Impact of ICT-based Market Information Service Projects on Smallholder Farm Input Use and Productivity in Kenya

Abstract

Information asymmetry has traditionally constrained smallholder farmers’ access to markets. Past studies indicate that it contributes to low adoption of modern agricultural technologies that have the capacity to enhance the productivity of smallholder farms. Low use of inputs results in low farm productivity, which curtails the transformation from subsistence to commercial agriculture, hence perpetuating the detention of smallholder farmers in the low equilibrium poverty trap. The desire to improve farmers’ access to markets has seen the emergence of a number of projects that employ Information and Communication Technology (ICT) tools in the provision of market information. However, little is known about the effects of such projects on smallholder agriculture, particularly in developing countries. The present study evaluates the impact of participation in an ICT-based market information service (MIS) project on farm input use (e.g. fertilizer, purchased seed, purchased manure, pesticides, labour etc.), labour and land productivity in Kenya. It employs propensity score-matching technique on cross-sectional data of 375 farmers from Bungoma, Kirinyaga and Migori counties in Kenya. The study finds that participation in an ICT-based MIS project has a positive and significant impact on the quantity of seeds and fertilizers used and improves land and labour productivity. Specifically, participants in an ICT-based project spent between Kshs 282.45 and 359.21 and Kshs 952.67 and 1035.10 more than non-participants on purchased seed and fertilizer per acre, respectively. Additionally, participants in the ICTbased MIS project have relatively higher land productivity (between Kshs 7,007.14 and 8,605.84) per acre than non-participants. Participation in an ICT-based MIS project also increases labour productivity by between Kshs 367.46 and Kshs 406.95 per acre. However, participation in an ICT-based MIS project has a negative and significant impact on the use hired, family and total labour. Participants in the ICT-based project use less labour by between 6.10 and 6.46, 7.95 and 13.49, and 15.68 and 21.96 man-days per acre for hired, family and total labour, respectively. The study discusses the implications of these findings for policy.