Improving Agricultural Market Performance:
Developing Agricultural Market Information Systems
14
stakeholders (CTA 2015). Furthermore, MIS has to be distinguished from agricultural
statistics, which includes production and price data. These statistics are often used by
policymakers to inform actions taken by governments, for instance in informing the design as
well as monitoring implementation of projects and programmes to promote growth in the
sector. At the macroeconomic level, food price data provides an important means to monitor
and contr economy-wide inflation. This is because food prices represent a much higher share
of the con mption basket in developing countries than in the more advanced (or wealthier)
economies Data fromMIS may be included in national agricultural statistics but the distinction is
nonethele important.
2.2.2 EARLY EXAMPLES OF MIS Whilst price information systems have been in existence for hundreds of years, dating back to
Roman times and the Muslim Caliphate during the 9th Century (Islam et al., 2010). One of the
first institutionalised MIS providers is the Office of Markets, which was set up in the United
States (US) in 1913 (Nikolov et al., 2000). Its main function, however, involves analysis of issues
relating to the structure and regulation of various financial and commodities markets in the US.
Other MIS followed in the US during the 1920’s, primarily to support price transparency and
curtail market concentration in the agro-industry (Bowbrick, 1988). The Public Ledger in the
United Kingdom is also one of the early forms of MIS, providing information which enabled trade
counterparties to engage in some form of arbitrage. Many of these systems were replicated in
Europe in the 1930’s and later extended to Africa and other developing countries in the 80’s
(Zoltner and Steffen, 2013).During the 1980-90s a wide variety of MISs were created in developing countries, largely at the
behest of the public sector and which focussed mainly on products related to food security.
These were driven in part due to the prevailing market liberalisation policies (post-Washington
Consensus) and in particular the push for the liberalisation of agricultural markets (Zoltner and
Steffen, 2013). As Marketing Boards were dissolved after the introduction of price liberalisation
many saw their residual function as data collection and dissemination and so developed MIS.
Therefore, many of the existing MIS are either hosted by Government agriculture statistics
departments or by former Agriculture marketing boards, some of which have been privatised.
2.3 LIBERALISATION IN DEVELOPING COUNTRIES: PRIME DRIVER OF
DEVELOPMENT OF MIS In the 1970-80s many developing countries liberalised the agricultural sector as part of broader
economic reforms. As noted by Rodrik (2006) and other authors, the reforms essentially aimed
at reducing the role of the public sector in the economy in order to create space formarket forces
to drive the efficient allocation of resources and therefore catalyse sustained growth. The
reforms in the agricultural sector greater flexibility in pricing of export commodities, partly
because exchange rate controls were eased in order to minimise overvaluation of national
currencies. Marketing of agricultural inputs and outputs was also transformed, resulting in
increased role of the private sector, as further discussed below. Governments also scaled back
from the supply of subsidised credit to farmers, with the expectation that microfinance
2 For example, Fawley and Juvenal (2011) note that whilst food accounts for only 15%of the U.S. consumer price index (CPI)
basket, the share in the CPI basket in the Philippines, which is classified as a lower-middle income country, is 50%.