Impact of Mobile Phone Application Usage on Farmers’ Price Realisation and Expenditure on Pesticides and Fertilisers

Abstract

Smartphones are fast emerging as one of the crucial technologies in agriculture and rural development. Even though, they possess immense potential in improving farmers livelihood and agriculture value chain, corresponding research is scant. By collecting novel data from 997 farmers in Andhra Pradesh, India (through collaboration with an agriculture technology start up) ours is one of the first studies in analysing the impact of agriculture information based mobile phone application (MPA). Using an instrumental variable two stage least squares regression (IV 2SLS) model, we investigate the impact of MPA on farmers price realised and expenditure on inputs (pesticides and fertilisers). The MPA usage was found to result in reduction of expenditure on pesticides and fertilizers incurred by the study farmers and an increase in farmers’ price realisation. This implies that the inputs and price advisory service available in the smartphone based MPA was effective in controlling input expenses of farmers and improving price realisation by farmers, thereby improving farming viability.

Keywords: Smartphone, Mobile Phone Application, Price Realisation, Input Expenditure, Agriculture Technology

JEL Classification: Q16, Q18