Improving Agricultural Market Performance:
Developing Agricultural Market Information Systems
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2.4 OBJECTIVES OF MIS Based on the foregoing discussions, MIS is often perceived as an institutional mechanismwhich can
fill information gaps and therefore ensure that parties which transact in agricultural markets do so
on a well-informed basis. Arising from this, the consensus among several authors, including David-
Benz et al. (2012), Galtier et al. (2014) and (Staatz et al., 2014), is that the primary objectives for
which many developing countries set up MIS after liberalising agricultural markets include those
identified below:a) To facilitate trade decisions for buying, selling and investing – this is relevant for
farmers as well as traders, processors and financiers who have to take decisions
regarding timing of transactions based on information on market trends.
b)Improve market transparency – engendering trust in the information provided and
encouraging use by actors because there is no perception about manipulation of the
information by particularly interested parties.
c) Minimise information asymmetry, thereby reducing uncertainties which stymie fluid
transactions between market actors. This is important not only to trade counterparties
(e.g. buyers and sellers who are negotiating a sale) but also to lenders who provide the
liquidity (finance) needed to implement marketing and/or procurement strategies of
these parties.
d) Enhance the bargaining power of smallholder farmers in selling their marketable
surplus, especially because they often have limited information about price levels and
trends as well as the market fundamentals which affect them. Hence, smallholder
farmers may be cheated when transacting with better-informed parties or the
perception of being cheated may affect their involvement in trading.
e) Provide policymakers with reliable evidence-basis to guide agriculture and trade policy
decisions, especially with regards to food security.
f) Assist in the conduct of agricultural research, especially in areas related to promotion
of productivity-enhancement, food trade policies and food security.