ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Product Differentiation

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The objective of the article “Product Differentiation to Tackle Farm Distress” by Devesh Roy and Smriti Verma (EPW, 11 May 2019) is to look at the farming crisis situation through the lens of product differentiation as a mitigating factor of low-income levels among the agricultural community, especially small and medium farmers. The authors need to be appreciated for identifying one of the structural and critical dimensions of agrarian distress, which is rarely dealt with in the agricultural policy discourse. It must be noted that the inadequate access to the market makes farmers vulnerable in terms of selling the crop produces for a lesser price than

the actual rates augmenting to low-level income and the cycle of indebtedness. In this context, while highlighting a variety of demand- and supply-side contributing factors of agricultural distress, it is observed that “what is missing from this set of explanations—which we want to highlight—is the lack of product differentiation that has restricted value generation in agriculture” (p 19).

In proposing product differentiation as a value addition to the prices of agricultural produces, the authors have provided certain ways of introducing product differentiation in food retail markets, emphasising prior set of information, certification of food products, and dissemination of good agricultural practices. Finally, it was concluded that “A system that is based on product differentiation is likely to protect farmers by shifting the market powers towards them.” The proposed product differentiation comes into the picture at the interaction phase, that is, exchange, which is one of the three core components of agricultural product markets (the remaining two are production and consumption). The interaction phase is an interface between consumption and production.

It is true that product differentiation enhances the value of agricultural products through enabling market competitiveness; however, the article would have gained wider academic and policy attention if it would have linked the cobweb model with consumption and production as supplementary variables. The proposed ways of product differentiation seem to appear general prescriptions rather than applying it specifically to the elements of horizontal, vertical and mixed product differentiation. Another point of analytical reference that would have strengthened the product differentiation argument further is “price differentiation.” Product differentiation has potential in facilitating the restructuring of a market regime that determines the prices for agricultural products. In a way, price differentiation directly correlates to the quality of product. This would have benefited the authors’ core arguments to serve the purpose of product differentiation as a policy instrument to deal with the farming crisis.

Notwithstanding the above, the authors have succeeded in diverting the policy discourse of agrarian distress from populist measures to the substantive issues that are hindering the growth of agricultural development in the country.

Nayakara Veeresha

BENGALURU

Updated On : 24th May, 2019

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