Electronic copy available at: http://ssrn.com/abstract=2618963 AGRO MARKET INFORMATION AND FARMERS MARKET LINKAGE: WAY FORWARD K.C.Siva balan, Jayalakshmi Umadikar, Suma Prashant, U.Sangeetha, Archana.K. Prasad IITMs Rural Technology and Business Incubator ( RTBI), Chennai, India Introduction In India, 70 percent of the population resides in rural areas and around 56 percent of workforceisengaginginagricultureandalliedsector(CensusofIndia,2011). Thoughfarmersareadoptingthelatestcropproductiontechnologiestobringout best yield levels, the profitability is decided by the market forces only. Many earlier studies(AparajitaGoyal,2013;Jensen2010;Ferris,2004;RATESCenter,2003) documentedthatfarmersrarelyselldirectlytoconsumersandtherearesignificant pricevariationsinthevillagemarkets.Thisinformationasymmtricitywillfoster opportunistic behavior of other market actors which in turn traps farmers in vicious cycle of poverty .Since farmers seldom sell their output on the main district markets, the sellers generally have less or little information about current prices while buyers are often well-informed, at least about the price in the district market where they are active (RATES Center, 2003). For farmers to take timely selling decisions and also supply the commodities at markets where they could get better prices, the right kind of market information has to reach them in time. Pierre Courtois and Julie Subervie (2014)estimatedthatduetothemobile-basedMarketInformationServices(MIS) program,farmersreceivedsignificantlyhigherpricesformaizeandgroundnutsto the tune of about 10 percent 7 percent for maize and groundnut respectively. IITMs RTBI along with IIT Madras, have successfully developed a system mobile based advisory system for Krishi, hereafter referred to as mASK- which has beenfunctioningtoserveasmallgroupoffarmersbyprovidingthenwith personalizedagriculturaladvisories,throughacallcenterapproach.This Agricultural Advisory System leverages the power of two-way communication over mobile phones and helps bridge the information gaps existing between farmers and experts. An integral feature of the system forms the farmers dashboard that hosts a Electronic copy available at: http://ssrn.com/abstract=2618963 completefarmerandfarmprofilealongwiththecrophistoryandadvisories provided from time to time. This enables tracking the stages of the crop and the time ofharvest.Duringarecentsurveyconductedwithfarmersregisteredintothe system,itisobservedthatalargenumberoffarmerswereinterestedinreceiving market and commodity price related information.In this context a research study was carried out to understand the information seeking behavior, market advisory preference of farmers and suitable approaches for enhancingthefarmprofitability.Moreimportantly,recommendationshavebeen made which can be utilized by the system such as mASK very effectively to provide market information at the right time to registered farmers.Methodology The study was conducted in the Trichy district of Tamil Nadu state. Out of 9 taluksofTrichyDistrict,threetaluksnamelyManachanallur,Lalkudiand SrirangamwereselectedbasedontheCropcoverageareaandCroppingpattern (Fig.1). From the fourteen blocks, Manachanallur, Lalkudi and Manigandam blocks wererandomlyselected.Twovillagesarerandomlyselectedfromeachblock namelyEdumalai,Kiliyanallur,Anbil,Nagar,ThayanoorandManigandam(6 villages/3blocks/10respondentsfromeachvillage).Thesocioeconomic variablesviz.Age,Educationstatus,Farmsize,farmingexperience,Annual income,Socialparticipation,Innovativeness,Informationseekingbehavior, PreferenceofAdvisory,awarenessone-mediatools,Modeofpreferenceof Advisoryservices,Preferenceofmarketadvisoryservices,WillingnesstoPay behaviorweremeasuredbyusingappropriatescalesandscoringtechniques.The constraintsfacedbytheusersandsuggestionstoovercomethehurdleswerealso discussed and documented after in depth interviews and Focused group discussions ( FGD) conducted among the crop growers of Trichy district. Datawerecollectedthroughawell-structuredandpre-testedinterview schedule. The statistical tools of cumulative frequency, arithmetic mean, percentage analysis,simplecorrelation,wereusedtoanalyzethecollecteddatabyusingwith STRATAsoftwareandSPSS16.0softwarepackagestherebymeaningfully interpreted and relevant conclusions were drawn. Fig. 1Map Showing the Study Area Tiruchirappalli District of Tamil Nadu, India Results