The use of information sharing systems to address opportunistic behaviour between tomato farmers and brokers in Zambia
Small-scale farmers are often unable to profitably participate in agricultural output markets due to the challenges engendered by their inability to access agricultural market information. The main horticulture output market in Zambia, the Soweto market, is characterised by such challenges. In 2010, it was found that brokers on the Soweto market inflate fresh produce prices to extract an extra commission (hidden commission) without the farmers’ consent. On the Soweto market, brokers take advantage of the existing information asymmetry to increase their financial gains when they transact with farmers by providing false price information to the farmers. The slow sales resulting from this behaviour leads to the deterioration and spoilage of tomatoes on the Soweto market. This behaviour deprives farmers of their profits and ultimately leads to reduced livelihoods of the rural population.
Information asymmetry, opportunistic behaviour, t-test, hidden commission, Soweto market.