Policy-led Crop Size Regulation and ICT-Enabled Marketing Ecosystem in FCV Tobacco to Ensure Price Stability

K. Viswantha Reddy, M. Shashi Madhav and L.K. Prasad

Indian Journal of Agricultural Marketing, 2025, vol. 39, issue 1

Abstract: Tobacco, a commercial crop, valued for its high returns, provides livelihood to ~ 45 million population and income and contributes to export earnings (Rs 12006 Crores in 2023-24). Recently, commercial crops like tomato, chilli, and onion observed a high imbalance in demand and supply and a high price volatility, which created a crisis-like situation in India. Conversely, FCV tobacco farming, regulated by policy-led crop size fixation, is more vibrant, and operates in an organized environment. In this context, a study has assessed the effectiveness of the Crop Size Fixation Policy and Information Technology (IT)-enabled e-auction system in FCV tobacco. The graphical analysis and instability index were employed by using secondary time-series data. The results found that the difference between the average crop size fixed (143.5 M kg) and average actual production realized (142.2 M kg) was very insignificant (0.7 M kg), in Andhra Pradesh during the last decade while in Karnataka, there was a slight difference (2.9 M kg) between the average of crop size fixed (99.1 M kg) and average actual production realized (96.2 M kg) in the corresponding period. The price instability has significantly decreased from 40% to 13% in Andhra Pradesh and 38% to 8% in Karnataka during the manual action period (2002-2013) compared to the e-auctioning period (2012-2023) and the average prices have increased from Rs 65/kg to Rs 125/kg in Andhra Pradesh and from Rs 70/kg to Rs 127/kg in Karnataka during the corresponding period. Thus, it is proved that such a policy for regulation was not in place kind of regulatory ecosystem has imparted production stability and price stability. However, for other commercial crops, such a policy for regulation was not in place for other commercial crops such as chilli, turmeric, tomato, and onion which experience high price volatility. Thus, there is an immediate need for such crops to have a similar kind of policy intervention to ensure better prices and augment farmers’ income to protect farmer producers and consumers from violent price fluctuations.

Keywords: Marketing (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ags:injagm:400047

DOI: 10.22004/ag.econ.400047

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