Addressing Market Imbalance: Alteration for Harmony
In Mali, where the majority of the population works in agriculture, the use of fertilizers is low due to the challenges of coordinating markets. However, a group of researchers, led by development economist Andrew Dillon and Nicoló Tomaselli, are working to change this by creating more accessible markets in low-income countries.
The researchers organised one-day village input fairs in Mali in 2017 and 2018, with different timing, payment, and financing options in various groups of villages. Two of these groups required buyers to provide a 50 percent deposit upfront, while the other two required a lower deposit of just 10 percent.
Dillon is focused on identifying more creative ways to publicize and build trust in these events, among both farmers and vendors. The team's strategy aims to address the "last-mile problem", a factor in the lack of certain services in isolated communities, making it uneconomical for companies to invest in the necessary infrastructure.
The researchers found that farmers' uptake of fertilizer was greatest at fairs that were held just after the harvest and that only required a 10 percent deposit. Farmers who attended these fairs saw a 52 percent increase in their production and a 60 percent uptick in agricultural sales. The total value of fertilizer used by farmers in the two groups that met both of these conditions increased by 24 percent to 28 percent, compared with the control group.
Moreover, the researchers found that organising markets earlier in the agricultural season was as effective as providing farmers liquidity through credit financing. This suggests that simply gathering buyers and sellers is not enough to create a new market; addressing financing tools and the timing of sales are also crucial.
The team plans to replicate and scale the success of these fairs, and they are now focusing on testing the model in Ghana, Côte d'Ivoire, and Senegal. They also plan to create local social enterprises and a global nonprofit organization to invest in making village input fairs while also measuring their effectiveness and then looping in more partners-like other nonprofits and governments-to expand these efforts.
Dillon notes that there will need to be greater participation in fairs if the markets are to drive change at the community level. By addressing the "last-mile problem" and improving timing and financing options for farmers, these strategies can help create robust markets in low-income countries, fostering local economic growth.
- In their efforts to boost agriculture and business in low-income countries, the team plans to leverage the success of village input fairs by investing in making them more accessible and effective, with a focus on education-and-self-development for both farmers and vendors to foster trust and participation.
- With the aim of driving change at the community level, the researchers are testing their model in other West African countries like Ghana, Côte d'Ivoire, and Senegal, using technology to streamline the process and create a global nonprofit organization that focuses on finance and investing in these innovative market strategies, addressing the challenges of financing tools and timing in agriculture.
