Village Study Report

VILLAGE STUDY SEGMENT (MRM 2008-10)

THEME PAPER

“STUDY ON PRODUCTION AND SALES PROBLEMS OF POTATO IN THE VILLAGE BHAWANIPUR OF ALLAHABAD”

Host organization: Bioved Research Institute of Agriculture and Technology (BRIA&T), Allahabad

Submitted by Bipin Mishra (8201048)

Faculty guide: Prof. R. N. Subudhi

SCHOOL OF RURAL MANAGEMENT, KIIT UNIVERSITY 1

BHUBANESWAR 2009 TABLE OF CONTENT

Theme Paper

1. Introduction……………………………………..………………………………….…...1 2. Methodology …………………………..……………………………………….……….2 2.1 Visits…………………………………………………………………………………5 2.2 Field studies………………………………………………………………………….5 3. Importance as a cash crop……………………………..………………….…...................6 4. Survey Findings: Production practices, Marketing practices, Costs, Shares and margins …………………………………………….........................................................7 4.1. Production systems and production costs………………………….………..…..7 4.2. Seed …………………………………………………………..…………..…..…8 4.3.Variety …………………………………………………………...….…………...9 4.4.Formal seed system………………………………………………………………9 4.5.Diseases…………………………………………………………………………..9 4.6. Awareness about diseases…...………………………………………………….11 4.7. Selection of land……...……...……………………………………………….…11 4.8. Weed Control…………………………………………………………………....11 4.9. Soil testing……………………………………………………………………....12 4.10. Fertilizer…………………………………………………………………….…...12 2

4.11.Soil preparation………………………………………………………………….12 4.12.Irrigation………………………………………………………………………....12 4.13.Post-harvest………………………………………………………………………13 5. Potato trading in Allahabad ………………………………………….….………………13 5.1 Potato trading: A general view………………………………………………...…….13 5.2 Potato sells structure and prices……………………………………………………..14 5.3 Potato trading channels………………………………………………………….…..16 5.3.1 Assembly traders………………………………………………………….…...16 5.3.2 Regional traders………………………………………………………….……..16 5.3.3 Rural wholesalers in Babooganj and Lalganj……………………………..……17 5.3.4 Urban wholesalers in Allahabad…………………………………………….…17 5.3.5 Retailers…………………………………………………………………….…..17 5.4 Potato selling margins…………………………………………………………..…...17 5.5 Socio-economic aspects……………………………………………………………..18 6. Lessons learnt…………………………………………………………………………..….18 7. Summary and conclusions…………………………………………………………..……..19 REFERENCES………………………………………………………………………………….20

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List of Tables Table 1: Parameters taken for study………………………………………………...3 Table 2: Source of information for analysis ……………………………………………......5 Table 3: List of field’s studies carried out in January, 2009 …………….………………....6 Table 4: Production cost …………………………………....................................................8 Table 5: Constraints facing potato production in Allahabad district, 2009….......................10

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1. Introduction Potato is a cool season crop in U.P. It is grown through the spring months and harvested in early summer. Potato is one of the major vegetable crops grown by farmers in the village Bhawanipur of Allahabad district. The potato is one of about 2000, species of the family Solanaceae. There are eight cultivated species of tuber and two hundred wild species (Horton 1987). Potato can persist vegetatively as tubers (Horton 1987). The tuber is an enlarged portion of an underground stem. Tubers contain most of the characteristics of the normal stem including dormant buds or eyes. The eyes occur in a spiral pattern of the tuber, with most being found towards the apical end of the tuber. These apical buds normally sprout first. About two weeks after stems first emerge from the soil, young tuber begins to grow at the tips of the stolons. For the tubers to enlarge, the amount of photosynthate available for translocation and storage must exceed that required by other part of the plant for the growth and metabolism. For most potatoes, short days and moderate temperatures stimulate tuber initiation (Horton 1987). High day temperature causes plant stress even under irrigation. When temperature is higher than 230 C, the net rate of photosynthesis decreases and if night temperature remains consistently above 20 C, tuber will not form. The potato can be reproduced from seed, however, potato is highly heterozygous and seed purity can only be maintained by vegetative propagation (Horton 1987). Almost without exception, most farmers plant tubers. The need to propagate vegetatively is one of the most distinguishing features of potato cultivation, strongly influencing not only how potatoes are grown but also where, by whom and for what purposes. The efficiency of sells for potato in village has been of significant concern in the recent years. Poor efficiency in the selling channels and inadequate sells infrastructure are believed to be the cause of not only high and fluctuating producer’s prices, as well as also too little of the consumer rupee reaching the farmer (see Kaul 1997, Ashturker and Deole 1985). Village farmers typically 5

