Calcutta, March 22: Gujarat can, Uttar Pradesh can, Punjab can, but contract farming has remained a no-no in Bengal despite the change of guard in the state.

Amid the latest potato crisis in Bengal - at least nine deaths since March 10 have been linked to the problem - some experts highlighted how the successive governments' aversion to a pragmatic approach of allowing contract farming was causing more problems in the market.

In Bengal, around 4 lakh hectares were brought under potato cultivation and the agriculture department estimated that a total of 120 lakh tonnes of potato - at least 20 per cent more than the average annual potato production - had been produced.

As Bengal has an annual consumption requirement of 60 lakh tonnes, the remaining will have to be sold to non-potato producing states.

But a surplus production of potato in other states such as Uttar Pradesh and Punjab has brought down the demand of the crop from Bengal, resulting in prices being depressed.

As Bengal has over 8 lakh potato farmers across Burdwan, Hooghly, Birbhum and West Midnapore, the government is trying to find a political solution to an economic problem by generously spending from the state exchequer.

'These do not solve the problems permanently. Next year or the year after that, the same problem of excess production will occur. But if the government continues to support the farmers by buying out their produce in case of excess production, they will never be careful in deciding their optimum quantity,' said an agriculture department official.

The Telegraph assesses the situation in Bengal and suggests what could be done to get rid of the problem.

Government action

1. Buying out: The Mamata Banerjee government has decided to buy 50,000 tonnes of potato at Rs 5.50 a kg directly from farmers.

Senior government officials said this would help small and marginal farmers earn a healthy return on their investments.

2. Withdrawal of control order: The state government has withdrawn all control orders issued in the past two years to contain the retail price of the produce that had gone up to Rs 25 a kg. The government had issued a blanket ban on export of potato to other states and on storing of more than 2,000 tonnes by a farmer in Bengal.

3. Transport subsidy: The Bengal government has decided to give subsidy to traders who would transport potato through railway or shipping. A total of Rs 100 crore would be spent for the purpose. Those who would export the produce using the railway freight carriage system would be given a subsidy of Rs 50 for each tonne while for shipping, the subsidy amount would be Rs 100 for one tonne.

TT recommends:

1. Contract farming: The government should allow contract farming for better utilisation of surplus potato as it would ensure a steady buyer for the produce at a price that would not fluctuate with market conditions.

In case of contract farming, the cultivators get seeds and fertilisers, besides technical know-how on how to raise productivity.

But senior officials said the government is against contract farming as it feels that farmers are treated like bonded labourers in this system.

'The situation, however, is different in states such as Uttar Pradesh, Punjab and Gujarat, where contract farming is helping cultivators realise a higher price for their produce,' said an official.

According to other officials, although there is a ban on contract farming in Bengal, a multi-national food processing company gives potato seeds and fertilisers to some farmers in Hooghly and buys back the produce at a good price.

'This year also, the farmers have sold their produce at a good price.... They did not have to depend on the demand in the markets. As the deal between the company and the farmers is not on paper and no farmer has lodged any complaint against this system so far, the government could not do anything to stop the practice,' said an official.

Apart from withdrawing the ban on contract farming, the government has to create an environment for food processing industries to invest here. For this, the government has to rethink its hands-off land policy and offer incentives to investors, the officials said.

The government should also encourage farmers to cultivate the chipsona variety of potato, which is used in making chips and French Fries, instead of the conventional Jyoti and Pokhraj varieties.

2. Decontrol cold storage rent: The government has to decontrol the cold storage rent to modernise the existing facilities and encourage investors to set up new utilities in the state.

As potato is cultivated once a year, unlike paddy, storage of the crop is important to keep it suitable for consumption and to export it to non-potato states through the year.

For example, Bengal has produced 120 lakh tonnes of potato this year while its storage capacity is 65 lakh tonnes. So, nearly half the produce cannot be stored and it would rot within the next two months if not exported.

Export of the tuber appears to be an uphill task because of the lack of demand in other states.

'Had there been enough storage capacity, we could have stored the produce and supplied it to other states when the demand for the produce would go up in the next few months. This could have helped the farmers get a better price,' said an official.

Sources in the cold store owners' association said the majority of the 450-odd stores in the state were more than 20 years old. The storage capacity of these stores could be enhanced if fresh investments are made.

As the government controls the rental system in Bengal, it affects the owners in two ways. First, they find it difficult to pump in fresh funds to modernise the stores and cannot benefit from the central assistance disbursed to for the purpose, officials said.

'According to rules, if the state government wants central assistance for the stores to get modernised, it has to decontrol the rent management system,' an official said.

According to officials, the rent for storing a quintal of potato in Bengal is Rs 136, while it is Rs 194 in Uttar Pradesh.

'The difference in rent is preventing entry of new investors as they don't find it lucrative in Bengal,' said a member of the cold store owners' association.

3. Stop intervening in the market: The steps initiated by the government make it clear that intervention in the market actually impacts adversely.

'Last year, storage of more than 2,000 tonnes was banned in Bengal. We apprehend that this could be re-introduced once the retail price of the produce go up in the next few months,' said a potato trader in Burdwan.

Similarly, this year's decision to buy the produce from the farmers at Rs 5.50 a kg is faulty.

'This is like an assurance that whatever you produce, the government will buy. If the farmers are aware of such a policy, would they ever be bothered about the quality and quantity of their produce?' asked an expert.

According to him, farmers in Gujarat have already started using machines to grade the produce and supply the buyers according to their requirements.

'The government has set up Krishak Bazars here, which are lying vacant. These facilities can be used for physically grading the produce. Machines can also grade the produce. Graded potato can fetch higher prices, but there is no attempt to initiate such measures,' said the expert.

'If the government wants to help the farmers, they should come forward with know-how instead of spending tax payers' money by offering subsidies,' he added.