POTATO is the most important crop in Pakistan after cereals with a potential of earning a significant amount for foreign exchange.
After meeting the domestic consumption and procurement of seed for the next growing season, the marketable surplus averages well over 1m tonnes, with a potential to generate revenue of around Rs20bn.
Russia, Sri Lanka, Malaysia, Central Asia and the Middle East are big markets for the Pakistani potato, whose quality and shelf-life is better than the Indian variety.
Unfortunately despite the crop’s great potential the local potato farmers are often unable to recover their production costs. The average price of potato in last two years remained Rs1,000/bag, which is much below the production cost of Rs1,350/bag.
Currently, a major chunk of potato seed is imported from other countries including the Netherlands and India. This escalates production costs and makes the business susceptible to market vulnerabilities
This excludes the storage cost of around Rs400/bag and the commission that growers have to pay at the rate of 5-10pc of a bag’s price to the middlemen besides transportation and marketing costs.
The current price of a potato bag is around Rs1,700-1,800 while all the cold storages in the area are booked to capacity. If the surplus is not exported a price crash looks imminent.
Abdul Hameed, a progressive potato grower and director of the Potato Growers’ Society of Okara expressed his concern over the government’s insensitivity towards the crop’s pricing.
He said the quality of agriculture data is poor and the government should consult the farmers before announcing a policy. The growers may switch to other crops if they cannot get a reasonable price for their produce,.
There is a need for introducing support price for potato. The proper compilation and dissemination of relevant data to farmers should also be managed for making informed decisions on the choice of crop.
Another important area to improve is the provision of quality local potato seed. Currently, a major chunk of potato seed is imported from other countries including the Netherlands and India.
This escalates production costs and makes the business more susceptible to market vulnerabilities. Research institutes and agricultural universities should be tasked with producing quality, affordable potato seed. A marketing board should be set up to keep a check on the activities of commission agents.
Published in Dawn, The Business and Finance Weekly, May 22nd, 2017