depend heavily on middlemen particularly in potato sells. The producers and the consumers often get a poor deal and the middlemen control the market, but do not add much value. There is also massive wastage, deterioration in quality as well as frequent mismatch between demand and supply both spatially and over time. In the light of these concerns, studies were taken-up at Bhawanipur nearby Berawan road, Allahabad. The studies sought to examine various aspects of the trading of potato in the wholesale markets with a view to improve the selling efficiency. The commercial value of potato in terms of direct consumption, processing as well as trade has risen substantially in recent years. Their economic importance has also increased and high labor intensity in the production also makes them important from the employment angle as well (Sharma 1991). In light of these issues, this study seeks to examine the market environment for potato in the Allahabad district. It examines various aspects of potato selling such as market infrastructure, selling practices, selling costs etc. in the wholesale markets in the Allahabad. The study also made an attempt to identify the prevailing value chain from the Farmer → Pre harvest contractor → Commission Agent → Wholesaler → Retailer → Consumer in terms of costs, prices and their shares in the selected markets. This paper examines the reasons for these conventional patterns of trade in potatoes. Since most of the potatoes produced are not being export outside the periphery of Allahabad district. The potato selling system as well as production system in this province is given particular attention. Understanding the patterns of selling and constraints to export will help identify ways to improve access to profitable markets for village farmers. Specifically, in this study we: 1) Describe the nature of current domestic potato selling systems in the village Bhawanipur Tal. Allahabad. 2) Diagnose constraints to the potato selling system in the village Bhawanipur. 3) Identify factors causing recent potato selling patterns in Bhawanipur and 4) Identify needs and opportunities for further improving village trade in potatoes and potato products.

1. Methodology

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Information was collected with formal questionnaires (Table 1). Respondents were randomly selected from potato growers. The number of respondents was 32 in the village Bhawanipur. Information recorded including quantities and price of potato purchased on the day of the survey. Number of field visits to Bhawanipur were made in January, 2009 to conduct semi-structured interviews with key informants, including farmers, small traders, large traders and wholesalers,. Interview topics included (I) trading channels, (ii) sells margins, costs, services, and profits, (iii) Potato quality and other possible constraints to exportation. Interviews of potato grower in Bhawanipur were also conducted in January 2009 to identify constraints to production and perceptions on the quality of potatoes. We also interviewed Agriculture Officer in Allahabad to determine whether phytosanitary regulations were constraints to potato exportation from Allahabad. Secondary data were collected to assess trends in potato prices at the farm, wholesale and retail levels in Allahabad and other major potato market centers. In this document only the information relating to production cost, consumption and selling was used. Table 1: Parameters taken S. No.

Parameters

Findings

1 2 3 4 5 6 7 8 9 10

Major Pest/ disease Problems Awareness about disease (%age) Selection of land No. of ploughing Soil Analysis Cropping System Pre land Preparation (Soil treatment) Seed variety Seed rate per acre Crop Spacing(in cm) Row to Row/ Plant to

Late & early blight, Leaf curl 27.18% Randomly 6 to 8 No Paddy- potato/ Wheat-urd/moong No G4, Gola 10-12 Quintal 25 / 15

11 12 13

Plant Pre-weed management Sowing methods Chemical fertilizer/ bio-fertilizer doses (in kg/

Hand weeding Spade made furrow method 100-200/ 0-100

Acre) DAP/Potash 7

14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

Application methods of fertilizers Time of sowing Irrigation time and type Post weed management Earthing and Nitrogen application (in kg/acre) Chemical pesticides Doses of Chemical pesticides (gm/acre) No. of Pesticides application Bio-pesticide used, if any? Bio-fertilizer used, if any? Harvesting time Harvesting Methods Input Cost/Acre (in Rs./Acre) Output /Acre (in Rs./Acre) Selling Method Post harvest Technology, if any? Percentage of Storage at Go down Spatial Differentiation of Land Any Other Problems In Potato Cultivation

Broadcasting 15 Oct. to 15 Nov. 6 to 8, Flood irrigation Hand weeding Urea-100-150 Indophil 750-1000 2-4 No No March With the help of spade and khurpi 10000-15000 15000-18000 Selling to local traders from field No 0-5% 1-5 Unavailability of DAP fertilizer at the time of need

