Deciding how much to grow can be difficult for farmers in developing countries, who largely operate without crucial market information. Governments and non-governmental organizations (NGOs) are attempting to address this knowledge gap, but how widely should they deliver such information to the maximum benefit of farmers? Is wider information distribution always best?

This important issue is the subject of an innovative modelling study by Xiaoshuai Fan and Ying-Ju Chen of HKUST, along with their colleagues. The authors found that the best policy for providing relevant agricultural information depends on a combination of four key market conditions. Their findings have crucial implications for governments and NGOs striving for socially responsible conduct and poverty alleviation among farmers.

Market knowledge can make the difference between poverty and financial success for farmers in developing countries. Often, however, information such as forecasts of future market demand or current market price is either unavailable or not widely accessible because of poor Internet access and illiteracy among farmers. Governments and NGOs in emerging economies are developing different ways to provide relevant market knowledge via information and communications technologies. The results of this study provide “practical guidance for governments and NGOs when developing agricultural information services,” write the authors.

Farmers, governments, and NGOs operate under different environments and market conditions. “Governments and NGOs usually provide agricultural information services free of charge,” say the authors. For example, India’s Ministry of Agriculture has launched call centers in Kisan to deliver free extension services to farmers over the phone. Using a model based on four market/environmental conditions, the researchers examined how widely a social planner should disseminate public information to farmers. Interestingly, they found that providing information to just one farmer was best; disseminating information more widely to farmers provided detrimental.

However, the researchers recognize that alternative market conditions can exist. Free services, for instance, can be “inconvenient because they usually require farmers to initiate calls (or search the internet) in order to access market information,” the authors note. Changing the model assumptions separately, the researchers reveal different results from those from their base model. For example, “when the information service is self-funded so that there is a fee for information access” the authors find that “the central planner should disseminate more widely when farmers’ private information is sufficiently precise.” Distributing information more widely is also optimal when yield rates are uncertain. The “optimal information policy provision policy depends on the competition type,” conclude the authors, “as well as yield uncertainty, source of funding, and the social planner’s ultimate goal.”

These novel findings will help governments and NGOs to support farmers in developing countries. As policymakers seek to disseminate relevant market information, they should consider differing market conditions and environments to help farmers make the best production decisions. Such an approach will make the delivery of their information services not only socially responsible but also poverty alleviating.