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Potato prices crash in India as the new crop begins arriving in North India

The current protests by farmers, who have laid a siege to the national capital region of Delhi, have not had any effect on potato harvest.

December 14, 2020 / 03:31 PM IST

Potato prices in India have dropped over 40 percent at primary agricultural markets in northern parts of the country in the last three weeks as the new crop has begun arriving.

Prices in Uttar Pradesh’s Agra markets have crashed below Rs 1,600 a quintal from around Rs 2,900-2750 on November 24-25. On December 14, potato at Fatehpur Agricultural Produce Marketing Committee (APMC) market was quoting at Rs 1,550 a quintal against Rs 2,750 on November 26.

In Madhya Pradesh, prices in Indore district markets had declined to Rs 1,600 a quintal last weekend. In Punjab’s Jalandhar district, too, potato prices had dipped to Rs 1,600 during the weekend.

According to the Consumer Affairs Ministry, potato prices in Delhi have dropped to Rs 38 a kg on December 13 from Rs 45 on November 30, while in Mumbai they had slid to Rs 45 from Rs 52 during the same period.

“Prices have dropped sharply in the last couple of weeks but they will have to stabilise now. Otherwise, growers will stop harvesting,” said Patit Paban De, former president of West Bengal Cold Storage Association.

According to Ajay Agrawal, a trader in Indore, potato prices are a tad higher for the new crop around Rs 25 a kg, while the old crop was quoted around Rs 20-22 a kg.

“The new potato crop has begun arriving in Uttar Pradesh. Arrivals are good,” said Mahendra Swarup, President of Federation of Cold Storage Associations of India (FCAOI).

Paban De said that the crop this year was good in Uttar Pradesh as well as Punjab, where also farmers have begun harvest. “This year, the area under potato is at least three per cent higher. In Uttar Pradesh, the productivity is higher than last year,” he said.

According to the Ministry of Agriculture’s third advance estimate of horticultural crops in India, potato was cultivated on 20.56 lakh hectares during the 2019-20 crop year (July-June) against 21.73 lakh hectares in 2018-19.

“We have to watch out for fog which can affect the crop. The climate has to be suitable. Production could pick up further from this week-end since the climate would be suitable,” said Paban de.

Indore trader Agrawal said prices are expected to drop further with the potato crop arrivals expected to peak next month. “Arrivals will gather speed next month across the country,” he said.

FACOI’s Swarup said that farmers were rushing their produce to the markets and are yet to seek cold storages. “Farmers will opt to storage in our cold storages around February-end when prices slump due to high arrivals,” he said.

Bengal’s Cold Storage Association’s Paban De said growers could halt harvesting if prices nosedived since their cultivation costs are higher this year. “Farmers have paid higher prices for potato seeds, which had doubled. Labour costs are also up this year,” he said adding that they had paid Rs 800-1,000 a quintal for the seeds.

The farmers can hold on to their crop at least till January 10 but after they will have to harvest. “If prices are going to rule low, they might seek to keep their potatoes in cold storages. Packing and storage costs would cost them an additional Rs 1,000 a quintal,” Paban De said.

The current protests by farmers, who have laid a siege to the national capital region of Delhi, have not had any effect on potato harvest. “The farmers' protests have not affected harvest, going by the arrivals,” said Swarup.

Thousands of farmers, most of them from Punjab, are protesting against three new agricultural legislations implemented by the Union government. The legislations, ushering in reforms that are seen akin to the 1991 economic reforms, allow growers to sell their produce to anyone in any part of the country, enter into contract farming, and sell without bothering about the storage limit fixed by the government for various commodities.

On the other hand, farmers, especially from Punjab, argue that it would weaken the APMC system through which most of them sell their foodgrains. They also contend that it would end the minimum support prices (MSP) scheme for various crops.

The Centre has, however, denied these saying the APMCs will co-exist with the new marketing platforms that will come up with the news legislations, while it has no plan either to end the MSP or procurement of grains by the Food Corporation of India for maintaining buffer stocks.

Potato arrivals last week were 74,000 tonnes in Uttar Pradesh, 7,700 tonnes in Punjab and 3,500 tonnes in Madhya Pradesh. During the week ended December 6, the arrivals were 51,500 tonnes, 1,500 tonnes and 4,300 tonnes respectively.

Potato prices have surged mainly due to low production as unseasonal rainfall last year affected cultivation. In addition, rains this year has affected the crop in Karnataka and Maharashtra.

This led to potato production dropping to 48.66 million tonnes in 2019-20 against 50.19 million tonnes the previous year.

Higher consumption due to the national lockdown imposed by the Union government to tackle the spread of novel Coronavirus also aided the price spike.

(Subramani Ra Mancombu is a journalist based in Chennai, who writes on topics in commodities and agriculture)

Subramani Mancombu is a journalist based in Chennai who writes on commodities and agriculture
first published: Dec 14, 2020 03:31 pm