Table 2: Source of information for analysis 8

Source

Method

of Period

Type of information

collection General References, reports*

Review

Domestic market Producer’s survey

January

to Experiences

and

February,

observations, Trade and

2009

trends

Formal

January

questionnaire

February,

to Production, preferences

2009 Export market Focused discussion producers

in

group Interaction

with January

to farmers,

potato February,

the business

to Field performance of seed, Assessment by producers

2009

village Bhawanipur Source: Primary data * From the survey report conducted by Bioved Research Institute of Agriculture and Technology, Allahabad

2.1 Visits Additional information was collected through visits to potato producers, seed merchants and traders. 2.2 Field studies A range of field studies evaluating the performance of seed, fertilizers, irrigation, field preparation, protection measures, and post harvest technology were carried out in selected farm locations in the village, with the objectives to evaluate variety and seed management effects and to demonstrate the potential benefit of high yielding variety seeds.

Table 3 List of field’s studies carried out in January, 2009

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Type of activity

Details

Seed source effects

Seed from released varieties produced by agricultural research

Variety effects

is not replicated by farmers Demonstration of potential benefit of HYV variety

Seed source effects

Explanation of the potential benefit of certified seeds

Effect of storing

Potatoes produced were stored in cold storage for 120 days, varieties Kufri Jyoti, Khangma Kaap, replicated by majority of

Effect of irrigation

farmers. No significant data was found on effect of irrigation.

2. Importance as a cash crop Most important crops in Bhawanipur based on cultivation area, number of producers and food security are wheat and rice. Both are mostly produced for home consumption. Important cash crops that emerged over the last 4 decades are potato, tomato and cauliflower. Based on the number of households benefiting, it is again potato which is the most important cash crop. In spite of this the importance of potato for income generation is not being reflected in the association between the value of input cost and the value of output yield. In spite of this, potato is likely to remain the single most important cash crop available in the Bhawanipur. Potato has a major impetus in the transformation of subsistence production systems to market oriented systems. Simultaneously, with lack of access to right place of selling at right point of time became more imperative. There are enormous dramatic changes brought by science and technology for production but the moment when it comes to potato, it fail to do so for farmers of Bhawanipur. Earlier potato was being exported from this village to outside the Allahabad district. But since last few years potato is not being exported outside the periphery of Allahabad district because of several restriction imposed by state government. 80% of all households in Bhawanipur cultivate potato for selling but farmers fails to get the benefit of selling. During harvesting period it becomes available in abundant quantity of Allahabad district which leads more supply of potato than demand. As a consequence price get drastically reduce. This is the reason why farmers are bound to suffer the losses. Considering its contribution to the individual 10

household income, the adoption of this cash crop has no impact on the socio- economic conditions of rural households in the Bhawanipur of Allahabad district.

3. Survey findings: Production practices, Selling practices, Costs, Shares and margins This section examines different features of the potato markets, and the existing selling practices followed by the selected sample respondents of the village Bhawanipur. Production costs at various stages, problem of potato cultivation, trading agencies and the producers based on the sample survey conducted in the village Bhawanipur, Allahabad district. Current Practices 4.1 Production systems and production costs Potato is almost exclusively produced under rainfed conditions by small farmers with landholding <2 ha. The respondents of the village have an average land 0.48 ha potato and yield of 25.9 t/ha. The main potato production areas are concentrated in the Allahabad belt. The two most important production systems are: • Potato in rotation with wheat, barley, green gram, vegetables in the regions traditionally growing wheat, barley, chickpea, black gram and vegetables in the Allahabad. • Potato-mustard intercropping in regions traditionally growing mustard in the ACZ-5 region. Due to small landholdings and lack of other suitable crops many farmers do not follow a systematic crop rotation. Potato-pea is popularly practiced in the Allahabad. All production systems are highly labors intensive as most of the work except field preparation is done manually, resulting in high production costs (Table 4).

