RISK MANAGEMENT INFORMATION NEEDS OF FARMERS ALONG VEGETABLE SUPPLY CHAIN: IMPLICATIONS FOR EXTENSION OUTREACH PROGRAMS

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1 Journal of Software Project Management and Quality Assurance Volume 1 Number 1 January-June 2011 pp RISK MANAGEMENT INFORMATION NEEDS OF FARMERS ALONG VEGETABLE SUPPLY CHAIN: IMPLICATIONS FOR EXTENSION OUTREACH PROGRAMS Basavaraj Basannagari 1 1 Indian Institute of Technology, Kharagpur (India), (basavaraj_hcu@yahoo.co.in) Abstract: Information is essential to managing agricultural risk. Vegetables are among the most risky crops to farmers than other crops. Vegetable growers face multiple, often simultaneous, sources of risk therefore they need a diverse range of risk management information for good decision making and to support their farm enterprises. This study aimed to find out the risk management information needs of vegetable growers and preferences for information sources along the supply chain. Using a structured questionnaire, 304 vegetable growers from the state of Uttar Pradesh were randomly approached in villages and queried on above subjects of investigations including their socio-demographics. The findings suggested to adopt innovative strategies included public-private-ngo partnership and make effective linkages & coordination with various characterized sources of agricultural information to meet all informational need of farmers for effective agricultural risk management. Keywords: Risk management, information, vegetables, supply chain. 1. INTRODUCTION Risk and uncertainty are ubiquitous and varied characteristics of the Indian agriculture. Vegetable production which is major sources of income and livelihood to most of farmers is much more exposed to risk than other crops. India is the second largest producer of fresh vegetables in the world (next to China) which accounts for about 15% of the world s production of vegetables (Bhaskarachary, 2009). Importantly, the country occupied prime position in the production of cauliflower, second in onion and third in cabbage in the world. However, due to complex physical and biological process, the vegetable growers face a variety of risks along the chain (Hurley, 2010; Cecchini and Raina, 2004). The risk in vegetable production is exacerbated by a variety of factors, ranging from climate variability and change, natural disasters (flood and drought), disease outbreaks, technological change, social and personal, weak rural infrastructures, policy change, changing consumers preferences, markets inefficiencies, market prices, limited extension and financial services including limited span and design of risk mitigation instruments such as credit and insurance (Ali and Kapoor, 2008; Cottern et al, 2008; Chong, 2005; Hardaker et al., 2004). Managing risk is important to farmers particularly to marginal and small farmers because they lack resources to absorb shocks (Boehlje and Lins, 1998). The essence of managing risk is making good decisions which depend on timely accurate and customized information and its proper analysis (Narula, 2009; Galloway and Mochrie, 2005). Effective information delivery requires recognition of the needs of the farmers and the determination of how best to provide them with the information they need (Ommani and Chizari, 2008). Past studies have revealed that farmers require a diverse range of information through the agricultural cycle starting from crop planning at the pre-sowing stage through to planting, growing, harvest and postharvest stage and at the end of cycle i.e. selling/marketing (Narula and Chopra, 2010) (Figure 1). Recent developments in information technologies (ITs) have the potential to provide timely information even to remote located farmers, and to create efficiencies across agricultural supply chain by addressing all informational needs (Parmar, 2009). A wide range of traditional and modern sources of agricultural information is available to farmers including their social networks. However,

38 Journal of Software Project Management and Quality Assurance Figure 1: Information Needs of Farmers Through Agricultural Cycle the access and adoption of information is limited in developing

