India: Slumping potato prices hit Indian farmers, but worse is yet to come

Hit by low wholesale prices, potato farmers in Uttar Pradesh and Punjab have not been able to recover even the production cost of the crop as market price of potatoes crashed by 39-50 per cent in December 2018, according to the latest report on the crop by the Department of Agriculture Cooperation and Farmers Welfare.

Around Rs 9-12 per kg is spent on potato farming, but, of this, Rs 6-8 per kg is production cost and Rs 3-4 per kg is spent on harvesting, packaging, cold storage and transportation. The report shows that while farmers in Punjab were forced to sell their crop for Rs 4 per kg, those in Uttar Pradesh sold potatoes at Rs 6.7 per kg last month. In November 2018, the wholesale price of potatoes was Rs 7 per kg in Punjab and Rs 11 per kg in Uttar Pradesh.

The average price of potatoes also crashed by nearly 33 per cent in the past five years (between 2012-13 and 2017-18). During this period, the dip was the most in October (115 per cent).

While farmers struggle to sell their new produce, they also have large amount of stocks lying in cold storages. As many as 660 cold storages in Punjab can store up to 21.55 lakh metric tonnes, but the production this year was more than 25.15 lakh metric tonnes. The low prices have made it unfeasible for them to pay for their potatoes in these storages and they prefer to leave them over there. The situation in Uttar Pradesh too is no different.