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Table 4 Production cost Component Seed Fertilizers Pesticides Labor Farm traction Total Source: Primary data

Production cost Total (Rs/ha) 13894 6559 1821 4200 3937 30411

Percentage (%) 45.68 21.59 5.98 13.81 12.94 100

Small plots and sloping land limit the opportunities for mechanized production. The high labor requirement is further amplified by the requirements for guarding fields against wild animals i.e. blue bull (Boselaphus tragocamelus). Depending on the terrain, farm size and the accessibility to resources, potato growers use tractors, power tillers and bullocks for land preparation. Over the last few decades a substantial number of potato varieties were introduced in India. Currently the following four varieties are formally recommended by the Ministry of Agriculture: Desiree, Kufri Jyoti, Yuri Kaap and Khangama Kaap. Indian farmers and consumers clearly prefer the red skin variety Desiree, which is accounting for about 90% of the potato produced. Some growers believe that white skinned varieties (Kufri Jyoti and Yuri Kaap) are less susceptible to damage when compared to the red potato. 4.2 Seed No aspect of growing potato is more important than the selection of the best planting material, for the yield obtained from different stocks of the same variety under the same condition of culture, depends more upon the quality of the planting stock than on any other single factor (Balaoing and Lazo 1967). Moreover, the use of high quality seed improves the productivity of traditional inputs such as labor, irrigation and cultivation practices (Monares 1981). At planting time, the seed should be at such a stage that emergence takes place quickly and a sufficient number of strong stems develop from the seed tuber. The seed should be free from pest and diseases that could spread during the growing season and destroy the crop. To encourage a more uniform crop, the size of the seed tubers planted should not vary greatly. This study reveals that 12

growers of this village have concern with the quality of seed but they have limited access. During planting period they use to buy seed from local market nearby village, which limit the quality of production as well as quantity. 4.3 Variety While many potato varieties have been developed and are cultivated throughout the country, most have been selected under very specific environmental conditions (Beukema and van der Zaag 1990). In selecting a suitable variety, farmers generally select Gola (836, 707, S2), G4, Shrinath, H2 varieties from the local market, which gives no certainty to growers about quality and the desired tuber characteristics in terms of skin color, flesh color, tuber size, and storage capabilities. However farmer seldom use a criterion in selecting or rejecting a variety. Rather, the decision is made with consideration of availability of variety in the local market at right point of time. It may be more profitable for the farmers to grow an established variety. Even so, farmers do not prefer a certain variety because of the lack of accessibility at a right point of time during planting. Moreover, there is no processing unit of potato which can create demand of a particular variety. Furthermore, variety being used by farmers does reflect a conventional pattern of selection, the agro ecological environment, and the cropping system and food requirements. 4.4 Formal seed system The fundamental objective of certified seed is to produce seed guaranteed to be of the desired variety and within established tolerance limits to be free of pest and diseases (Crissman 1990). Study suggests that most government institutions are incapable of producing and managing the large scale production of certified seed. Formal seed production programs produce only a small proportion of total seed requirements. Department of agriculture and cooperation fails to supply the certified seed at require time during sowing which leads farmers to buy local seed. This is also a major reason of limiting the production of potato in Bhawanipur. 4.5 Diseases A very common fungal disease of the foliage is early blight (Alternaria), late blight (Phytophthora). Fusarium and Verticillium wilts are also caused by fungi. Blackleg, a bacterial 13

disease, is characterized by a blackening of stems and a yellowing and curling of leaves. Tubers of the potato are also subject to attack by a variety of pathogens. Various Fusarium species and the blackleg bacterium cause tuber rots. Rhizoctonia solani forms black sclerotia on the surface of tubers which gave rise to the name black scurf for this particular disease. Another fungal disease of the tuber surface is common scab (Streptomyces). Root-knot nematodes form irregular bumps on the tubers. The potato plant is also susceptible to a variety of virus diseases such as potato leaf roll, rugose mosaic and purple top. A three or four year rotation helps avoid certain disease problems. Main problems facing potato production constraints in Allahabad district are given in Table 5. Table 5: Constraints facing potato production in Allahabad district, 2009. Problems ranked in order of importance 1 Marketing,

2 Late

3 blight, High cost of

4 Inadequate

lack of cash Early blight

Production, unavailability of Seeds,

marketing

certified seed, DAP, Urea, Expensive

Bacterial wilt,

Potash

Poor inputs

seeds, like

fertilizers

Source: Primary data

Sells is one of the biggest problems facing most growers. Bhawanipur, for example, one of the leading potato producing areas of Allahabad district has a large number of potato refrigerated cold storage whose capacity is not enough due to abundant quantity of potato. This facility was meant to ease selling problems amongst growers cooperatives affiliated to the ADC (Agricultural Development Corporation) in Allahabad District. The major problem facing the farmers is one of low producer prices, a common feature at each harvest. The poor prices have a negative consequence including low input use and poor crop husbandry practices resulting in low harvest yields. Middlemen usually buy potatoes from farmers field itself for selling to various markets. These traders are seen as a necessary evil exploiting the growers yet helping them market the surpluses both within Allahabad and in adjoining markets such as Pratapgarh, Raebareily, and Koushambi etc. 14

