In a recent news release, the Dutch Ministry of Agriculture, Nature and Food Quality reports that (Indo-)Dutch companies believe they can help establish more sustainable value chains for potato farmers who are struggling to get remunerative prices in certain regions of India.
According to the government’s news release, it is essential that Indian farmers plan on how to ride the wave of potato production, together with other stakeholders including policymakers, private sector companies and financial organisations. ‘This will require effort, perseverance and patience. Slowly and surely that can be achieved, with Dutch partners supporting Indian farmers with the right varieties, storage facilities and processing equipment.’ Dutch companies providing these solutions, from planting material to processing equipment, believe that their technologies can help Indian growers of potato crops.
Potato prices have crashed this season. Farmers of Uttar Pradesh, the largest potato growing region in India, are staring at a loss as the current market prices make up for just 25 to 30 percent of the costs farmers incur in growing. Reasons for this drop in market prices are manifold, the news release states. ‘Even though Uttar Pradesh has the largest number of cold storages in the country, last year’s stock is still available, which makes it difficult to create more storage space for the harvest this year. Farmers also have increased the production of new varieties of table potatoes, which have a shorter growing period but also a shorter shelf life. Many farmers of Madhya Pradesh and Rajasthan, the adjoining states of Uttar Pradesh, have also shifted to growing the same potato varieties, whereas earlier they used to grow garlic.’ When interviewed, Indian potato farmers mentioned that the retail companies usually buying the produce for their stock, have not approached them to buy potatoes. Farmers in Punjab, the potato growing state mostly known for growing seed potatoes that are supplied across the country, are earning less than half of last year’s price. Taking a learning from this, farmers in Gujarat, the state that houses the largest number of potato processing companies of India, are planning to shift to cultivating processing varieties. These farmers have approached the Indian government to discuss how growing processing varieties can be supported.
Hemant Gaur, Managing Director at SV Agri, representing Dutch companies Mooij Agro, Agrico and Kuipers in India, feels that many lessons can be learned from the glut that the Indian potato sector is currently facing. He explains that while many potato farmers in Uttar Pradesh are not able to recoup the prices of producing potato, farmers who have grown processing varieties are reaping a reward as the local government is helping them to export to neighboring countries as well as to Malaysia and the United Arab Emirates. Gaur says that it is only easy to export potatoes to other countries when internationally known varieties are grown. He states that, as the Dutch companies have the largest number of varieties that are internationally known, the Indian government allowing and promoting growing internationally accepted varieties will help to open markets in more countries. Gaur also mentions that, to make value added products like potato flour, powder, flakes, granules and pellets, India needs a bigger volume of processing potatoes. Furthermore, companies who want to produce these value added products need equipment that can efficiently handle such volumes. Gaur thinks that Dutch equipment suppliers will be the right partners to help Indian processors with this development. Kiremko India CEO Bhavana Vishwanath echoes SV Agri’s managing director: ‘Indian potato growers should be encouraged or incentivised to grow processing varieties.’ She concludes with the suggestion that Indian companies or farmer producer organisations who want to set up potato processing plants should be able to benefit from interest subvention schemes* that will help them in purchasing the right equipment and inspire them to invest.
* Interest subvention is the reduction of interest rate, when granting a loan to a party. Traditionally, these subvention schemes have been offered by the Indian government to the Agricultural or Educational sector and can be categorized as a subsidy, and this can be also be called priority sector lending. Read more here.
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