Bane for farmers, boon for traders

potato2014Potato This Year
Many of the country’s seven lakh potato farmers are on the verge of bankruptcy for fast falling prices of their produce.

Yet, government steps to ensure fair prices, ease export barriers and find new markets are scarce.

Analysts and industry operators say the recent moves to boost exports will not give the farmers an immediate respite.
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The government should buy potato from growers to mop up the additional supply, and distribute those through social safety net schemes to help the prices rebound, they say.

Bane for farmers, boon for traders

Agriculture Minister Matia Chowdhury, however, said the government has no such plans; instead it is trying to find markets to export potato through the private sector.
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“We are aggressively looking for new markets,” she told The Daily Star over the phone.

She said around 30,000 tonnes of potato were already shipped to several countries, including Russia, in the current fiscal year.
“Exports will rise further,” she said, adding that the prices will rebound in a month.


Earlier, Bangladesh Cold Storage Association had urged the government to buy potato from the market and distribute those under the safety net schemes such as VGD (vulnerable group development) and VGF (vulnerable group feeding).

But officials at the agriculture ministry said the proposal is not viable as the government has no specialised warehouse to preserve potato.
A farmer in Majadanga in Dinajpur stopped harvesting potatoes midway fearing the produce would fetch very low price. Photo: Star
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The prices of potato at the farmers’ end now stand at Tk 1.76-Tk 5 a kilogram, which is far below the production cost of around Tk 6, according to estimates by Bangladesh Agricultural Research Institute.
Farmers in the north dump potatoes on highways in a novel protest against falling prices of their produce, while policymakers are looking to boost exports as a way out.

“It is not possible to increase exports overnight,” said Shaikh Abdul Quader, president of Bangladesh Potato Exporters Association.

Though the government has been providing 20 percent cash incentives for potato exports for the last several years, exports didn’t pick up for lack of production of exportable varieties, said Quader.

The annual consumption demand is 60-65 lakh tonnes against the production of 82 lakh tonnes a year. Of the total produce, 10 lakh tonnes are used as seed, according to Bangladesh Cold Storage Association.

REASONS BEHIND SUPPLY GLUT
In November and December last year, many farmers in the north put harvests on hold due to shutdowns and blockades.


Cold storage operators couldn’t clear stocks in the wake of countrywide political unrest in the run-up to the January 5 national election.

As the political situation returned to normal after the polls, farmers began to harvest to go for another crop, while cold storage operators started releasing old stocks.

The twin actions resulted in a supply glut causing a sharp fall in the prices though production remained almost the same this season like the previous years.

Sultan Ali Sarker, a small farmer from Dhupchachia in Bogra, said he took half an acre of land on lease to cultivate potato. He had delayed harvests because of hartals, but when the political situation improved, he found the prices falling.

“I can neither harvest potato nor cultivate Boro paddy as I run short of cash. I can’t even pay off my loans,” he said over the phone.

However, the agriculture minister said it is a passing phase.

“Those who wanted to destroy the economy through hartals and blockades are responsible for the plight of the farmers,” said the minister.

TRADERS FEAST ON FARMERS’ WOES
Traders continue to make profits in the absence of government monitoring. Potato prices are hovering around Tk 15 a kilogram in city markets though the Trading Corporation of Bangladesh puts the rate at Tk 8-10.

“Traders are cashing in on the supply glut,” said Mahabub Hossain, former executive director of Brac.

The current production is higher than the annual demand, and increased exports may arrest the fall in prices, said the agricultural expert.

Hossain, too, suggested that the government buy potato from farmers and distribute those through social safety net schemes.

“It will help curtail the supply and, at the same time, allow low-income people to get the vegetable at low cost,” he said.

The government should set up small cold storages across the country and explore the African markets to increase exports, he added.

Sohel Parvez – thedailystar