4.6 Awareness about diseases Cultivation of a good crop is essentially depends upon the management practices of insect pest and diseases. During the survey we found that the farmers are not aware of harmful insect pest and diseases which limits the production of crop, at the same time it incur the high input cost. Villagers reported that it is responsibility of government official to send the agricultural subject specialist on visit who can make aware of farmers about the identification of insect pest and diseases and their management practices within a feasible limit. Questionnaire survey revealed that farmers are only aware about 27 % of harmful insect pest and diseases. This is not said to be satisfactory for cash crop growing farmers in the village Bhawanipur of Allahabad district. 4.7 Selection of land Selection of proper land for a particular crop is prerequisite for harvesting of a good crop. Land should be selected on the basis of requirement of crop. We found in our study that farmers have minimum concern with the selection of land. Most of the farmers select any piece of land randomly for potato cultivation. While good water penetration and aeration are musts for proper growth and tuber formation of potato. It was found that only 34.37 % farmers go for selection of land on some basis i.e. availability of irrigation facility, minimum disease occurrence, minimum weed emergence, type of soil, alternate selections of land are some ground of land selection for potato cultivation. 4.8 Weed Control Weeds should be controlled in potato fields since they cause many problems besides being hosts for insects and diseases. An effective weed control program takes into account the weed problem, cultivation and herbicides. Fields containing perennial weeds should be avoided. When herbicides are used, the choices of which one or ones to use should be tailored to the specific weed problems and when these weeds germinate. Methods of application vary from pre plant incorporation, post-plant and pre emergence, to post-emergence applications. Farmers of this village are not aware of particular kind of herbicides for particular type of problem. Hand weeding is prevailing practice for weed management. Some of the farmers do not realize the 15

importance of weed management which limits the proper utilization of available nutrient in the soil. 4.9 Soil testing Potato grow well on a wide variety of soils and soil pH can be as low as 5.0 with satisfactory production. For harvesting of good crop it is essential for soil to hold reasonable nutritional status. Some of the farmers of this village are aware of soil testing but they have no access to soil testing laboratory so it’s not their mistake to ignore soil testing. Sometimes farmers were motivated for soil testing by Dr. B.K.Dwivedi, Director, Bioved Research Institute of Agriculture and Technology, Allahabad but it was not continued for longer time because of lack of interest in agriculture officials. 4.10 Fertilizer Fertilizer is one of the most important inputs of potato crop in this village. Farmers primarily apply 115 kg. /acre of Nitrogen along with potash 100kg/ acre and DAP at the rate of 181 kg per acre during entire cropping period by either broadcast or pre plant incorporated. Top dress or irrigate on additional N when tubers begin to form. Two or three Nitrogen top dress applications of 30 kg/acre each may be needed. Too much N can be detrimental and decrease tuber quality, grade, and yield. Potassium sulfate is preferably use in potato cultivation by farmers. 4.11 Soil Preparation Good water penetration and aeration are must for proper growth and tuber formation. Excessive tillage and land preparation causes compaction and should be avoided. To be effective, the soil should be ploughed below any compacted layer within the normal root zone and then disk harrowed before planting. We found that an average ploughing of land is done 6 times by farmers before cultivation. Number of cultivation depends on the economic capacity of farmers; those who are rich do more ploughing than poor one. 4.12 Irrigation Soil moisture is probably the most important factor determining potato yield and quality. About 20 inches of water are needed to produce a potato crop in Allahabad. When irrigation is practiced 16

