The State of West Bengal is reeling under an acute potato crisis due to a lack of availability of cold storage facilities. While the State produces 11.5 million tonnes of potatoes annually, there is a storage capacity of only 7 million tonnes.
State government controls rental prices of cold storage facilities
To add to the problem, the government controls the storage rental prices. Patit Paban Dey, the president of the West Bengal Cold Storage Association was quoted in an Economic Times report as saying, “While the storage rate per tonne in adjacent Bihar is ₹2400, here it is ₹1360 only and is much lower than in any other state… As the rate is controlled by the State government, we cannot change it. The government must re-set the rate.”
Dey further added that the initial investment for cold storage is around ₹8000 per tonne with an operational cost of ₹1250 per tonne per season. However, the rental amount is fixed at ₹1360 per tonne. As such, there is a significant decline in investment by potato traders in cold storage facilities in West Bengal.
Farmers forced to sell potatoes at low prices to traders
Due to the chronic shortage of cold storage capacity, farmers need to procure ‘bonds’ by paying an upfront fee for partial storage. Due to a lack of financial resources and cold storage facilities, several farmers are compelled to leave their harvest in the fields. They are also forced to sell their harvest at low prices to influential traders who profit when prices soar up. Speaking of this trend of hoarding and profiteering, a trader from Jalpaiguri stated, “This beneficiary group never likes any capacity augmentation that can spoil the profit chain.”
CMO refuses to clear 42,000 tonnes of potato stockpile
The West Bengal government had reportedly procured 42,000 tonnes of potatoes to ensure ‘fair price’ to the farmers, as per a report in Anandbazar Patrika. Another objective behind the move was to stabilise market prices in case of chronic shortage. Despite clearance from the Agriculture Department of the State and the rise of potato prices to ₹40/kg in the open markets, the Chief Minister’s Office has refused to budge. Had the government released the potato stock, it would not have to sell subsidised potatoes ( at ₹25/kg) via the stalls built under the ‘Sufal Bangla’ scheme.
As per reports, the Agriculture Department has no explanation as to why the CMO had not cleared the stockpile of potatoes from the cold storage. The West Bengal government is losing out on extra ₹1.5 – ₹2 lac rupees everyday by buying 1000 sacs of potatoes each day from the open market and selling it at subsidised prices. The Agriculture Department is of the view that the release of the potato stock, possessed by the government, will help stabilise the market price.