Information Economics and Agriculture

By: Bikal Dhungel 

This article will highlight some issues about information economics and the role of information in agriculture.

Normally economics was understood as a science that deals about resource scarcity and how to make an efficient use of given resources. 'Resource' was understood as some object. For example, oil is a resource, coal is a resource, cotton is a resource but information ? Information was not considered as a resource of its own for a long time but since few decades, information is an area in itself that has a huge importance. In economics, it is now a separate discipline, Information Economics, for simple reason which is, the extent information affects the economic decision making and the economy as a whole. In other words, information has value and it helps people to maximize their returns. Take lawyers for example, they make their living by giving people information. The information lawyers have, others dont have, that is why they are ready to pay for this. For this term we call 'Information Asymmetry', which in this case says, the lawyers and the customer have different information. One has more information and the other less. What cause this difference in the amount of information they both possess is the amount of time invested to acquire this information. Lawyers study several years and work several years before they can set up as a lawyer. In this period, they gain expertise. All they have is better information which they use to make money. However, exchanging and acquiring information is not the same as exchanging and acquiring other physical goods because information is non-rivalrous, which means, even if I get some information from somewhere, you can also get it or your getting of the information does not exclude me from getting it. In the case of other goods for example a mobile phone, it is different. When I buy a certain piece of mobile phone from a shop, it is gone, i have it and you cannot buy the same phone. Information is also different from other goods because of its marginal cost. When a company produces mobile phones, for every additional phones, it should spend more money but in the case of information, it can simply copy this or reproduce this with zero cost. I wrote that information is non-rivalrous but in reality in some cases, it can be made rivalrous. Like when you work in a government agency that has published a report on crimes, may be only few people have an access of this. So, one can exclude others artificially but in general information remain non-rivalrous.

We often hear that we live in an information age. So what is this information age ? Information age means, we are overwhelmed by information through various means. When we take internet as an example, we can look for certain things through various search engine, we can check train schedule, we can google through the website of our school and do many things. With the help of mobile phones, we can contact with people, share ideas, exchange information and so on. There are social networks, there are professional networks, there are dating websites, online health check ups and many more. This was meant by information age. When we are able to invest in few devices, we are the part of the information age. Due to rapid transformation of information and communication technologies, more and more people can afford such devices. There are now more mobile phones than toilets in a typical developing country. Why the information is important is because it can increase our well being, in all sectors. This article focuses only on agriculture. The overall influence of better information technologies in all other sectors can be a big topic in itself. Information is needed everywhere. I took agriculture about agriculture is very important in developing countries. It is their lifeline. Over 70% people in least developed countries are farmers and most of them subsistence farmers. They are also the poorest. Hence, improving the lives of farmers through information will contribute to alleviate poverty and generate economic growth. Without supporting farmers, it is not possible to achieve growth.

70% of the world population live in rural areas, most of them in developing countries are subsistence farmers, who are poor and are under threat, either of any natural disasters or climate change. Climate change will affect developing countries over proportionally but even within developing countries, poor are especially at risk. Apart from climate change, a bigger challenge is of poverty. The crop yield is so low that mal-nutrition is rampant in least developed countries. Effects of not having enough to eat will remain lifelong, in terms of lower cognitive skills, risks of diseases and many more. This in turn will push the poor even further in poverty traps. Hence, to pull them out of this trap, the first step it is needed is to increase their daily calory intakes. This can be done by providing them with more foods which again can be done by increasing yields. The United Nations called so called Millennium Development Goals whose first goal to eradicate extreme hunger and poverty. Without achieving this goal, other seven goals cannot be realised. The first goal can be realised though agriculture. It is also necessary to ensure food security which has become a luxury these days. So, a sharp productivity increase in agriculture is vital to ensure food security. However, it is easier said because other challenges developing countries are facing cannot be ignored. The rate of population growth is higher, more living space is required, houses should be built on farm lands, and there will be pressures on other natural resources like water which could be used in agriculture, increasing production itself is resource intensive, especially water. Places that face water scarcity will find tough to achieve this. This is the main challenge we face today, how to maintain this balance, the use of resources and increasing the crop yields. Though there has been extraordinary developments in the past decades concerning biotechnology, information technology, market structure etc, challenges remain. But still, something should be done. Emerging economies like China and few other countries have invested heavily in agriculture in the early stages of their growth. Productivity increased and crop yield also increased with it, which was then able to support the growing needs of people. Though the agricultural growth has increased, the share of agriculture in national GDP decreases. This is a quasi natural phenomenon of growth. The more a country develops, its share in agriculture decreases as people move to industries and then to serives. The higher the share of agricultural GDP, poorer the country. So, when people start moving to industries, inequality also rises in the initial stage but slowly it will decrease. As productivity per worker increase, due to technology, a household where 5 people worked in farms before, now need just three, then the two will go to the city to work somewhere else. By this way economic growth occurs. As productivity increases, less and less people are required in agriculture and slowly, the total number of farmers will approach to 0. this is also the difference between three worlds. In poor world, mostly over 70% of the working age group involve in agriculture, in the middle income group, it is between 4-20% and in rich countries, mostly less than 4% as in the case of France or even less than 2% like in Germany. So, the question arises, how can we reduce the proportion of farmers or in other words, how can we help the farmers to increase productivity so that they come out of poverty trap and contribute to the economic transition of a nation. This is where the role of information is needed. With information and information technology, it would be possible to accelerate productivity growth.

