West Bengal plans freight subsidy for potato export

The state has announced an MSP price for direct procurement

If high potato prices had led West Bengal Chief Minister Mamata Banerjee to stop supplies to neighbouring states last year, this time a bumper crop has prompted the state government to roll out subsidies and minimum support price (MSP) for increasing potato consumption.

The state government has decided to provide railway freight subsidy of Rs 50 per quintal to potato shipment from south Bengal, and Rs 100 a quintal from north Bengal, Arup Roy, agricultural marketing minister, West Bengal, told Business Standard.

Besides, the state would also extend a subsidy of Rs 100 a quintal for potatoes sent via water transport to neighbouring countries, added Roy.

This year, the state was hopeful of exporting potatoes to Bangladesh and Sri Lanka, as some traders had already started the process, said a potato trader.

For the first time, the state government has announced a minimum support price of Rs 550 per quintal for procurement of 50,000 tonnes of potato from farmers for government schemes such as mid-day meals in schools and anganwadis, the government sponsored child and mother care centres. The state has witnessed potato production of about 110 lakh metric tonnes this year, against 95 lakh metric tonnes last year, a rise of nearly 16 per cent over the last year. In a normal year, the potato production in West Bengal is close to 100 lakh tonne. Of this, nearly 40 per cent is sent to Jharkhand, Odisha, Bihar and Assam, among others.

As a result of a bumper crop, potato prices at the wholesale level have crashed from nearly Rs 1,600-1,800 per quintal around December 2014 to nearly Rs 340-420 per quintal at present, said Patit Paban De, member, West Bengal Cold Storage Association. At present, in the retail level, the prices of potatoes is close to Rs 7-8 per kg, against Rs 20-25 per kg in December 2014, when potato crisis was at its peak.

“If all the fixed costs are added, then the minimum price at the retail level should be nothing less than Rs 11 per kg. However, at present the prices are stuck at Rs 7-8 a kg,” said De. This year, farmers have sold potato at a loss. Against the cost of production at Rs 400-420 per quintal, farmers could get only Rs 350-360 per quintal from field level sale.