Potato Value Chain in West Bengal

Potato (Solanum tuberosum L.) popularly known as ‘The king of vegetables’,

has emerged as fourth most important food crop in India after rice, wheat and
maize. Indian vegetable basket is incomplete without Potato. Because, the dry
matter, edible energy and edible protein content of potato makes it nutritionally
superior vegetable as well as staple food not only in our country but also
throughout the world. Now, it becomes as an essential part of breakfast, lunch
and dinner worldwide. Being a short duration crop, it produces more quantity of
dry matter, edible energy and edible protein in lesser duration of time than
cereals like rice and wheat. Hence, potato may prove to be a useful tool to
achieve the nutritional security of the nation.

It has been observed that during present trend of diversification from cereals to
horticultural crops, shifting from wheat / barley cultivation to potato cultivation,
returns more to the farmers. Potato is a major food crop, grown more than 100
countries in world.

The native South Americans brought Potato under cultivation possibly 2000
years before the Spanish conquest. In 1537, the Spaniards first came into
contact with potato in one of the villages of Andes. In Europe, it was introduced
between 1580 .A.D. to 1585 A.D. in Spain, Portugal, Italy, France, Belgium and
Germany. At present, China, Russia, India, Poland and U.S.A. contribute a
major share of total world production. It was introduced in India by the
Portuguese sailors during early 17th century and it’s cultivation was spread to
North India by the British.

Potato is one of main commercial crop grown in the country. It is cultivated in

23 states in India. Uttar Pradesh, West Bengal, Bihar, Punjab and Gujarat
account a lion’s share in total production. Country has achieved a tremendous
growth in potato production during last four to five decades. The annual
compound growth rate of potato is higher than other major food crops in respect
of area, production and productivity. In the year 2022-2023, the production was
45 million tonnes. Hence, owing its significant growth in production, bumper
yields has been observed almost in every year.

West Bengal is an agricultural economy employing 44% of its workforce in the

agriculture sector. It is the second-largest horticulture producing State in India,
after Uttar Pradesh. Among the horticulture crops, potato plays a vital role in
the agricultural economy of West Bengal. It is a Rabi potato producing state
where the sowing period is from mid-September to November, and the crop is
harvested from December to March. Around 13.4 million metric tonnes (MT) of
potatoes were produced on 4.5 lakh hectares of land in West Bengal during
TE2018-19.
The major potato growing districts include Hooghly, Burdwan, Bankura and
Medinipur. Many intermediaries such as village traders, cold storage owners,
commission agents, wholesalers, and retailers are involved in the potato supply
chain from the production of potatoes until it reaches the final consumer.
Generally, the farmers cannot sell their potato produce directly to the
wholesalers and thus sell it to the village traders near the wholesale markets.
On average, a farmer in West Bengal earns INR 5 by selling 1 kg of table
variety of potatoes. In contrast, the farm-gate prices of 1 kg of processed variety
of potatoes in Gujarat are INR 9.65/kg. From 2015 onwards, many food
processing industries have shifted their base from West Bengal to Gujarat due to
factors like the quality of potatoes and the starch ratio in the potatoes produced.
The potatoes are stored in the cold storages in West Bengal before the
consumers ultimately consume them. There were 514 cold storages in West
Bengal in August 2020, of which 90% (463 cold storages) are used for storing
potatoes. The average capacity of potato cold storage in West Bengal is around
11,000 MT. The loading of potatoes in cold storages starts towards the end of
February and closes by March-end, whereas the unloading starts from May/June
onwards and goes on till the end of the storage season in November. During the
peak season, 100% of the cold storage capacity is utilised to store potatoes, but
as the unloading starts, the cold storages capacity utilisation also starts
decreasing.
Currently, the storage rate in West Bengal is INR 157/quintal/season. Losses of
potatoes also occur during the intermediation process before it reaches the final
consumers. Temperature, humidity, and air movement can affect the stored
potatoes’ quality during the storage process. Overall, 27-30% of the losses
occur in the supply chain of potatoes in West Bengal. In 2019-20, of the 13.16
million MT of potatoes produced in the State, 4.37 million MT were consumed
by the domestic consumers, 6.79 million MT were exported to the other states,
and the remaining 2 million MT was lost during the intermediation process.
The potato supply chain involves several intermediaries ranging from village
traders, cold storage owners, commission agents to wholesalers and retailers.
The harvested crop is generally sold to village traders, as Mandis and
wholesalers are not accessible to a majority of potato farmers in West Bengal.
As a result, a farmer earns an average of INR 5 per kilo of the table variety of
potato in West Bengal. In contrast, the average farm-gate prices of potato in
Gujrat comes around to about INR 9.65 per kilo.

