A Triple Hurdle Analysis of the Use of Electronic-Based Agricultural Market Information Services: The Case of Smallholder Farmers in Kenya

Abstract

Smallholder farmers’ access to markets has traditionally been constrained by lack of market information. The need to facilitate farmers’ access to markets has seen the emergence of many projects that employ electronic tools in the provision of market information services (MIS). This study used a triple hurdle analysis to examine the factors influencing farmer awareness of electronic based (e-based) MIS projects, the decision by smallholder farmers in Kenya to participate in such projects and the use of services they provide. It finds that the drivers of awareness, decision to participate in e-based projects and use of the use of e-based MIS various farmer, farm and location-specific characteristics as well as endowments with physical, financial, human, and social capital. It specifically finds that education, distance to market, membership to farmer organizations, household income and cell phone ownership affect both the decision to participate in e-based projects and the use of MIS services such projects offer. The study concludes that transaction costs and social, financial and human capital endowments play an important role in smallholder farmer participation in e-based projects and the use of e-based MIS. The study discusses the implications of these findings for policy and practice.