Potato growers in dire straits

For some years now, good harvest of potatoes has turned out to be the cause of the growers' misery. While concerned quarters put it on lack of planning, which among other things includes dearth of sufficient storage facilities in the vicinities of potato growing areas, the burden of bumper harvest falls squarely on the farmers who are extremely ill at ease with their produce in a severely under-priced domestic market.

Not only for potatoes, the same is often the case with some other horticulture products such as tomatoes, leafy vegetables, pineapples etc. The case of potatoes this year is perhaps more distressing than the others. Thanks to the media that the matter has been highlighted from various angles, but in the absence of any ready mechanism to address the situation, the plight of the farmers stands no chance of getting addressed at the policy level.

The Bangladesh Bureau of Statistics (BBS) data show that over the years, despite losses incurred by farmers, land area for potato cultivation has been on the rise which goes to explain that farmers are yet to abandon one of their favourite and relatively easy-to-grow crops. According to the Department of Agriculture Extension (DAE), the total land area under potato cultivation increased on an average by 3.24 per cent in 2016-17 over the preceding year, to 0.46 million hectares (460 thousand), targeting production of 10 million tonnes. The target has been well achieved. Local varieties were grown in 71,927 hectares, while high yielding varieties (HYV) in 372, 208 hectares - suggesting an overwhelming preference for the latter.

Unfortunately, increased harvest has only added to the loss of the farmers. Unprecedented price slump has caused many farmers in the northern zones to sell their produce immediately after harvest.

A FE report, quoting an official of the Department of Agricultural Marketing, mentioned that potato of different varieties has been selling at Tk 4.0 (granola) to Tk 8.0 (desi, diamond) at farm-level against the production costs of Tk 6.5-Tk 11 a kg. The official reportedly said that the current market price of potato is at a five-year low. The last steepest fall was recorded in 2013. As a result, farmers were incurring losses to the tune of 35 to 50 per cent depending on areas and varieties. The same FE report mentioned that lower prices and unsold potatoes at warehouses caused Tk 125.15 billion in losses to the farmers and cold storage owners last year. Faced with the situation, the Bangladesh Cold Storage Association (BCSA) has sought rescheduling of their project loans and working capital (cash credit or CC).They also sought a 20-year moratorium on their outstanding loans to protect both farmers and businesses.

Low demand in the wake of bumper production is the main reason for the losses of both farmers and cold storage owners. According to a member of the cold storage association, 1.5 million tonnes of potatoes remained unsold before the beginning of the current season because of low demand which caused the association members Tk 28.12 billion in losses. The same source mentioned that farmers incurred losses to the tune of Tk 33.25 billion by selling 5.3 million tonnes of potato at only Tk 700 a sack (80 kg sack) against the production cost of Tk 1,400. President of the BCSA said the country's 416 cold storage owners incurred Tk 63.78 billion in losses from cash credit and project loans on account of reducing the storage rent and providing loans to farmers. Reportedly, storage rent was reduced substantially to Tk 250 per sack from Tk 400 last season to encourage farmers to take delivery of their produce.

One has reason to ask why is it so? Potato is a staple in some countries of East Europe. Russia and the now-independent states under the former Soviet Union, the main consumers of potatoes, are largely dependent on imports, although Russia is the third largest producer of potatoes, next to China and India. Bangladesh has been exporting potatoes to some counties, including Russia, in small volumes. Exports to the East European markets are on since 2011. Reports say, due to bad harvest in Europe last year, currently there is an increased demand for procuring potatoes from non-traditional sources such as Bangladesh.

Concerned quarters believe that exports could bring a respite to the farmers if there is a concerted move to grow potatoes keeping in view the market-specific choices and standards set by the importing countries, particularly in respect of sanitary and phytosanitary requirements. However, there is no certainty that exports would ensure fair price to the growers. Despite such uncertainty, it can be said that an organised move to export will, in all probability, generate greater demand for quality produce which would be reflected in prices at growers' levels as well.

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