In India’s potato belt, farmers toil for a meagre harvest, while microfinance lenders profit.
Sixty-year-old Zarina was lamenting, “If God gives rain, what can we do? Next year, we will have a good price.” Zarina resides in Bakali, a village situated in the district of Jalpaiguri in West Bengal, along the banks of the Teesta River. Bakali is among the villages along the Teesta River where potatoes are the primary crop. Like many others, Zarina is also a potato farmer. She supports a family of seven, with her son being the sole breadwinner, as her husband is unable to work due to a lung disease.
The family owns 1.5 bighas (0.37 ha) of land and has leased an additional 2 bighas (0.50 ha) for potato cultivation. Her family has loans from a private microfinance institution, with an interest rate ranging 21-27 per cent. They are required to make weekly payments of Rs 625 to the loan personnel. This is not their only loan; like many villagers in this region, microcredit loans are essential to cover the expenses of potato cultivation, and these loans are used for both potato farming and other necessities, with the expectation of repaying them through potato cultivation.
Over the past 15 years, potato cultivation has become the most profitable crop in the northern part of Bengal. While tea cultivation is a lifeline in northern Jalpaiguri, potato cultivation is paramount in this region. Paddy, the other major crop, does not yield significant profit, leading farmers to shift their focus to potatoes.
In this area, two varieties of potatoes, Pukhraj and Jyoti, are predominantly grown. Pukhraj arrives in the market early, at the end of January. However, this year, the prices were exceptionally low, forcing farmers to sell a truckload of potatoes (200 packets, each weighing 50 kgs) for Rs 25,000 to 30,000 thousand (Rs 1-2 per kg). Since Pukhraj potatoes cannot be stored in cold storage, farmers had no choice but to accept the low prices, resulting in significant losses. When the Jyoti variety entered the market in late February and early March, prices rose slightly, but it was still insufficient. Jyoti potatoes were selling for Rs 55,000 to 60,000 per truck (200 packets), which translates to a mere Rs 5.5-6 per kg.
To cultivate potatoes on one bigha (0.25 ha), a farmer must spend a minimum of Rs 25,000-30,000. With each bigha yielding 70-80 packets, producing a truckload of 200 packets requires an investment of at least Rs 60,000-70,000. The entire process from planting to harvesting potatoes takes a minimum of 90 days.
This season, at the time of planting, there was a severe shortage of the preferred fertilizer of DAP (Di-ammonium Phosphate), and the farmers had to purchase alternatives at inflated prices or resort to the black market. Roni, a potato farmer, said that he managed to buy DAP at Rs 2,350 per packet. He also noted that some farmers were compelled to buy 10-26-26 fertilizer at Rs 2,100 per packet, whereas the market price was only Rs 1,650 per packet.
Sumon (40), an educated young man, has a family but no job. Consequently, he cultivated potatoes on his brother-in-law’s land. Sumon has also taken microcredit loans, and due to low prices and untimely rain, he is struggling to meet the instalment payments. He claims to have borrowed Rs 40,000, but after tax deductions, he received only Rs 38,000.
The same predicament befalls another potato farmer, Sahima Begam, and her husband Fajarul Hoque. They have two loans, one with a 21.65 per cent interest rate and another with a 21 per cent interest rate. Fajarul cultivated potatoes on his own land and leased land from other villagers. He harvested nearly 300 packets of potatoes but lacked the necessary bonds to store them in cold storage. Although there are cold storage facilities available in the Dharampur Gram Panchayat (Bakali) for 35,000 packets, Fajarul couldn’t obtain coupons for the bonds due to the absence of Krishak Bandhu IDs.
Krishak Bandhu is a programme by the West Bengal government to give financial help to farmers for rabi and kharif crops. To obtain a Krishak Bandhu ID, a farmer must possess a Khatian (Record of Rights). Eventually, he secured bonds for only 50 packets after standing in a long queue at the cold storage facility with his Aadhaar card. The cold storage authority occasionally provides bonds to farmers without Krishak Bandhu IDs only if they have remaining bonds after fulfilling their government and other quotas.
