According to a news report by BusinessLine, many potato farmers in India’s Bengal state increasingly prefer to cultivate potatoes under contract for processing by companies such as PepsiCo, ITC and Parle Agro, rather than the open market.
The potato variety owned by PepsiCo India (referred to by locals as the ‘Pepsi’ variety) is preferred by food processors, and although the variety has a lower yield and costs more to cultivate, the final product sells for more than double the price that growers receive for the traditional Jyoti variety.
BusinessLine cites the example of forty-three year old Mintu Ghosh, a potato farmer from Bankura district, approximately 200 km from Kolkata, who says he is happy that he took the decision to scale up cultivation of potatoes for PepsiCo India.
Ghosh, who owns around 10 bigha of land (approximately 4 acres), used to cultivate the common Jyoti variety on nearly 8 bighas and the “Pepsi” variety (as it is commonly known) on the remaining area till about two years ago.
However, he decided to increase cultivation of the Pepsi potatoes last year following a price crash of the tuber for two successive years.
In 2017, bumper production of potato saw prices crashing. In 2018 again, though production was nearly 9 per cent lower as compared to 2017, prices, which were initially firm, started dipping after August-September as farmers and traders had loaded excess stock in cold storages in anticipation of prices firming up.
In 2017, prices were ruling at around ₹240 a quintal; in 2018 this came down to as little as ₹200-220 a quintal in November-December.
“I earn close to ₹800-820 a quintal for Pepsi potatoes, as compared to ₹400 a quintal for the Jyoti variety. So, I decided to increase the area under cultivation. I am not alone, there are many other farmers in my locality who are also resorting to this to earn better price,” Ghosh told BusinessLine.
Farmers growing Pepsi potatoes this year are therefore likely to make a clean gain of around ₹17,000 on every bigha of land cultivated; while those growing the Jyoti variety stand to earn only around ₹4,000 per bigha, excluding all expenses.