Information & pricing in local agriculture
March 20th, 2009 § 2 Comments
Landscape, Murambi District, Rwanda
Thinking some more about the geographic scale of different agricultural markets has led me to consider how information availability and pricing might differ between them. Mobile phones are still a fairly rare commodity in rural Rwanda (outside of the towns), and if some set of extremely poor farmers were only selling extra produce hyperlocally, it seems that perhaps prices would either be set in total isolation from regional or national prices, or might be determined exclusively by a few people with mobiles. (I wonder if outside information would be convincing in this scenario – if the phone guy says to the farmer, “this cassava is 5 francs cheaper in Nyamata,” would the farmer accept this as a negotiating tactic, or assume that he’s lying? Perhaps it’s connected to how easy it is for the phone guy to actually access the cheaper cassava in Nyamata – the credibility of his threat.)
Then again, even with mobile technology to help information access along, its helpfulness still seems fundamentally predicated on A) physical mobility and B) social networks. Information about great prices in a town up the road will be less useful to a farmer if he still can’t reach it easily, and receiving the information in the first place is still connected to one’s actual social network (and ability to pay for airtime, of course). I wonder if the differing availability of mobiles to rural residents of different socioeconomic statuses may actually increase the vulnerability and exclusion of the poorest of the poor, rather like differing levels of access to microinsurance might actually push healthcare farther out of reach of the poorest.
Market access for the poor
March 15th, 2009 § Leave a Comment
I wish I had a better intuition on the question of the social impact of large-scale agriculture on smallholder farmers. I’m guessing the deciding factor is the strength of their existing market connections – whether they’re strong or weak, and central to livelihoods or a supplemental source of income – but I can’t seem to get at it on Google with specific regard to Rwanda.
This is probably analogous to any form of large-scale, cost-efficient production – the potential for socioeconomic displacement depends on the product you’re displacing. And I suppose that’s also a commentary on the target market. I’d guess that the vast majority of Rwandese agricultural production is by smallholder farmers for either hyperlocal (within a few miles) or local (say half a day’s walking distance) markets, and that only certain commodities are ever going to be linked to the Kigali low-income or high-income markets. (There’s not really a hell of a lot of local stuff being sold to high-income people in Kigali anyway, except maybe the specialty vegetables at Simba. The wealthy mzungus & Rwandese have their own totally separate selection of imports, whose prices correspondingly reflect good information about international pricing and transport costs. Which is to say, they cost an arm and a leg.)
So I’m wondering if perhaps there are many smallholder farmers who are producing the same types of commodities as might be produced commercially, but if they’re really not linked into the same markets that large-scale production would target. It seems like this might be more of a threat to medium-scale enterprises that already serve perhaps a regional or national (Rwandese) market, but then that’s a difficult ethical issue from threatening the livelihoods of smallholders who have almost nothing to start with. It’s a persistant challenge of doing business in poor countries – weighing the social benefits of increased food production & lower prices (marginal improvements to the well-being of many relatively poor consumers) vs. the possibility of undercutting the incomes of medium-scale farmers (major detriments to well-being of a few relatively poor producers). As an aside, I think there’s also an interesting lesson about innovation in there – that its effects will go in different directions depending on whether it’s creating an improved version of an existing product or service, or whether it’s creating something so novel that new markets develop around it. “Innovation” always seems to be referred to as a uniform category of activities, without regard for its differing impacts, at least in popular parlance.