to supplement rainfall it should be applied in frequent light amounts. Secondary growth and growth cracks occur when irrigation or rainfall occurs after moisture stress. The soil should be kept uniformly moist until tubers have reached full size. Farmers of this village are facing many problems for irrigation purposes. There is no permanent solution of irrigation. Some time farmers get water from canal for irrigation that is approximately 3-4 months in a year and rest of the period they have to depend either on diesel pump set or on electric pump set. Farmers think twice before irrigation with diesel pump set because it increases the cost of production. On the other hand there is no certainty of electric availability in day time. So, farmer’s uses diesel pump set as an alternative of canal and electric pump set. Most of the time farmers irrigate their land in night with the help of electric light which shows the concern of farmers toward input cost. Irrigation itself is a big concern of farmers in the Bhawanipur. 4.13 Post-harvest Generally, most cultivars are ready for harvest four to five months from planting. Potato growers in Bhawanipur may harvest their crop during February- march. For potato growers there is generally no time pressure for harvesting as fields may remain fallow after potato harvest. Most ware stored potato is sold by the producers within 1-2 months after harvest. The most common method is to store the harvest in temporary sheds in or near the potato field. There is no grading and packaging directly in those temporary sheds form where they are loaded onto trucks. Producers without road access to the field may use tractor, power tiller or bullock-cart to carry the potato to a road point. Farmers generally do not grade their produces at the time of selling. During the survey, 88% of the respondents reported that they do not grade their potato before taking to the market. The grading is mostly done by size, farmers however, often bring mechanically damaged (bruise, cut) and green potato to the market. A grader is not adopted because of mechanical problems.

4. Potato trading in Allahabad Allahabad is the most important potato producing area in U.P. Potato is one of the main commercial crops in the village Bhawanipur of Allahabad district. Potatoes, with Gola, G4 as the preferred variety, are grown mainly on small-scale. 17

5.1 Potato trading: A general view Because of its geographic location, potatoes from Bhawanipur can be easily sell in the local and regional markets of Allahabad district and also in outside of the U.P. basically, potato selling in Allahabad is a non institutionalized service to break the movement of potatoes from producers to consumers. Government intervention in potato selling is mainly limited to the availability of physical infrastructure, such as roads and market centers. Potato trade is primarily in the hands of private enterprises. These conditions may imply that potato selling system in Allahabad, like in other potato production centers, largely operates under the forces of supply and demand. Problems that may occur in a system are usually due to: (a) producer characteristics – large scale vs. small scale, in relation to the potato volume sold, (b) crop characteristics – perishability, (c) demand patterns – seasonality, (d) sells system complexity – inefficient flow of information, insufficient physical facilities, and low financial capacity of the trade participants. For the producers, price instability may discourage crop intensification and hinder adoption of new technologies, while for the consumers; it may influence the consumption patterns and push consumers to switch to other foods. 5.2 Potato sells structure and prices Certain features of a market influence the conduct of firms in a market environment. These features are usually unique to the product and involved institution. There are at least four market structure characteristics that are mutually important determinants of the type of conduct that prevails in all markets. These are (i) The number and size of firms engaged in trading (ii) the nature of the product as viewed by the buyers, (iii) entry and exit conditions; and (iv) status and availability of knowledge about costs, prices and market conditions among the participants. Trading outlets for potatoes basically include local and regional markets. These traders are responsible for bringing products to local consumers in potato-deficit areas. During our survey, however, we found that there were only 6 or7 traders or firms that have routinely marketed potatoes in the last 1-2 years. It should be emphasized here that the number of traders or firms in domestic market influences how the traders/firms behave. No single trader or firm can possibly try to maximize profits without 18

concern about other traders/firms trying to undercut their expected gains. As such, each trader or firm may strive to increase his/its share of the market and may use a number of sales tactics. To standardize products across producers and assure homogeneity, the tubers are graded or classified according to size. In this way most buyers feel that the product of one seller is practically no different from that of another seller. A farmer will thus find it difficult to convince traders that his or her potato is any better than another farmer's potato, except when measured by obvious grade differences but it is not in practice. The trader does not need to fear that an undercutting price will completely erode the trade. However, varies over time since farmers freely decide to leave the market when the potato business is no longer profitable for them. This is because the potato trade environment allows traders or firms to enter or exit the market when they want to. Factors that may influence entry and exit include absolute cost advantage and unique managerial and technical competence held by existing traders or firms. Buyers or sellers will likely make rational decisions if they have useful and timely information at their disposal. Within the context of potato marketing, the existing market knowledge held by potato buyers and sellers have permitted them to make informed decisions in the market environment in which they operate of several characteristics listed. Two most important are the number of traders or firms and the nature of the product. Price fluctuation is a source of uncertainty that confronts potato growers. As negotiations and trade take place between buyers and sellers, potato prices may change from week to week, from day to day, and even within the trading day from farm to farm. Potato show strong seasonal price pattern although they are at their lowest between February and May. The largest volume of potato usually harvested in the early part of the year in February- March. Growers of potatoes intended for market sale at the time of harvest because potatoes commonly become available in abundant quantity during harvesting period. As consequence price get drastically reduced. Most of the farmers do not intend to go for cold storage because of high charges. Even so, if they go for storage, but the moment when they want to sell storage potato after 2-3 months price remain same as it was during harvesting. Most of their experiences in this regard told that even they fail to get storage cost. This is because of extreme supply of potato during a certain period and less demand. It is obvious that potato should sell to the potato deficit areas where farmers can get a reasonable price. Most of the time it happens so, that farmers are not willing to discharge their 19

