A New Approach to Monitoring Farmer Prices: Method and an Application to Malawi

Abstract

This paper proposes a new approach to monitoring farmer prices in low-income developing countries. This crowdsourcing approach involves broadcasting radio jingles inviting farmers to report the prices and locations at which they sold their crops to a toll-free call centre, with weekly prizes to incentivize reporting. An application to Malawi illustrates the feasibility of this approach in a setting where internet connectivity is limited but mobile phone coverage is reasonable. The majority of farmers reporting sold to assemblers or small traders and received substantially less than official minimum farm gate prices. Non-parametric analysis shows that farmer prices vary according to bargaining power and sales volume but not by distance to the point of sale. These findings may be explained by the fragmented and monopsonistic nature of food markets in Malawi, and farmers’ mode of transport to the point of sale.

Keywords:

• Monitoring farmer prices
• crowdsourcing
• conditional density estimates
• bargaining power
• time to market
• Africa

Acknowledgements

We thank Bjorn van Campenhout for developing the dashboard used to create the maps in Figures 7 and 9, Rosemary Botha and Dennis Ochieng for coordinating and managing the 2019 crowdsourcing pilot and 2020 crowdsourcing exercise, and Farm Radio Trust for operating the call centre, making and managing the broadcasting of the radio jingles, and coordinating the distribution of the weekly prizes with Farmers World/Agora.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

The data used in this paper is available from the corresponding author or IFPRI Malawi on request.

Notes

1 For example, while the Malawian Ministry of Agriculture and Food Security, along with several other international organisations, collect information of the market prices of a number of food items on a weekly basis, the collection of data on ‘farmgate’ prices takes place more erratically and is usually restricted to major markets and trading centres when it does occur.

2 The 2019 Population and Housing Census in Malawi found that 51.7 percent of rural and urban households owned mobile phones, respectively. Less than one-tenth of one percent of households have landline (MTL) connections, almost all of which are located in urban areas.

3 Given their infrequent use in the pilot, we discontinued the use of text -based responses after the pilot continuing only with telephone-based price reporting via the call-centre.

4 The duplicate calls are understood to be farmers who telephoned the FRT call centre to report the same transaction more than once to increase their chances of winning vouchers. The number of duplicate calls was minimised by the call centre setting-up an automatic alert when the same phone number telephoned again.

5 The 2019-20 Integrated Household Survey (IHS5) indicates that 43.6 percent of rural and 82.4 percent of urban households owned mobile phones. Less than one-tenth of one percent of households had fixed phone connections, almost all of whom were located in urban areas.

6 The maize and soybean harvest in central Malawi, where most of our crowdsourced data comes from, starts in late March/early April and runs through until late June/early July. In southern (northern) Malawi, where little soybean is grown, the maize harvest occurs about a month earlier (later) than this.

7 There are no commonly agreed quality standards set for crops in Malawi and traders mainly assess quality based on moisture content and visual appearance a common occurrence within rural markets.

8 In contrast to Eastern Africa and also South Africa, there are very few grain driers in Malawi. Use of moisture meters by all types of buyers, including the parastatal agencies, is also extremely rare.

9 Until 2022/23, the Malawi budget cycle was based on a July-June financial year. Due to a change of Government, the 2020/21 National Budget (which includes subventions for ADMARC and the NFRA) was not approved by Parliament until 2 September 2020.

10 See: https://massp.ifpri.info/2021/06/14/interactive-heat-maps-on-crowdsourcing-exercise/.

11 In practice, processors and large traders would need to evaluate whether the lower prices in these TAs are sufficient to offset the additional costs of procuring from these locations.

12 A Facebook platform for food prices was set-up by the World Food Programme in Malawi a few years ago but discontinued after it was discovered that most traders did not have computers or use smart phones. This may, however, be expected to change gradually over time.