. rice) stocks and

prices (e.g. paddy or rice)

World Food Programme (WFP)Publishes Food Security Monitoring BulletinsContains plenty of production (e.g. meteorological) information, but also information related to food markets (e.g. for Ramadan).

Retail Price Trends for Selected Food Products during Ramadan in Indonesia

Market informationavailable through e-commerceproviders in Indonesia(e.g. SIPINDO)

Challenge of e-commerce:Requires IT equipment and knowledge (e.g.smartphones or tablets), which for the time beingonly a limited number offarmers have.

Assessment of MIS in Indonesia

• Studies undertaken in the 1990s concluded that the MIS in Indonesia provided a valuable service, most notably to farmers and was also sustainable. Few assessments of the system have been carried out in recent times.

• One of the main reasons for public investment in MIS is to enhance government capacity to respond to food security emergencies in the country.

• The MIS in Indonesia is quite elaborate in that it operates within a legislative framework with clearly defined roles for various government agencies. The defined roles are complementary and well-coordinated to assure the quality of information published by BPS and other agencies.

• Funding for the MIS is assured through government budgetary provisions to the Ministries of Agriculture and Trade.

• A Technical Working Group involving donor agencies such as WFP and FAO has been set up to regularly review relevant developments and advise the government on policy responses to mitigate any potential food crisis.

• Farmers and traders interviewed in and around Bogor at the end of September 2017 indicated that they mainly obtain price information by phoning potential buyers in different markets (i.e. they do not use information from MIS).

Uganda case study - introduction

• Uganda is one of the trailblazers in setting up MIS. The first among these is FOODNET, which was established in 1993. Also, Indonesia was included as a case study in report for COMCEC meeting on Improving Agricultural Market Performance – Creation and Development of Market Institutions (August 2017).

• Commodities: Banana, root crops, maize, beans, vegetables, sesame, sunflower, oil palm, coffee, cotton, tea, cocoa, tobacco, sugarcane, fish, livestock.

• Liberalisation of the agricultural sector in the 1980-90s, with the government scaling back its role in the marketing of the main export crops and private exporters allowed entry into the trade.

Uganda – Mapping of Market Information System(MIS)Name of MIS Type of MIS Information covered Information users

FARMGAIN Africa Private Crop prices, stock availability, product flows, regional prices, and other advisory services

Farmers, traders, government

AGRINET Private Crop prices, stock availability and traders

Farmers, traders, government

Infotrade Private Crop prices, stock availability and traders

Farmers, traders, government

Uganda Coffee Development Authority(UCDA)

Public Local market prices, export parity prices, supply availability and output forecasts

Farmers, exporters, government

Regional Agricultural Trade Intelligence Network (RATIN)

NGO Regional prices, stock availability, product flows, trading platform (GSOKO)

Farmers, traders, government

BETTA Grains Private Regional prices, stock availability, product flows, comparative regional prices

Farmers, traders, government

FEWSNET(Famine Early Warning Systems Network)

Donor Local market prices, regional prices, supply availability, regional produce flows and forecasts

Farmers, traders, government

World Food Programme International public

Monthly Market Monitor National and intl. policy makers,

Uganda - Details of MIS structure• FARMGAIN Africa – Food crops and export crops prices, stock availability, product flows, regional

prices, and other advisory services; data collection through interviews and observation and enumerators and data from regional sources; funding through internal cross-subsidies and donors.

• AGRINET - Crop prices, stock availability and traders; interviews observation by enumerators; dissemination through e-mail, website, mobile SMS.

• Infotrade - Crop prices, stock availability and traders; interviews observation by enumerators; funding through internal cross-subsidies and donors.

• Uganda Coffee Development Authority (UCDA) - Local market prices, export parity prices, supply availability and output forecasts; dissemination through e-mail, website, mobile SMS ; funding through government and donors.

• Regional Agricultural Trade Intelligence Network (RATIN) – Covers food crops traded in regional market; regional prices, stock availability, product flows, trading platform (GSOKO); dissemination through e-mail and website; funding through internal cross-subsidies and donors.

• BETTA Grains - Food crops traded in regional market; regional prices, stock availability, product flows, comparative regional prices; dissemination through e-mail and website; funding through internal cross-subsidies and donors.

• FEWSNET (Famine Early Warning Systems Network) - Local market prices, regional prices, supply availability, regional produce flows and forecasts; dissemination by e-mail and website; donor funded.

• World Food Programme (WFP) - Monthly Market Monitor; international donor funded.

Examples of MIS in Uganda

MIS/Payment System for Newly-Established Uganda National Commodity ExchangeSource: Mobipayagrosys, Uganda

RATIN (Regional Agricultural Trade Intelligence Network (RATIN) Maize Prices in Eastern African Cities (KES/90kg) on 18th December 2017

WFP Uganda Monthly Market Monitor (August 2017)

Advantages and challenges of Uganda Agricultural MIS

Advantages Challenges

• There is a wide range of MIS platforms in Uganda.

• Having been one of the pioneers with FOODNET, a 1GMIS in the 1990s, Uganda currently has MIS of all types, including those with national, regional and international coverage.

• There are government and private-operated MIS as well as platforms run by NGOs.

• The most active users of the existing MIS are development practitioners such as the staff of World Food Programme (WFP) and USAID.

• At the same time, among the stakeholders consulted many were either unaware of or dissatisfied with the existing MIS.

• Farmers often rely more on informal networks (e.g. phoning other farmers or traders).

• Traders usually consult and/or observe their counterparts for price information.

• Warehouse operators may consult leaders of farmers’ groups, their field agents, or traders on prices in rural and urban markets.

• Banks tend to rely on their clients or on staff at branch offices.

