Dumping of potato in Agra and other parts of UP as prices slump

Stockists and warehouse keepers in Agra district of Uttar Pradesh are dumping potato at 20-25 paise a kg, to clear cold storage space of inventory not being claimed. Farmers and stockists are reportedly finding the value not worth the cost of transport from warehouses to wholesale markets.

There are, consequently, reports of dumping on the roads. And, on fields before tilling for the next crop, for use as biofertiliser.

The problem is reportedly similar elsewhere in the country. Barring some centres, the price quoted is ~4-5.5 a kg across the country, against a cost of production of around ~5 a kg.

“Farmers and stockists do not have any option but to take out their entire quantity from cold storages, which require to be cleaned before the beginning of the next arrival season from mid-February. Since they require six weeks for hygienic cleaning and maintenance, cold storage owners want to evacuate the entire storage before December 31. So, both farmers and stockists are in deep distress here,” said Vishal Jain, owner of Viraj Traders, a potato stockist in Agra.

The Third Advance Estimate of output projects the country's potato output at 48.2 million tonnes (mt) for 2016-17 (July-June), a 11 per cent increase from the previous year’s 43.4 mt. UP's contribution, at 31 per cent, is the highest. West Bengal is next at 23.3 per cent and Bihar at 13.2 per cent.

UP's estimated potato storage capacity is 12.46 mt, commensurate with its production. Cold storage owners normally vacate the entire warehouse during December. This year, however, they'd directed their stockist potato clients to remove their entire amount before October 31, extended later to endNovember and then December 15. However, farmers and stockists are not even claiming their inventory in many cases, due to falling prices.

“Potato size below the edible grade (30mm radius) has started spoiling. Thus, the quality of small-sized potato has deteriorated. Therefore, farmers and stockists face no buyers for these,” said Yaduvir Singh, owner of Shiv Kumar & Sons, a stockist in Agra.

Also a potato farmer, he urges the government to start futures trading in the commodity.

“The government had allowed this but then suspended it in 2014. Futures trading was a good tool for price indications. We used to deliver a large quantity of potato through commodity exchanges. We never saw such a large volatility in the price when traded on commodity exchanges,” said Singh.