Abstract
The present study attempts to examine the marketable surplus, storing profitability, marketing efficiency, market integration, the demand-supply elasticities including problems and prospects of processing and exporting of potato. This study indicates that, marketable surplus of potato is around 82 percent and 22 percent is sold at the time of harvest. Regression coefficient of total production of potato confirms that total production is the best predictor in determining the level of marketable surplus. The elasticity of sale with respect to total production is more than unity. Farmers' traditional method of storing potato appears to be more economical for short term storage (four months or less), and cold storage appear to offer best alternative for long term storage (five to eight months). The study revealed that local marketing channel-II (Farmer - Bepari - Consumer) is efficient while the channel which supply potato to the major consuming population i.e. channel-VI (Farmer - Aratdhar - Paiker - Retailer - Consumer) is more efficient. The empirical result shows that regional potato markets in Bangladesh are highly cointegrated. This indicates that commodity arbitrage is working fine. The compensated and uncompensated own price elasticities indicate that all food items are price inelastic. The estimates of cross price elasticities indicate that the substitution effects of price are not quite strong. Therefore, government price interventions may not lead to considerable price repercussions in the economy. The supply elasticities of potato area with respect to its price are significantly positive for Bangladesh. The short-run price elasticity is 0.12 and long run elasticity is 1.88 for the country. Response to risk variable indicates that the farmers are prone to the changes in the variability of its price. The adjustment coefficient is remarkably low (0.06), which implies fairly low rates of adjustment to the long run equilibrium for potato area indicating that there is an area adjustment problem. Price policies will be effective for obtaining the desired level of output. But the low price elasticity suggests that any form of pricing policy related to potato will be a costly means of stabilizing production. If intervention in the market is to be made as a policy instrument, then it must be implemented during the harvest season for altering price expectations.