Pakistan is a leading grower of potato — a vegetable which is relatively affordable even for the poor when compared to other vegetables available in the market. It is consumed extensively and cooked in myriad ways. Potatoes can be mixed and used with other vegetables, cooked with meat or rice, deep fried, filled in bread and so on. One can say it is a food fit for all and that also at reasonable rates.
However, this year the situation is different and this popular vegetable is getting out of reach of common man. The prices at the moment are more than double of what they normally are over this time of the year. This is despite the fact that the current yield of potato is more than the total demand of the country which hovers around three million tonnes.
It can be safely said that there was a surplus of 1 million tonnes which was enough to cater to the export needs of the country or to meet any unexpected demand. Potatoes were exported in large quantities to Afghanistan and Iran but people associated with agriculture business say this is a regular phenomenon and should not have had such an impact on potato prices in the local market.
So, the question that arises here is as to what are the factors which are pushing the prices upwards every other day. Different stakeholders are citing different reasons amid apprehensions that traders, stockists and hoarders are colluding with each other to make money through speculations and creating artificial shortage in the market.
Against this backdrop, the government of Punjab — the province which produces close to 80 per cent of potatoes in the country — has issued warnings to stockists and traders and asked them to bring potato prices down to Rs30 per kilogram from the existing Rs60 and above.
Punjab Minister for Food and Chairman Cabinet Price Control Committee Bilal Yaseen has attributed the escalation in prices to manipulation by hoarder and hinted at steps to discourage export of potatoes. This statement has come at a time when the federal government has shown its intention to allow duty free import of potato from India.
Dr Tariq Bucha, President Farmer Associates Pakistan, tells TNS that the reason behind increase in potato prices are simple and the government should not suspect the farmers and traders in agriculture business. He says this year the yield of potatoes was less than normal and the major reason for this shortfall was adverse weather and extension in winter season. Huge quantities of potatoes were destroyed due to frost and there was re-sowing which ultimately increased the input costs.
Secondly, he says the cost of inputs has increased considerably over the years, which is 17 to 19 percent on all agricultural inputs. This ultimately translates into a cumulative effect of 23 to 25 per cent on the price of agricultural products, he adds. He says if the government wants to make food affordable for common man it should remove these taxes instead of raiding godowns of farmers and confiscating their crop.
Besides, Bucha says there was 3.5 per cent reduction in cultivation areas as farmers were not getting good price for the last three years and they decided to go for some other crop. There was further pressure on demand as Russia has lifted ban on import of potatoes from Pakistan. In the last four months, he says, 80,000 tonnes of potatoes have been exported to Russia and there are further orders of 20,000 tonnes yet to be fulfilled.
The government seems helpless in bringing down the prices and the only option it can think of is to allow duty free import of potatoes from India. Currently, there is a 25 per cent import duty, advance taxes and levy on these imports from India.
Khalid Khokhar, President Pakistan Ittehad Council, says farmers of the country have rejected the government’s decision to allow duty-free import of potatoes from India. He tells TNS they will hold protests against the decision from Okara to Rahim Yar Khan, the main agriculture belt of the country.
His point is that it is unfair to import potatoes from a country which gives subsidy worth Rs100 billion to its agriculture sector. He says it is strange that the government is ready to forgo the import duties and taxes earned from imports from India but not willing to give partial relief to the heavily taxed local farmers.
Hafiz Zahid, a trader in farm products, says he lives near Bund Road, Lahore where too many cold storages are located and sees long queues of truck every day. These trucks carry potatoes to be stored there for long periods. He says as it will take summer crop around two weeks to arrive from northern areas, people are investing in them to benefit from the increase in their demand.
Zahid fears the demand will further rise with the advent of Ramzan when eating habits in the country change overnight. He says it is expected that the prices will go up to Rs100 or even more if no measures are taken by the government in this regard. He says two years ago people could import duty free potatoes to bridge the demand-supply gap but this is not the case at present.
Zahid says the eating up of agricultural land around cities due to housing projects has also led to an increase in prices of agricultural products. In the past, transportation costs were minimal but today they reflect heavily on prices. “You can well imagine how much it costs to bring agricultural products from a distance of 100 kilometres or more,” he says.
Dr Bucha objects to allegations of hoarding against farmers and traders for profiteering. He says it is a normal practice to stock agricultural products and release them in the market as per their demand. “Do you think three million potatoes can be supplied in the market at one particular time? Who would buy and eat such huge quantities.” He says it is not always the stockists who keep agricultural products in cold storage. Farmers also avail this option and bring the produce in the market when they feel they will get good return on their investment, he adds. He cites the example of government buying wheat and keeping it in godowns all over the years. “Can we call government a hoarder?” he questions.
An official in the Agriculture Department contests the claim that the input cost has got to do with the prices that exist at the moment. He says the potato available in the market was sown in October 2013 and the cost of production was around Rs12.5 per kilogramme. Even if the losses caused by frost are taken into account, this cost is not more than Rs20 per kilogramme, he adds.
The official believes the game is not in the hand of farmers and the market was being manipulated by hoarders. If a farmer has stored his produce in a cold storage, he says, he should not be considered a farmer and be taken as a hoarder as the nature of his work changes. He says it is a fact that there is a shortage in supply and one reason for it is that half a million tonnes of potato have been exported formally and smuggled out of the country. “Potato import is imminent as it will reduce pressure on demand and force hoarders to release stocks which they are holding to make undue profits.”