Files
Abstract
Government of Malawi has been promoting initiatives like Malawi Agriculture
Commodity Exchange (MACE) that aim at reducing information asymmetry among
market players especially smallholder farmers. Using co-integration error correction
models, the study assessed effectiveness of modern ICT based market interventions on
improving maize marketing efficiency in Malawi. Considering that efficient markets are
integrated markets when price difference is only a factor of transaction costs, TAR
models assessed price transmission speed in pre – ICT and post – ICT periods. Using
logit model, the study further identified socioeconomic factors influencing use of
modern ICTs among smallholder farmers.
Of the sampled households, only 18 percent used modern ICTs because of high initial
capital cost, illiteracy and lack of awareness on the modern ICTs. Based on the logit
model results, the significant socioeconomic factors that highly influenced use of
modern ICTs were physical asset wealth and gender of the household head. The spatial
integration results show that markets in Malawi were integrating. The results of TAR
models in pre – ICT and post – ICT periods show that ICT based market interventions
have positively influenced market integration and price transmission. Thus, modern
ICTs have contributed to the reduction of search transaction costs leading to improved
marketing efficiency. Based on the results, the study recommends the need to increase
awareness on ICT based market interventions to all gender groups and to improve market infrastructure in the country.