India: Cash crunch hits country’s potato seed bowl

Shortage of new currency notes has hit potato farmers in Punjab, who are now struggling to sell their stock of potato seeds. At the peak of the potato sowing season, the lack of new notes in the market is preventing potential buyers from purchasing supplies.

“There are buyers but they do not have the new currency. We have been sending our trucks to other states, but there are no labourers to unload the stock. There is no money to pay them,” said Jaswinder Singh Sangha, general secretary of the Jalandhar Potato Growers Association. Most of the traders are small businessmen and they prefer purchasing the stock with cash, he added. The potato farmers of Punjab are also the primary suppliers of potato seeds across the country.

The rates of potato seeds too have crashed over the past one week, from Rs 1,800 per 50 kg to Rs 1,000- 1,200 for the same amount.

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Prices for the early variety of potato that is already available in the market too have come down, from Rs 20 per kg in wholesale market to Rs 10-12 per kg.

“After 1984 riots, which also happened in November, this is the first time we are facing such a crisis. Trucks are ready with the supplies, but transporters do not have cash to send them to other states,” said Sangha.

Punjab has around 560 cold storage units which dispatch about 1.1 million tonnes (mt) of potato seeds to other states, while 0.4 mt is used by potato growers within Punjab. So far not even 40 per cent of the seed stock has been sold, said farmers.

The potato planting season begins in early October and lasts till November 25 across the country. In Punjab, the seeds are sown in October itself, and the first batch of the vegetable arrives in the market by mid-November. In the other states, the potato seeds are only sown in November.

Punjab, which produces about 2.2 mt of potatoes a year, supplies the seeds of the vegetable to farmers in Uttar Pradesh, West Bengal, Bihar, Madhya Pradesh, Gujarat etc. Punjab meets around 63 per cent of the annual potato seed demand of the country.

Apart from the small amount of seeds used in Punjab in October, most of the stock has been lying in cold storage units.

Said Raghbir Singh, president of the JPGA, “Several traders who had come to Punjab last week to buy the potato seeds returned empty-handed. The farmers here were not willing to accept the scrapped currency notes.”

“We do not know how to tide over this situation. The government should have had adequate stock of new currency notes. The seed supply season lasts only for three weeks. We are bound to incur heavy losses,” said Satnam Singh, a potato grower.

Doaba region, where potato seeds are grown on around 90,000 hectares, is considered the potato seed bowl of the country.