Scope for potato processing industry in Bangladesh
Frequent undue price fluctuations create uncertainty about the market price and enhance risks in potato production as well as potato business
Saifullah Khandker and Ashish Basak
Its high time we to rethink about the processed potato products and markets diversification for the sake of the farmers. The production of potato is increasing in Bangladesh, but excess production is creating havoc due to a glut in the market. Although, Bangladesh is the eighth largest potato producer in the world and third biggest in Asia, potato is consumed as a vegetable here, where in many countries it is a staple food.
According to Bangladesh Bureau of Statistic over 10 million tons of potato produced in 2017, and 5.3 million tons of potato kept in 390 cold storages across the country to maintain a sustainable supply during the year. Unfortunately, up until December 2017, 60per cent of the potato sitting in the cold storage due to the downward trend of the potato price. Moreover, new potato started to enter in the market from December, in this situation, what would the farmers do with the potato kept in the storage is in question! Currently, farmers are discouraged to store the potato in cold storage as the storage cost is higher than the cost of the produce. However, at present two-thirds of the total produce do not find any space in the cold storage and a part of which is consumed shortly after harvest and the rest is kept in traditional storage at home under room temperature and humidity at farm level. Most cases the excess production goes to waste.
In Bangladesh most of the potatoes consumed is unprocessed. Only 2per cent of the potatoes are processed to mainly Chips and Crakers. Bangladesh Agriculture Research Institute (BARI) has so far developed 44 potato varieties. But the majority of Bangladeshs potato production is used for direct consumption. The varieties used for table potatoes are not appropriate for processing (the dry matter content is too low) or export (foreign consumers have different tastes). Moreover, the quality of the potato seed also an influencing factor, the formal sector seed potato production is only 5-9per cent of the total requirement. Both private and public sector together supply only 5per cent quality seed of the total requirement. Remaining 95per cent is the low quality seed potato which is produced by the farmers themselves. Using the low quality seed produce the crops which is not preferred for processing and export.
Though the record amount of potato is produced, but the quantity of export is not considerable. According to Bangladesh Bureau of Statistic the revenue generated from exporting potato was $33.8 million in 2013-2014 financial year where the amount came down to $13 million in 2016-2017 financial year. Currently, there are only a few, around 8-10 established private companies that export fresh or processed potatoes, mostly to Singapore, Malaysia and the UAE and very recently to Russia, Vietnam and Sri Lanka.
Currently, overproduction of potato is seen as a burden from the viewpoint of the farmers. We are concerned about the matter as the poor farmers in Bangladesh work hard to produce the crop, get only financial distress end of the day instead of making profit. On the other hand, we are losing GDP from this sector where it has a potential to contribute to the economy. We believe overproduction of potato is not a threat which is the current scenario, rather it could be turned into the opportunity by utilising the resources in processing industry. The increasing demand for processed food products may drive the proper utilization of the excess potato which require products diversification. Companies should consider to make much diversified processed potato products such as potato soup, hash brown, mashed potato, French fry. And as a precondition, the farmers should consider to produce the suitable verities for processing using the high quality seeds.
To solve the storage problem, natural cold storage for potato preservation need to be invented across the country to avoid the problems with the current cold storage system. Wageningen University, Netherland has invented a unique method to store potato using natural cold storage system which is the bondage of technology and nature. By using the method potato crops could be preserved for six months. Natural wind and light is basically the key to the success where automation is only a means to manage. Moisture and ventilation is maintained through the computer programmer. In Bangladesh, we are lagging behind from doing it and to save farmers from wastage of their produce, public-private partnership and funding would make it easier to build such platforms. This is not a costly venture and through this we can save a lot of farmers and a lot of produce.
Moreover, frequent undue price fluctuations create uncertainty about the market price and enhance risks in potato production as well as potato business. For stabilizing potato prices, forecasting of potato prices and target production should be made in time before sowing, so that the farmers can adjust potato acreage accordingly.
With successful operation of a buffer stock, price instability may be reduced. Government should take necessary steps so that the market prices of potato remains uniform all-round the year and all over the country. This may be possible through price control mechanism of the government. Organising the proper processing and logistics (find new markets) badly needed. Potato is consumed as a vegetable in Bangladesh, if percentage of potato consumption is increased pressure on rice would be reduced. Hence potato can play an important role in the food security of Bangladesh.
The writers are faculty of German University of Bangladesh
