ICT-BASED MARKET INFORMATION SERVICES INCREASE AGRICULTURAL SEED ADOPTION AND INCOME AMONG UGANDAN FARMERS Policy Brief 15, June, 2016 Silver Spring Hotel 1

Outline 2  Rationale  Intervention design  Method and data  Key findings  Policy action

Rationale 3  Kiiza and Pederson (2012) argue that easily accessible ICT-based market information through radios, internet, mobile phones, on when (time for planting), where (terrain) and which seed quantities & varieties to use and at what price, has the single most significant impact on influencing farmers decision to adopt to new seed technologies.  In adopting new seed technologies, smallholder farmer households are ultimately able to improve their yield and incomes.  A major assumption assumed in here is that equal information on how to access markets on issues surrounding improved seed varieties i.e. from either formal (adopters) or informal (non-adopters) is available but it is up to the farm households to choose a mode that maximises their utility.  Thus, given farm household characteristics, availability of both formal and informal market information, a farmer will behave to either or not adopt improved agricultural seed technologies.  Thus, Kiiza and Perderson (2012) explore this empirically using sample survey data at Parish level.

Intervention-theory 4

Methods and data 5  Methods  Use sample data to explore the determinants of adoption of ICT- based market information from sources such as formal (radios, mobile phones, internet centres) or informal (traders, fellow farmers, relatives and friends) by farm households.  To assess the impact of access to ICT-based market information on the intensity of adoption of new seed varieties by a farmer and increase in farm yields, a propensity score matching (PSM) method is employed.  Why PSM?

6  The data that informs this study was collected from 13 districts in Uganda. District regional location: North (Apac) ; East (Iganga, Kamuli, Kapchorwa,Soroti and Tororo); Central (Kayunga, Kiboga, Luwero, MasakaRakai); West (Masindi, Ntungamo)  In each district, one sub-county was randomly selected and from each sub county, two parishes were randomly selected from which 39 smallholder farmers were also randomly selected for inclusion in the study thus providing a total sample of1,206 farmers.  Out of 1,206 only 252 farm households matched in characteristics to estimate if adoption of ICT- based market information had an impact of the “share of improved seed planted in 2006 and 2007”.  To estimate the impact of ICT-based market information on yield only 512 Vs 530 farm households matched in characteristics for estimation in 2006 and 2007 respectively.  To estimate the effect of adoption of ICT-based market information on incomes out of the total sample only 241 and 328 farm households matched for those growing maize only in 2006 and 2007 respectively.  More household level information was gathered. Data

Key Findings [Kiiza and Perderson (2012)] 7

8 1. Farmers who regularly transport their crop yields to the market, those belonging to a farmer group or cooperative, having access to finance (loans) and farm households much closer to a trading centre or district capital had much higher chances of adopting ICT-based market information services than those who were not. Furthermore, government awareness campaigns promoting various given crops had the highest significant effect on increasing chances of farm households to embrace/adopt ICT-based market information services-by 19 percent-; the effect is even much higher among commercially-oriented farmers. 2. Increased awareness on market information through measures such as popular localized FM radio stations, farmer cooperatives, market information centers- mobile phones, internet facilities have a big effect on Ugandan farmers’ adoption of improved seeds. That is there was an average increase of 33 percent in the share of improved seed being planted by farmers who had accessed ICT-based market information in 2006 and the margin was equally high a year later (29 percent).

3. Effect of adoption of improved seed on farmer yield and profit by cropping season 9

Policy actions Deliberate efforts should be made to promote initiatives that increase awareness and access to ICT-based market information together with yield-augmenting agricultural seed technologies. This should be done especially with regard to adoption of improved seed varieties for rural households and smallholder farmers. 2. Government should create a conducive environment for the private sector to expand their investments in telecommunications infrastructure into rural areas where adoption of ICT is still low due to low penetration.

Thank you 11