However, this process is uncertain and often requires farmers to endure long wait times. According to data published in the publication Uttarbanga Sambad on March 12, 2023, 33,050 ha in Jalpaiguri district alone were used for potato cultivation, resulting in a total harvest of 86,500 tonnes of potatoes. Furthermore, the district boasts 23 cold storage facilities with a combined capacity of 402,500 tonnes, leaving an excess of 462,500 tonnes of potatoes. An investment of Rs 950 crore has been made in potato cultivation in Jalpaiguri district alone.
The distribution of bonds is a complex process. Some farmers either failed to secure bonds or resorted to purchasing them on the black market due to their lack of Krishak Bandhu IDs or Krishan Credit Cards (KCC). With a KCC, farmers can obtain loans from Public Sector Banks at a lower interest rate. When asked why he lacked a Krishan Bandhu ID or KCC, Fajarul sighed, stating, “To obtain a KCC, I need land Khatian (Records of Rights), and to obtain Khatian, I need money. I couldn’t afford it.”
Fajarul, like other Muslim farmers in the area, belongs to the Nashya Shaikh community, a marginalised minority within the Rajbongshi Muslim community, facing economic and social challenges. In 1968, Jalpaiguri was severely affected by a devastating flood caused by the Teesta River. Bakali, being situated on the Teesta’s banks, was completely submerged. Many poor villagers lost their property documents, and while some of the affluent managed to recover some of their documents, the poor were unable to secure their land papers.
Additionally, after land reforms were implemented under the left-wing government that came to power in Bengal in 1977, sharecroppers (bargadars) obtained land from the zamindars but encountered difficulties registering the lands in their names. Some are still grappling with land mutations.
Consequently, a significant portion of farmers remains excluded from the benefits of the Krishan Credit Card. These farmers are unable to sell their paddy, the main crop of the region, to Kisan Mandi and are forced to sell it to local businessmen at lower prices. To sell at Kishan Mandi, a farmer must provide land papers.
Similar to Fajarul, Harun, another potato cultivator, lacks a KCC. As a result, they turn to private microcredit loans with high-interest rates. These loans are also used for purposes beyond agriculture, such as home construction, with potato cultivation serving as a means to repay the loans. The easy availability of these loans has contributed to their popularity in Jalpaiguri and Cooch Behar. When the government announces a moratorium on farm loans, these villagers are excluded from the benefits because the moratorium only applies to loans from Public Sector Banks.
Nuru, the son of Nazrul, is another potato farmer who has cultivated potatoes on 3.5 bighas(0.87 ha) of his land and leased an additional 2 bighas (0.50 ha) at a rate of Rs 3,000 per bigha. His wife, Rumi Khatun, also has a microcredit loan with a 21 per cent interest rate. Interestingly, the loan documentation provided by the bank is in Hindi, a language neither Rumi, Nuru, nor any other family members can read. As a result, they are unaware of the exact interest rate but are only familiar with the weekly or monthly payment amounts.
According to MFIN Micrometer Q4 FY21-22, a quarterly report published by the Microfinance Institutions Network (MFIN), Tamil Nadu had a gross loan portfolio (GLP) of Rs 36,806 crore as of March 31, 2022. This was followed by Bihar (Rs 35,941 crore) and West Bengal (Rs 34,016 crore). West Bengal had the highest average loan outstanding payment per borrower at Rs 53,708, followed by Kerala at Rs 46,704. Both West Bengal and Kerala are agricultural States. India’s top five States in terms of gross loan portfolio are West Bengal, Tamil Nadu, Bihar, Karnataka, and Uttar Pradesh. On a district-wise basis, nine out of ten top districts are in West Bengal. These include North 24 Parganas, Murshidabad, Jalpaiguri, Nadia, South 24 Parganas, Bardhaman, Hooghly, Howrah, and Cooch Behar, according to Sa-Dhan.
