Managing the risk in horticulture crops

Abstract

India being a predominantly an agrarian economy with horticulture as an important economic activity, it is importance to give fillip to horticulture activity. Monsoonal climate and drought conditions coupled with lack of intensive irrigation facilities necessitate the horticulture activity. India being blessed with different biogeographic zones and a wide range of climatic zones can produce a variety of horticulture crops ranging from tropical crops to temperate crops. But, horticulture require intensive investment and supervision when compared to commodity crops like rice, wheat etc. Also, horticulture produce is highly perishable and susceptible to weather fluctuations. Hence, for encouraging farmers to take up horticulture as a means of their livelihood without risk of being exposed to highly fluctuating (falling) incomes, policy makers should concentrate on more effective risk management techniques. No private player would come forward to mitigate the risks in horticulture, because, claims to premium ratio is generally high, and risk related to market, like price risk and cost risk cannot be managed by private players. Hence, government shall try to facilitate mitigation of weather risk, price risk, market risk etc. Factors leading to price risk, weather risk and market risk were analysed and recommendations were made for effective mitigation of risk. Govt. initiatives like, Rythu bazaars were thoroughly analyzed regarding their contribution in mitigating the price risk. Critical weather parameters leading to fluctuations in the yield of various horticulture crops were explored. Market imperfections were brought to light and remedial measures were suggested. Impact of inflation, cold storage and food processing facilities was also analyzed.