Bangladesh: Potato farmers drown in debt as price plummets

But due to an oversupply of potatoes compared to demand, he is now unable to even recover his production costs and repay his loans.

He has to pay more than Tk 20,000 every month as interest.

As creditors began showing up at his doorstep more frequently, Khairul found himself cornered by mounting pressure.

He is now selling potatoes at Tk 12 to Tk 14 per kilogram (kg), well below the production cost.

Khairul Islam is not alone in his struggle. Across Bangladesh, many farmers are counting their losses amid a market oversupply that the government has yet to bring under control.

Farmers and traders said that while the cost of producing and storing a kg of potatoes ranged from Tk 26 to Tk 28, they are now being sold wholesale from cold storage at just Tk 8 per kg. After deducting cold storage rent and labour costs, farmers and traders are left with only 52 to 68 paisa per kilogram.

Bangladesh produced a record 1.15 crore tonnes of potatoes last season, far exceeding the annual domestic demand of around 90 lakh tonnes, according to the Bangladesh Bureau of Statistics.

The Department of Agricultural Extension (DAE) estimates the production cost in northern districts in the last seasons, which account for around 80 percent of total production, at Tk 14.5-Tk 16 per kg.

During visits to various kitchen markets and super shops in Dhaka and other parts of the country, potatoes were found selling at retail for Tk 15 to 16 per kilogram.

Stakeholders blame the government for failing to implement its announced measures, including a minimum cold storage gate price of Tk 22 per kg and a planned procurement of 50,000 tonnes.

The fixed cold storage price is not followed, and the procurement of the promised amount was never carried out, leading to oversupply.

They also said that lured by the high potato prices during last November’s planting season, farmers expanded cultivation at an unprecedented rate, a time when the government should have warned them against planting more.

Mohammad Delwar Hossain, a wholesale trader at Karwan Bazar in the capital, said that considering the farmers’ perspective, the current price of potatoes is extremely shocking.

"They’re being sold at very low prices," he said. "At the rates potatoes are selling wholesale now, farmers can’t even recover their production costs."

He added that yesterday, potatoes were selling at Tk 9 to Tk 12 per kilogram in the wholesale market. Over the past two weeks, the wholesale price has dropped by Tk 2 to Tk 3 per kilogram.

"This will likely discourage farmers from cultivating potatoes in the upcoming season," he said.

Lokman Hossain, a farmer from Lalmonirhat, cultivated potatoes on three acres of land this season. His production cost came to about Tk 18 per kilogram, and he expected to sell the crop for around Tk 25 per kg. But during the harvest, he was forced to sell half of his produce at only Tk 15 per kg.

"I stored a good portion of my potatoes in cold storage, hoping to get a better price later," Lokman said. "But now I’m selling them for Tk 12 to Tk 15 per kg, which doesn’t even cover my costs."

He said he had borrowed Tk 3 lakh from a local cooperative to finance his cultivation.

"I pay Tk 9,000 in interest every month, and I’ve already lost about 70 percent of my investment. Now, I’ll have to sell part of my land to repay the loan," he added.

"Potatoes have become a crop of despair," Lokman said quietly. "Maybe I’ll grow them again — but only on a small patch of land."

Sirajul Islam, additional director of the Rangpur Regional Office of the Department of Agricultural Extension, said, "If the government buys potatoes directly from farmers, they will get fair prices.

"This year’s losses may discourage them from cultivating the crop in the next season," he said.

Meanwhile, the once-bustling cold storages of Munshiganj now stand eerily quiet. With potato prices plunging to a record low, both buyers and sellers have all but disappeared from the district’s major storage facilities.

Workers at the storage confirmed that the wholesale price has fallen drastically—hovering between Tk 8 and Tk 9 per kilogram, depending on the day.

Prashanta Kumar Mondal, manager of Kadam Rasul Cold Storage, said the market collapse has left both farmers and traders in distress. "We still have around 20,000 sacks of potatoes belonging to over a hundred farmers and traders," he said.

"Barely 200 sacks are sold each day. After paying the cold storage rent of Tk 280 per sack, farmers are left with only Tk 50 to 100 in hand. There’s no way to recover their losses," he said.

District DAE Deputy Director Md Habibur Rahman acknowledged the problem, said that the government’s earlier plan to ensure sales at Tk 22 per kilogram did not materialise.

"For various reasons, the initiative couldn’t be implemented," he said. "However, the government remains sincere in its efforts. We still hope for some positive outcome before the season ends."

Agricultural Marketing Officer ABM Mizanul Haque said that although the government announced it would buy potatoes at Tk 22 per kilogram, no actual purchases have taken place.

Prices continue to fall by the day. With new potatoes expected to arrive in the market by November, there will likely be little demand for the old stock, he said.

Agriculture Secretary Mohammad Emdad Ullah Mian couldn’t be reached for comment on the matter over the phone.

Prominent economist Jahangir Alam Khan, said this is totally a management failure. When prices fell, there should have been a floor price, but they did not set one for a long time.

Only after four or five months, when public outcry began, they fixed it at Tk 22, which merely covers the cost of production, not the absolute minimum. Even that was not properly implemented, he said.

The government should have procured a large quantity of potatoes. With total production more than 1 crore tons, the government should have purchased 12–13 lakh tons, but they only bought 50,000 tons, he added.

The entire issue reflects weak government management and a lack of priority for farmers, he said.

Despite repeated warnings, the government did not take the farmers’ distress seriously. As a result, many farmers have been severely harmed, driven into debt, and are now in deep financial trouble, he added.

Potato cultivation in the coming season will decline because farmers will cut back due to the losses they faced this year. Consequently, production will fall, prices will rise, and consumers will suffer, he said.

This situation highlights the absence of a balanced agricultural policy, he added.