Dear FSN Team,
Good morning!
Demand and supply of agricultural commodity, in general, are not very responsive to price changes, price volatility is strong in short run. The geopolitical and climatological unpredictability adds to significant price volatility. The following measures are suggested to reduce price volatility:
- Crop diversification can be used as a step to reduce price volatility.
- Investment in R&D, extension and capacity building helps in addressing price volatility. Investments in agriculture is also important. However, investments, whether foreign or domestic, private or public, must consider varying local circumstances and proceed with extra caution in ecologically sensitive or biodiverse areas. Something which of course can be done by genuinely involving agro-ecological experts and local populations with traditional/local knowledge about their surroundings – which of course is just one of many rationales for promoting participation and consultation.
- Use of ICT for analysing information on past trends regarding area, production, productivity, consumption, utilization, pest attack, climatic conditions, environmental concerns, fertigation, etc are of immense use in making decision in crop production. For example, past trends in climatic conditions may help growers in scheduling cultivation activities for optimum production and control of stresses. Such measures also help in addressing price volatility.
- Introduction of effective price insurance measures also help in managing price volatility.
With warm regards,
Pradip Dey
Dr. Pradip Dey