I enjoyed reading this piece in the New York Times about how mobile phone text services (from Reuters) are transforming agricultural markets in india by giving farmers more info on when to sell their goods at the right time in different markets - for higher prices and profits but at same time giving them means to lower consumer prices. At least some of the food crisis problem is due to a lack of transparency in pricing and ineffective / inefficient means to connect buyers and sellers. Simple technology like a pricing text service for farmers to help them find optimum prices can help reduce waste, speed goods to market, and lower costs for consumers. Its not just a questiion of increasing production capacity to meet growing demand.
Whether it is for a Wall Street trader or a farmer in India, the right information at the right time is a necessity for success.
For 157 years, since signing a contract in 1851 to supply stock prices from exchanges in Continental Europe to the London Stock Exchange, Reuters has served up numbers to the finance set. The International Herald Tribune has a partnership with Reuters, under which the two companies jointly publish the Business with Reuters section of the paper.
Now, Reuters, part of Thomson Reuters, is trying to provide analogous services to farmers in the developing world, where price information is stubbornly hard to compare. If successful, the program could become a model for economists and international agencies that have long proselytized for the use of technology - in particular, the mobile phone - to burnish economic growth in places like India and sub-Saharan Africa.
To that end, the company has been testing a program called Reuters Market Light for several months in Maharashtra, an Indian state about the size of Italy. The state is one of India's prominent agricultural centers, with farmers growing onions, oranges, corn, soybeans, wheat and bananas. But the farmers' business suffers from the difficulty of comparing prices from one market to another.
"We kind of saw that there was a clear market inefficiency," said Mans Olof-Ors, a Reuters employee who had the idea for Market Light three years ago. "The farmer would decide which market to travel to, then would just sell to that market. So there was no competition between markets."
Reuters has dispatched about 60 market reporters to the region to report on the going price for, say, oranges or onions, and to package the data into a text message that is sent to subscribers.
The service is signing up about 220 subscribers a day at a price of 175 rupees, or about $4.10, for three months at post offices throughout Maharashtra. The average monthly income of a farm household is about $50, according to the Indian government. The service has about 40,000 customers so far - a tiny portion of India's farm population, which is in the hundreds of millions, but it proves that many farmers are hungry for more information.
Reuters has collected anecdotal evidence from farmers about how the service has influenced their decisions about crop sales. One farmer, according to Reuters, held back the sale of 30 quintals of soybeans - one quintal equals 100 kilograms, or 220 pounds - for 15 days after noticing that prices had been rising for several days. He was able to get 400 extra rupees a quintal.
Amit Mehra, managing director of Market Light, said early data showed that most subscribers were making more money from their crops.
"We've seen that about 70 percent have benefited and changed their behavior about when to sell and when to harvest and where to sell," he said.
Some academic research has shown that mobile phones can have a stark effect on economic growth in rural areas. Robert Jensen, an economist at the Watson Institute for International Studies at Brown University, has studied the impact of putting mobile phones in the hands of fishermen in Kerala, a southern region of India. His study found that both fishermen and consumers benefited: profits rose 8 percent while prices of fish fell 4 percent.
Continue reading the article here
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