This Policy Note summarizes Working Paper 33, which examines the impact of providing price information from a commodity exchange to small farmers and traders of maize and soybean in central Malawi.
Using data from a panel survey of 399 farmers and 78 traders conducted before and after the main marketing season, and using kernel propensity score matching to account for possible differences between the treated and non-treated farmers, the study analyzes whether providing better price information increases volumes sold through structured markets, sales prices, and farmers’ levels of commercialization.
The authors find that the share of sales through structured markets, the volume of maize sold by traders, and maize and soybean prices increased significantly after the intervention. The authors also find positive, though in-significant, effects on maize and soybean sales prices, sales through structured markets and levels of commercialization. However, the authors find negative and significant effects on the quantities of maize farmers sold, suggesting paradoxically that providing farmers with price information reduces their sales volumes.
The study concludes that provision of price information alone is not enough to facilitate small farmers’ and traders’ use of structured markets. Greater effort is needed to sensitize farmers and traders on the quality and quantity requirements, as well as the operations of structured markets.
Authors: Dennis O. Ochieng, Rosemary Botha, and Bob Baulch, February 2020.
Click here to read and download the Policy Note (PDF 352 KB)
