The suicidal potato economy of West Bengal

Last December, the weather conditions were apt—moderately cool temperature with adequate dew—for a good potato harvest in West Bengal. Yet about 20 farmers committed suicide in the state.

In December 2010, West Bengal had a record potato output. Starting March 2011, the market started falling. By November 2011, 32 farmers had committed suicide. In December 2011, as the new crop starting coming in, after the old crop was either sold in distress or destroyed, prices stabilised.

By November, 2013 West Bengal was again faced with a crisis. This time, the price of potato had shot up to Rs 50 per kg from Rs 5 per kg two years ago due to low production in the previous year. The state government restricted potato export from West Bengal to other states, imposed a cap on its selling price, and ordered owners to empty their cold storages.

This is the erratic potato economy of West Bengal, one of the most risky farming bets. With a contribution of 25 per cent in India’s potato output, West Bengal is the second largest producer of the vegetable after Uttar Pradesh.

Inadequate marketing channels, manipulation by middlemen and the absence of support prices make potato cultivation in the state inherently risky.

This year, West Bengal has produced close to 11 million tonnes of potato. Local consumption is not more than 5.5 million tonnes. The state generally sends about 4.5 million tonnes of the commodity to neighbouring states. The state is left with excess production of 1 million tonnes, leading to a price crash.

And with production in Uttar Pradesh and Punjab exceeding estimates, the market for the vegetable in other states has also become competitive.

While a handful of rich farmers in the districts of Paschim Medinipur, Barddhaman and Hooghly can pay for transportation and the rent for cold storage, small farmers in West Bengal sell their produce to middlemen. Once sold, it becomes a sophisticated trade of paper slips, informally known as potato bonds. These bonds are sold at a premium during a short crop and fall freely during a good harvest.

Farmers in the state fail to get good prices during shortages because by the time prices start picking up, they have sold their crop. In 2013, when potatoes were selling at Rs 50 per kg, farmers had not made more than Rs 5 per kg, a profit of not more than Rs 1 per kg.

“Farmers are dependent on middlemen for selling their crop in West Bengal, which is why they fail to get good prices during shortages, but get low prices during excess production,” said Pranab Chatterjee, professor at Bidhan Chandra Krishi Viswavidyalaya.

Another problem with potato farming in West Bengal is the lack of infrastructure. The cold storage capacity in West Bengal is 6-6.2 million tonnes, which leaves around 1-1.5 million tonnes of potatoes in the fields. This apart, electricity costs have pushed up cold storage rents by Rs 14 per quintal over last year to Rs 135.

Also West Bengal depends on Punjab for potato seeds. Of the requirement of nearly 800,000 tonnes of seeds, only 300,000 tonnes are produced in West Bengal. Due to last year's deficit crop, the cost of seeds this year went up to Rs 5,000 per quintal from Rs 3,000 a year ago.

“The government should come up with a definite mechanism for fixing prices of potatoes. Also, the government should purchase 10 per cent of the crop during distress sales,” said Patit Paban De, member, West Bengal Cold Storage Association.

• Cost of farming this year: Rs 400-440 per quintal
• Cost of cold storage this year: Rs 150 per quintal
• Total cost of production this year: Rs 550-590 per quintal
• Selling price for farmers this year: Rs 300-350 per quintal
• Potato production 2014-15: 11 mt
• Domestic consumption: 5.5 mt
• Export to other states: 4.5 mt
• Excess production: 1 mt
• Total cold storage capacity in the state : 6-6.2 mt