The Telegraph
Sunday , August 10 , 2014
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Potato quota scrap fuels price rise

Calcutta, Aug. 9: The Mamata Banerjee government’s decision to scrap the space quota of farmers at cold storages has contributed to the rise in potato prices, a section of officials said today.

Earlier this year, the government had replaced the old quota system, under which 40 per cent of the space of a cold storage was reserved for farmers, with a first-come-first-served policy.

The officials said the new system was helping traders, who buy potato from farmers, rig prices by manipulating supplies.

“We have come to know that only about 85,000 tonnes of potatoes have been released to the market in the past one week while the consumption requirement is 1.25 lakh tonnes. We are certain that the cold storages have at least 31 lakh tonnes of potatoes. This means there is no real shortage,” an official said.

The officials said the stock in the cold storages was much more than the requirement of around 25 lakh tonnes till December, when the new crop will arrive. They accused the traders of creating an “artificial shortage”.

Under the previous system, the cold storage owners had to set aside 40 per cent of the space for small and marginal farmers. Of the remaining 60 per cent, 10 per cent space was reserved for the zilla parishad and the district magistrate and 50 per cent for whoever else wanted to store stock. The entire quota system has been abolished.

A member of the West Bengal Cold Storage Association said that had farmers been allowed to store a considerable portion of their produce, the supply chain would not have been affected.

Farmers reinvest the money earned from the sale of the tuber in cultivation in monsoon (July-August) and winter (October-December). So they bring their stock to the market during these two periods, when the price of potato goes up following an increase in demand because of several factors.

According to the cold storage owner, the abolition of the quota had allowed traders — who have more stock available with them than farmers — to book more space in cold storages. He said traders were reasonably better off and knew how to manipulate the system to earn higher returns, adding that this was one of the main reasons for the rise in potato prices.

Potato is now selling at Rs 22 a kilo in Calcutta markets and Rs 20 a kilo in the districts.