potato from cold storage. Because of prevailing low prices, at the same time farmers are unable to send their potato outside of Allahabad district because of several restriction imposed by government. 5.3 Potato trading channels Trading channels facilitate the flow of potatoes from producers to consumers. A variety of well established although informal marketing channels exist in Allahabad district for the distribution and sale of potatoes in the domestic markets. Aside from the growers themselves, the participants in potato marketing activities are assembly traders, commission agents, regional traders, wholesalers, and retailers. In this case, government agencies play no supportive role, such as collecting and publicizing market information, and generally regulating no fair trading practices. The following are among the prominent marketing channels for domestic Market. •

Grower- assembly trader - rural wholesaler - urban Wholesaler in Allahabad - retailer – consumer

•

Grower -rural wholesaler - urban wholesaler -Retailer –consumer.

•

Grower- retailer from some city markets in Allahabad- consumer.

•

Grower -regional trader - retailer in Allahabad- consumer.

•

Grower- assembly trader - rural wholesaler in Bhagautipur- urban wholesaler.

In Allahabad- regional trader - retailer in other towns such as Berawan road, Babooganj and Lalganj - consumer The above list is not exhaustive. The following types of middlemen and their principal functions are identified from the existing marketing channels. 5.3.1. Assembly traders They may include small-scale, itinerant traders or petty field and rural assemblers, who either reside at or travel to farms or rural markets to purchase potatoes. Their activities may encompass purchase of small lots of potatoes from several growers and/or purchase of truckloads of potatoes from one or more growers at the same time, and the sale of these potatoes to wholesalers in the rural market town of Babooganj and Lalganj. 20

5.3.2. Regional traders These middlemen reside outside the production centers and only go to Babooganj and Lalganj to buy potatoes. They bring their own or rented transportation to the field to haul potatoes that they have bought from rural assemblers or farmers. Later, they ship these potatoes to the wholesalers or retailers in Allahabad districts. 5.3.3 Rural wholesalers in Babooganj and Lalganj These are traders residing in Babooganj and Lalganj who receive potatoes from growers, assembly traders, and other shippers. They sell potatoes on a wholesale basis to regional traders, and mainly to wholesalers. 5.3.4 Urban wholesalers in Allahabad These are traders residing at the Allahabad Market Center who receive potato mainly from wholesalers. They have permanent stalls in the market center and sell their potatoes to retail merchants and secondary wholesalers in other smaller urban markets. Most of the potatoes they handle are sold on a wholesale basis. 5.3.5 Retailers These traders are considered as the last link in the trading channel. They generally buy a small lot of potatoes and sell them in an unaltered form to the consumers. 5.4 Potato selling Margins Trade participants are involved in many activities that add utility to potatoes and fulfill the sells functions desired by potato consumers. These activities require costly resources, regardless of who performs them. Transaction or exchange activity also generates income for traders. However, it should be noted that not all of these income are pure profit. In fact, a big selling margin may result in little or no profit or even a loss for the producers. This depends not only on the marketing cost as described previously, but also on the selling and buying price. Thus, a potato selling margin measures the share of the final potato-selling price that is captured by a particular agent in the trading channel, and includes costs and sometimes, additional net income. 21

