The recent plunge in potato prices to ₹3-4 a kg in West Bengal has once again raised serious concern over marketing related policies of government. It is not the absence of support which makes farmers so vulnerable; but it is the approach of the policy to address the issue which matters. After farmers committed suicide, the West Bengal Government announced its plan to procure the tuber at a price higher than what market was offering.

The initiative of the State government to procure potato at ₹5/kg has arrested further fall in price. However, the short-term approach is not the solution to farmers getting remunerative price. Incidences of farmers’ committing suicide in West Bengal have taken place at a time when the Centre is finalising the guidelines for a Price Stabilisation Fund (PSF) which aims to provide support to State government in procuring perishables such as potato and onion when farmers are not getting remunerative price .

Why price falls Seasonality is an inherent factor with the production of agricultural commodities, which often results in price turning volatile. But the interesting factor is that many of the agricultural commodities do not reflect the true fundamental picture. The price discovered for agricultural products are reflection of demand and supply equation confined to a particular geographical area only.

While the average weekly price of potato during second week of March in West Bengal was ₹415.48 a quintal, at the same time prices were ruling higher in Kerala (₹2,296), Karnataka (₹1,500), Meghalaya (₹1,267), Andhra Pradesh (₹1,239), Tripura (₹1,113), Maharashtra (₹994), Telangana (₹824).

The spatial variation in price across various markets in the country indicates that there are some factors prohibiting price rise by considering the demand and supply situation in other States as well. Hindrances in inter-State movement of agricultural goods have lot to do with this price variation, exaggerated by the move of State government to ban the inter-State trade of potato two years ago. It is high time that the States came forward in amending their agricultural marketing policy to support the Centre in establishing a barrier-free market.

Information asymmetry PSF is an important step to safeguard the interest of producers and consumers against price volatility that has been observed in the case of horticultural commodities in the recent past, mainly onion and potato.

Availability of stocks has a major impact on prices stabilising as has been envisaged through this scheme on price stabilisation.

Considering major factors which may vary from season to season, the area under cultivation and climatic variables play an important role in defining total production in a particular region. Improvement in available infrastructure and various government and non-government machinery is a prerequisite for real time collection, dissemination and assessment of data pertaining to these variables. Currently, agricultural data’s reliability and on time availability have been challenged.

With present guidelines of the PSF, farmers will be offered Government support only after they face hardship. But again, the approach can be even more efficient by taking cognisance of farmer’s requirement well before sowing begins.

The obsolete method of data collection, projection and analysis needs to be replaced with advanced technology, which is faster and reliable. PSF should include a component for strengthening of data collection and dissemination method. This may result into not only strengthening of information system, but will also be a facilitating factor in decision making.

Market Intelligence Advance indication of prices help farmers in making better decision for their land utilisation. Currently, information is disseminated to farmers through Price Ticker Board (PTB). Farmers refer to these PTBs only when they go to APMCs to sell their produce. What farmers need is advance price information to facilitate sowing decision.

The scheme needs to be linked with other schemes of the Department such as Agri Tech Infrastructure Fund. This inter-linkage will ensure availability of sufficient infrastructure for efficient supply chain and better price discovery.

The writers are associated with NIAM, Jaipur. Views are personal.