Bumper crop brings misfortune to potato farmers

Five decades after the much talked about Green Revolution, India has failed to address steep cycles in cultivation of crops such as potato. This is a bumper year for the tuber and farmers in top producing states such as Uttar Pradesh, West Bengal and Punjab struggle to recover the cost of cultivation.

Notably, India is harvesting a bumper crop in spite of the damage caused to one-third of the crop due to the unseasonal rains and hailstorm last month.

Brij Kishore Prasad, a Kolkata-based potato trader, said farmers in the second-largest potato producing state of West Bengal had realised Rs 8-10 for a kg of the crop last year (these are prices at which farmers sold to wholesale traders, not retail prices).

Naturally, they got tempted to expand the area and produce more.

"This year, they are realising Rs 2.50 to Rs 3 while the cost of production is about Rs 4 a kg. The cold storages are full and sizeable surplus is left out in the open. Demand and price needs to improve to support the farmers."

The situation is not different in Punjab, the fifth-largest grower. Prices here, too, are ruling under Rs 2 a kg.

Reports of potato farmers committing suicides have emerged from Uttar Pradesh (the largest producer) and even from West Bengal. There are also reports of cold storages declining to stock potato from farmers apprehending that they may not return to claim the stock later if prices crash further.

Last June, when the NDA government was just one month old, it imposed a minimum export price (MEP) of $450 a tonne when domestic retail prices touched Rs 30 a kg. The intention was to discourage exports so that there is more produce left for local markets, and so that prices come down.

The MEP was removed only in February this year when the Rabi crop had already been sown and was getting ready for harvest. However, with proper monitoring of the sowing pattern, the decision to lift MEP could have been timed well to support exports. In fact, considering that export was a minuscule 166,642 tonnes (2013/14) in the 42-million tonne crop, the decision to impose an MEP should never have been taken. Exports doubled in 2014/15 in spite of the MEP but the cap on price sent out a negative signal in the domestic market.

The government must have a mechanism to forecast demand and advise farmers on sowing of major crops including potato. Public and private investment should be stepped up in setting up cold storage infrastructure. Even industry players such as PepsiCo, ITC and Parle - who have booming businesses that use potato as a key raw material - can take the lead in educating farmers with demand estimates.