Relevance of RCT can be explored in agricultural marketing policy research

Published: October 18, 2019 2:58:06 AM

Randomised control trials can be instrumental in assessing pre- and post-intervention of resource agencies towards capacity building of farmer organisations

RCT,  agricultural marketing, policy research, agriculture, Agricultural Research, e NAM, NAMFirst, price forecasting of agricultural commodities necessitates an extensive field research to understand how farmers engage in price setting.

Kushankur Dey 

RCT or Randomised Control Trial has become a fad in experimental research. Relevance of RCT can be explored in agricultural marketing policy research as agriculture and development cannot be seen in isolation. And that exploration bears some rationale for India.

We know that small landholders account for a little over 85%, and have less than one to two hectares of operational landholdings. They, however, contribute to more than 40% of gross cropped area, but often realise a poor return as consequence of unexpected crop loss due to climate change, distress sales of their marketed surplus, and excessive intermediation in agricultural markets. Because of these interconnected issues, smallholders do often fail to take informed decisions on which crops they should grow, when, where, and how to market their produce.

To overcome such problems or to offer a real-time feedback to smallholders about market potential of their produce, National Agricultural Higher Education Project at the auspices of Indian Council of Agricultural Research has instituted the Centre for Agricultural Market intelligence in a few State Agricultural Universities. World Bank has extended funding support. The major objectives are to study price forecasting and behaviour of agricultural commodities, export competitiveness, evaluation of electronic National Agriculture Market (e NAM), capacity building of farmers and associated stakeholders or market institutions.

The Centre need to carry out experimental research to a greater extent . Evidence-based scientific study needs in-depth understanding of the context and phenomenon, that Randomised Control Trails (RCTs) can achieve.

First, price forecasting of agricultural commodities necessitates an extensive field research to understand how farmers engage in price setting. RCTs make a significant difference as gainst other evaluation-based measures. For instance, in Africa, experiments have focused on assessing the role of price information in agricultural markets via SMS. In India, similar type of intervention took place in Gujarat in 2007-09 to elicit information about farmers’ price expectation and their attitude towards futures price adoption.

Second, export competitiveness of commodities is based on acreage and substitution effect of agricultural crops that leads to price effect in international trade. RCTs can be useful in assessing export competitiveness in those areas of cultivation which are awarded with GI for particular crop/commodity.

Third, evaluation of e-NAM requires a thorough understanding of agricultural market functioning. As 8-9% of total regulated market yards (about 7,500) are converted into e NAM, it is opportune time to use RCTs for evaluating the performance of the electronic spot market in terms of price discovery, crops arrival, auctioning, and trend in farmer participation. Based on RCT-based experimental research, agriculture marketing policies can be tweaked to increase farmer awareness of market realities, improve their bargaining power through collective action, and to bring about efficient allocation of resources.

Fourth, capacity building of farmers and stakeholders also need RCT. For instance, Farmer Producer Companies have drawn policy attention from the market access and risk management viewpoint. Notwithstanding a renewed interest in agriculture policymaking, capacity building programme need to assess farmer market orientation, perceived risk attitude, risk exposure, farm size and performance. RCTs can be instrumental in assessing pre- and post-intervention of resource agencies towards capacity building of farmer organisations.
Fifth, it is important to note that any evaluation-based experiment entails investment and time.

As poverty alleviation research has been emerged through a dedicated lab named J-PAL, a network of researchers does carry out extensive field-interventions in the developing and least-developed countries on poverty issues. Drawing a parallel from such research, agricultural market intelligence centre needs an appropriate design for the required intervention and should develop a network of diverse scholars and professionals to incentivise farm realities with appropriate policy instrument and mechanism.

Faculty, IIM Lucknow, associated with an Agri-Business Group

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