ICT Policy for Agriculture Based on a Transaction Cost Approach

In Sri Lanka, the majority of farmers are generally poor,and rely on subsistence agriculture. If these farmers can even partially be made responsive to market needs, as opposed to current household needs, they could cultivate at least some income generating crops, which if sustained, can reduce their poverty. However, high transaction costs associated with obtaining market information have continued to keep poor farmers entrenched in subsistence farming. The current ICT revolution is making previously costly market information much more affordable to these farmers. Therefore, if used appropriately, ICT can help reduce the high transaction costs associated with market information thereby helping farmers move toward some level of commercialization. The question is how a country can achieve this objective. This paper considers the case of Sri Lanka and provides lessons, both positive and negative, for African policymakers.