Friday, February 03, 2006

Fishermen in Kerala

One of the most famous innovations brought about by cellphones was with the fishermen in Kerala. Excerpts from the article by economist Swaminathan Aiyar:

Fishing boats came ashore early every morning and fishermen auctioned their catch to traders at dozens of shore points. The auctions had to carried out rapidly since the fish were highly perishable. However, neither fishermen nor traders knew how much fish would be landed at which point. One consequence was that the price of fish could vary by 50% between two shore points just 15 kilometres apart. Due to uneven distribution, there would be a surplus at some places leading to wastage, and a shortage at other places. With the arrival of cellphones, fishermen began making calls to traders while still at sea, and the earlier lack of information that bedeviled both traders and fishermen was bridged. Many fishermen even began selling their catch on the phone while still at sea, and then steered their boats to the shore points where their respective buyers were waiting. The result was that the volatility of fish prices fell dramatically, and wastage was reduced. Even the consumers benefited with reduced fish prices.

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