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Farmer bargaining power and market information services

Author

Listed:
  • Pierre Courtois

    (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - UPVM - Université Paul-Valéry - Montpellier 3 - INRA - Institut National de la Recherche Agronomique - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)

  • Julie Subervie

    (Marchés, Organisations, Institutions et Stratégies d'Acteurs - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - INRA - Institut National de la Recherche Agronomique - CIHEAM-IAMM - Centre International de Hautes Etudes Agronomiques Méditerranéennes - Institut Agronomique Méditerranéen de Montpellier - CIHEAM - Centre International de Hautes Études Agronomiques Méditerranéennes - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)

Abstract

In many Sub-Saharan African countries, farmers typically have a choice between selling their products to traders who travel between villages and markets and transporting their products to the nearest market themselves. Because of communities' remoteness and poor communications with marketplaces, farmers' uncertainty about market prices is usually high. Traders may take advantage of farmers' ignorance of the market price and extract a rent from them by offering very low prices for their pro ducts. In this article, we model bargaining interactions between a farmer and a trader who incur different transportation costs, and we study how price information affects the bargain and the balance of power. We then estimate the causal effect of a Market Information System (MIS) working through mobile phone networks on Ghanaian farmers' marketing performances. We find that farmers who have benefited from the MIS program received significantly higher prices for maize and groundnuts: about 12.7% more for maize and 9.7% more for ground-nuts than what they would have received had they not participated in the MIS program. These results suggest that the theoretical conditions for successful farmer use of MIS may be met in field.

Suggested Citation

  • Pierre Courtois & Julie Subervie, 2014. "Farmer bargaining power and market information services," Post-Print hal-02794142, HAL.
    • Handle: RePEc:hal:journl:hal-02794142
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