Retail dumping by companies sinks potato prices, Gujarat farmers suffer losses
There has been a significant rise in potato production over the last decade in Gujarat, with a record 12,39,769 metric tons of potato being produced. Despite the surge in production, market prices of potatoes have sharply declined, leaving farmers in financial burden.Farmers say that this crisis primarily relates to the rapid expansion of contract farming, which has inflated both the area under cultivation and the overall yield. As a result, there has been an oversupply of the vegetable in the market, which has pushed the prices down to ₹120-₹140 per quintal (equal to 100 kilograms) this year, almost half of what farmers earned last year (₹230–₹250 per quintal).Farmers spend ₹40,000 to ₹45,000 per acre on cultivation, while their returns are barely ₹30,000 to ₹35,000, creating a huge gap between input and output costs. Adding to their woes, cold storage rental fees have increased from ₹2.60/kg to ₹2.70/kg for eight months, making it difficult for small-scale farmers to store their produce and wait for better prices.Farmers allege that companies involved in contract farming are selling raw potatoes directly to retailers.They suggest that if companies refrained from retail dumping, prices could stabilise, benefiting both independent and contract farmers.Lakshmanbhai Chaudhary, a farmer from Nanosana and member of the North Gujarat Potato Contract Farmers Association, stated that agreed prices are not being respected by companies.The association had fixed the purchase rate at ₹267 for 20 kilograms, but many companies have paid only ₹240.“Companies ask us to grow potatoes based on fixed prices, but later dump their produce into the retail market instead of making processed products. This has directly impacted the market price and our income,” Chaudhary said.
There has been a significant rise in potato production over the last decade in Gujarat, with a record 12,39,769 metric tons of potato being produced. Despite the surge in production, market prices of potatoes have sharply declined, leaving farmers in financial burden.
Farmers say that this crisis primarily relates to the rapid expansion of contract farming, which has inflated both the area under cultivation and the overall yield. As a result, there has been an oversupply of the vegetable in the market, which has pushed the prices down to ₹120-₹140 per quintal (equal to 100 kilograms) this year, almost half of what farmers earned last year (₹230–₹250 per quintal).
Farmers spend ₹40,000 to ₹45,000 per acre on cultivation, while their returns are barely ₹30,000 to ₹35,000, creating a huge gap between input and output costs.
Adding to their woes, cold storage rental fees have increased from ₹2.60/kg to ₹2.70/kg for eight months, making it difficult for small-scale farmers to store their produce and wait for better prices.
Farmers allege that companies involved in contract farming are selling raw potatoes directly to retailers.
They suggest that if companies refrained from retail dumping, prices could stabilise, benefiting both independent and contract farmers.
Lakshmanbhai Chaudhary, a farmer from Nanosana and member of the North Gujarat Potato Contract Farmers Association, stated that agreed prices are not being respected by companies.
The association had fixed the purchase rate at ₹267 for 20 kilograms, but many companies have paid only ₹240.
“Companies ask us to grow potatoes based on fixed prices, but later dump their produce into the retail market instead of making processed products. This has directly impacted the market price and our income,” Chaudhary said.
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