2 38 Journal of Software Project Management and Quality Assurance Figure 1: Information Needs of Farmers Through Agricultural Cycle the access and adoption of information is limited in developing countries due to various socio-economic and physical constraints (Foster and Rosenzweig, 1995). He further added that a source of information must be credible, reliable, cost-effectiveness and above all, familiar to the user before he would use it. The purpose of this paper is to investigate the risk management informational needs of vegetable growers and preferences for information sources along the supply chain. More specifically, this study also evaluated the information characteristics of the various sources of risk information. 2. DATA AND PROCEDURE This study is based on a comprehensive vegetable producers survey using a structured questionnaire, administered personally during the first quarter of A multi-stage random sampling approach was adopted to select a total 304 vegetable growers from 12 villages of 6 blocks in two representative backward districts of Uttar Pradesh namely Mirzapur and Sonbhadra, as per given plan (Figure 2). Figure 2: Multistage Sampling Procedure Keeping stated objectives into account, the questionnaire was subdivided into three sections and accordingly the growers were queried on need of risk management information and preferences for information sources along vegetable supply chain including socio-demographics as last section. Five point Likert type scale were used to rank growers responses on risk management information sources and also evaluated their informational characteristics. The data obtained through the surveys has been processed by means of SPSS 15.0 statistical software. The descriptive statistics (mean), chi-square test and factor analysis were attempted to analyze data. The literature review was done using authentic and reputed journals, agricultural reports and books to support the study. 3. RESULTS AND DISCUSSION 3.1. Profile Analysis Table 1 provides profile of vegetable growers under the study. Of the 304 vegetable growers, a majority of 265 growers were male i.e. 87.2% of total sample, which implies that vegetable production is basically undertaken by the male group. The age composition of the sample showed that there was equal participation of all age groups of vegetable growers. The average age of the overall respondents estimated to 38 years. Educational profile of the respondents indicated that about one third growers had no formal education compared to 65.9% with formal education. Again, those with formal education about 81.7% studied up to the primary/ junior high school level only. Some 18.3% were graduated. About 82% of farmers interviewed were married. The OBC were the most dominant social category with 65.4% participation in vegetable cultivation. Farming were the dominant primary occupation while some respondents were also involved in business (6.9%) and service sector (7.9%). Most of the farmers belong to lower income groups of less than 5000 per month with a dominance of income group. Average landholding of vegetable grower was 1.41 hectare. Further, landholding distribution analysis indicated that more than 80 per cent of farmers were belonging to marginal and small landholding categories, followed by medium (16.2%) and large (3.3%). This clearly indicates that vegetable cultivation is basically done by marginal and smallholders. All the socio-demographic groups differ significantly within its sub-groups.

3 Risk Management Information Needs of Farmers along Vegetable Supply Chain: Implications for Extension 39 The major crops grown by these farmers included potato, tomato, onion, cauliflower, parval, capsicum, torai, and lady-finger besides rearing of small ruminants like sheep and goats Need for Risk Management Information In recent years, the farmer s demand for agricultural information has increased significantly (Ali and Kapoor, 2009). Farmers require a diverse range of crucial information for decision making and best practices in crop production, processing, handling, storage and marketing. In developing countries such as India, the villages are located in remote areas where farmers have little or no access to input and output markets including extension services and hence lack in crucial information needed to support their farm enterprises (Narula, 2009; Studies have pointed out that information required to farmers differed across landholding size or agroclimatic region (Rivera, 1996). Apart from needing different types of information, the different farmers may have different information search behaviors. Of the range of information required, the study resulted that marginal and small farmers prioritized the need of information for crop planning and weather at pre-sowing stage; packaging, procurement, storage & handling at post harvest stage; and finally market demand, market linkages and market prices at the selling/marketing stage. The medium farmers prioritized for crop planning and field preparation at pre-sowing stage and market demand and market linkages at the selling marketing stage. The large farmers prioritized information need for weather condition at pre-sowing stage; methods of planting at sowing stage; expert advice and crop nutrients related information at the stage of crop growing. Except few, all types of informational need were reported by large farmers at the stages of harvest, post harvest and selling/marketing. The significant difference across farm categories were found in their risk management informational needs at the stages of planting, growing and selling/ marketing on its selected aspects (Table 1). The chi-square statistics indicates that marginal and small farmers significantly needed more information about till/no-till, pre-treatment of seed & soil, number & time of irrigation, quantity & frequency of fertilizers application, market demand and market prices of produce than those of medium and large farmers. The results have important implications to planners and policy makers. Overall, more emphasis should be given to provide information at the stages of pre-sowing and post harvest including selling and marketing aspects. In particular, the information should be provided on crop planning and weather, method of planting, crop diseases and insects, crop harvest timing and methods, post harvest aspects such as sorting, grading, packaging, storage and handling including marketing related information. There must be ensured to access and adoption of agricultural information to marginal and small farmers Preferences of Risk Management Information Sources Efficient crop production requires that producers have timely and relevant information about Good Agricultural Practices (GAP) along the supply chain. A wide range of sources of risk management information is available to farmers therefore choice of appropriate medium is crucial in agricultural information delivery (Chatman, 1983; Aboyade, 1987). However each sources of information is limited to provide only on few specific aspects of agricultural information (Table 1). Farmers prefer sources which, during transmission, ensure them of providing good characteristics of information (Pushkaran and Knight, 1980). The major characteristics of good information are accessibility, usability, timeliness, accuracy, costeffectiveness, reliability, exhaustiveness, and aggregation level which lead to improved decision making and creates value (Galloway and Mochrie, 2005). As majority of the farmers do not have access to all sources of information due social, economic and physical constraints, the informational needs of farmers on various aspects remains unmet. (credit, seed, fertilizers & crop nutrients); when to irrigate, how much and which methods to be applied, what chemicals are permitted in the production process and post harvest operations to meet international standards (to meet export standards); and what are its desired crop characteristics including market prices of crops (Key and Runsten, 1999) turnover makes. Efficient production requires that farmers have timely and relevant information about the needs of the farm when it requires supply of inputs Consequently, farmers stressed with poor yields and marginal incomes which resulted into little to no Chetley, 2006; Cecchini and Raina, 2004).

