This delays for the Internet Fiber is just one of the many examples of how to buy certain products or services sometimes refuses to shape or achieve its potential, even in high demand, says Andrew Dillon, an economist for development and a clinical associate professor at Kellogg.
In a new document that is part of a broader series, Dillon and colleague Nicoló Tomaselli-a doctoral student at the University of Florence-understand what they need to create markets in places such as low-income countries where they are needed, but absent.
“We tend to think about the missing markets as a problem on the part of demand,” says Dillon. “For example, some farmers in low -income countries are poor so that they don’t have enough money to buy the things they want and that’s why markets are not formed.”
“But people haven’t thought of this problem so much on the offer,” he continues. “We also have to ask the question,” If farmers have to feed their families and fertilizer is such a useful product for them, why are people not trying to sell it to them? ”
In part, the answer ends up in what is known as the “last mile problem”, where the most isolated and-margalic communities often lose critical services because it is not costly for companies to invest in the infrastructure required to provide them. It helps to explain why some rural households in the US still do not have high -speed internet access, while clusters of new homes in suburban or urban areas have no problem tasting.
But the problem of the last mile does not tell the full story.
Dillon and Tomaselli analyzed market standards at exhibitions of a daily village in Mali-where sellers sold fertilizers and other agricultural products that can help farmers with their crops. The researchers found that simply gathering a group of potential buyers (in this case, farmers) and sellers are not in fact enough to lubricate the tools of a new market. It is also equally important to often deal with fluctuations, such as providing funding tools and the timetable of reports.
“We often think of market access as a consumer who has a market to buy a desired product,” says Dillon. “But resolving the problem of the last mile also requires the thought of timing when consumers are offered products and payment and funding options are not just the opportunity to buy something.”
Creation of adjustments
About one -third of the western African nation of Mali is covered by the desert of the Sahara and, like many countries in the region, its agricultural productivity is low. However, the overwhelming majority of people in Mali are working in agriculture.
Fertilizers and other agricultural materials and equipment could make a dramatic difference in the productivity and income of these farmers, but farmers in the area use much less fertilizer by growers to other parts of the world. This is largely due to the fact that markets for agricultural products in rural areas are rare and difficult to coordinate, as sellers’ concerns about the cost-efficacy relationship of travel to sparsely populated areas.
Dillon and Tomaselli wondered if the change in how market opportunities are usually organized could lead the village farmers to make more purchases, thereby attracting sellers to continue selling products to these remote villages.
The researchers have worked alongside the local partners in Mali to organize several village inflow reports in 2017 and 2018, where they could create agricultural products such as fertilizers.
They accidentally gave 140 villages to one of the seven groups. A group of villages did not hold reports (the control group) and each of the other six teams made exhibitions with different timing, payment and funding options.
Four of the team reports were scheduled shortly after the harvest, when the farmers were full of profits for the year. Of these four groups, two required buyers to provide a 50 % down payment to deliver purchases later (during the planting period when farmers apply fertilizer) and the other two required a lower deposit of only 10 %. Two of these four groups also offered credit services from a local microfinance institution, while the other two did not.
Unlike the four teams holding after the harvest, two final teams later hosted reports during the planting period, which is the normal moment when farmers buy fertilizer. One of these groups had access to credit services, while the other did not.
Best time for better credit
The researchers used a combination of data from these reports and household research to monitor the use of fertilizers by farmers.
They found that the hiring of farmers’ fertilizers was greater in reports shortly after harvest (when farmers had the most cash to spend) and This required only 10 percent deposit. The available credit services made a minimal difference in farmers’ shopping decisions in the harvesting reports. The total value of the fertilizer used by farmers in the two groups that met both of these conditions increased by 24 % to 28 %, compared to the control group.
In addition, farmers who attended reports that took place during the later planting period were made about so many fertilizer purchases as these two other groups – as credit services were also available.
Ultimately, the organization of markets earlier in the agricultural period was just as effective as providing liquidity to farmers through funding of credit. Since agricultural funding is often limited to low -income countries, one of the most effective ways to build agricultural markets facing the problem of the latest mile is to coordinate the schedule of markets.
Buying fertilizers in these previous credit reports, for example, can be more cost -effective for farmers, as they pay mainly with their own money instead of interest loan. This also removes the need for coordination with a microfinance partner and gives suppliers a longer period of time for the delivery of goods.
Above all, the researchers found that farmers who bought fertilizers saw a 52 % increase in production and a 60 % upward trend in agricultural sales.
“With the focus on market creation, the village input reports provide a service to agricultural representatives – which create business opportunities,” Dillon says. “But it is also about providing a service to farmers. They receive access to products that can, in the long run, improve their productivity and create more food safety for themselves and their families.”
Peeling premature success
With the success of these first reports, the researchers are now focusing on their reproduction and escalation. In the next phase of their work, says Dillon, the guideline question arises: “Since it works in research, how will we translate it into the real world?” In other words, how could these reports eventually become self -sustaining?
He and his team are working to create local social enterprises and a global non -profit organization to invest in village input reports, while at the same time measuring their effectiveness and then finding more partners – such as other non -profit and governments – to expand them.
They also plan to try the model in Ghana, Ctregated Coast and Senegal.
Dillon notes that there should be greater participation in reports if markets are going to lead to a community level, which is a key objective of continuing escalation research in this area. And this may require leaders and organizations involved in this project to identify more creative ways to disclose and build confidence in these events, between farmers and sellers.
“How do we create agricultural transformation?” Dillon says. “One of the things we need to understand, in order to have a broader impact is the way in which participation in these reports. This is where the thought of marketing strategies becomes very important.”
