The Potato Value Chain in Bihar: An Assessment and Policy Implications

Abstract

the NAIP project in Bihar are focusing on. Primary surveys were fielded with producers, traders, cold storages, and retailers at the end of 2009 on the rural-urban potato value chain in Bihar, more in particular from the disadvantaged districts part of the NAIP project (Vaishali and Samastipur) to urban consumers in Patna. The most salient findings are presented below.Upstream. First, potato production in Bihar is largely in the hands of smallholders: farmers from the smallest half of potato producers cultivate 0.5 acres of potato. This compares to 1.8 acres for farmers from the largest group. Second, farmers suffer from an important late blight disease problem. Actual potato yields in 2009 were two-thirds lower than the expected yields due to that disease. Despite the incidence of this disease, reported potato yields in the districts are as high as the national level, casting doubts on the national agricultural statistics in vogue which consider Bihar a lagging potato state. Third, farmers rely relatively little on seed markets and almost all farmers store their own seeds in cold storages. Only on 18% of the plots were purchased seeds used, indicating that seed replacement ratios are about 1 out of 5 years. However, larger farmers replace seed more often. Fourth, despite the low use of seed input markets, important changes have happened over time and the white potato variety has now become much more important than the traditional red variety that was usually grown. Especially the larger farmers have switched relatively more to the white variety. Fifth, larger farmers are able to obtain higher yields, possibly because of their more intense use of inputs. Sixth, 70% of the potato farmers are now empowered by a mobile phone. While some farmers use it to do market transactions, this is still only a minority (20%). Seventh, sales in the harvest season are almost all to a village broker while in the off-season, potatoes are mostly sold to traders at the cold storage. Wholesale market sales by the farmers are of less importance. Eight, an important reason why a number, and especially the smaller, farmers sell after harvest is the urgent need of money. Little credit or advances are used in market transactions and the major reason for the choice of a trader is when 2 he pays immediately. Ninth, while almost all farmers participate in cold storages as to store their seeds, larger farmers store relatively much more for sale at an expected higher price in the offseason.Midstream. First, an important boom in cold storage capacity -and thus in potato productionhas happened in the two studied districts. The number of cold storages in the last decade doubled or tripled and rapid up-scaling of cold storages led to an even faster total capacity expansion, i.e. a triple and five-fold increase over the same period. Second, the boom is associated with increasing commercialization of potatoes from the two districts as the share of storage for seed potatoes is relatively on the decline. Third, several triggers explain the boom in thi...

Can fruit and vegetable aggregation systems better balance improved producer livelihoods with more equitable distribution?

“…Rather than subsidies or quotas to increase direct F&V delivery, the introduction of small-scale market-based cold storage significantly reduces F&V wastage rates and retail prices. However, despite the number of cold storage units in Bihar increasing by 67% between 2000 and 2011, cold storage in Bihar is “almost exclusively used for the storage of potato” ( Minten, Reardon, Singh, & Sutradhar, 2011, p .5 ), with F&V facilities only available in hub markets like Bihar Sharif and Muzaffarpur. Therefore, whilst our findings are timely given the planned national increase in cold storage investment ( Government of India, 2020 ), their realisation requires the diversification of national and state-level policies from the industrial-scale towards more locally managed cold chains, which extend the life of perishable F&V within the local market environment.…”

Governance structures and price volatility perceptions in the Indonesian chilli value chain

“…, 2020; Singh et al. , 2013); (2) poor handling and storage facilities (Minten et al. , 2011); (3) imperfect information flows resulting in information asymmetry in buyer-seller relationships (Rich and Dizyee, 2016); (4) weak legal and quality assurance systems (Singh et al.…”

“…For example, Singh et al (2013) focused on improving shared values among actors across the vegetable value chains in Nepal, through the involvement of support providers at a local level. Transaction-cost related issues faced by smallholders include: (1) high transportation costs due to poor road conditions and other physical infrastructures (Darko-Koomson et al, 2020;Singh et al, 2013); (2) poor handling and storage facilities (Minten et al, 2011); (3) imperfect information flows resulting in information asymmetry in buyer-seller relationships (Rich and Dizyee, 2016); (4) weak legal and quality assurance systems (Singh et al, 2013;Ouma et al, 2017); (5) high costs of production inputs (Singh et al, 2013); (6) high search costs primarily due to scarcity caused by disease outbreaks (Ouma et al, 2017); and (7) severe weather (Rich and Dizyee, 2016). These issues often result in smallholder farmers choosing to primarily engage in lowvalue markets (Darko-Koomson et al, 2020;Ouma et al, 2017).…”

The challenges of aligning aggregation schemes with equitable fruit and vegetable delivery: lessons from Bihar, India

“…For instance, evidence from the potato value chain in Bihar suggests that cold storage can dampen short-term price variations (Minten et al, 2011). Despite the number of cold storage facilities increasing by 67% from 2000 to 2010, the latest data suggests that Bihar still has the third widest horticultural cold storage deficit of all Indian states (Vanitha et al, 2013).…”

“…Yet, combined with reduced wastage rates, F&V storage may allow producers and traders to better align supply with demand and better connect supplies to rural markets. Such a strategy would require significant state investment to build new facilities (Narula, 2011) or a weakening of the cold storage monopoly held by potato traders in Bihar (Minten et al, 2011). Moreover, traders in Bihar Sharif market (Nalanda district) described how particular F&V products would be moved into storage prior to festivals in order to artificially inflate prices.…”