Uttar Pradesh’s Hot Potato: Another Farm Crisis Ignored

Despite knowing the problem, both the state and central governments have failed to address the crisis UP's potato farmers are facing.

Farmers dump potatoes on the streets in Meerut in March 2017. Credit: Munish Kumar

Farmers dump potatoes on the streets in Meerut in March 2017. Credit: Munish Kumar

Devi Singh (46) grows potatoes in the rabi season in Saras, a village of 1,200 people in Mathura, part of Uttar Pradesh’s potato belt. In 2017, he suffered massive losses as the price of potatoes in the wholesale market fell well below the cost of production. Last Thursday, he sat glued to the television screen at the village tea stall listening to Arun Jaitley as the finance minister announced the 2018 Union Budget. “Aalu kisanon ki awaz Dilli tak pahonchi thi is bar. To humein yakeen tha ki vitt mantri humein kuch raahat denge (This time the voice of potato farmers had reached Delhi. Therefore, we were sure that the finance minister will grant us some relief),” said Singh.

However, Singh was left disappointed when Jaitley’s speech ended. “Kuch bhi nahi kiya humare liye. Bade-bade wade karke chhod diya. Humara jo nuksan hua hai uski bharpayi ka koi zikr nahi. Yahaan aalu kisan barbaad hue ja raha hain aur kisi ko parwah nahi hai (Nothing has been done for us. Only big promises have been made, nothing else. There was no mention of compensating us for the losses that we have incurred. Potato farmers are being ruined and nobody cares),” he said.

Singh was not too impressed by Jaitley’s announcement of ‘Operation Green’ to deal with the problems faced by potato, onion and tomato growers. Outlining that “these perishable commodities pose a challenge in connecting farmers and consumers in a manner that satisfies both”, the finance minister announced an allocation of Rs 500 crore for ‘Operation Green’ that “shall promote Farmer Producers Organisations (FPOs), agri-logistics, processing facilities and professional management”.

Jab ho jaye tab batana. Abhi to ghoshna hui hai, fir committee baithegi, fir plan banega, fir kayi saal bad kuch hoga. Humara jo nuksaan abhi ho raha hai uska kya? (Tell me when it happens. Right now it has been announced, then a committee will be formed, then a plan will be made, then after many years something will happen. But what about the losses that we are incurring right now?)” asked Singh.

Ashok Gulati, an agriculture economist, believes that Operation Green is a step in the right direction. “This has been the need for a long time. So the fact that they have announced this is a step in the right direction. However, we have to wait and see what the final blueprint of the scheme is. The plan has to come. It will take time, no doubt. Right now, it’s only initial seed money,” Gulati told The Wire.

Agricultural policy expert Devinder Sharma believes that enough has not been done for horticulture crops. “First, they have not spelt out anything. They first have to come up with a plan. No one knows how long that will take. Then, the allocation of Rs 500 crore is nowhere close to being enough. This year, in Punjab alone, farmers had to throw away Rs 250 crore worth of potatoes. Similarly, this has happened in West Bengal, Uttar Pradesh, Madhya Pradesh and several other states. So it’s not a small problem that can be taken care of by a meagre allocation of Rs 500 crore,” Sharma said.

Why are potato farmers suffering in UP?

The ‘humble’ potato has recently captured headlines as it has found itself dumped on streets in Uttar Pradesh (UP) by farmers, since wholesale prices have dipped to less than half of the cost of production. In one instance, heaps of dumped potatoes outside chief minister Adityanath’s Lucknow home led the UP police on a wild goose chase, tracking 10,000 phones to ‘catch’ two men responsible for the dumped potatoes. Their efforts brought back memories of 2014, when the UP police were tasked with finding and rescuing Samajwadi Party leader Azam Khan’s stolen buffaloes.

The dumping of potatoes on streets, which has now become a ‘hot potato’ for the Adityanath government in the state, has been ongoing for several months in various parts of UP. Farmers began dumping their potato crop on the streets in March 2017 in an attempt to express their grievance and to seek government intervention as wholesale prices, which had been hovering around Rs 200 and Rs 250 per quintal for some time, did not show any signs of moving northward. “I am getting a price of Rs 200 per quintal in the mandi. My cost of production itself is about Rs 600 per quintal and on top of that are the overheads of packaging and transport, which take the cost to around Rs 900 per quintal,” Madan Pal Singh, a potato farmer from Amarpur, a village on the outskirts of Meerut, told me when I met him in March 2017.

