Market Information - Dissemination of Perishable Agricultural Prices
The purpose of the Fostering Agricultural Markets Activity (FARMA) is to provide technical assistance in Bosnia Herzegovina (BiH) sub-sectors of agriculture markets through demand driven assistance aimed at improved competitiveness of BiH agricultural products. FARMA is to expand environmentally sustainable production, processing and sales of value-added agricultural products. The expected result of FARMA is contribution to poverty reduction.
At the beginning of the USAID/Sida FARMA project it was observed that the prices among the wholesale markets of BiH varied significantly from day to day and from one market to another. Experience has shown in many countries that the dissemination of wholesale prices for perishable agricultural commodities can have a very favorable impact on the efficiency of markets resulting in the movement of greater volumes, improved quality, better availability year around, higher profits for farmers and other actors in the commodity chain and lower prices for consumers.
During the 2011 agricultural season FARMA worked with the Excellence in Innovation project and AgroLink to gather and disseminate wholesale prices for perishable agricultural commodities. The objective was to improve market efficiency, which directly relates to the project's purpose to "foster agricultural markets." Daily prices were gathered from the principal wholesale markets of the country and disseminated the same day both via radio broadcasts and through SMS messaging. While the radio broadcasts had the potential of the widest dissemination, an intern studying the system for her Masters thesis determined that while the markets did improve their efficiency, as evidenced by reduced price variance among markets, the most important contributor to that effect was the distribution of prices via SMS messaging. While this was surprising given the relatively few SMS messages, it was explained because the SMS messages were being accessed by the "right" people. These users tended to be those involved in the wholesale business who did the greatest amount of trading.
Due to budget constraints, FARMA was unable to support the effort during 2012, though AgroLink did continue the service on a subscription basis. During the intermediate time several discussions have been held with the USAID Regional Competiveness Initiative (RCI) project and the Standing Working Group (SWG) which is a collaboration of ministries of agriculture among the countries of the region; Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Macedonia, Montenegro, Serbia, Kosovo. The nature of these discussions has been how to improve the market efficiencies among the countries served by SWG. To that end, FARMA noted that the software installed for AgroLink, called the Commodity Price Database (CPD), can support this objective. There are already some prices being gathered in surrounding countries, such as in Croatia, Serbia, Montenegro, and Albania. Of course, these prices are reported in the local currency and in the sale units common to each country. The value of the CPD toward this effort includes:
- The data input process is very rapid, meaning that it is feasible for AgroLink to receive and input the prices from all of the countries as frequently as daily.
- The software manages exchange rates.
- The software manages differences among sale units.
- Reports can be customized and stored, making it possible to pre-define reports that can be called up and generated every day.
Because of these characteristics, the CPD would allow the input of prices from the different countries then, using pre-customized reports, generate a report for each country that has the data from their own country as well as the markets of the surrounding countries, adjusted to their national currency and familiar sale units. These reports can then be disseminated to each country separately. Importantly, the marginal cost of these daily efforts is not high, amounting to several hours of work for one individual.
Beneficiaries will include both the public and private sectors. The daily reports will be sent to the ministries of agriculture of each country. They can use the information as part of their policy making and trade analysis. In addition, they may choose to distribute the information as they like. These will be reports that show the prices for a range of products for markets from each country. Users in the private sector will be able to access the prices via SMS messaging. By sending a text message with the product code they will receive a text message with the prices for that product across the markets. In addition, the public and private sectors may purchase from the provider specialized reports such as price histories that could be used for supporting business plans submitted for financing.