Bumper crop drives down potato prices by 50%

Potato farmers in the country are suffering huge losses as a bumper crop has sent prices crashing by nearly 50 per cent in major producing states since December last year. Potato production in 2007-08 is estimated at 30.44 million tonnes, up 12.65 per cent from 2006-07.

The limited cold storage capacity in the country is adding to the problem and driving farmers to dump the crop at prices lower than Re 1 a kg. Situation is especially grim in Uttar Pradesh, the country’s biggest potato producing state.

“Potato production has been continuously rising due to an increase in the area under the crop. While output is high this time, the situation has been compounded due to high stocks in cold storage from previous year’s production. This is putting huge pressure on prices,” said Satish Bhonde, additional director, National Horticultural Research and Development Foundation (NHRDF).

Potato prices in Agra, a major mandi of UP have gone down by more than 40 per cent to Rs 130 a quintal since December. Arrivals have been heavy across the major mandis in the country.

“Though the mandi price is ruling around Rs 1.30 a kg, the price realisation to farmer is as low as 70-80 paise,” said a Jalandhar-based potato trader. At the retail level too, prices have dropped by half to Rs 5 a kg over the last two-three months. The recent decision by Pakistan to impose a 25 per cent tax on the import of Indian potatoes has aggravated the situation, especially in the mandis of Punjab.

India is world’s third largest potato producer. UP, West Bengal and Bihar are major potato growing states of India.

A number of farmers prefer growing potato since it is a short duration crop and requires only three months to mature.

“Potato, unlike onion, does not have an export potential. We export only 75,000-80,000 tonnes of potato annually. The only other avenue is value addition through processing. Here too, the user industries enter into contract farming with the growers to meet their requirements,” said Bhonde.