Project title: Supply Chain and Institutional Change in Agriculture – A Case Study of Potato

Project leader:  Dr. Harbir Singh

Project team:  Dr. Suresh Pal

Background:

Supply chains are becoming increasingly important component in the delivery of agricultural products. Especially, the private sector has initiated vertical coordination in agriculture as a response to meet consumer demand for food quality and safety, and also to overcome firm’s production constraints caused by factor market imperfections. This study analyzed such private initiatives with a case study of potato which has high demand as fresh food and, more so, in processed form.

Objectives:

1. To examine the linkages and innovations in supply chain of potato and response of     

    R&D to these innovations,

2. To assess the impact of innovations in supply chain on potato growers, and

3. To suggest suitable policy measures for strengthening the supply chain in agriculture.

Study area:

Potato growing areas of Punjab (Jalandhar) and Uttar Pradesh (Ghaziabad)

Methodology:

New institutional economics (NIE) framework that endogenizes the existence of institutions in the analysis of the responses of the households. Focused group discussions (FSG) and farm surveys were conducted to elicit information from the respondents.

Key findings:

1. The linkages among public-private R&D are inadequate and information flow is very weak.

2. Private sector initiatives for vertical coordination has improved linkages and information flow among the stakeholders in supply chain.

3. Assured market, guaranteed price and timely payment for the produce were the most

    important factors for farmers to enter into production contract with the private sector.

4. Linkages with private sector resulted in positive spill-over effects for the farmers.

5. Farmers having production contract with private sector, realized higher net returns (14% to

    24%) in comparison to those selling in the open market.

Funding agency: NCAP