Impact of SMS-Based Agricultural Information on Indian Farmers

Abstract

This study estimates the benefits that Indian farmers derive from market and weather information delivered to their mobile phones by a commercial service called Reuters Market Light (RML). We conduct a controlled randomized experiment in 100 villages of Maharashtra. Treated farmers associate RML information with a number of decisions they have made, and we find some evidence that treatment affected spatial arbitrage and crop grading. But the magnitude of these effects is small. We find no statistically significant average effect of treatment on the price received by farmers, crop value-added, crop losses resulting from rainstorms, or the likelihood of changing crop varieties and cultivation practices. Although disappointing, these results are in line with the market take-up rate of the RML service in the study districts, which shows small numbers of clients in aggregate and a relative stagnation in take-up over the study period. JEL codes: O13, Q11, Q13. The purpose of this study is to ascertain whether agricultural information distributed through mobile phones generates economic benefits to farmers. We implement a randomized controlled trial of a commercial service entitled Reuters Market Light (RML) offered by the largest and best-established private provider of agricultural price information in India at the time of the experiment. Operating in Maharashtra and other Indian states, RML distributes price, weather, and crop advisory information through SMS messages. We offered a one-year free subscription to RML to a random sample of farmers to test whether they obtain higher prices for their agricultural output.

A text message away: ICTs as a tool to improve food security

“…Similarly large effects are suggested by preliminary research in Peru (Beuerrmann, 2015;Chong et al, 2005) and the Philippines (Labonne and Chase, 2009). Others find much smaller (Goyal, 2010) or no effects (Fafchamps and Minten, 2012;Mitra et al, 2011). A more thorough list of such studies is presented in Table 1.…”

Assessing the Role of Mobile Phones in Offering Price Information and Market Linkages: The Case of M‐Farm in Kenya

“…It may be that farmers also used price information they obtained from other M-Farm users or that the changes were in fact stimulated by the broader ADS project on agribusiness development. Discrepancies between perceived and actual impacts of the mservice RML on agricultural practices were also observed by Fafchamps and Minten (2012). It is interesting to note that the perceived impact of participation in M-Farm has been less pronounced on the production of commercial crops such as maize and beans in Migori compared to Rachuonyo.…”

“…In contrast, Fafchamps and Minten (2012) conclude that the m-service Reuters Market Light (RML), which disseminates price, weather and farming information to Indian farmers via SMS, did not induce systematic changes in agricultural practices, such as adopting new varieties or changing cultivation practices. The authors do not differentiate between different types of information delivered by the service when assessing impacts.…”

“…A study in Colombia shows that although many farmers who received daily price information via SMS were more knowledgeable of prices in different markets, they did not receive higher sales prices than those who did not use the service (Camacho and Conover, 2011 Fafchamps and Minten (2012) find that farmers with a free one-year RML subscription did not receive significantly higher average prices. They also conclude that the RML subscription did not impact transaction costs 3 nor did it induce farmers to economize on the cost of searching for price information.…”

“…Several authors have assessed the impact of price information m-services on farmers' income (Camacho and Conover, 2011;CTED, 2013;Fafchamps and Minten, 2012;Islam and Grönlund, 2010;Lokanathan et al, 2011;Subervie, 2011) although only two of these studies have been published in peer-reviewed journals (Fafchamps and Minten, 2012;Islam and Grönlund, 2010). 1 One of the studies also looks at the role of price information in inducing farmers to switch traders (Islam and Grönlund, 2010) while another examines the impact of a mobile phone-enabled trading platform on sales patterns (Lokanathan et al, 2011).…”