Problem of plenty. Potato prices crash as Uttar Pradesh, Bengal report higher production

Kolkata, March 8 Potato prices have dropped by nearly 50 per cent currently on a steep rise in the spud’s production across key growing areas. Potato prices are now ruling closer to the cost of production this year.

Currently, the average price is ₹750-Rs 800 a quintal against ₹1,400-1,600 during the same time a year ago. The average cost of production for the farmer ranges between ₹750 and ₹800 a quintal.

Uttar Pradesh, which is the largest producer, followed by West Bengal, the second largest, are likely to report a bumper crop this year. This is likely to drag down prices, possibly leading to a crash. UP, in fact, saw the wholesale price of the hybrid variety dropping to as low as ₹250-300 a quintal at the beginning of this season.

According to Arvind Agarwal, President of the UP Cold Storage Association, the production in the State is likely to be close to 240 lakh tonnes, going by government estimates.

“Definitely, a bumper crop has been reported across centres. While Punjab and Madhya Pradesh are likely to report some shortfall, they do not contribute much to the overall table variety of potatoes. We are in the mid-cycle of harvesting, and both UP and West Bengal are staring at a bumper crop. Prices in UP had crashed with the hybrid variety, which has less solid content, fetching as low as ₹250-300 a quintal, so the farmers were not harvesting,” Agarwal told businessline.

However, the slightly better varieties such as Chipsona and Kufribahar, which have a higher solid content, are fetching close to ₹750-800 a quintal.

“There is a vast gap between the two varieties, but a major chunk of the crop coming into the mandis is of lower value, and that has depressed the overall market. Farmers are unable to recover their cost of cultivation,” he said.

Though official estimates of the crop size in West Bengal is expected to be close to 130-140 lakh tonnes this year, the industry expects the crop to be slightly lower at around 110-120 lakh tonnes. This is almost 29 per cent higher than last year’s production of around 85 lakh tonnes and nearly 16 per cent higher than the State’s average production of around 95-100 lakh tonnes a year.

“Though we were expecting a higher crop at the beginning of the season based on the area cultivated and weather conditions from what we see now the productivity is slightly lower and we are expecting production of around 110 lakh tonne this year. We expect prices to hold firm at the current levels,” Patit Paban De, member of West Bengal Cold Storage Association said.

States procure to aid farmers

According to industry sources, various state governments are trying to step in to prevent a possible crash in prices by announcing procurement of potatoes from farmers at a minimum support price (MSP). West Bengal government plans to procure close to 10 lakh tonnes of potatoes this year and has fixed the MSP at ₹6.50 a kg.

Even the Haryana government is believed to have announced some measures to support prices from crashing, sources said. On Tuesday, the Gujarat government announced measures to procure onion and potatoes from farmers in view of the price crash.

“UP government has not yet announced anything but there are rumours that they might make some announcement soon,” a source in the know of the matter said.   

The intervention of state governments by way of the announcement of a subsidy or MSP would help boost sentiments and prevent prices from crashing, an official said.

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