The impact of receiving SMS price and weather information on small scale farmers in Colombia

Small-scale farmers in developing countries often make production and sale decisions based on imprecise, informal, and out-of-date sources of information, such as family, neighbors, or tradition. Lack of timely and accurate information on climate and prices can lead to inefficiencies in the production, harvesting, and commercialization of agricultural products, which in turn can affect farmers’ revenues and well-being. We did a Randomized Controlled Trial (RCT) experiment with 500 small-scale farmers in a rural area of Colombia where there is nearly full mobile phone usage and coverage. Treated farmers received around 8 text messages per week with prices in the main markets for crops grown in the region, and customized weather forecasts. Compared to a control group, we find that treated farmers were more likely to report that text messages provide useful information for planting and selling, and more likely to always read their messages, indicating an increase in appreciation and use of this type of technology. We also found heterogeneous effects by farmer size. Smaller farmers try to make use of the intervention by planting more crops for which they have price information. Larger farmers seek new markets and increase conversations with other producers. Despite these positive effects, we do not find a significant difference in farmers reporting a price, price differential with the market price, or sale prices received. Our results indicate that farmers are amenable to learning and using new technologies, but that the introduction of these technologies do not always translate into short-run welfare improvements for them. Given the increased interest in incorporating information and communication technologies into agriculture, our findings indicate that prior to a large-scale implementation it is necessary to better understand what prevents farmers from more directly profiting from this new information.