West Bengal’s Potato Politics Exposes Odisha Supply-Chain Flaws

High potato prices have consistently made the headlines in Odisha since West Bengal government stopped supply to other states around mid-July. While the northeast states that depend on potatoes from West Bengal were able to meet local demand through imports from neighbouring Bhutan, Odisha was left scrambling for supply of this much-loved staple.

Odisha Chief Minister Mohan Majhi has made several requests to his West Bengal counterpart Mamata Banerjee to restore supplies, but she has not relented. Odisha has thus been forced to seek potatoes from Uttar Pradesh, which is as distant as Bhutan but logistically easier.

Despite being the top potato-producing states, accounting for nearly 50% of India’s potato supply, even UP and West Bengal are witnessing high potato prices, hinting at supply and price manipulation by cold storages and traders.

As ordinary citizens are forced to buy potatoes at Rs 50 and above per kg in Odisha, the discussion veers to the production/consumption mismatch. According to available information, Odisha’s annual potato consumption is 13 lakh tonnes, while production is around 3 lakh tonnes. However, the production figures, often quoted in media reports, seem to be outdated and incorrect.

As per a report in The New Indian Express dated March 13, 2023, there was a bumper potato crop in Odisha last year, with traders offering only Rs 5 per kg to farmers as the wholesale price was Rs 10 kg. The report quotes Horticulture Directorate sources as saying that they expected the yield to be around 6 lakh tonnes at an average of 20 tonnes per hectare. As neighbouring West Bengal produces about 12 million tonnes a year, Odisha does not stand a chance to sell its potatoes to other states. It must keep potatoes produced in the state in cold storages as part of crop management.

The report further revealed that thanks to the area expansion programme through the cluster approach, potato cultivation area increased to 33,000 hectares in 2022-23 from 27,155 hectares in 2021-22. The anticipated production in 2023 was 7.26 lakh tonnes. According to the state Horticulture Directorate, Odisha envisages to produce over 13 lakh tonnes of potatoes by 2024-25.

The sudden embargo on potato supply from West Bengal to Odisha and other states has disrupted the supply chain and led to increase in local market prices. However, the real issue for Odisha lies in the lack of cold-storage facilities that could store potatoes at cost-efficient prices and meet local demands throughout the year.

The pressure on existing cold-storage facilities during the potato harvest season, when 90% of the annual production becomes available at once, leads to plummeting prices and wastages. This, in turn, contributes to the national potato wastage, which amounts to 16% of total production. Nearly 68% of national cold-storage capacity is used for potato storage. Given this, there is a clear need for better strategies to reduce the wastage and add more storage capacity.

With 60 million tonnes, India is the second-largest potato-producing country in the world. China produces 90 million tonnes, while the European Union’s combined production is 55 million tonnes. India has a low per capita potato consumption at 24.5 per kg in contrast to 90 kg in Europe and 117 kg in the US. Nepal buys potatoes worth $50 million per year from India and boast a per capita potato consumption of 75 kg.

In this light, the elevated potato prices in India are even more alarming. What if Indians’ potato consumption increases to match their European, US, or even Nepali counterparts? Potato consumption in India will surely grow in line with the global trend. Given this, the current potato crisis in Odisha and elsewhere is a wake-up call to put in place a clear strategy for producing and managing the potato crop more efficiently in the country.