Abdur Rashid (62), a farmer from Baganbari, an adjacent village to Bakali, has cultivated potatoes on a total of 9 bighas of land(2.25 ha) with 6 bighas(1.5 ha) belonging to him and 3 bighas(0.75 ha) leased at a rate of Rs 4,000 per bigha. His son, Roni, an educated young man, expressed disappointment when untimely rains in the second week of March damaged the potato crop. He even shared pictures of his waterlogged potato fields, explaining, “The water in the fields is gradually receding, but we can’t harvest the potatoes now. Those submerged will begin to rot in 3-4 days.” He criticised the delay in the cold storage facilities’ opening, as they only began accepting potatoes on March 17th. If they had opened earlier, the potatoes could have been harvested and stored before the rain arrived. The area was hit by heavy rain in the second week of March.
The same situation is faced by Mahabubar Rahman (60), once a dedicated CPIM cadre who has transitioned into potato farming. He harvested 600 packets this season and raised valid questions during our conversation. Unfortunately, no one was available to address them. He inquired, “Why do we still rely on Punjab for good quality seeds? Why is the distribution of cold storage bonds arbitrary? Why doesn’t the government establish cold storage facilities? Why can’t we export our potatoes? Why do the storage facilities open so late?”
Not every farmer can afford to store potatoes, as storing and selling them after a few months does not always guarantee higher prices and involves significant carrying and storage costs. To transport 100 bags of potatoes to storage, Mahabubar Rahman incurs expenses of Rs 4,000, with a storage charge of Rs 100 per packet. This means that storing 100 packets in cold storage costs him approximately Rs 15,000. Consequently, if farmers like Rahman fail to sell their stored potatoes for Rs 1 lakh per truck when they are eventually released between September and December, they will suffer significant losses.
Profits of hoarders
All small farmers had sold their potatoes by the end of March, and those who obtained bonds for cold storage had already sent their potatoes for storage, as small farmers and sharecroppers encountered challenges in acquiring bonds.
Since the cold storage facilities are privately owned, owners sell bonds to large businessmen and hoarders. Consequently, as farmers and big businessmen sold their potatoes, and hoarders stored them, the price of potatoes began to rise. In the past five days, the price of potatoes doubled.
Pranagopal Bhowal, the president of AIKS (All India Krishak Sabha) in Jalpaiguri district, voiced his concerns: “The government decided to purchase potatoes at a low price, so farmers were reluctant to sell to the government. The lack of government centres, kiosks, or stalls for purchasing potatoes from farmers allowed hoarders to buy from farmers and store them.” Now, with the storage period coming to an end, potato prices are skyrocketing, and farmers are facing losses. It’s a government conspiracy, he told Bengali daily Uttarbanga Sambad.
According to West Bengal’s Minister of Agriculture, Becharam Manna, the government capped the price at Rs 6.5 per kg, but the farmers did not sell to the government as they received better prices elsewhere. “The government has succeeded in providing a good price to the farmers. The Ministry of Agriculture will work to regulate potato prices throughout the year,” he told local media. This statement reflects a lack of understanding of the ground reality. Notably, the government did not purchase a single packet of potatoes from my village or my district, Jalpaiguri.
No relief for the farmers
For the past few years, farmers have been grappling with untimely rains during each potato harvesting season. When potatoes are submerged in water during harvesting, they rot in the ground, leading to farmers losing the opportunity to store them as seeds for the next planting season. Consequently, they must purchase seeds for the following season, increasing cultivation costs. Untimely rains also damage other crops like pumpkins and garlic.
In the past, poor farmers would invest any extra income in livestock such as hens, goats, ducks, and cows to secure their future. However, since private microfinance companies entered the scene, they have been absorbing every spare penny from the poor. These farmers are currently walking a fine line, but their precarious situation could lead to dire consequences if they remain trapped in debt. Thus, it is not surprising that individuals like Sahima Begum resort to selling betel nuts to meet their loan installments.
People like Zarina, Allah, and Sarkar find themselves in similar situations. They may not have faith in the same solutions, but they share a common struggle. The question remains whether the authorities are aware of the challenges faced by people such as Zarina and if they exist within the government’s imagination.
Moumita Alam is a freelance journalist based in West Bengal.