When we talk about agriculture, it is not only growing crops, the role of a farmer is much wider. So, when we say using information to enhance productivity, it means the whole food chain i.e. Using information in cultivation, water usage, fertilizer uses, harvesting, transportation of crops or foods, packaging, preservation, processing, quality management, safety, storage, marketing and when applicable, disposing. Innovation with information in all these things can enhance agriculture. All stakeholders of agriculture would profit from the availability of information. So what are these information exactly that helps ? The need of information varies between the stakeholders. Cultivators would need different types of information than those in marketing. The variety of information can be for various purposes, like

1. Office Automation – application of telephone networks, computers and other telecommunication technologies in order to increase the productivity or organisations. Both public and private sector can help in it to provide a better service in agriculture to facilitate rural development. This includes the use of machines in government offices in both national and local level, uses in small farms and firms which will strengthen the process.
2. GPS System – GPS or Global Positioning System revolutionised our age, its uses are wide and benefits huge. In agriculture, it can be used for making maps, doing surveys and it even provides the benefits of geo-fencing. There is an interesting Ted Talk about the use of local knowledge where the speaker organised a group to plant tomatoes in one village somewhere in sub Saharan Africa. They didnt consult with the locals. After some time, tomatoes were growing and one night Hippos from the nearby river came and ate away all the tomatoes. Why I mention this story is, animals eating away the crops is a serious problem in developing countries. Lots of effort will be wasted by this way. So, GPS can help to solve this problem by tagging animals which will enable them to see where this animal in roaming right now. By this way one can avoid the animals wandering in the farm and squandering the crops.
3. Geographic Information System, GIS – this will enable us to digitalize the land maps using the data and help us to make better decisions about what and where to plant using the data from the past. In general, GIS is better to store, analyze and better manage data which has a wide application in agriculture. The world food program writes that GIS methodology will help to understand the vulnerabilities among population residing in areas that are prone to natural disasters as the analysis could be done considering natural hazards, environmental disasters, degradation, food insecurity etc. The satellite images will help to analyze the poor growing seasons which can be used to plan an intervention by the authorities to support vulnerable groups. Moreover, it will contribute to the research related to agriculture and environment.
4. Computerized Devices for Research – We have arrived very far in terms of human medicine, we have also developed a certain degree of knowledge about animals, about their behaviors and diseases but we have a long way to go. Most deadly diseases we face today, for example malaria, HIV and the violent killers of the past, namely Plagues have its origin in animals, that killed many people. Since the end of hunting and gathering society, we are literally living together with domestic animals, and also sharing their diseases. We have little understanding about how animals acquire diseases, how their foods affect their health which in turn affect our health. Herd management software can for example help to analyze the effect of animal feeds on disease, or milk yields or similar. Analyzing the effect on milk yield, it would be possible to maximize the yield producing higher benefits. This information should be shared nationwide so that the gain will be higher. Individual farmers will obviously oppose this because they would prefer to increase profits by higher yields. But when it is done nation wide, the nation as a whole profits. So, a cooperation between private and public sector will generate better outcome.
5. Radio Frequency Identification ( RFID ) - It would help in tracking the livestock which is already in use in advanced countries. For example every cattle is tagged with RFID technology which can be used to identify it. More data can be recorded for example bearers location the origin of the cattle, age, sex etc. This will help the farmers and researchers in optimizing.
6. Smartphone Apps – Even smartphone apps will help in agricultural yields. These days even in developing countries, farmers are carrying mobile phones. They can contact the responsible person if they have any queries like how to cultivate certain crops, what to do when there are problems. They can either ask other people or can look at it themselves. The source of information in informal economies are mostly neighbours and surrounding. ' You know I had used the crop from this place, i did this and this and my tomatoes were as big as pumpkins ', farmers can communicate via mobile phones. The facility of weather forecast for example helps them to plan the day better. The take the raincoat with them to the field, to plan works depending on rainfall and take proper actions in time when it is necessary. Smartphones should not only be used to communicate but also to look for information, share information to increase crop yield and to get better prepared for risk.

These are few information technologies that can help farmers to increase productivity, crop yields and finally reduce poverty. There are other devices that can help anywhere in the agricultural chain between cultivation and disposal. It is only necessary to identify proper steps where an intervention can be useful. The use of information can revolutionize our generation if only the responsible stakeholders play their role efficiently. Governments in poorest countries should acknowledge that farmers in the first hand will not be able to take part in information age without support. They should be taught to do this. Using the modern ways of teaching, like drawings, photographs, audio, video and other things, farmers should be taught to do things, to use devices and make the most out of it. There should also be a better allocation of market places and a viable pricing system. The challenge of developing countries is also to get the prices right. Farmers produce crops, they bring it to the supplier, sell the crops or vegetables with a price that is only slightly higher than their production cost but that middleman who brings crops to the market takes the most profit. The established system of market does not allow the farmer to bring the crop directly to the market. Using information, this can be changed. In another stage, changes in the way food markets typically work will benefit the general public. The origin tags, expiry dates will help customers to choose foods according to it. Advanced countries have this system in law but poorest countries cannot implement this for vegetables and crops sold on the informal market. Something could be done there. Moreover, there can be more research in food businesses that is sure to induce more food related business people. By the points above, I mean using information to make the food market efficient and especially with the information technologies, we will be able to increase crop yields, decrease production cost and this will reduce food prices and everybody can afford enough foods and this will reduce poverty, increase their physical ability, cognitive ability and contribute in the development of a society. Hence, do not ignore agriculture. Understand the role of information, understand the dynamics of information, psychology of learning and implement information where ever necessary to solve the most challenging problem of our generation, which is to end hunger.