UP Elections: Crashing Potato Prices Deepen Farmers’ Woes in Uttar Pradesh

Mainpuri, Kannauj, Farrukhabad (Uttar Pradesh): Aram Singh, a 49-year-old farmer from Mahloi village at Kurawali tehsil in Mainpuri district of western Uttar Pradesh recently suffered a massive loss of Rs 3 lakh after failing to get a fair price of his last season's potato harvest, which was 300 quintals. He could sell only 60% of the total production, while the rest got infected with soft rot that rapidly led to the breakdown of the entire pile in storage.

He was expecting to recover the loss from the next paddy crop, unaware of another big jolt coming his way. The Kharif crop was partially destroyed by stray cattle and unfavourable weather. Nonetheless, his production was good. He could have earned well had the market price been in accordance with the minimum support price (MSP), the government procurement price — which was Rs 1,940 per quintal for a common variety the 2021-22 crop year (July-June).

But as the market was flooded with the produce soon after the harvest, the price of paddy in Uttar Pradesh dropped to just Rs 1,100-1,300 per quintal, much below the MSP and significantly lower than Rs 2,590 per quintal — which would have been the MSP if imputed costs of capital assets and rental on owned land was taken into account in calculating the cost of production as recommended by the Swaminathan Commission.

With no other source of livelihood and all the savings running dry, he borrowed Rs 1 lakh from a private lender to once again produce potato on four acres and wheat and mustard on his rest four acres of land. The prevailing market price of white potato grown in the region on a vast scale varies between Rs 200-250 per 40 kg packet, based on its quality and size.

After excluding labour cost, mandi charges, expenditure on transportation and packaging cost, he will have no profit, no loss given the whole chunk of production is sold.

The potato prices had touched Rs 43 per kg last year because supply chains were affected because of COVID-19 induced lockdowns. Hoping to make profits, farmers took up its cultivation on a larger scale this year. But a bumper crop has now sent the prices crashing down. There is a pall of gloom in villages where potato farming is the mainstay as the prices are plummeting with each passing day.

Though Singh's potato production was destroyed because of rotting in the cold storage and as a result he had suffered losses, and potato prices had risen to Rs 43 per kg following the lockdown and farmers — encouraging farmers to grow more. But against their expectation of getting a good price this year, the potato prices are now fluctuating between Rs 5 and Rs 6.25 per kg.

“The hike in potato prices last year encouraged us to grow it on a large scale. But now it appears that we committed a big mistake because the rise in production has brought the market abysmally low. It has a surplus supply, and therefore, we are barely getting between Rs 500 to 650 per quintal. No one can even imagine earning profit with these prices. It would be enough if we get back even the input cost in entirety," Singh told NewsClick with visible despair on his face.

“It is nothing but a harvest of loss,” said the farmer who was busy arranging his potatoes harvest on a tractor’s trolley.

Uttar Pradesh has the highest potato production across the country. It shares around 35% of the country's total production. With 6.10 hectares of land under potato cultivation in the state, 14.78 million tonnes of potato was harvested here in 2019-20, as per the Union Ministry for Agriculture and Farmer Welfare.

Mathura, Agra, Sirsaganj, Farrukhabad, Mainpuri, Etawah, Kannauj, Aligarh and parts of Kanpur are among a few districts in Uttar Pradesh that are known for their high production of potato. Global food giants, which manufacture potato chips, procure potatoes from here.

Potato production across the country, according to the data, increased to 53.69 million tonnes in 2020-21 as against 48.56 million tonnes in 2019-20.

Despite the high yield, there is no apparent end of woes as Uttar Pradesh farmers face the problem of the plenty. Unable to repay the debt they have, interests are accumulating — making them get trapped further trapped under substantial financial burden. The reasons behind the rising debts are said to be higher cultivating costs and lower selling prices.

Alok Dubey, who lives on the outskirts of Kannauj, has cultivated potato on 20 acres of land — which he has taken on lease from a landlord at the rate of Rs 40,000 per acre for one year.

