A mobile market for agricultural trade in Uganda

Information failures lead agricultural markets to exhibit substantial inefficiencies in developing countries such as Uganda. Trade links between buyers and sellers are created informally by word of mouth and rarely grow beyond established social circles. Various mobile systems have aimed to improve market efficiency, but have been hampered by poor availability of Internet-enabled devices, users' extreme cost sensitivity to network charges, and cultural expectations of face-to-face negotiation. Previous work in this area has thus focused on price advisory systems or classified advertisements, which we argue are not effective. We analyze past price data from the rural agricultural market in Uganda, gauging inefficiency by estimating opportunities for arbitrage by transporting commodities from one city to another and from warehousing nonperishable commodities to resell them later; in both cases, we find striking price imbalances. We describe a novel double auction mechanism that we have designed to be practical given the constraints of SMS-based communication, and argue that it provides market participants with appropriate incentives. We present the results of field trials of the system, which after six months registered more than a thousand farmers and traders across Uganda and received $1.0M USD in bids and $1.7M USD in asks.