and Discussion Agro Market Information seeking behavior of farmers Theagriculturalinformationplaysapivotalroleinacceleratingagricultural productivity,farmprofitabilityandinturnleadstoupscalingofrurallivelihoods. ThecommunicationsourceswhichfarmersusevariesfromAgriculturalextension officers to neighbors and relatives. The farmers are using print media such as News papersandJournalstoelectronicmediasuchasTelevisionandRadio.The reliability,reachabilityofeverycommunicationsourceisuniqueandhasitsown advantagesanddisadvantages.TheNationalSampleSurveyOrganization(NSSO) hasdocumentedthatattheall-Indialevel,only40%offarmerhouseholdshave access to one or more sources of information (NSS, 2005). The NSSO found that of thesixteendifferentsourcesforaccessinginformationonmoderntechnologyfor farming about 16.7% of the farmers got their information on a daily basis from other progressive farmers in their villages.Table.1 Distribution of respondents based on their market information seeking behavior Figures rounded off / Multiple answers n=60 S.NOParticulars Market Information seeking behavior RegularlyoccasionallyNever No%no%no% 1.Private farm consultant183015252745 2.TNAU Scientists--9155185 3. Agricultural Department officials 274515251830 4.Agro input dealers488081347 5.Neighbors / relatives91525422643 Pluralistic Approach for Information sharing Inthepresentstudy,fromtheanalysis(Table.1)itisfoundthatthemajor sourcesofmarketinformationforfarmersareagroinputdealers(80percent). Nearly15percentoffarmersobtainedtheirinformationfromneighborsand relativesregularly.Agriculturaldepartmentofficialscontributetoabout45percent inprovidingthemarketinformationonregularbasis.Farmersalsogainmarket information from private farm consultants like executives from input manufacturing companies(30percent).Thefarmerswhoseekmarketinformationoccasionally fromTNAUscientistswere15percentonly.Thefindingswarrantthepluralistic activities of all stakeholders in transfer of Agro market information and in line with findingsofSaravanapriya(2005).Theauthorsopinethatalongwiththepublic extensionfunctionaries,thepara-extensionworkerssuchasinputdealers,private farmconsultantshouldalsobeinvolvedindisseminatingpriceinformationtothe needyfarmers.ForthiseveryvillagecouldhaveaFarmersDiscussionGroup (FDG)comprisingfarmers,ruralwomen,inputdealer,villageyouthand progressivefarmersheadedbyappointed/electedconveners.Ithasbeenobserved thatencouragingtrainedindividualswouldhelpincreatingacompetitive environment for agricultural information sharing (Global Agri System 2008). The mASKused by RTBI,enables two waycommunications where farmers canclarifytheirdoubtsandthecalloperatorcanreceivethefeedbackandmentor theclienteleintimelymanner.Duringtheinitialperiodoftheprogram,awareness ontheadvisoryservicesshouldbecreatedamongthefarmingcommunity.Along withawarenesscreation,fieldlevelfollowupactivitiesviz.,-conductionof communitymeetings,advertisementviamassmediashouldbecarriedoutinthe villages along with the enrollment of subscribers, From the study it was inferred that local channels of communication (channels within the social system) like local rural youth and input dealers are preferred by more than one third of the respondents (38 percent, 37 percent respectively). The formal official communication likethatwith extensionofficerswasless(10percent)sincetheclientelemightfeelthatthe extension officers are from outside the social system (Fig.2). The finding was in line withPrabha(2014)whosestudydocumentedthatnoneofthebeneficiaries(100 percent)optedforStateDepartmentofAgricultureasanalternatesourcefore-velanmaiextensionServicesbyTamilNaduAgriculturalUniversity.Hencelocal convenersshouldbeinvolvedinmassawarenesscampaignandupscalingofthe program. Fig.2AlternateextensionpersonnelunderCallcentrebasedAgromarket advisories n=60