“The input cost has gone unexpectedly high. Because of a massive shortage of fertilisers, DAP, urea, and potash are being sold in the black market at Rs 1,500, Rs 330 and Rs 1,100 against their controlled prices of Rs 1,250, Rs 270 and Rs 950 per 45 kg bag. The cost of seed potato was significantly high. The hike in diesel prices has increased the cost of ploughing. For irrigation, we depend on electricity — which is also too costly. Potato crop needs pesticides, which are also expensive. If all these expenditures are counted together and added with the labour cost, production costs range between Rs 50,000-60,000 per acre. The average yield would be around 2,000 kg if weather favoured. The recovery will be half of the input cost if the yield is sold at Rs 5 per kg. We will be able to earn profit only when it is sold above Rs 10 per kg, he told NewsClick.

The 40-year-old had cultivated potato on 10 acres of land last year. The total yield was 1,000 quintals. He said he suffered a loss of Rs 4 lakh as the potatoes are still in cold storage.

He said the government argues that farmers should go for crop diversification if they want to earn profits. "Seeing a good return on tomato, which was being sold at Rs 700-800 per carat (25 kg), I cultivated it, but the price has crashed to Rs 200-250 per carat. I have grown brinjal on around two acres of area. We are getting the price of Rs 8 per kg, which is again not a profitable price. If it is sold at Rs 15 per kg, then only we will be able to earn something," he explained.

Farmers said they have been driven to poverty and are on the verge of committing suicide.

A potato farmer who has been forced to make his wife and children work as farmhands along with him, Rajesh Kashyap, says, "We have been throwing away potato for the past two years; even the cattle don't eat it. The prices have fallen so low that despite throwing out the produce from the cold storage, we still had to pay Rs 40 as rent to the cold storage. We are completely ruined."

Mincing no words expressing her anger for political parties, his wife Radha Kashyap said, "Be it the BJP, the Samajwadi Party and the Bahujan Samaj Party, none of them have done anything to improve the situation."

PRICES SET TO CRASH FURTHER

This year, the farmers have increased their yield by cultivating potatoes on higher acreage. Weather conditions helped them improve the production. They are selling their harvest at whatever prices they get, fearing a further decline in the market rate.

“Telangana has banned potato supplies from UP. Many farmers have their last season's harvest in cold storage. In such a situation, if Telangana does not lift the ban on potato imports, then the local market will have a huge surplus, resulting in further lower prices. We will then be left with no option but to throw it on the road," said Mohit Singh, a 33-year-old potato farmer from Kamalpur village in Kaimganj block of Farrukhabad.

Potatoes were imported in large quantities from UP in Telangana.

HIGH PRODUCTION, BUT NO INDUSTRY

Despite high production, the region has a severe shortage of food processing industry, which could have consumed a large quantity of production locally.

Potato is usually sown in Uttar Pradesh in mid-October or early November. It is harvested in late February or the first week of March. The farmers here sell one-fifth of the crop. The rest are kept in cold stores to be sold till the next crop in November. Fresh potatoes hit the market in some parts of Himachal, Punjab, Karnataka, Maharashtra, and UP during this period.

The Uttar Pradesh government had to face an embarrassing situation in January 2018 when tonnes of unsold potatoes were dumped in front of the state assembly and the chief minister’s residence in Lucknow by farmers as a mark of protest against the price they were being paid for their produce.

Coming to their rescue, the State government has started a scheme to provide a subsidy of Rs 50 per quintal for transport to other places up to 300 km. The government has also made it mandatory to cook potatoes in midday meals for over one crore children of government schools.

However, the farmers claim that the government’s efforts are on paper and not on the ground. Even if these measures are implemented, it won’t be enough to account for the surplus.

The only solution, farmers say, is the establishment of food processing industries in the potato producing region of the state.

US-headquartered food and beverage firm Pepsico had commissioned its largest greenfield plant in Mathura's Kosi Kalan last year for its Lay's potato chips. Though it has pledged to source 1.5 lakh tonnes of potatoes annually from local farmers, their resolve is yet to be implemented.

In addition, the farmers believe that just one such factory won't be enough for such a massive production in the state. "We need many more industries," they maintain.

However, previous experiences suggest that such industries benefit only big farmers as their procurement norms are very strict. They accept the consignments based on the quality and size of the produce, which are not in control of the person growing it.

Secondly, these plants come with so many litigations and police cases. Farmers lands may be acquired at throwaway prices, which cause conflicts between the farmer and the companies.