By Nantoo Banerjee
Tens of thousands of potato growers in Bengal are in deep financial distress since the beginning of this year with traders forcing procurement prices to drop below Rs. 200 per quintal or around Rs.1.90 per kilogram. West Bengal and Uttar Pradesh have witnessed record potato production this year. The trade has choked the off-take forcing producers to sell potatoes at throwaway prices. Bengal farmers are the worst hit. Ironically, the average retail market price of potato across the country is around Rs.2,500 per quintal. West Bengal farmers are losing over Rs.7,000 per Bigha (17,452 Square Feet) of land used for potato cultivation.
The massive price drop at the growers’ level is believed to have been engineered by middlemen, traders and cold storage operators. Surprisingly, neither the state nor the central government has come to the rescue of the poor potato growers. West Bengal is the country’s largest grower of potatoes per acre and the second largest in terms of total produce after Uttar Pradesh. With the ruling Trinamool Congress in West Bengal and Bharatiya Janata Party at the Centre busy in electioneering in the region, none seems to be seriously interested in addressing the concerns of the distressed farmers.
One of the key reasons behind the price crash at the growers’ end in Bengal is the lack of agricultural marketing infrastructure. This is forcing farmers to sell their produce at below cost prices for fear of spoilage and also to pay off a part of imminent debt. The government could at least ask leading commodity traders to come to the rescue of Bengal’s potato growers. Potatoes are in great demand across the country. Only last year, India went for potato imports. The union government allowed the import of fresh and chilled potatoes from Bhutan without any license up to June 2023. According to a notification by the Directorate General of Foreign Trade (DGFT), import of potatoes from Bhutan is permitted freely without any license up to June 30 to stabilise the prices in the domestic market. A similar action was also taken in 2020. The government appears to be concerned only about the retail price of potatoes and not at what prices potatoes are procured from domestic farmers by the trade and middleman.
India’s major potato growing states are West Bengal, Uttar Pradesh, Bihar, Madhya Pradesh, Gujarat, Punjab, Assam, Haryana, Jharkhand and Chhattisgarh. Annually, India produces about 50-55 million tonnes of potatoes. Around 50 percent of the production comes from the two states — Uttar Pradesh and West Bengal. This year, potato production in Uttar Pradesh is around 15.5 million tonnes. West Bengal’s output is over 12 million tonnes. Despite a record potato production this year, the price depression at the farmers’ end in UP is much less than that in Bengal. Sowing of potatoes usually begins in November. The crop is harvested after two months. Uttar Pradesh, the largest producer of the tuber, witnessed a 15 percent increase in production in the latest crop season compared with a year earlier. Overall, potato farmers are staring at a huge loss as prices have crashed to half from a year earlier, amid a glut in production in Uttar Pradesh, West Bengal and Punjab.
It is not clear why the government, the agricultural export promotion council and the commercial wing in Indian embassies and high commissions abroad are not pushing export of potatoes from India. Most of the country’s fresh potatoes are exported to the United Arab Emirates, Oman and Sri Lanka. Globally, the top three exporters of fresh potato, last year, were the United States with 31,377 shipments followed by Pakistan with 26,348 and India at the 3rd spot with 24,247 shipments. However, in terms of export of all categories of potato, India’s share of the global export market is below two percent and the country occupies the 15th spot. As of April 2022, the price of one kg of potatoes in the US market amounted to $2.6 dollars. Correspondingly, South Korea had the highest market price of $3.5 dollars per kg of potatoes. Based on a comparison of 161 countries in 2020, Belarus ranked the highest in potato consumption per capita with 170 kg followed by Ukraine and Kazakhstan.
Interestingly, the government’s price protection policy for agricultural commodities does not cover three important crops — potato, onion and tomato — putting the growers entirely at the mercy of the trade and cold storage operators. While their growers suffer losses, pushing many to even commit suicide, the trade sharks benefit from both shortages and surpluses by using the import-export tool. This year, Maharashtra onion farmers too are facing losses as the selling price of the staple has dropped to an all-time low, hovering at Rs 9-11 per kg. The farmers have demanded the average price be increased at least to Rs 20-22 to overcome the expenses in growing the produce. In Karnataka, both tomato and onion growers are a worried lot as the bumper harvest has led to a crash in prices in the state.
The government’s minimum support price scheme covers upto 25 agricultural commodities each year in the crop seasons after taking into account the recommendations of the Commission for Agricultural Costs and Prices (CACP). The commission recommends MSP for 22 crops and Fair & Remunerative Price (FRP) for sugarcane. Apart from Sugarcane for which FRP is declared by the Department of Food & Public Distribution, the 22 crops covered under MSP include Paddy, Jowar, Bajra, Maize, Ragi, Arhar, Moong, Urad, Groundnut-in-shell, Soyabean, Sunflower, Seasamum, Nigerseed, Cotton, Wheat, Barley, Gram, Masur (lentil), Rapeseed/Mustard Seed, Safflower, Jute and Copra.
According to All India Kisan Sabha (AIKS), a representative body of farmers, potato growers in Bengal should be paid Rs.900 per quintal as minimum support price. It also wants the government to buy potatoes at the stipulated price from them so that they do not fall into the trap of middlemen. The farmers should be given preferential treatment in storing their produce to stop the distress sale of potatoes. In the past, the Left Front government in West Bengal had stepped in twice, allotting Rs 400 crore and Rs 600 crore to directly purchase potatoes from the farmers, recalls Amal Halder, secretary of AIKS West Bengal state committee.
However, the present state government as well as the centre do not seem to be seriously concerned about the growing agrarian distress while taking credit of the country’s spectacular agricultural output growth. The seemingly ineffective minimum support price system, rural indebtedness and inefficient value chain are among the key reasons for frequent agrarian distress in the country. Farmers need to be protected through a composite insurance scheme covering risks arising out of both crop failure and market failure. The value chain needs to be completely revamped to integrate farmers directly to the ultimate consumers. (IPA Service)
