The Union government announced on 12 April 2017 that it would buy up to 1 lakh tonnes of potato grown in the 2016-17 crop year at Rs 4,870 per tonne from the Uttar Pradesh farmers to protect them against the drastic reduction in prices.
The centre would also be giving them an additional amount of Rs 1217.60/tonne to help them bear all their overhead costs.
• The decision was approved by the Union Agriculture Ministry under the Market Intervention Scheme (MIS).
• The scheme would be implemented by the state agency.
• Under the scheme, a maximum of 100000 metric tonne of potato may be procured.
Overhead expenses covered under the scheme include transportation charges, mandi tax and godown charges.
• The centre, where the purchase will take place, will be decided by the state government in coordination with the state agency.
• The crop would be bought directly from those who grow it such as the farmers’ organisations and cooperative societies in order to eliminate the role of middlemen, who might take advantage of the scheme.
• The government will ensure that the sellers are genuine farmers.
• The government would also ensure that the payment is made through cashless transactions, preferably through demand drafts, as far as it is possible.
• Barter system or payment in kind in exchange for the crop would also not be allowed.
• The procured stocks will then be disposed of in the open market to ensure maximum realisable price.
• The products if necessary may also be sold to processing units within the state.
• The state agency would also try to export the processed potatoes.
However, the stock would not be sold at the same market rate at which it had been procured during the period of the scheme, in order to avoid recycling. If the prices are better, it may also be sold locally.
The Potato crop, which has seen an unusually productive harvest in the crop year 2016-17, is facing a drastic fall in its rates in Uttar Pradesh, its leader producer. The wholesale rates of the crop have fallen even below Rs 4 per kg as against Rs10-12 per kg about a year ago.
Overall, the country’s total potato output in this crop year is expected to be around 49 million tonnes.
Who: The Union government