The ACE Market Information System
This is the second out of seven articles published by ACE to mark 15 years of operation and celebrating the regulatory license recently acquired from the Registrar of Financial Institutions. The articles will be made available on the ACE website, as they are published by selected media.
The Agricultural Commodity Exchange for Africa (ACE) has labelled market information as the first step on the structured trade ladder. It is a natural start, being a manageable and cheap way to integrate and work with rural populations. The theory, research and practice on use of market information is plentiful and, although not unanimous, it points to the fact that access to market information benefits rural individuals. However, the main longer term problem with market information is that no one seems to have managed to make a market information system economically viable. ACE believed it had an advantage. ACE did not need to sell the information to farmers, ACE could give it for free. Eventually, all things being equal, ACE anticipated that providing market information would lead to increased trade, with the commission on the traded volume covering the cost of the market information. The idea of a sustainable market information system integrated with the trade platform, made ACE jump at the opportunity, when the USAID market linkages initiatives (MLI) facilitated ESOKOs entry to Malawi in 2011.
ESOKO was a technology platform out of Ghana and had spearheaded large scale distribution of market information through SMS in many African countries. ACE started collecting price information from rural and urban markets and uploading it to the ESOKO platform and then utilising the ESOKO technology to send out the information on SMS.
To pilot this, ACE registered 250 farmers on the ESOKO platform. The result was incredibly promising. Within 2 months over 70 contracts were signed on ACE, making the exercise very sustainable. An interesting personal story also emerging which was later published by USAID.
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