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 UNIVERSITYBHUBANESWAR

2009

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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

4.11. Soil preparation………………………………………………………………….12

4.12. Irrigation………………………………………………………………………....12

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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 23 0 C, the

net rate of photosynthesis decreases and if night temperature remains consistently above 2 0 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

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

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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.

2. Methodology

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,

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(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 Major Pest/ disease Problems Late & early blight, Leaf curl

2 Awareness about disease (%age) 27.18%

3 Selection of land Randomly

4 No. of ploughing 6 to 8

5 Soil Analysis No

6 Cropping System Paddy- potato/ Wheat-urd/moong

7 Pre land Preparation (Soil treatment) No

8 Seed variety G4, Gola

9 Seed rate per acre 10-12 Quintal

10 Crop Spacing(in cm) Row to Row/ Plant to

Plant

25 / 15

11 Pre-weed management Hand weeding

12 Sowing methods Spade made furrow method

13 Chemical fertilizer/ bio-fertilizer doses (in kg/

Acre) DAP/Potash

100-200/ 0-100

14 Application methods of fertilizers Broadcasting

15 Time of sowing 15 Oct. to 15 Nov.

16 Irrigation time and type 6 to 8, Flood irrigation

17 Post weed management Hand weeding

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18 Earthing and Nitrogen application (in kg/acre) Urea-100-150

19 Chemical pesticides Indophil

20 Doses of Chemical pesticides (gm/acre) 750-1000

21 No. of Pesticides application 2-4

22 Bio-pesticide used, if any? No

23 Bio-fertilizer used, if any? No

24 Harvesting time March

25 Harvesting Methods With the help of spade and khurpi

26 Input Cost/Acre (in Rs./Acre) 10000-15000

27 Output /Acre (in Rs./Acre) 15000-18000

28 Selling Method Selling to local traders from field

29 Post harvest Technology, if any? No

30 Percentage of Storage at Go down 0-5%

31 Spatial Differentiation of Land 1-5

32 Any Other Problems In Potato Cultivation Unavailability of DAP fertilizer at

the time of need

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Table 2: Source of information for analysis

Source Method of

collection

Period Type of information

General

References, reports* Review January to

February,

2009

Experiences and

observations, Trade and

trends

Domestic market

Producer’s survey Formal

questionnaire

January to

February,

2009

Production, preferences

Export market

Focused group

discussion to

producers in the

village Bhawanipur

Interaction with

farmers, potato

business

January to

February,

2009

Field performance of seed,

Assessment by producers

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.

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

Type of activity Details

Seed source effects Seed from released varieties produced by agricultural research

is not replicated by farmers

Variety effects 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

farmers.

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

3. 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

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reason why farmers are bound to suffer the losses. Considering its contribution to the individual

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.

4. 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 Production cost

Total (Rs/ha) Percentage (%)

Seed 13894 45.68

Fertilizers 6559 21.59

Pesticides 1821 5.98

Labor 4200 13.81

Farm traction 3937 12.94

Total 30411 100

Source: Primary data

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

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uniform crop, the size of the seed tubers planted should not vary greatly. This study reveals that

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

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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 2 3 4

Marketing,

lack of cash

marketing

Late blight,

Early blight

Bacterial wilt,

High cost of

Production, unavailability of

certified seed, DAP, Urea,

Potash

Inadequate

Seeds, Poor seeds,

Expensive inputs 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.

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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

importance of weed management which limits the proper utilization of available nutrient in the

soil.

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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

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

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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.

5. 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.

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

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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

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

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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

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.

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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.

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

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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.

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

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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.

6. Lessons learnt

(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.

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7. 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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