Assessing the Impact of Digital Procurement via Mobile Phone on the Agribusiness of Rural Bangladesh : A Decision-analytic Approach

The research assesses the impact of a digital pro- curement (e-purjee) system for sugarcane growers in Ban- gladesh. The system itself is simple, transmitting purchase orders to local farmers via SMS text notification. It replaces a traditional paper-based system fraught with low reliabil- ity and delivery delays. Applying expected value theory, and using decision tree representations to depict growers’ decision-making complexity in an information-asymmetric environment, we compute outcomes for the strategies and sub-strategies of ICT vs. traditional paper-based order management from the sugarcane growers’ perspective. The study results show that the digital procurement system outperforms the paper-based system by tangibly reducing growers’ economic losses. The digital system also appears to benefit growers non-monetarily, because of reduced uncertainty and a higher level of perceived fairness. Sug- arcane growers appear to value the non-monetary benefits even higher than the economic advantages of the e-purjee system.