Measures to stabilize prices in agriculture
- Improved transportation: This makes arbitrage easy and stabilizes the supply by moving goods from areas of plenty to scarcity areas.
- Technological improvement: The government can institute maximum price to prevent price from rising during periods of shortage and minimum price to prevent fall in price in case of surplus.
- Diversification in Agriculture: Encourage growing of variety of agricultural commodity to avoid over reliance on one or few commodities.
- Industrialization within agriculture: Government should encourage establishment of agro-based industries to process agricultural commodities before export since prices of industrial products are more stable.
- Provision of storage facilities: The government should provide farmers with storage facilities such as refrigerators
- Modernization of agriculture: Government should encourage use of modern techniques in agriculture in order to stabilize supply.
- Fixing minimum price control: the government should pass a legislation setting a minimum price in order to motivate farmers to undertake agricultural activities.
- Strengthening commodity agreements: the government should enter stronger commodity agreements and strengthen the existing ones in order to bargain for better prices for the farmers' products.
- Market research: the government should search for alternative market that pays, better prices for the farmers' products.
- Provision of extension services to farmers: government should train. more extension workers so that farmers receive adequate advice on farming.
- Provision of credit facilities: the government should extend loans to farmers to enable them expand their farming activities.
