Forty-three year old Mintu Ghosh, a potato farmer from Bankura district, approximately 200 km from Kolkata, is happy that he took the decision to scale up cultivation of potatoes for PepsiCo India.

He is among several farmers in Bengal who are increasingly taking to cultivation of potatoes for processing by companies such as Pepsico, ITC and Parle Agro.

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.

Big earnings

“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 .

A farmer can typically grow close to 120 bags (of 50 kg each) of Jyoti potatoes on one bigha of land. He incurs expenses of around ₹20,000 per bigha. While the expenses incurred on growing Pepsi potatoes is slightly higher at around ₹22,000-23,000 per bigha and the yield is close to 100 bags (of 50 kg each), the higher price offered by the company more than offsets the relatively lower yield and high costs.

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.

For farmers engaged in PepsiCo’s collaborative farming, it is not just about an assured buy-back at pre-agreed prices but also the handholding support extended by the company. Apart from supplying high-quality planting material, the company regularly conducts sessions on capability building for growers; provides training on better agro practices, judicious use of fertilisers, chemicals and water.

Growing demand

“There has been close to 20-25 per cent growth in the number of farmers going in for cultivation of such potatoes (used for processing) on a year-on-year basis. The area under cultivation has also witnessed a steady rise and has increased by nearly 10 per cent this year as compared to last year,” said Ram Pada Pal, owner of Sri Gourango cold storage.

The cold storage, which is in the Hooghly district of West Bengal, has a separate storage facility for potatoes for processing companies such as PepsiCo, ITC, Parle. Compared to others, PepsiCo continues to be the highest procurer of these potatoes.

Rinkesh Satija, Director - Agri, PepsiCo India In West Bengal, confirmed the growing demand. The company has been expanding potato sourcing in the State over the years. PepsiCo sources the entire quantity of potato used in Lay’s and Uncle Chipps from farmers in India.

“We work with around 11,000 farmers in West Bengal, and our potato cultivation collaboration covers around 9,500 acres in the State as compared with 5,300 acres in 2010,” he said.

Cold storages have also been ramping up their infrastructure and making suitable changes so as to be able to cater to the increasing demand for storing such potatoes. Storage houses get almost 70 per cent higher rentals storing such potatoes.

Depending on their location and infrastructure cold storages can earn as much as ₹250 a quintal as rent for storing potatoes used for processing as compared to the ₹148 a quintal price fixed by the State government’s rent control act.