Also read: For India’s Farmers, Budget 2018 Is Nothing but a Hoax

Singh claimed that a year earlier, in March of 2016, he was getting a price 4.5 times higher. “At around the same time last year, I was selling at Rs 900 per quintal. At least I was able to recover my cost. But things started getting bad after demonetisation,” he said.

Demonetisation led to a severe cash crunch extending up to February 2017 in rural areas and small towns across India, and the potato wholesale market, which relies exclusively on cash for trade, was severely impacted causing a fall in prices. In addition, the new harvest of potatoes, which started trickling in by February, was a bumper crop. UP, which produces around 30% of India’s potatoes, produced 155 lakh tonnes, further increasing the downward stress on prices.

Sudhir Panwar, a professor at the University of Lucknow, former member of the state planning commission and president of the farmers’ organisation Kisan Jagriti Manch, believes that a combination of these factors led the potato wholesale market to become a buyer’s market, where the farmers did not have a choice but to accept whatever price they were being given. “Farmers desperately needed cash after demonetisation. Plus, there was excess supply of potatoes in the market. And potatoes are also a semi-perishable commodity. These factors created a buyer’s market, where the buyer determined the price and the farmer had to accept it,” Panwar said.

Recognising the problem, on April 11, 2017, the newly-elected BJP government in UP announced that it will buy one lakh tonnes of potatoes from farmers at Rs 487 per quintal. The move was aimed at pushing up prices in the wholesale market, where prices had fallen to as low as Rs 150 per quintal. However, within days of the announcement, farmers started complaining that officials at the procurement centres were being unreasonably picky with the size and shape of the potatoes that they were procuring, and that most of the produce was being turned away. Eventually, the government only procured 13,000 tonnes against the promised one lakh tonnes.

“The UP government could have addressed the problem in the beginning by procuring potatoes from farmers, but did not do so. They allowed the problem to continue and it has turned into a crisis now,” Yogendra Yadav, social scientist and politician, told me recently.

The problem snowballed in December 2017, when cold storages in the state too started dumping potatoes on to the streets. “Farmers did not turn up to take back their stored potatoes and we had no option but to throw away the potatoes that had been stored in the cold storage. The new season is almost here and it takes around two months to clean and get the cold storage ready for the next season,” said Brahmpal Singh Chauhan, manager at a cold storage in Kharkhoda, a small town near Meerut.

In order to get a better price for their produce, farmers do not sell their entire produce at the time of harvest and store around 80% in cold storages to make staggered sales through the season as and when prices rise. But during the previous year, that opportunity did not present itself as prices never rose.

“Usually around May and June, I am able to get higher prices of around Rs 1,200-1,300 per quintal for potatoes. This time, I kept waiting and waiting for prices to rise. But they kept falling,” said Devi Singh.

Madan Pal Singh at his field in Amarpur, Meerut. Credit: Munish Kumar

Madan Pal Singh at his field in Amarpur, Meerut. Credit: Munish Kumar

Cold storages charge farmers Rs 250 per quintal for storage through the season. “Prices in the mandi are below Rs 200 per quintal. Plus, there would be the additional cost of transporting from the cold storage to the mandi if I were to take back my produce from the cold storage. It would make no sense to do so,” Devi Singh told the The Wire.

At the prevailing prices, if farmers were to take their potato produce out of the cold storages, they would have to pay out of their own pockets. Their unwillingness to do so has led to a situation in which cold storages have thrown away the stored potatoes.

“We have 29 crore people in our country who sleep on an empty stomach and potatoes are being thrown away. This shows how the government has completely failed in its food management policy. They could have easily managed this situation. UP has a surplus of potatoes. But there are regions where there is deficit, and the excess potatoes could have been transported to those regions instead of being wasted like this,” said Devinder Sharma.