The State has vast growth potential in the horticulture sector, requiring a shift
from cold storages to integrated cold chains to realise its full potential.
Modernisation of the existing Commission
traditional Agents cold storages into multi-purpose cold
involved in the
storages will be the right firstintermediation
step, incentivising
process
diversification of the cropping
pattern bringing new avenues of growth for the farmers. The modernisation will
Farmers Village Wholesale Retail Vendors
Traders Markets

(Mandis)

Cold Storages
Exported
to other Consumer
Rent is regulated as per West States in West
Bengal Agricultural Produce Bengal
Marketing (Regulation)
(Amendment) Act, 2014.
Intermediation process
varies from state to state,
and is driven by potato
supply system

also help to maintain the potatoes’ quality and minimise the post-harvest losses.
Moreover, it will help the farmers to realise a more significant economic value
for their produce and boost their income.

West Bengal, a prominent horticulture producing state in the country, should set
the pace for other states to follow. West Bengal Department of Food Processing
Industries and Horticulture should lead the development of a cold chain action
plan, outlining the approach and benefits of a modern, environment-friendly
cold storage value chain in the state. The policy document should introduce
state-level subsidy support to supplement the central MIDH as Viability Gap
Finance to make the retrofitting-cum-modernisation scheme financially viable.
Moreover, the below figure also suggests some of the possible options for
recovery of investment for modernising-cum-retrofitting that can support
modernisation of the existing cold storages; organisations such as EESL can
facilitate modernising-cum-retrofitting of cold storages in West Bengal.
over 90% of potato farmers in West Bengal sell their crop to village traders
instead of Mandis or wholesalers, which can be attributed to various reasons,
including but not limited to inaccessibility, logistical issues et cetera. Further
down the supply chain, the village traders sell part of the produce to the
block/district mandis, and the remainder is stored at cold storages, at which
point wholesalers purchase the same as per demand in their respective markets.
The produce is then sold to vendors from city markets, wholesalers from other
states, and other direct-to-consumer retailers.
The cold storage business is a necessary value add to the potato farming
business in West Bengal. Farmers, traders and wholesalers hire the storage
capacity at their local cold storage to increase the shelf life of their produce.
Good quality potatoes stored in the cold storages, modernization of cold
storages, and proper farming equipment can help inflate the wholesale prices of
potatoes and thereby increase the profitability of cultivating potatoes in West
Bengal. Inhibiting factors include lack of modern technology and government
intervention, viz. lowering the slabs on electricity and rental rates.
Due to the bumper crop, and lack of post-harvest management, glut situations
risen in the market for the surplus yield every year which ultimately results in
decline the prices drastically. Varieties like Kufri, Chipsona-1, Kufri
Chipsona-2, Kufri Jyoti, Kufri Luvkar, Kufri Chandramukhi have been
released recently by different research organizations for processing purposes. In
India, there is a great scope for cultivation of potato suitable for processing.
Further, there is a rising demand for quality processed potato products from the
country particularly in Middle East. The countries like Japan, Singapore, Korea,
Malaysia, China also have a great demand for processed potato products as well
as fresh potato for processing purpose. Thus, the potato processing has opened a
new dimension for development of agro based industries in the country.