Kind of Mobile Advisories Morethanhalfoftherespondents(56percent)preferredTextbasedmarket information services (Fig. 5). The respondents felt that they can store and share the text message with the fellow farmers. They can re-use the messages later when need arises.Buttherespondentsinsistedthatthemessagesshouldbedeliveredinlocal languagesonly.Ontheotherhandnearlyhalfoftherespondents(44percent) preferred voice based message services. They felt that there was difficulty in reading themessagesincethemobilehandsetshassmallscreensonly.Instead,listeningto voicemessageswouldbeverymucheasierevenforilliteratefarmers.SinceRTBI mASKisfunctioningasahelplineservice(callcentremode),thefarmerscan clarifytheirdoubtsincropproductionatthesametimethemessagedeliveredwill be reinforced to the farmers in timely manner. Table.2 Mode of preference of e-Market information services n=60 S. Noe-market information servicesPreference (in percentage) 1.Call centre38 2.Mobile devices50 3.Conventional(Extension functionaries ) 12 Preference of market advisoriesAninsightfromthetable3revealedthatvastmajority(92percent)ofthe respondentsoptedforBuyerandSellerdetailswhichwillbeverymuchusefulto spotoutandfacilitatethebuyingandsellingpointsnearby.Themiddlemen interferencewillbeconsiderablyreducedbydirectsellingofcommodities.The profitmargincanalsobeincreasedifnomiddlemencommissionchargeswere incurred.Majority(58percent)oftherespondentspreferredmarketintelligence news.Thedailypriceandforecasting,markettrendsmayhelpthefarmersin decisionmakingandselectingthemarkets.Theexportmarketdetailswerequoted as preference by nearly two-fifth of respondents (47 percent) which showed that the farmers are looking for avenues for more profit and new market places. Nearly one-third(30percent)showedpreferenceforGovernmentsubsidyschemessothat eligible beneficiaries could apply for the appropriate schemes. Table. 3 Preference of market advisories n=60 S.NoKind of Market AdvisoriesPreference in percentage 1.Market Intelligence news58 2.Buyer and Seller contact details92 3.Export market details47 4.Government subsidy details30 Willingness To Pay (WTP) for the Advisories Thesustainabilityofanyprojectdependsontherevenuecollectionaswellas numberofbeneficiariessubscribedfortheservices.Thevastmajorityofthe respondents(90percent)showedinterestinpayingforthemarketadvisoriesif deliveredintimelyandsitespecificmanner.Alittlemorethanone-third(38 percent) opted for INR 200 as annual subscription charges followed by 38 percent of the respondents preferred to pay more than INR 200 and up to INR 400 per annum. Only10percentoftherespondentsexpressedtheirnon-willingnesstopayfor advisories(Fig.3).Publicsectorextensionserviceshavealwaysbeenfreeforthe farmers,whichmayhavecreatedaparticularmindsetamongthebeneficiary respondents. Fig. 3 Willingness To Pay (WTP) for the Advisoriesn=60 Thefivecharacteristicsofthebeneficiaryrespondentsviz.,age,experience,land holding pattern, income and innovativeness showed significant relationship with the dependent variable Willingness to Pay, while education was negatively correlated. Thecorrelationvalueofagewassignificantat0.01percentlevel.Itcanbe concluded that regardless of the age of the respondents, they were willingness to pay fortheadvisoryservices.Thevariablesviz.,experience,landholdingpattern, income and innovativeness showed significant relationship at 0.05 percent level. It canbeinferredthathigherthefarmexperience,landownership,incomeand innovativeness level, higher will be the willingness to pay behavior. The factors like higherlandholdingownershipandhighincomelevelmightmakeitaffordablefor those farmers to opt for pay user market advisory services. Need for Backward and Forward Linkage Forsustainingfarmprofitability,itisimportanttodevelopthefarmersaccessto backward(seed,fertilizer,pesticideandotherinputs)andforward(trading, wholesaling,export)marketsforimprovingtheirprofitability.Thiscanbedonein any of the following ways: e-Media Tools (i)Market Information PortalMarketinformationportalcouldbeaonestopshopforproviding marketinformation(price,demandandsupplysituation),contact nameandaddressofserviceprovidersandothervaluechainactors. Theportalcouldalsoassistinprovidingcriticalcurrentissues affectingproductionandsalesofcommoditiessuchasfarming practices,pestinfestationandmeasurestotake,etc.