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A sudden and sharp increase in cold-storage rent for potatoes has triggered widespread discontent among farmers, who are calling the hike "unreasonable" and a potential disaster for their livelihoods.
The rent has surged from Tk 4.0 to Tk 8.0 a kilogramme despite no significant rise in electricity costs or operational expenses for cold storage facilities in recent months.
Farmers around the country are protesting against the decision, warning that it will lead to higher potato prices for consumers in the later months and make the potato market volatile again.
The Bangladesh Cold Storage Association (BCA), representing 405 cold storages, has set the maximum rent at Tk 8.0 a kg for the current season. They, however, claimed that the rent was Tk 7.0 last year, meaning a 14.29 per cent increase.
While the association claims that the increase is only one taka, farmers argue that the rent has doubled due to a new rule limiting potato sacks to 50 kgs. Previously, farmers could store sacks weighing up to 70 kgs without additional charges, paying a flat rate of Tk 350 a sack. Under the new system, farmers must pay Tk 8.0 for one kg stored, significantly raising their costs.
Jahirul Hasan Paramanik, a Nilphamari-based farmer, said he had gone to a local cold storage to book space for his 15 bighas of crops which will be harvested from the last week of this month.
He said last year he had stored 20.0 tonnes or 300 sacks of potatoes for Tk 0.105 million at Ismail Cold Storage in Saidpur.
He said earlier the charge was based on per sack containing 70-72 kgs of potatoes. But this year the cold storage owners' syndicate has introduced new system that requires farmers and small traders to pay Tk 8.0 for per kg.
He said the production of potatoes has increased by 20-25 per cent which means prices might remain rational in the next eight months and farmers who have the ability to store some potatoes could hardly make profits as the fare has been doubled. "We are already in a tough situation as the price has declined to a three-year low."
When contacted, Mustafa Azad Chowdhury, president of the Bangladesh Cold Storage Association, said that the increase in rent is necessary due to rising operational costs, including high bank loan interest rates. He also cited labour laws and reduced storage capacity as reasons for the 50-kilogramme sack limit.
He said the fare was already Tk 7.0 a kg, but cold storage owners gave businesses and farmers the facility to keep potatoes with 70-80 kg sack at Tk 350-400 across the country. Due to the labour rights issue, the cold storage owners are now bound to allow 50-kg sack, he said.
He claimed that most of the cold storages have become sick amid rocketing electricity prices and other costs last year. Cold storage owners have over Tk 300 million worth of electricity bills to pay, he added.
He said operating costs have surpassed Tk 9.0 a kg and it is now impossible to run the units with earlier fare. The decision to put up the rent was taken in the meeting of the association, held in November last year. On January 15, all the cold storages were instructed to charge Tk 8.0 a kg for this season.
Consumers Association of Bangladesh Vice President SM Nazer Hossain said the cold storage owners have never made it clear that they are charging Tk 4.0 though the official fare is Tk 7.0. He said big traders and cold storage owners have the hold of minimum 50 per cent of potatoes stored in cold storages.
Meanwhile, farmers have taken to the streets to protest the rent increase. In Rajshahi, potato growers staged a demonstration on Mohanpur Upazila Parishad premises, with some even lying on the Rajshahi-Naogaon highway to block traffic. Similar protests have erupted in other potato-growing regions, with farmers demanding a rollback in the rent hike.
Value chain expert and farm economist Prof Golam Hafeez Kennedy told the FE that suspending a facility that is being provided for decades just in a month is an injustice.
He said the cold storage owners haven't clarified it even to the government last year when they and their allied traders were benefiting hugely from the skyrocketing trend in potato prices which marked an all-time high at Tk 80 a kg.
He said the fare should be increased reasonably or this double charge could discourage thousands of farmers to store potatoes. The whole market will go to the hands of few hundreds of big traders across the country, he said, adding that the agriculture, commerce, food and home ministries along with the local administration should immediately take steps to address the issues.
When contacted, Agriculture Secretary Dr Mohammad Emdad Ullah Mian said that the cold storage owners have not formally discussed the matter with the ministry or its affiliated organisations. He claimed that he has just been informed about the issue and made an assurance that the ministry will take necessary initiatives to solve it.
Department of Agricultural Extension (DAE)'s horticulture division said that the production of potatoes might surpass 12 million tonnes this year from 10.6 million last year thanks to the persisting favourable weather.
Cold Storage owners said a total of 365 units are now operational out of 405 which could store a maximum of 4.5 million tonne. Last year the Association told the government that they stored 2.5 million tonne.