[Answered] Discuss the significance of effective policy interventions in stabilizing the prices of perishable agricultural commodities. Suggest measures to improve the agricultural supply chain for these crops.

Introduction: Brief contextual introduction

Body: Significance of policy interventions in stabilizing prices of agri commodities

Conclusion: Way forward

In India, where a significant portion of the population relies on agriculture for income and consumption, stabilizing the prices of perishable agricultural commodities holds immense significance.

Significance of Stabilizing Prices of Perishable Agricultural Commodities in India

  • Farmer Livelihoods: Erratic price fluctuations can leave farmers vulnerable. Low prices during bumper harvests can lead to financial distress, impacting their ability to invest in future crops. Conversely, high prices during lean periods might not benefit them due to a lack of storage facilities. Price stability provides predictability and helps farmers plan their finances better.
  • Consumer Welfare: Volatile prices can create uncertainty for consumers. Unusually high prices can lead to food insecurity, especially for low-income households. Stable prices ensure consistent access to essential food items at affordable rates.
  • Reduced Food Wastage: Price crashes incentivize farmers to harvest prematurely or even discard produce, leading to food waste. Stable prices encourage harvesting at optimal times and better planning, minimizing waste.
  • Overall Economic Growth: A stable agricultural sector promotes economic stability. Predictable income for farmers allows them to contribute more effectively to the rural economy. Additionally, stable food prices contribute to overall price stability in the nation.

Measures to Improve the Agricultural Supply Chain for Perishable Crops

  • Improved Storage Infrastructure: Building and maintaining a network of cold storage facilities, warehouses, and proper transportation infrastructure like refrigerated trucks are crucial. This reduces spoilage and allows farmers to store produce during gluts, releasing it strategically to market demands.
  • Price Stabilization Mechanisms: The government’s Minimum Support Price (MSP) scheme can be strengthened by ensuring efficient procurement and timely payments to farmers. Exploring derivative instruments like futures markets can also help farmers hedge against price risks.
  • Improved Market Access: Strengthening local mandis (agricultural markets) and promoting direct marketing between farmers and consumers (e.g., farmer’s markets) can reduce the role of middlemen and ensure a fairer share of profits for farmers.
  • Demand Forecasting and Crop Planning: Implementing data-driven techniques to forecast demand and guide farmers in choosing crops and quantities can help avoid gluts and shortages, leading to price stability.
  • Investment in Food Processing: Encouraging the growth of food processing industries can create additional demand for perishable crops, particularly during peak seasons, and add value to agricultural produce.
  • Promoting Farmer Awareness: Educating farmers about post-harvest handling practices, storage solutions, and market trends can empower them to make informed decisions and minimize losses.


By implementing these measures, India can create a more resilient and efficient agricultural supply chain for perishable commodities, benefiting both farmers and consumers and contributing to a more stable and prosperous agricultural sector.

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