• Policymakers often do not utilise data published by MIS providers, except when directly involved in projects related to the MIS platforms. Notable exception are officials of NAADS who require information for extension advice to farmers.

Assessment of MIS in Uganda• Different forms of funding configurations are in place for MIS in

Uganda. This includes the totally government-funded Coffee MIS run by the UCDA and donor-funded systems such as FEWSNET and the WFP’s platform. In addition, there are private MIS platforms which rely on internal cross-subsidisation from other commercial activities undertaken by the providers.

• No formal legislative or regulatory framework exists in Uganda for MIS, which has partly contributed to the large number of MIS providers in the country without driving up uptake among key market players such as farmers, traders and financial institutions.

• It may be worthwhile to have a more enabling regulatory framework as far as MIS is concerned, in order to rationalise investments in MIS capacity.

• It appears important to promote effectively utilised MIS which encourage transparent engagement in market transactions.

IMPROVING AGRICULTURAL MARKET PERFORMANCE:DEVELOPING AGRICULTURAL MARKET INFORMATION SYSTEMS

CONCLUSIONS AND POLICY RECOMMENDATIONS

MIS development trajectory: from 1GMIS 1GMIS:

Mainly run by government organisations (e.g. Ministries of Agriculture)

Covers strategic staple crops for food security reasons; and Major agricultural exports

Tracks prices from several markets but usually no trend analysis Price data obtained from interviewing market players; not based

on record of actual transactions Reporting is based on standard weights but prices based on

volume measures Data transmission is paper-based Dissemination of market information is via radio/TV broadcasts

and print media Data used by mainly government policymakers and uptake by

private actors low due to data reliability issues

MIS development trajectory: 2GMIS

Use of ICT in most processes: Data collection (using tablets) Data transmission and processing (automated) Information dissemination via mobile phones, emails and

websites

Broader range of agricultural produce covered Wider range of providers involved e.g. donors/NGOs (national and

regional), private (independent, linked to trading or exchanges), international monitoring platforms

Type of price data collected – same as in 1GMIS except where linked to structured trading systems e.g. exchanges);

Other data/information: output forecast, trend analysis, trade flows and stock monitoring

Triangulation of national, regional and international information

Beyond 2GMIS: filling the gaps• 2GMIS: gaps in information where not linked to structured

trading systems e.g.: • Limit uptake by market players, hampering market performance

• Lack of transparently-discovered prices; stock monitoring information

• Limited data analysis and interpretation capacity

• Information asymmetry between actors

• Sustainability challenges

• Advances:• Development of database of different actors to facilitate transactions

and access to services, including payments services

• Enhanced crop forecasting using remote-sensing technology

• Individual crop performance monitoring facilitating tailored extension service delivery as well as reducing information asymmetry, thereby fostering forward trade contracts and financing

• More effective stock monitoring linked to standardisation of quality, weights and measures; also WRS

• Diversification of services e.g. exchanges on prices/government agencies on forecasts and stock monitoring – synergies between market institutions clearly evident

Recommendations to improve MIS (1)In designing MIS account should be based on assessment of the

needs of market players: This is important in ensuring that providers offer what is needed and ensure

significant utilisation of the MIS by market actors;

Implies providers will go beyond disseminating nominal prices leaving information gaps which discourage uptake by market actors

Gaps to be filled include price trend analysis, forecasting of output and supply, monitoring stocks and demand; and maintaining databases/monitoring systems for enterprises

Formal coordination systems should be set up to complement use of MIS in managing national food security. Indonesia and Ethiopia cases show that:Formal regulatory and coordination systems optimise use of MIS in

managing food security crisis;

Coordination platforms should include but not limited to government agencies but also donors, organisations involved in monitoring regional/international food markets and major market actors;

Roles should be clearly defined for the actors; and

Market should be informed about conditions and potential actions.

Recommendations to improve MIS (2)Food security policies should be aligned to agricultural trade and

market development programmes: This includes development of MIS and other market institutions;

Focusing on moderating short-term food price shocks can marginalise long-term agricultural market development goals (e.g. ad hoc controls over food imports and exports create market uncertainty); and

Efficient domestic markets catalyse output and productivity growth which reduce import dependence and minimise shocks from global markets.

Development of MIS and other market institutions should be linked due to mutually-reinforcing benefits:WRS and commodity exchanges ensure more transparent price discovery,

thereby improving quality of price data and therefore uptake of MIS;

Reliable MIS essential in promoting uptake of WRS and exchanges.

Governments support MIS as sustainability is a challenge: Justified on “public good” grounds in terms of promoting efficient output markets

and improving supply of agricultural finance; and

By improving the quality of information which underpins government actions, thereby achieving set objectives with minimum adverse impact on agricultural markets.

Improving MIS monitoring indicators (1)

Recommendations include the following:

User satisfaction surveys should conducted regularly: • Survey benchmark: baseline stakeholder needs assessment;

• Use both structured questionnaires and qualitative approaches e.g. key informants interviews and focus group discussions

• Online surveys for users accessing information via websites and emails.

Surveys should include assessment of quality, relevance and timeliness of information: • Involve triangulating information provided by MIS platforms with

available data and information from other sources.

Improving MIS monitoring indicators (2)

Recommendations also include:

Assess cost-efficiency of service provision: • Review of MIS process (collection, analysis and dissemination) to

identify cost-efficiency opportunities;

• Assess governance systems in relation to capacity to respond to stakeholder needs and market developments.

Assess impact of MIS on development of agricultural markets:• Despite attribution challenges

• Not just number of users/requests and estimates of producer margins; but also

• Role in formalising agricultural trade and uptake of market institutions

• Involve research institutions – mutually beneficial