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

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
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
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
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
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
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
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
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
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. 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. 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. 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. 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. 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. 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. 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. 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. 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. Thank you!
Comments and suggestions welcome
n.minot@cgiar.org
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