Improving Agricultural Market Performance:

Developing Agricultural Market Information Systems

system which has been set up for this purpose is that it is not simply based on tracking food

prices but a Technical Working Group involving donor agencies such as WFP and FAO has been

set up to regularly review relevant developments and advise the government on policy

responses to mitigate any potential food crisis. WFP regularly publishes outcomes of the

reviews, providing a means by which market actors can be informed about the risk of food price

and supply shocks.

Despite these impressive features of the MIS in Indonesia, especially in underpinning policy

actions, the evidence from this study shows that farmers and other actors are not using the

system as the basis for their marketing strategies and action. This is happening despite the fact

that the system covers a wide range of agricultural and livestock products and the collection of

data extends to remote parts of the country. Farmers and traders interviewed in and around

Bogor at the end of September 2017 indicated that they mainly obtain price information by

phoning potential buyers in different markets (e.g. around Bogor or in Jakarta). As such the

mobile phones (standard phones or smartphones) play an important role for farmers in terms

of obtaining information for bargaining but not as anticipated in theory – i.e. by checking

published prices. Trust appears to play an important role in this system where farmers rely on

the word of traders despite the high risk of conflict of interest.

The main factors which appear to be hampering uptake are accuracy and frequency of

dissemination of the data. The view of especially farmers is that the price data disseminated is

not qualitatively better than what they obtain directly by phone. This is because the data is

obtained by phoning traders and farmers rather than being a record of transparently discovered

prices as occurs, for instance, at commodity exchanges. Furthermore, apart from a few

commodities such as rice, the price reported does not give any indications of quality premiums

which exist in the markets.

It is anticipated that as the WRS and structured marketing systems which are being developed

by the government mature, their role in generating transparently discovered prices as well as

filling data gaps (e.g. on stock levels) will enhance the quality of information disseminated and

foster increased up. This is expected because the use of the modern trading systems requires

access to reliable and timely market information, as seen from best-practices in the world,

including in OIC countries discussed in Chapter 3 and Chapter 4 respectively.