(Policy FrameworkforAgriculturalExtension,MOA,GovernmentofIndia, 2001). The portal can seek advertisement from the various commercial serviceprovidersandvaluechainactorsandcanbecomesustainable. Thepersonalized-sitespecific,relevantandtimeboundAgro information will reach the end clientele and makes the innovation and diffusionprocesseasier.AgromarketAdvisoryservicescanleverage theforwardandbackwardlinkagesoffarmerswithmarketsand conglomerationofstakeholdersispossible.Thetimelymarket informationhelpstocreateawarenesstheaboutmarketprices, facilitatestradeandinthetimemarketglutsituationtoplanfor commodities storage decisions. The positive impact of Reuters Market Light(RML)mobileservicesinMaharashtra,Indiawasdocumented byFafchampsandMinten(2011).In2014Sivabalanetal.,studied theforwardlinkageofTomatogrowersandconcludedthatthe widespreaduseofICTtoolsamongtheagriculturalclusterswould bring out not only horizontal integration of vegetable growers but also verticalintegrationofallthemembersofthesupplychainleadingto bettertheprospectsoffarmprofitability.Theawarenesscreationon neweradvisoryservicesandtechnologyisimperative.Thefarmers should be completely clear of the nature and objectives of the services before subscription of any market advisory services. The training need ofthefarmersshouldbeidentifiedandnecessarycapacity strengtheningprogrammeshouldbeinitiated(Khurana,and Satvindarkaur, 1996). (ii) Mobile based Market Advisories Withincreasingmobileownershipof951.37million,Mobile technologyhasmanymoreadvantagessuchaspersonalized informationsharing,instantdeliveryofmessage,mobilityofdevices andcheapercostfordeploymentthananyotherICTdevicessuchas computers, Internet etc., The people in rural areas can connect with the local,regionalandnationalknowledgecentresviamobiletelephony andareabletoreceivefarmbasedservices,accessmarketsandavail banking/ financial services without any hindrance to their regular farm activities.Mobiletechnologyensuresdeliveryoftimelyinformation thathelpsunderstandandanalyzemarketprices,facilitatestradeand helpsfarmermakeinformedbusinessdecisions;reducestransaction time,travel,andcostsbybridgingdistancesandallowingforamore effectiveuseoftime;strengthenscommunicationswhichpromote socialnetworksandcommunitiesprogressinhealth,safety, employment,recreation,andotherareas;andfinallyincreaseslevels ofcommunityparticipation,facilitatinganinformeddecisionmaking process,particularlyencouraginggreaterparticipationfromrural women.Thecropgrown,distanceofmarket,pricevolatilityand volumeoftradeinthemarket,commoditytobemarketed,socio-economic characteristics of farmers are playing a role in theintensity ofmobiletechnologyimpactonthelivelihoodoffarmers(Muto, MegumiandT.Yamano(2008).AkerandFafchamps(2010) estimatedtheimpactoftheuseofmobilephonesonfarm-gate agriculturalpricedispersioninNiger.Themobiletelephonyusage reducedproducerpricedispersionforcowpeasby6%,andtheeffect wasstillstrongerinremotemarketsandmarketsthatdonothave pukkaroadsaccess.Thebettercommunicationwithsocialnetworks helpsintimesofshockandreducesrisktohouseholds.(Akerand Mbiti,2010).Jensen(2007)statedthattheintroductionofmobile phonesdecreasedpricedispersionandwastagebyfacilitatingthe spreadofinformationforfishermeninKeralastate,India.Abraham (2007) found that the widespread use of mobile phones among Kerala fishermenincreasedtheefficiencyofmarkets.Fishermenwhocan afford to get timely price information wereable to decide on the best markets to sell their daily fish catch. Mittal and Tripathi, (2010) noted thatthepotentialbenefitsofthemarketandtechnologyinformation transferhavebeenobtainedmainlybylargefarmersinthevarious states of India. Power of Aggregation - Crop clustersThetrendofmonocroppinghasalwaysshowntheprobabilityof higher returns and heavy losses. For example in Trichy district, paddy andSesamumaretwincropsforeveryseasonandleadstoeither market glut or price jackpots. For an individual, it is hard to find new marketsandnewbuyers.Atthisjuncture,theCropclusterscanalso playanactiveroleinsharingandexchangingcriticalbackwardand forwardlinkageinformationincollaborationwiththevariousvalue chainactorsandserviceproviders(McCluskeyandDesmond O,Pourke.,2001).Theycanholdworkshopsordiscussionmeetings withtheseactorsonweeklybasistoupdateinformationand knowledge.Thelatestandupdatedlocal,stateandnationallevel marketinformationcouldbemadeavailabletoproducersbyMarket CommitteesandMarketingBoardsthroughlargedisplayboardsfor developingmarketingintelligenceamongfarmers.Villagelevel procurementcenterscouldbeestablishedinpotentialareas.Farmers couldbeencouragedtoformtheirownmarketingco-operative societiesinordertoreapthebenefitofeconomiesofscale(low handlingcost,transportationcostandstoragecost).Bythisboth farmersandconsumerswillbebenefited.WithCropclusters becoming active, post-harvest losses could also be avoided with more importancebeinggiventoagro-processingopportunitiesforrural youth.Asthevaluechainmanagementmovesuptoagro-processing sector, the durability option of sale of produce also improves giving a