Contribution of Information Sources on Purchase of Agricultural Inputs
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A study published in the Journal of Agricultural and Food Information investigates the use and contribution of information sources in the purchase of agricultural inputs by Indian farmers. This is relevant because quality agricultural information is crucial for farmers’ decision making since agriculture is full of climatic and marketing uncertainty. Previously there have been multiple studies on the role of information in the context of agricultural practices but very few that focus on information use by farmers for the purchase of agricultural inputs. This study attempts to fill this gap with the objective of studying farmers’ information sources and its use during the buying process for agricultural inputs.

The paper classified agricultural inputs into two broad categories: frequently purchased inputs and infrequently purchased inputs. Seeds, fertilizers and agrochemicals were regarded as frequently purchased inputs whereas a pumpset for irrigation and tractors were considered as infrequently purchased agricultural inputs. An information source was defined as any individual, organization, event, or medium which was used by the farmer to get required information during the buying process for agri-inputs. Information sources were then divided into two categories, personal and non-personal and classified as commercial or noncommercial. The paper identifies the importance of an information source in terms of its relevance to the farmers during the buying process.

Regarding methodology, the study surveyed 278 farmers with diverse socioeconomic background across eight Indian states. The farmers were questioned concerning the different dimensions of information sources they used for purchasing specific agricultural inputs including, seeds, agrochemicals, fertilizers, pumpsets and tractors. All farmers that took part in the study were the major decision makers on their farms and bought frequently purchased inputs on at least three occasions during the year of the study. The data was collected through a structured questionnaire which contained questions related to the farmers’ agro-economic characteristics such as age, education level, landholdings, number of years in farming, number of crops grown in a year and a level of quality consciousness for different agricultural inputs. The questionnaire also asked questions related to the sources of information used by farmers in purchasing agricultural inputs.

Regarding measurements, the quality consciousness of farmers for different agri-inputs was captured through their intention to buy only high quality products, which was measured as extremely high, high or negligible. The importance of an agri-input was measured in terms of its relevance as perceived by the farmer in increasing production, farmers were asked to classify importance as very high, high, moderate, less or negligible. The influence of explanatory variables (such as education, land size, number of crops grown) on the number of information sources used while buying agri-inputs was estimated through a regression analysis.

Of the 278 farmers surveyed all indicated that they had bought seed over the past year, of which 196 had purchased agrochemicals and 167 had purchased fertilizers. Over the past three years, 95 had purchased a pumpset and 67 had purchased a tractor.  Regarding the farmers’ quality consciousness for different agri-inputs, the study found that about 75 percent of farmers were quality-conscious when buying seed, agrochemicals, and fertilizers and about 60 percent when buying a pumpset or tractor. Interestingly, for products that farmers had less experience with buying, such as pumpsets and tractors, there was less of a focus on quality.

Regarding the number of information sources used by farmers while purchasing agricultural inputs, the study found that the average number of information sources used by farmers for purchasing a frequently purchased input is between two and three and around four for infrequently purchased inputs. The paper argues that this difference is because most farmers know relatively little about the technical details of the non-frequently purchased products and therefore are more inclined to use more sources of information in order to reduce uncertainty.

Regarding the contribution of sources of information to the total acquisition of information the study found that the overall contribution of personal sources of information (fellow farmers/friends, extensions service agents, salespeople, tradeshows) to the purchasing process was significantly higher at around 76 percent of farmers than that of nonpersonal sources (articles in print media, advertisements and sales literature) at around 24 percent. Additionally the table indicates that the use of personal sources was higher for frequently purchased inputs as compared to non-frequently purchased inputs.  The paper highlights that farmers generally considered interpersonal channels as more reliable and more accessible than nonpersonal sources. The paper also finds that commercial sources (salesperson, tradeshows, articles in print media, advertisements and sales literature and noncommercial sources (fellow farmers/friends and extension service agents) were used about equally at 51 percent and 49 percent of farmers respectively.   

The regression analysis finds that that the education level of farmers did not have a significant influence on the number of information sources used. Conversely, the study indicates that land size has a positive and significant relationship with the number of information sources used by the farmers for buying frequently purchased inputs. It is argued that this is because small and marginal farmers generally remain dependent on the advice of fellow farmers while large landholders seek information from different sources.  Similarly the number of crops grown in a year was a significant positive factor in the number of sources used during the buying process for seed and tractors. These results indicate that the number of information sources used by farmers depends on their perceived importance and that when farmers attach more importance to a product they use more sources to acquire the product. Furthermore, the paper argues that farmers are more likely to invest in gaining more information as a long as the perceived benefits exceed the perceived costs.

In conclusion, the paper argues that these findings are significant in the context of increasing competition in Indian agriculture. The paper suggests that there is an overdependence on fellow farmers for information and argues that using more diverse sources of information would be beneficial for farmers in general. This paper also claims to be particularly useful for agribusinesses as a clearer understanding of the information sources used by farmers is essential to developing an appropriate marketing and communication strategy and that agribusiness firms must strengthen commercial sources of information and focus on increasing their acceptance among farmers.  

The full paper can be accessed here.

A previous blog on ‘The impacts of information on returns from farming’ can be accessed here.

 

By: Bas Paris, IFPRI

Photo credit:IFPRI-IMAGES, Flickr