No buyers for Bhutanese potatoes due to demonetization in India
Farmers across Bhutan have been hit hard with the continuous deflation in the price of potatoes in the past few years. The situation has been made worse this year by the recent demonetization announcement on November 8 by the Indian Government.
According to the marketing advisor with the Food Corporation of Bhutan (FCB), Bhim Raj Gurung, the demonization of high denomination, 500 and 1000 Indian currency notes has hit both Bhutanese farmers and FCB hard.
He said that the price of potatoes is expected to drop further due to the decline in the number of Indian traders. He said, “FCB had to stop carrying out auctions of the potatoes for two weeks due to slump in traders as well as prices.”
Around this time last year, potato farmers fetched between Nu 45 to Nu 50 per kilogram. On 18th November, farmers further saw drop in the price from Nu 27 to Nu 23 per kg.
Currently, the auction yard in Phuentsholing has run out of storage space with over 240 truckloads of potatoes that are yet to be auctioned off. There are 200 more trucks on its way to their respective auction yards in the country.
“Since we are directed by the government not to accept old INR notes, farmers are unable to find customers from India.”
Bhim Raj Gurung said that the Indian traders are unable to get the adequate notes to purchase potatoes from Bhutan as they are allowed to exchange a maximum of INR 4000 of new notes from the bank in a day. This has come down to INR 2000 now.
He added that the Indian traders purchased Bhutanese potatoes worth INR 2 million in a day as the rupee they got to swap in a day is insufficient to buy the required quantity of potatoes.
Therefore, he said, that the farmers are witnessing a sudden drop in the price of potatoes.
As of yesterday, farmers in Phuentsholing auction yard managed to get slightly higher price compared to the farmers selling in the Samdrupjongkhar auction yard.
As per the FCB record, the farmers in Samdrupjongkhar were able to fetch Nu 18 to Nu 19 per kilogram, whereas the farmers in Phuentsholing fetched Nu 27 per kilogram after the demonetization move in India.
The marketing advisor, FCB, shared that FCB officials have held meetings with the farmers to stop transporting the potatoes to the auction yards, given the current problem with the Indian traders and dealers.
November is the peak season for potato trading in Bhutan. The auction yards across the country, with the capacity of about 100 metric tonnes, are already running out of space with farmers rushing in to sell potatoes.
The marketing advisor said if the financial state of the Indian dealers or traders does not improve then the Bhutanese farmers will have a hard time in selling their potatoes.
He said that from first week of November to December 15, the farmers in India plant potatoes and the dealers look for potato seeds from Bhutan. “If problem persist till December, our farmers will not be able to sell their potatoes,” he said.
Meanwhile, FCB is waiting for agriculture ministry’s intervention in helping the farmers to sell their farm produce. FCB is also looking for other alternatives in finding buyers within and outside the country other than India.
The Ministry is aiming to atleast help farmers sell potatoes above the cost of production which is about Nu 12 to Nu 13 per kg.
Pic Courtesy: fontana-foundation.org