filliptomarketefficiency.Moreoverwhenvalueadditionprospects getrealized,themarketingefficiencypossibilityimprovesaswell. Thepossibilityofmarketingcontractsnotonlyimprovestheprice spreadtotheadvantageofthefarmersbutalsoincreasesthechances ofriseinfarmersshareitself.TheformationofFarmerBased Organisationsandfarmergroupsisoftenencouragedtoreachthe farmers (Swanson 2008). Creating of Markets for Producers (M4P) AccesstoinformationisnomorefarfetchedwhenICTenabled informationservicesaredominatingthemarket,resultinginthe infrastructuralbettermentstartingfromthefirstlevelmarketsor village markets. The digital inclusion has made the buying and selling processmorecomfortableandeasywithjustamousesclick.The trendofpurchaseonsourcespecificcommoditiesvaluedby consumers such as certified products (Eg. Brown rice, Black rice etc.,) isincreasing.TheDigitalcommercemarketstoodatRs8,146crores inDecember2007andRs47,349croresbytheendof2012.By December2013,digitalcommerceinIndiagrewtoRs62,967crores (Internet and Mobile Association of India (IAMAI) report May 2014). Insteadofsearchingfornewmarkets,wecancreatemarketsfor producers (M4P). The paddy growers could be trained for new paddy varieties, special varieties suitable for diabetics, children and pregnant women that could fetch higher price in the markets satisfying selective group of consumers. For the forward linkage of farmers with markets, KnowledgeandCommerceStationmodelwouldbeanappropriate approach.Inthismodel,personalisedextensionserviceslikebuyer andsellerdetails,priceintelligence,placeintelligence,product intelligenceandmarketinformationcouldbedeliveredinlocal languagesviatextandaudiomode.Theregistereduserswillbe grouped as the producer clusters and can access Online Trade Platform (OTP)forbuyingandsellingofTraditionalDhanyasviz.,blackrice, Minor millets, herbals and organic fruits and vegetables. The franchise retailunitinproducerclusterareasenablesmallholdersandrural women to step up in the agro value chain by getting involved in value addition,sellingtobuyers,takingupexportordersandgettinghigh farm gate prices. Conventional paddy varieties for special consumer sectors Diabeticpatientsoptforvariousdietmodesskippingricedietsto controltheirdiabetes.ManyofusarenotawareaboutKarun Kuruvaipaddywhichcancontrolandkeepdiabeticpatientsoutof danger.ThevarietyKarunKuruvaialsocalledasKaruvatchi,Panai marathu samba. Based on the Laboratory studies on physio- chemical properties and nutrient analysis and assessment of taste and Glycemic Index(CIKSincollaborationwithEthirajCollegeforWomen, Chennai),thevarietieslikeKarungkuruvaiandNeelamsambaare rich in iron and calcium where as protein content is rich in thevarities likePerungar,KarungkuruvaiandKullakarandverylowglycemic index of 50 55is estimated in Karungkuruvai, Kullakar, Kouni and Kalanamakvarieties(CIKSquarterlyNewsletter,October2014Vol. 15No.4.www.ciks.org).Thesevarietiesrequirelesswaterand droughttolerancecharacteristicsmakesthesevarietiesmoresuitable fordeltaareas.Theaveragepriceof60Kgsofkaruvatchipaddyis from Rs.1800 Rs. 2000, which is a high return for the paddy growers (Dinamalardailydated19thJan,2014).Thusidentificationof indigenous commodities and awareness creation on cultivation aspects can increase the profit margin. Future thrust and recommendation .Having enquired among the farmers registered with the mASK on what could bethereasonsfarmersdonotcalltoseekinformationwhentheyhadcertainly mentioned their requirement for market information earlier during surveys and need assessments, farmersstated that they get to know the market information from the middlemen,whowouldalsobuytheirproduceonfarm.Itisfeltthatimmediate needformoneyandeaseofsellingtheirproduceatfarmgaterestrictsfarmersto enquire further for better price margins. The authors feel that, however ensuring the qualityofinformationandreliabilityofthesourceofinformationcouldprove dependableforfarmersregisteredunderanysystem.Theservicedeliveryofthe messageisasimportantasthatofthecontent.Thetimelyinformationismore valuableindecisionmakingprocess.Themobileadvisoriesalongwithin-person interactionwhichfarmerscanhavewiththemASKexpertwillhelpreinforcethe message delivery to farmers.There is a potential for theintegration of farmerdash board with buyer and seller online platform which could prove more useful than the individual interventions. 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