India Faces Acute Cold Storage Shortage

Potato farmers in India are facing big challanges. While potato production has been increasing year after year exports have seen a decline due to unsuitable domestic varieties and an underdeveloped food processing value chain, the Business Standard recently noted. The report also highlights the fact that farmers looking to store their yields in cold storage find no space.

Even as the government offers a minimum support price (MSP) of Rs. 5.5/kg in Uttar Pradesh and Bengal – the country’s top producing regions – farmers say the sum does not cover production costs, as cold storage levy is Rs. 2.5/kg. Transport costs are another reason why farmers apprehensive about using cold storage facilities.

The report also notes that in 2018-2019 production was estimated at 52 million tons and consumption only at 32 million. The current season is also expected to see over-production and the storage facilities are already full. Kolkata-based potato trader and cold storage owner Patit Paban Dey told the publication there is an urgent need to increase the per capita consumption in southern India, where it is below the national average 20kg/year.

According to Agra-based Rajesh Goyal, acting president of the Federation of Cold Storage Association of India, back in 1998 the retail price of potato in Uttar Pradesh was around Rs. 20/kg. But in the 20 years since, farm input costs for potatoes have doubled from Rs. 3/kg to Rs.7-8/kg. Moreover, the price in Angra’s wholesale market has been Rs. 5-6/kg since January 2017, except for the April to November period when it was Rs. 10-15/kg. Since 2015, only in November 2014, has the wholesale prices been above Rs. 20/kg.

Last year, the Uttar Pradesh government had stated it would procure 100,000 tones directly from farmers at MSP. Actual procurement was only 13,000 tones at sub-MSP prices. At present, the government of Bengal said it would procure 1 million tons at MSP of Rs. 5.5/kg, said the report.