Economics of Information in Developing Country Agriculture: Evidence from South India

Public agricultural extension systems often fail due to inadequate consultation of farmers about their information needs and poor understanding of their information search strategies. In discussing and implementing extension programs and advisory services, the following questions need to be addressed: What information do the farmers need? How and where do they search for information? What factors determine their search behavior? How much are they willing to pay for their information? While the first two sets of questions are addressed fairly well in the literature, the latter two have not yet been attempted in the context of developing countries. Using a case study of two districts in South India, we examine farmer information needs and their information search behavior, factors affecting their search behavior, and their willingness to pay for information. Cluster analysis on access, frequency and use of information sources identified four farmer information search behaviors – high, medium, semi-medium and low. The groups differed significantly by post-high school studies, household economic status, cultivated land area, agricultural income, and membership to a farmer-based organization (FBO) and a Primary Agricultural Cooperative Bank (PACB). We use these four information search behaviors to examine differences in information needs, sources used and preferred sources. The important information needs related to rice included pest and disease management, pesticide and fertilizer application, seed variety, seed treatment. Rice production practices and credit information was more important for the low search group. Private input dealers and the state department of agricultural extension staff were the main information sources, though use of these two sources decreased with greater information searching. High and medium searchers used a greater number of sources, which also included print media and TV. The major constraints to information access, common to all search groups, were poor reliability and timeliness. The preferred medium of information was interpersonal contacts followed by information via mobile phones, where a helpline or voice messages was preferred over SMS. Through a contingent valuation technique it was found that farmers’ willingness to pay for voice-based mobile phone messages was low. The results show that the delivery of agricultural information, tailored to the different information search behaviors of farmers, is important to consider for extension programs.