4 40 Journal of Software Project Management and Quality Assurance Table 1 Sources of Risk Management Information and their Use Information Sources Use Newspaper Market rates, new products, local News, query or question answers related to agriculture, advertisements, job related news, government s subsidies, and contract rates. Agricultural Magazines Package of practices of different crops, profit and loss of different crops, new movies, monthly news, articles. Pamphlets Knowledge about particular crop, like cash crop and a specific disease control. KVKs/Research Stations Expert s advice, new technologies and hybrid seeds, disease control measures, weather related advices, input related advices. Radio Weather information, Government schemes, news, disease and pest control. Television Krishak darshan for different kinds of information, upgraded package of practices of agriculture, news, new techniques, fashion trends, market watch. Fellow Farmers Seed sowing, harvesting, input use time and quantity, new technologies and new world. Farm Fairs Hybrid seeds, improved practices of farming, irrigation related up gradation. Portals News, new trends in different fields like in agriculture as well as in human life. Agricultural shows/films New products and farm Agri-input dealers Source: Adopted from Narula, technologies. Seed, fertilizers, pesticides, farm machinery. To evaluate the collective representation of available sources agricultural information, factor analysis was made using principal component extraction method with Varimax rotation. The factor analysis of 24 sources of risk management information has extracted 6 factors which explained 61.6 per cent of the variance (Table 1). Using the factor loadings, the sources of information were grouped into their respective factors and named according to their collective representation. The farmers preferences of various sources of agricultural information are also provided by evaluating their characteristics on five points Likert type scale. The total variance explained by factor one (F1) is highest 14.8% primarily comprising the advanced information sources with high loading and can be termed as Innovative. The findings indicate that, among the studies sources of agricultural information, mass media, interpersonal network and commercial network are among the highly characterized sources of risk management information which are able to provide timely and accurate information to farmers. These sources of agricultural information are easy to access, full of content, highly reliable and more economical to farmers. The innovative sources of information such as agricultural shows/films, power-point presentations, and SMS are failed to provide information with multicharacteristic features. The Institutions dealing with agriculture sector and responsible to provide agricultural information to farmers is needed to make partnership with the private institutions/organization and NGOs to ensure farmers unmet informational needs at the least possible cost. 4. CONCLUSION AND IMPLICATIONS Information is a critical resource in risk management of agricultural enterprise. Timely and accurate agricultural information interacts with and influences agricultural productivity in a variety of ways. It can help farmers to make informed decisions on good agricultural practices (GAP) across agricultural cycle starting from crop planning at the pre-sowing stage through to planting, growing, harvest, post harvest stage and at the end of cycle i.e. selling/marketing including consumers feedback. Agricultural productivity can arguably be improved by relevant, reliable, economical, currency and customized information and knowledge. The assessment of risk management informational needs of vegetables growers resulted that different farm categories of farmers prioritized different information needs. However, each source of information has its own limitation due to various socio-economic and physical constraints. The factor analysis extracted six important factors, as representative sources of risk management information, were innovative, institutions, interpersonal, traditional, mass media and commercial networks. The evaluation of these representative sources of agricultural information indicated that mass media, interpersonal network and commercial network were among the highly characterized sources. Therefore, the sources of information under these representative categories

5 Risk Management Information Needs of Farmers along Vegetable Supply Chain: Implications for Extension 41 should be given more emphasis as preferred sources to deliver agricultural information. It is strongly recommended to adopt innovative strategies as suggested in Table 2 including publicprivate-ngo partnership and effective linkages & coordination among various characterized sources of agricultural information to meet all informational needs of farmers for risk management and to support their farm enterprise. Table 2 Innovative Strategic Interventions to Meet Farmers Informational Need From To Generic Localized specific information (commodity-specific) Traditional media Social media & Social Networks Information clutter SMART information Information supply Demand driven information Free of cost information Value added premium services Single supplier Collaborative business modules Text services Multimedia supported information Costly technology Cost-effective innovative solutions Source: Adopted from Narula, ACKNOWLEDGEMENT This paper is a part of my doctoral dissertation. The intent of this part is to investigate farmers informational need for agriculture risk management and preferences for information sources along the supply chain. I would like to thanks my research advisors for his guidance throughout the research and also for my professional development. I would also like to thank Mr. Basavaraj Basannagari for his technical support in this part of study. REFERENCES [1] A. D. Foster, and M. R. Rosenzweig (1995), Learning by Doing and Learning from Others: Human Capital and Technical Change in Agriculture, The Journal of Political Economy, Vol. 103(6), 1995, pp ,. [2] A. R. Ommani, and M. Chizari, Information Dissemination System (IDS) Based E-Learning in Agricultural of Iran (Perception of Iranian Extension Agents), World Academy of Science, Engineering and Technology, 13 September 2009.

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