A typical wholesaler in Allahabad will generally buy about 3-5 tones of potatoes per day directly from farmers. Purchases are arranged by a visit to the farmers at harvest time. Potatoes are assembled, and later send to wholesalers in urban centers. Retailers from these markets buy an average of about 30-400 kg of potatoes. Selling costs are the highest at the retail level, but retailers are compensated by high profit margin. During our survey in February 2009, the price of potatoes at the growers' level was actually quite low (Rs. 2.50 per kg). It indicates that growers only made a small profit. Some of them even experienced losses, since the cost of production was between Rs. 12000-13000 per acre for most farmers. Output yield varies from year to year. Even a relatively high farmers' share of the final retail value was not a guarantee that potato growers earned profit. As in the case of the domestic market, potato traders mostly collect fresh potatoes from farmer's fields. After procurement, potatoes are sorted, packed in net sacks and transported to different destinations. The main destination market for potatoes from Bhawanipur is Allahabad. Some of the farmers use cold storage for storage purpose. The length of storage time is mainly influenced by the time needed by farmers to get the desired amount of profit. But most of the time they fails to store longer time in cold storage because of uncertainty of getting right price at the time of sell. Sorting is usually carried out by female labor, while packing is handled by male labor. The length of storage ranges between1 to 3 month before sell. At the time of the survey production cost and profit margin are sensitive to changes in uncertain rates. This shows that the total margin of potatoes from Bhawanipur to Allahabad is Rs 1.050 per kg. Farmers do not want to bear transportation, especially container charges. 5.5 Socio-economic aspects Socio-economic aspects of potato production and marketing are also very important. The areas of research within this field include urban and rural market information, farmers’ responses towards market situation, farmers’ behavior towards technology innovation, and institutional set up for agribusiness development. Policy analysis to formulate policy recommendations will be a special need and will continue to be a major part of the activities of the sociologists and economists of the institutions.

1. Lessons learnt 22

(i) For village-level extension work, farmers as resource persons will hit the nail on its head. (ii) Frequent visits of officers to the target areas left a better impact on farmers. (iii) Camaraderie between farmers and extension workers is vital to the fruition of the rural development.

2. Summary and Conclusions This theme paper has examined multiple aspects of the linkages of poor rural households to markets and how to improve these linkages to sustain improved rural livelihoods. Potato is one of the vegetable crops that have strong potential for markets. New superior varieties of potato are needed to fulfill the demand of both producers as well consumers in the markets . Sells priorities in potato are needed to establish with integrated approaches to support the development of the agribusiness system of the commodity, i.e. varietal improvement, seed management, cultural practices, control of pests and diseases, and post harvest management. Potato as vegetables constitutes an important part of daily diet and is now in great demand round the year. Similarly Allahabad’s presence in the production of potato is also very significant. Among the production of major vegetables, potato occupies the first position in cultivation. Traditionally village farmers of Bhawanipur depend heavily on middlemen particularly in the trading of potato. There has been great concern in recent years about the efficiency of potato trading. It is feared that low efficiency in the trading channels accompanied with poor sells infrastructure would not only lead to high and fluctuating consumer prices, but also only a small fraction of the consumer rupee reaching the producer farmer. It may also leads to deterioration in quality, frequent mismatch between demand and supply both spatially and over time resulting to highly fluctuating prices. This study consolidates the major findings of the studies that are conducted at Bhawanipur. These studies mainly address issues such as production practices of potato, present marketing practices of potato, the seasonal phenomenon in terms of their market pattern/sale, existing major marketing channel and lastly the price spread in potato marketing and the share of producers in consumer rupee.

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References adt.curtin.edu.au/theses/available/adt-WCU20040205.140732/unrestricted/03Chapter2.pdf

Ashturker B.M and C.D. Deole, Producers’ Share in Consumers Rupee: A Case Study of Fruit marketing in Marathwada, Indian Journal of Agricultural Economics, 40,3, 1985 Balaoing , V.G. and Lazo, F.D. (1967), Irish Potato Production in the Philippines: Problems and Prospects. Philippine J of Plant Industry. 32 (3-4). pp 195-216. Crissman, C.C. (1990). Comparing Aspects of Seed Potato Program in Ecuador, Kenya and the Philippines in Rashid, M.M., M.A. Siddique and M.M. Hussain (Ed). Seed Potato in Bangladesh. Bangladesh-Netherlands Seed Multiplication Project. pp 63-74. Horton, D. 1987. Potatoes. production, marketing, and programs for developing countries. Boulder, Colo. Kaul, G.L, Horticulture in India: Production, Marketing and Processing, Indian Journal of Agricultural Economics, 52,3, 1997 Monares , A. (1981). The Potato Seed System in the Andean Region: The Case of Peru. PhD thesis. Cornell University Sharma, R.P. and R. Ezekiel, 1993. Influence of time of nitrogen application on number and size of potato (Solanum tuberosum L.). Indian J. Agron, 38: 154-156 Van der Zaag, D.E. (1990). Recent Trends in Development, Production and Utilization of the Potato Crop in the World. Asian Potato J. Vol 1 (1). pp 1-11. Vander Zaag, P. 1984. One potato, two potato. Far Eastern Economic Review n. vol. (August 23): 64—65.

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