Taking Profit from the Growing Use of Mobile Phone in Benin: A Contingent Valuation Approach for Market and Quality Information Access

Abstract

An information systems-adapted Contingent Valuation survey was used to assess smallholder farmers' perceptions and the premium they are willing to pay (WTP) to get mobile phone-based information on market prices and product quality to overcome the recurrent information asymmetry issues in the chain. The investigations, consisting of an exploratory case study in Ghana followed by a survey with 285 observations in Benin, demonstrated that market information asymmetry indeed leads to lower prices for farmers. In Ghana, market price alerts through mobile phone messaging allowed decreasing transaction costs for farmers from US $2 to US $150 per transaction. In Benin, most farmers who are using mobile phones are WTP a premium of up to US$2.5 per month to get market price and quality information. Econometric models showed that decisive factors for the premium to be paid include farm location, market channel, profit margin, contact with agricultural extension services and technical support from buyers. The study suggests a multi-stakeholders' platform for an efficient and sustainable mobile phone-based market information system in agri-food chains.

Keywords:

• information asymmetry
• market information
• food quality
• willingness to pay
• pineapple

Acknowledgements

We are thankful to all respondents both in Ghana and Benin for their contribution.

Funding

Financial support from Wageningen University Interdisciplinary Research and Education Fund (INREF) and the Netherlands Fellowship Program (NUFFIC) is gratefully acknowledged.

Notes on contributors

Djalalou-Dine A.A. Arinloye is an Agricultural Economist, Associate Scientist at the International Institute of Tropical Agriculture (IITA), Cotonou, Benin. He holds a PhD in Business Administration and Management Studies from Wageningen University (WUR) in the Netherlands. He has an undergraduate degree in Agricultural Economics from the University of Abomey-Calavi, Benin. His research interests include supply chain governance, knowledge management and market information systems.

Anita R. Linnemann is an Assistant Professor in Product Design and Quality Management at Wageningen University, the Netherlands. She obtained her PhD degree at Wageningen University and she is lecturing and conducting research on consumer-oriented design of foods with a focus on tropical agricultural production systems and sustainability, using a chain approach.

Geoffrey Hagelaar is an Assistant Professor in Business Administration and Management Studies at Wageningen University, the Netherlands, and he is full Professor of Supply Chain Management at the University of Applied Sciences Windesheim, Zwolle, the Netherlands. He did his PhD at the University of Twente, Department of Public Administration. He lectures in the fields of Food Quality Management and Supply Management. His main research area is chain and networks in the public and private sector with focus on chain governance, network and supply management.

Ousmane Coulibaly is a senior agricultural economist with IITA and based at the Station of Cotonou in Benin. He holds a PhD and MSc in Agricultural Economics from Purdue University and Michigan State University (USA). He has worked as an IPM economist for evaluating biological control and other pest- and disease-tolerant techniques throughout Sub-Saharan Africa. He has coordinated the Cowpea Project for Africa (PRONAF). His current focuses are capacity building of national agricultural research systems’ scientists, policy-makers and development project managers in Sub-Saharan Africa.

Onno S.W.F Omta is full Professor, Head of the Department of Business Administration and Management Studies at Wageningen University, currently consisting of an international Faculty and PhD students from Europe, Africa, Asia and South America. He wrote his PhD thesis on management control of biomedical research and pharmaceutical innovation at the University of Groningen. His current research interests focus on innovation management and entrepreneurship in international chains and networks.