Elsevier

Research Policy

Volume 30, Issue 1, January 2001, Pages 121-141
Research Policy

Between data and decisions: the organization of agricultural economic information systems

https://doi.org/10.1016/S0048-7333(99)00096-7Get rights and content

Abstract

In the current political economic environment there is pressure to reduce and reorient public agency involvement in agricultural economic research and information services. Efforts to evaluate the effectiveness of public investments and enhance sectoral coherence through exploitation of institutional complementarity are constrained by weak understanding of how economic information is produced, processed and circulated. In this paper, we locate the centers of analytic competence and analyze supply of agricultural economic advisory services through development of an information accounting framework. We focus on the relative contributions of public agencies, commercial firms, collective organizations, and informal networks in order to identify organizational structures and institutional arrangements of coordination in the agricultural economy. The observed division of labor in information systems reflects the heterogeneous distribution and strategic choices of actors with respect to internal analytic competencies. Decision makers in agricultural businesses are heavily dependent on the services of a diverse range of intermediaries who perform information translation and customization functions. These intermediaries rely heavily on largely, but not exclusively, publicly supplied data and information inputs. This strongly linear aspect of agricultural economic information systems is identified as a component subsystem within the larger and more highly interconnected system of innovation. The dominant role of public agencies in economic information systems suggests that they currently perform highly valuable coordinating functions in agriculture. While commercial and collective organizations make important contributions and could be mobilized to assume broader responsibility, there are likely to be limitations to substitutability based on the classic (but still fully relevant) problem of private underinvestment in information.

Introduction

In the contemporary political economic context of liberalization and privatization, the role of government in coordinating economic activity is in question (Evans, 1995). There has been a semantic and somewhat less consistent material retreat from state intervention and a corresponding ascendance of theory, ideology, and policy rooted in the self regulating capabilities of markets. In agriculture, these trends are evident as applied to commodity and trade policy, as well as research and extension policy (Bonanno, 1998). It is argued that historical, technological, and organizational developments inside and outside of the agricultural sector require a redefinition of the public–private sector division of labor in agricultural economic information systems. More specifically, public fiscal austerity, structural change in agriculture (Bonanno et al., 1994; Schertz and Daft, 1994; Goodman and Watts, 1997), the increasingly proprietary nature of information and the associated rise in private investment in research and extension (Fuglie et al., 1996; Wolf, 1998) have destabilized political support for public investments in producing and distributing agricultural economic information. By economic information we mean interpretation and strategic analysis of market trends, policy considerations, and movement of the technological frontier.

Reconsideration of the role of government in agricultural information systems with an eye towards disengagement, reflects the view that public agencies are not sufficiently accountable and that in some measure public investments are no longer justified. More specifically, we identify four implicit criticisms of public services. These criticisms are integral to the logic that reductions in government information provision will not impair the performance of US agriculture. First, significant public–private sector redundancy exists. Second, private sector firms currently perform the lion's share of the work while public agencies' clientele are composed of a small number of weak actors. Third, public information is of inferior quality relative to private services. And, fourth, in the event of public sector disengagement, commercial and cooperative organizations will emerge to service vacant niches.

In this paper, we empirically analyze the organization of economic information networks and use these results to assess the validity of these four criticism. We identify pathways of information flow in a set of agricultural commodity systems through development of an information accounting framework. We document patterns of interaction between a diverse group of decision support service providers and a diverse set of users of analytic services. Based on empirical analysis of who is providing which information services to whom, we identify organizational structures and institutional arrangements contributing to economic coordination in a set of agricultural commodity systems (Salin et al., 1998). We find a measure of support for the generally held view that `the public sector wholesales information and the private sector retails it', but we illustrate why this stylized and linear characterization of the division of labor is only partially correct and in some ways misleading. The methodology we develop here allows us to present a detailed portrait of the production, processing, and circulation of information.

