2011 sustainable rural market information systems - … · 2011 sustainable rural market...

Investment Centre Division

Food and Agriculture

Organization of the

United Nations ID

s 2

011

Sustainable Rural Market

Information Systems

What is a proper market information system?

Listen to the success stories and think together.

Session moderated by Andriy Yarmak and Inna Punda

Rome, 16 December 2011


Organization of the

United Nations Investment Centre Division

Problem statement

Most TA projects focus on helping

farmers increase production

…which leads to higher supply

…which leads to lower prices

… and even lower income and greater

problems!


Organization of the


Problem statement

Some TA projects help farmers find

markets but when projects end, these

markets are not sustained, because

farmers still do not know how to find

markets, and market situation itself

changes very rapidly.


Organization of the


Problem solution

Market Information System (MIS) is the

key element of marketing infrastructure

and the basic element of marketing

… However, it is not always easy to make

MIS sustainable


Organization of the


Achieving sustainability of MIS is more

difficult in the following situations:

Low-income countries with poor

infrastructure (however, this also means

that costs of MIS will be low, which

makes chances still rather good);

Small countries with small number of

paying customers;

Sectors with a limited number of market

participants (consolidated sectors)


Organization of the


What’s Market Information System?

Daily & weekly commodity prices?

Offers & Bids?

Market news?

Production, processing & trade

statistics?

Supply and demand balances?

Production & price forecasts?


Organization of the


Do you want to reach millions?

Market players who can’t or do not want to pay

for MIS usually do not value it & can’t benefit

significantly from MIS, thus, free market

information is not really necessary but making

it affordable is an important challenge

Example of Ukrainian vegetable farmer (costs

of MIS are only about 2% of a revenue from 1

ha or about 0.2% of small farmer’s revenue but

it could help them increase revenue by at least

5%).


Organization of the


Information exchange before the MIS

Processors Wholesalers

Farmers

Wholesale

markets

Input

Suppliers

Retail

chains

Equipment

suppliers

Importers

and

Exporters


Organization of the


Information exchange with MIS

Processors Wholesalers

Farmers

Wholesale

markets

Input

Suppliers

Retail

chains

Equipment

suppliers

Importers

and

Exporters

Market Information System


Organization of the


Delivering information to end users

gets less expensive

Time sensative Analytical Technological Promotional

Phone Consultant x x

Web-portal x x x x

Weekly publications x x x

Manuals x x x

Conferences x x x x

Types of InformationTypes of information

delivery

• New important and inexpensive way in the upcoming years

would be deliver via smartphones when their costs will decline;

• Radio is still good but rather expensive way, which could be

used only with government support

… however, there is more and more harmful information spread

around


Organization of the


Market Information System Definition

In most cases TA projects limit their

efforts to development of MIS elements,

which, while helpful, do not really

resolve the key problem – do not create

sustainable infrastructure for efficient

marketing

MIS has to include all fundamental

elements in order to provide good

quality information for making marketing

and strategic decisions


Organization of the


Benefits of MIS

Improves marketing decisions;

Lowers price fluctuations;

Facilitates sales and lowers losses;

Attracts investments;

Improves strategic decisions;

Increases competitiveness.


Organization of the


Who benefits from MIS?

Farmers (sales, prices, planning, inputs);

Processors (purchases, sales, planning);

Input, machinery and equipment

suppliers (promotion, planning);

Wholesalers, importers/exporters,

retailers (price, buy, sell, planning);

Banks and financial institutions

(evaluation of credits);

Governments (greater budget revenues,

new jobs)


Organization of the


Key principles of MIS

Independency (provider should not be

involved in trade or sales of anything

besides MI services);

Transparency (users should have access

to detailed methodology of information

gathering and analyses);

Continuity (same principles used over

time make analyses of time series

possible);


Organization of the


MIS experience

Commercial Polish MIS for Dairy, oilseeds,

grains and meat sectors - still operational, fully

self financed, no donor support (since 1997);

MIS elements in Macedonia (1998-2003) for

meat & dairy – USAID financed – closed down

after the end of the project;

Commercial MIS for grains & oilseeds (APK-

Inform) in Ukraine – still operational, since

2004 extended to Russia and Kazakhstan, no

donor support (since 1996);


Organization of the


MIS experience (continued)

Initially USAID-funded (2003-2006) and now

commercial MIS for fresh produce sector in Ukraine

(Fruit-Inform) – still operational and fully self-financed

since 2007 (no donor support). Since 2007 it was

expended to include Russia and Poland.

USAID-funded MIS for fresh produce sector in

Georgia (2005-2007), closed down after the end of

the Project

MIS for fresh produce and Moldova AgroInform, 35-

40% self financed, the rest – supported by donors and

other commercial activities of organization

Have seen lots of donor-funded elements of MIS – all

closed down after the end of financing and none has

survived


Organization of the


Efficiency of MISs in Ukraine

From the user’s point of view • $20-100 per each $ spent in fresh produce and even

more for grains and oilseeds of measurable impact;

• Easy and quick access to high quality evaluation of

new projects (some projects we have saved would

have caused losses of up to US $20mn and the costs

of evaluation are usually less than 0.1% of the

project value);

• Significant savings on marketing costs & great

promotion of produce;

• Access to global knowledge base;

• 70,000 users in Ukraine & Russia


Organization of the


Marketing of the MIS itself is an

important component to success

Excellent PR tool by itself;

In Ukraine we were not selling

magazines (they do not usually cost

much) or subscriptions, we provided

each client with a fully-staffed 10-

people-strong marketing departments,

which never goes on vacation at about

10% cost of mid-level employee.


Organization of the


F&V MIS macro- impact in Ukraine

Number of F&V processing companies

increased from 8 in 2003 to 125 in 2005

and to about 150 in 2010;

Modern F&V production has been

created and Ukraine became a large

next exporter of vegetables and a

significant exporter of fruit;

Modern storage infrastructure has been

created (US $600mn in investments)

Modern wholesale markets were built


Organization of the


F&V MIS macro- impact in Ukraine (continued)

Huge increase in tax revenues from the

sector to the Ukrainian budget;

Significant impact on GDP growth

Significant support to foreign exchange

balance (from net importer to net

exporter)

500 thousand new jobs created


Organization of the


Thank you!

2011 sustainable rural market information systems - … · 2011 sustainable rural market...

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