Potato World vision PW-ACTUA Price formation People take it for granted that potatoes are always available, everywhere. However, there’s a whole world hidden behind the potato. On the supply side, a lot is going on with regard to potato varieties and storage techniques, big data, robotisation, the income development of the growers and so on. On the demand side, there are demographic developments, changing consumer demand, and the global market revolution. This column discusses some aspects of the price formation of potatoes. Potatoes change ownership not only through free trade, but also through contracts and cooperatives. These three management structures differ in terms of the available information and incentives for the various parties, and are therefore important in understanding the creation of value and price formation. This will be explained with two examples. Potatoes are increasingly being traded through contracts. Additional contracts have an initial price-lowering effect, because contracts are entered into by the buyers who want to pay a relatively high price. So they disappear from the free trade sector. Unexpected circumstances, however, force them to come back once in a while. This has a price-increasing effect, as there is now a demand both from buyers who have remained in the free trade sector and the residual of the demand from the contracts. The price-increasing effect dominates the price-reducing effect when there is a substantial number of contracts. A second example concerns the ‘yardstick’ effect of the cooperatives on price formation in free trade. Cooperatives have a positive effect on the price that farmers receive with free trade, because the proceeds from the supplies to their cooperative go back to them. This establishes a floor for the price in free trade. Potato price formation is important, but the topics in the introduction indicate that there are many other aspects to the potato market. Once again, the question arises as to which management structure best can implement this. For example, are potato cooperatives better able to bring about innovation than contracts because they provide all kinds of services for members/ growers? Bon appetit! George Hendrikse Professor, Erasmus University Rotterdam Researcher Ingo Hein recently received £625,000 for follow-up research into resistance genes against Phytophthora infestans. Plant scientists from the British University of Dundee and the James Hutton Institute are looking for new Phytophthora resistances to produce robust potato varieties. Recently, chief scientist Dr Ingo Hein received additional funding of £626,000 from the Biotechnology and Biological Sciences Research Council (BBSRC). In recent years, a great deal of research into the potato disease Phytophthora infestans has already been carried out at the British centres. It was discovered that wild varieties from the potato’s countries of origin, such as Peru, contain natural resistance genes that can be crossed into cultivated varieties as we know them in Europe and Great Britain, researcher Hein explains. ‘By using modern techniques, such as reading the DNA in wild potatoes, we can now more easily identify the resistance genes than in the past. Originally, potato varieties already had resistance genes in them or they were later crossed into them by breeding. In the meantime, due to the strong presence of certain Phytophthora populations, four resistances have already been broken. The trick is now to search for new R-genes and possibly also to combine them in newly-developed varieties. Resistances are of great importance, among other things because this allows us to reduce the use of chemical crop protection agents,’ says the scientist. ‘This is very relevant to cultivation, because these products can be harmful to the environment.’ In his search for more robust varieties, Hein works together with potato processor McCain, the British potato trading company Greenvale, and the James Hutton Institute. ● Brits are looking for new Phytophthora resistances Potato World 2019 • number 4 11 Pagina 10
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