A better understanding of roles and relationships in information systems is needed to advance the current search for complementarity among institutional forms. By institutional complementarity we mean an alignment of rules, incentives, expectations, assets, and capabilities of the relevant assemblage of individuals and organizations so as to promote effectively the social objectives of efficiency, equity, and sustainability. The present article contributes to this theoretical and highly ambitious project through an analysis of the contemporary division of labor in information systems (Sayer and Walker, 1992). We locate the centers of analytic competence in the agricultural economy through evaluation of the relative contributions to information service provision of public agencies, commercial firms, collective organizations, and informal networks. These four classes of organizational structures are recognized as the principle forms through which economic coordination and regulation are achieved.

Section snippets

Distinguishing between data and information

As is traditional in the field of economics of information, we define information as an input that results in a reduction in a decision-maker's uncertainty. As more information is collected and assimilated, and the quality (e.g., accuracy, timeliness, specificity) of a decision-maker's information becomes higher, ability to make “good” decisions — resource allocations that enhance their positions relative to their objectives — improves.

Following Boehlje (1998), information can be conceptualized

Methods and analytic framework

Our accounting of information exchange was constructed through a combination of 68 personal interviews and 140 mail surveys in four commodity case studies; Washington potatoes and white wheat, Iowa hogs, and California fresh tomatoes. This contrasting set of products cannot be said to be representative of all of agriculture, but provides an interesting cross-section due to variance in market structures; small (tomatoes) and large (hogs) commodity markets, domestic (tomatoes) and international

Results

Table 1 displays education levels and data and information use of respondents. As expected, there are differences in human capital between endusers and intermediaries. As indicated by level of formal education, intermediaries are more likely to be analytically inclined than are endusers. Endusers, on average (and almost as a general rule), have had less formal education than intermediaries (∝=0.01).

Our findings as to respondents' usage of data and information conform to our hypotheses. Endusers

Circulation of information

In Section 4, we identified intermediaries as suppliers of analytic services to endusers and went on to analyze heterogeneity among them in terms of data and information inputs and outputs. We now turn to an analysis of their roles in circulation of information. We examine the structure of information networks for eight specific topics; (i) domestic supply forecasts, (ii) domestic demand forecasts, iii) international market outlook, (iv) price forecasts, (v) economic implications of production

Information accounting

In the previous discussion we have demonstrated that endusers receive information from both USDA and from a variety of intermediaries. Also, we have illustrated that intermediaries receive a large portion of their information from USDA suggesting that public information reaches endusers, in part, indirectly. In an effort to refine our description of division of labor in agricultural economic information systems, we make an attempt to provide a more detailed estimate of the overall public sector

Value of information

In the previous discussion we identified the relative contributions of various organizations to supply of information as a function of volume or frequency. Here we analyze the relative value respondents attribute to information from the various sources. For us value is interpreted to indicate respondents' evaluation of the quality and usefulness of suppliers' information (e.g., accuracy, timeliness, accessibility, specificity). The higher the reported value, the greater the affect that supplier

Entrepreneurial response to public sector disengagement

The final data presented are a further measure of the value endusers and intermediaries place on public data and information. We have presented behavioral data and indirect estimates of public and private sector contributions to respondents' information supply. Now we utilize attitudinal data. Respondents were asked to respond to two statements using a 5 point Likert scale ranging from −2 for strongly disagree to +2 for strongly agree. “If public agencies were to reduce their data production I

Conclusion

We have presented a detailed accounting of circulation of agricultural information and how decision support services are provided to business decision makers. Theoretical consideration of the nature of information, functional specialization, and distributions of analytic competencies and human capital allowed us to derive a conceptual model of information systems that was validated empirically. We provided estimates of the relative contributions of public, commercial, collective, and informal

Acknowledgements

This research was funded by USDA Economic Research Service under Cooperative Agreement 43-3AEK-7-80040. We are grateful to all survey participants, Steve Wu for research assistance, Gilles Allaire and three anonymous reviewers for helpful comments on earlier versions of this paper, and Unité d'Economie et Sociologie Rurales, INRA, Toulouse, France and University of California, Berkeley Institute for International Studies for financial support. All errors are the responsibility of the authors.

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