Devi Singh had produced 200 quintals of potatoes last season and had stored 160 quintals in a cold storage in Mathura with the hope of getting a better price later in the season. “As I am a small farmer and need cash early in the season, I usually sell around 60-70% of my produce at the time of harvest. But this time the prices were so low that I decided to wait and stored most of my produce in the cold storage,” said Singh.

But Singh’s decision backfired as the prices fell further. “Now that entire produce which I stored had been wasted as I cannot take it back from the cold storage because that will mean incurring a further loss,” he said.

Singh has two teenage sons and a 20-year-old daughter. He would like all of them to stay away from agriculture. “Kisani se jitna door rahen wo log, utna acha hai. Ismein to sirf barbadi hai. Humara kya hai? Kuch saal jiyenge ek waqt ki roti khake, fir ye hi mitti humare praan le legi (The further away they stay from agriculture, the better it is for them. It only leads to ruin. What about me? I will survive on one meal a day for some time, then this very soil will claim my life),” a stoic Singh told The Wire.

As is often the case with a crisis of this kind, the current potato crisis has left most potato farmers deeper into debt. When I met Madan Pal Singh recently, he told me that he had added a debt of Rs 3 lakh between March and December 2017 without having repaid any of his earlier debt. “I had to take the additional loan to be able to plant this season and also as my daughter was getting married,” he said. As he has not been able to repay an overdue loan from the district co-operative bank, he hasn’t been allowed further credit by the bank, and instead has had to borrow from sahukars (local money lenders) at rates of interest in excess of 30% per annum. Singh, a marginal farmer owning two acres of land, now has an accrued debt of Rs 6 lakh, of which Rs 5 lakh is from sahukars, outside the purview of any loan waiver.

“Sahukars have been hounding me every day to repay their loan. But I simply cannot. I have no money. All my hopes are now on the new harvest due in February,” Singh said.

Headed for a repeat?

However, it appears that Singh’s hopes would be crushed because we seem headed towards another bumper crop, as the Ministry of Agriculture and Farmer’s Welfare estimates production to be marginally higher than the previous year. “The situation is only going to get worse as the new harvest comes in. Prices are already rock bottom and the market will be flooded further. The government does not seem to have a plan to deal with this situation,” said Panwar.

Farm expert Devinder Sharma agrees with Panwar and goes on to add that the state has not had a plan for a long time. “This problem has been there for several years now and it has never been addressed,” he said. Sharma argues that too much attention is focused on contract farming for potato chips and on setting up new cold storages, while the real issues remain unaddressed. “The chips market is saturated. And if there was a shortage of cold storages, would potatoes have been thrown away by cold storage owners? But we keep focusing on these two as solutions whenever there is a crisis. The real problems of the market structure and role of intermediaries do not attract any attention,” he said.

Also read: Assuring Higher Farmer Income: Centre Passing the Buck to States Yet Again

Yogendra Yadav argues that in the current scenario, farmers who are already extremely vulnerable due to stagnant farm incomes are also left to bear the burden of market volatility. “Potatoes are a perishable commodity and the price is extremely sensitive to any change in supply making the market volatile. Even if the supply is ten percent higher, prices fall drastically. The farmer simply has no protection against this,” he said.

As the new harvest nears, demands for government intervention are growing. “Prime Minister Modi promised that farmers will be paid 1.5 times their cost of production. Therefore, we demand that the UP government buy potatoes from farmers at Rs 1,500 per quintal without any conditions. Also, the government should compensate the farmers for losses suffered in the previous seasons,” said Pushpendra Singh, president of the Kisan Shakti Sangh.

The Rashtriya Lok Dal (RLD), which still enjoys significant clout among the farmers of western UP despite its recent electoral failures, is threatening an agitation if the government does not address the problems of potato farmers. “The government must ensure systematic purchase of potatoes at profitable prices for farmers before the new harvest. Also, the government needs to reduce the cost of storing potatoes in cold storages. If these demands are not met, government officials and ministers will find potatoes in their offices and not on streets,” Jayant Chaudhary, vice-president of RLD told The Wire.

Kabir Agarwal is an independent journalist whose writings have appeared in The Kashmir Walla, The Times of IndiaMintAl Jazeera English and The Caravan. He can be found on twitter @kabira_tweeting.