Two years ago, Robert Jensen presented work he had done on the economic benefits of mobile phone adoption among fishermen of the Kerala state in India. Jensen showed that mobile phone adoption reduced price volatility in the fish markets and was able to show quantitative benefits for fishermen and for the fish consuming public in Kerala. This blog post has a summary, some graphs and the pointers to his initial presentation.
Now there's new data from Kerala on the transition that occurred with the advent of mobile phone service. In Volume 4, Issue 1 (Fall 2007 ) of Information Technologies and International Development, Reuben Abraham reports (PDF, registration required) the results of a series of focus groups conducted at 12 locations in Kerala India and interviews with nearly 200 local people associated with the fishing industry. Using this data, he provides a good view of the fishing supply chain in Kerala, details on what happened when mobile phone service became available, and a nice summary of the implications for policy makers:
This article has provided an example of the value of communications technology, especially mobile phones, in making markets work more efficiently. This research also firmly establishes the role of ICTs in rural markets as one that reduces transactions costs. Investments made with the aim of reducing transactions costs are more likely to succeed than amorphous, ill-defined attempts to bridge the “digital divide.”
What I found interesting was the complexity of the fishing supply chain with separation between fisherman, boat owners, fishing cooperatives, brokers/commission agents and wholesale and retail fish merchants. Apparently the economic benefits measured so far have come with little change in this complex supply chain. However, Abraham notes:
... the power the middleman holds over the fishermen due to the monopoly on price information has lessened somewhat. The free flow of information ensures the fishermen get the opportunity to drive a harder bargain than before.
It will be interesting to see what changes happen over the next 5-10 years as ownership of capital assets (like boats) evolves and the market adapts to the new flow of information. I'll bet that, increasingly, middlemen will be cut out and consumers will see even lower prices.