Declining water levels in UP had made them shift from growing wheat and paddy to potatoes, which require less irrigation. Though initially potato farmers made money by hedging potato prices on commodity exchanges, hardly three years later the farmers in Agra, who account for almost 8 per cent of the total potato produce in India, are lamenting their decision.
Anticipating the impending financial crisis, potato cultivators, through their organisation the Aloo Utpadak Kisan Samiti, Agra, held a huge rally in the Khandoli area of the town on Wednesday, in which more than 2,000 farmers of the region participated.
At the rally, the farmers wanted an additional “parity” price of Rs 200 per quintal of potatoes from the central government for those who go to mandis to sell. Also, they demanded that futures trading in potatoes should resume, enabling the farmers to trade directly with the buyers.
Farmers wanted the immediate revocation of the UP State Electricity Regulatory Commission's decision to increase power tariffs on pumpsets from Rs 80 to Rs 176 per hp. They also demanded the abolition of the mandatory transport subsidy forms 6R and 9R, required by the mandi committees before a farmer sold his crop at the mandis because farmers did not have them.
They also said that the transportation subsidy of Rs 7 crore, lying with the UP Marketing Federation, should be distributed among the farmers.
According to Committee President Dungar Singh, the onset of commodity exchange trading in potatoes had enabled the farmers to trade directly with buyers. The high profits due to the facility of hedging on the MCX and NCDEX encouraged the farmers in UP, Bihar, West Bengal and Gujarat to increase the total cultivated area of potato and consequently, the potato crop this year rose by nearly 30 percent.
But with the government placing a ban on the trading of this staple crop through commodity exchanges on 7th May this year and a bumper crop output overflowing the state coffers, the farmers in Uttar Pradesh as well as rest of the country are left with heaps over heaps of a rotting crop which is fetching less than half of its cultivation costs bringing the potato farmers on the brink of bankruptcy.
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He said that the state government had assured that it will buy the potato from farmers through NAFED but the farmers were not ready to sell their crop at the government supported price of Rs. 250 per quintal as the cultivation cost for the crop was around Rs. 450 per quintal. While the farmers in Uttar Pradesh had produced nearly 115.30mt of potatoes this year, cold stores in the state can store only 86mt and even these cold storages had raised their storage traiffs upto Rs. 30 per quintal now. The transporters have also raised their transportation tariffs by 25-30 percent, dealing another blow on the potato farmers.
In the rally, the farmers unanimously decided to pay only Rs. 80 per quintal towards storage and warned the cold storage owners to accept this decision. Also, he said, the committee has arrived on a decision to begin the disposal of the present potato stock by throwing it on the streets of Agra and the dates for the disposal will be announced soon.
Pushpendra Jain, committee secretary, said potato was being sold between Re 1 and Rs. 3 per kg. in mandis of the state while in retail, the same potato was costing Rs 6-8 per kg. indicating that banning futures trading had no impact on the potato prices and now, the ‘arhatiyas’ (middlemen) were reaping profit from the bumper crop instead of farmers.
He said that when the farmers traded in potato futures, they could also get indications on spot prices of potatoes and could then take their crop to sell it in spot markets without going through middlemen. But this situation has changed drastically since potato futures were banned by the government and the farmers have no other resort left except selling through the arhatiyas who skillfully manipulated the potato buying prices in their favor.
He said that the situation could improve slightly if the state government agreed to the farmers’ demand of raising the minimum support price of potato from Rs. 250 to Rs. 450 and that the farmers may still recover their cultivation costs. But only the lifting of the ban on potato futures could bring back the smile on the faces of these farmers, he added.