1. Designing Market Information Services
Prof. Sanjeev Kapoor
Indian Institute of Management
Lucknow

2. Agenda for Discussion Present Agri-business Context
Need for Market Information in Present Agri-business Scenario
Market Information Services – Concept and Uses
Using Market Information for Production Planning and Higher Price Realization
Designing Market Information Services – National & International Experiences
Promoting Market Information Services - Issues

3. Need for Market Information
Existence of competitive market economy after the globalization and liberalization
One of the pre-condition for a competitive market economy is that correct information on market conditions must be available to all stakeholders in the market system

4. Need for Market Information
Information related to
- prices
- demand of product
- Quality of product
- Transaction cost
- Intermediaries involved in the market
Information on these variables over time and across space

5. Market Information Services
Collection of price and non-price information, on a regular basis, related to widely traded agricultural products
Dissemination of this information on a timely and regular basis through various media to different players in the marketing system
Use of this information by recipients for increasing the production and marketing efficiency and transparency of the system

6. Market Information Services
Facilitate efficient allocation of productive resources
Bargaining power of the farmers with traders can be increased
Reduces transaction costs by reducing risks. Which market the farmers should send their produce, or whether to send their produce to market at all.
Availability of information encourages new entrants into the marketing system as lack of information is an entry barrier to both production and trade.
It provides opportunity to farmers to plan and diversify the production in lines with market demand.
It can be a valuable input into Early Warning System for food security by identifying areas of possible shortages as reflected by higher prices.

7. Market Information Services
Current information
Historical information
- complied over time, often several years
Use of these two different information is different

8. Market Information Services
Current information
- reducing market cost by reducing the risk of loosing the money on a market transaction
- channel selection (selling at farm gate, or to local market, or to wholesale market or selling directly to consumers)
- higher price realization due to increased bargaining power
- harvest decision
- Marketing strategy – individual or group

9. Market Information Services
Current market information and spatial Arbitrage
- Arbitrage is a process of buying at lower price and selling at higher price with the objective of taking advantage of price differences in two markets that exceeds transaction cost.

10. Market Information Services
Historical market information
- storage decisions
- production decisions
- entry in the trade
- selling decision (when to sell)

11. Use of Market Information for Getting Better Price
Is the wholesaler getting a good price for us?
Is the wholesaler being honest?
What other reasons could be for the price less than reported by MIS?
Am I getting the same price or better than other farmers?
I can negotiate with the present trader based on the reported price
With knowledge of marketing costs, farmers can find out realistic farm gate price.

12. Use of Market Information for Production Planning
Whether to grow new crops?
- based on net profit analysis
Whether or not to store?
- based on seasonal price fluctuations and storage cost
When to plant and when to harvest the crop?
- based on technical feasibility and seasonal price fluctuation

13. Market Information Services – Indian Experiences
Directorate of Marketing and Inspection
- DMI is an attached office of DAC, MOA
- Initiated a project “AGMARKNET” during March 2000
- Aims at networking 2810 APWMs by the year 2007
- Reporting of daily wholesale prices and arrivals
- Covers about 300 commodities and 2000 varieties of agriculture produce

14. Market Information Services – Indian Experiences
- Information is disseminated through the internet (agmarknet.nic.in)
- Information is accessible in eight regional languages besides English

15. Market Information Services – Indian Experiences
National Horticulture Board
- Initiated market information service in 1985
- collect daily wholesale market price and arrivals of seasonal fruits and vegetables from 36 markets
- International price of fruits, vegetables and flowers are also collected
- Brings out a weekly bulletin and a monthly bulletin
- disseminate information through web (hortibizindia.org)

16. Market Information Services – Indian Experiences
Department of Economics and Statistics
- collects daily wholesale price of important varieties of foodgrains from 140 markets
- Weekly wholesale prices of 130 agriculture commodities from 530 markets
- farm harvest prices for 19 crops from district level on sample basis
- daily retail prices of vegetables, fresh fruits, livestock products and foodgrains from 90 centers

17. Market Information Services – Indian Experiences
- Collects these prices through State Agricultural Statistical Agencies and State Agricultural Marketing Boards and its 14 Market Intelligence Units
- Generally there is time lag of 2-3 weeks for reporting and disseminating the data
- major thrust is providing inputs for generating weekly wholesale price indices by ministry

18. MIS - Components Target audience Purpose of information
Which information to be collected
How the information should be collected?
Dissemination of information
- mode
- frequency
Utilization of the information
Cost of MIS
Charging for information from the users
Institutional structure for setting MIS

19. S.No.
Feature
Indonesia
Zambia
South Africa 1.
Target Audience
Small Farmers
Traders
Farmers/Traders/Support Industries 2.
Purpose of Information
Negotiating with traders
Entry into Trade
Market selection, Enterprise selection using historical information 3.
Commodity
Vegetables
Maize
Poultry 4.
Nature of Information
Daily wholesale price in morning and afternoon
Daily wholesale and retail price
Highest and lowest price, quantity, unsold volumes, trends in prices 5.
Dissemination of Information
Radio/Newspapers/Notice Board
Market bulletins/ Radio/ price boards
Computer 6.
Cost
Donor Govt. and agency
Donor Agency and sponsorship by bank
Private Company 7.
Charge from user
Nil
Yes

20. Market Information Services - Issues
1. Accuracy
- Price related to a particular variety and for a defined quality
- It should be consistent over time
- Price related to which type of transaction in the market
- unit of information

21. Market Information Services - Issues
2. Availability
- Information to be available timely
- Mode of dissemination
- Radio, T.V, Phone, Fax, Internet
3. Analysis
- Interpretation of the information

22. Market Information Services - Issues
4. Sustainability of system
- Funding for collection of information
- Charging the cost from users
5. Scale of Information
- How many products should be covered?
- How many location or markets?
- frequency of data collection?