Information Access and Smallholder Farmers’ Market Participation in Peru

Previous studies have documented the effect of information and communications technology (ICT) on farmers’ market participation. We employ a triple†hurdle model to examine the effect of internet and phones on Peruvian smallholder farmers’ market participation, marketplace choice, and volume decisions using household†level data from the IV National Agricultural Census of Peru in 2012. Double matching at the district†and household†levels is implemented to address potential selection bias. Results indicate a positive direct effect of internet and phones on farmers’ market participation and volume decisions on the national market. Those with ICT access are more likely to sell on the foreign market than those without ICT access. The marginal effects suggest that internet access tends to have larger impacts on volume decisions than phones. In addition to direct effects, we find that internet access has significant and positive spillover effects on market participation and volume decisions in the national market. Without implementing matching procedures, the magnitude of the ICT effect tends to be smaller. Results provide empirical support for policies and social programmes that promote ICT especially internet usage in rural Peru to improve smallholder farmers’ marketing performance.