Awareness and the Use of Mobile Phones for Market Linkage by Smallholder Farmers in Kenya

Awareness and the Use of Mobile Phones for Market Linkage by Smallholder Farmers in Kenya

Julius Juma Okello (University of Nairobi, Kenya), Ruth M. Okello (Michigan State University, USA) and Edith Ofwona-Adera (International Development Research Center, Kenya)
DOI: 10.4018/978-1-60566-820-8.ch001
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Abstract

In many developing countries smallholder farmer participation in agricultural input and output markets continues to be constrained by lack of market information. Actors in most developing country markets operate under conditions of information asymmetry which increases the costs of doing business and locks out smallholder farmers. Attempts to address this problem are currently focusing on the use of ICT technologies to provide market information and link farmers to markets. This study examines the awareness and use of one such technology – mobile phones. It finds for male and female smallholder farmers in Kenya a high level of awareness and widespread use of mobile phones, mainly for social purposes. This study further finds that a low level of education, the cost of mobile phone airtime recharge vouchers and the lack of electricity for recharging phone batteries are the major impediments to the ownership and use of mobile phones, with female farmers more constrained than males. A high awareness of mobile phones among smallholder farmers presents an opportunity to strengthen smallholder farmers’ market linkage. However constraints to the usage of mobile phones will need to be addressed. The study findings indicate priorities for policymakers dealing with the specifics of ICT adoption as a tool to promote rural viability via rationalization of Kenyan agricultural markets.
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Introduction

Smallholder farmers account for more than 70 percent of the farming community in rural Africa. Yet, they continue to face significant problems in accessing production inputs and high value markets for their products. Some of these problems emanate from the bad past agricultural policies that entrenched the patronage of the state over marketing of agricultural produce in most African countries. The dominance of the state over agricultural marketing caused the private sector to retreat leading to lack of supportive services and inefficiency in the distribution of inputs (Poulton et al., 2006; Kirsten, Forthcoming). At the same time, the pricing and produce movement policies pursued by African governments made it difficult for private sector to profitably participate in the market.

Market liberalization policies of the 1980s and 1990s in many of the African countries removed some of the barriers to farmer participation in markets and their access to inputs. However, most smallholder farmers have largely missed the window of opportunity opened up by market liberalization (Jayne and Jones, 1997). Participation of many such farmers in better-paying markets and their access to inputs (information, credit, fertilizer, seeds, and insurance) has been dismal (Key and Runsten, 1999; Poulton, et al, 2006; Kydd and Doward, 2005).

One of the major contributors to poor smallholder farmers’ access to markets is the high transaction costs in both the input and output markets (Omamo, 1998a & 1998b). High transaction costs in turn arise from poor access to market information or absence of the type of information the farmer needs, lack of needed skills, and the lack of access to risk insurance (Key and Runsten, 1999; Tollens, 2006). Lack of requisite infrastructure and assets further hinder smallholder farmers’ access to markets (Barrett, 2008).

Market failure for smallholder farmers is especially more pronounced in cases where buyer(s) have quality and/or safety specifications that must met by farmers. Under such cases smallholder farmers face three distinct problems namely: i) how to meet buyer safety/quality specifications, ii) how to be recognized as producing safe food of required quality, and iii) how to maintain sustainable link with the buyer (Rich and Narrod, 2005). The challenge of maintaining a sustainable linkage with the buyer arises from the difficulties smallholder farmers face in producing consistent quality and volumes of the product (Poulton et al., 2006).

To enable farmers to overcome some of the constraints posed by market information inadequacies and induced input and output market failures a number of ICT-based projects are being implemented in several African countries. Examples include the Kenya Agricultural Commodity Exchange in Kenya, TradeNet in Ghana, Malawi Agricultural Commodity Exchnage in Malawi, Songhai Center in Benin, and Women of Uganda Network (WOUGNET) in Uganda (Ferris, et al, 2006). These initiatives include the use of mobile phones, internet, fax and CD Roms. Others use the more traditional radio and television options to provide market information. The shift to these technologies, especially mobile phones, has been driven by the rapid growth in the use of phones in rural Africa (Aker, 2007). A scoping study conducted in Africa finds widespread promotion of these ICT-based technologies in several eastern and southern African countries including Kenya, Uganda and Malawi (Munyua, 2009). Despite the mushrooming of ICT-based market information service projects that use ICT technologies, little is still known about the awareness and usage of such technologies by smallholder farmers in Africa. This chapter examines the awareness and usefulness of mobile phones among smallholder farmers in Kenya. Its broader purpose is to assess the level of awareness and use of ICT technologies by smallholder farmers and identify the opportunities (constraints) that should be exploited (addressed) by policymakers to promote greater use of the technology to link more farmers to markets. It specifically addresses the following research questions:

  • i)

    What is the extent of awareness of ICT-based technologies for provision of agricultural market information among rural smallholder farmers?

  • ii)

    What is the extent of usage of ICT-based market information technologies among such farmers?

  • iii)

    What is the effect of gender on awareness and usage of ICT-based technologies among rural smallholder farmers?

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