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
BHUBANESWAR

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 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

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 25 / 15
Plant
11 Pre-weed management Hand weeding
12 Sowing methods Spade made furrow method
13 Chemical fertilizer/ bio-fertilizer doses (in kg/ 100-200/ 0-100
Acre) DAP/Potash
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
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
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 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

Table 2: Source of information for analysis

Source Method of Period Type of information
collection
General
References, reports* Review January to Experiences and
February, observations, Trade and
2009 trends
Domestic market
Producer’s survey Formal January to Production, preferences
questionnaire February,
2009

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 Export market
Focused group Interaction with January to Field performance of seed,
discussion to farmers, potato February, Assessment by producers
producers in the business 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

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

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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
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

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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).

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
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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
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

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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
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, Late blight, High cost of Inadequate

lack of cash Early blight Production, unavailability of Seeds, Poor seeds,
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 marketing Bacterial wilt, certified seed, DAP, Urea, Expensive inputs like
Potash 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.

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
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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.
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.

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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
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.

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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
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

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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
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

18
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.

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.

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 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
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

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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
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

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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.

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

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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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