After rice, the potato prices have turned out to be the latest headache for the government. The prices of vegetables are also abnormally high, but the reasons are known.
As it has happened in the case of rice, the policymakers are clueless about the price hike of potato, a widely consumed vegetable in the country.
The government has tried its 'market intervention' mechanism in both cases without any tangible results. If not rice, potatoes have almost vanished from the wholesale market to avoid selling the vegetable at prices set by the Directorate of Agricultural Marketing (DAM).
The agricultural minister, who is regarded as a decent and practical man, sounded apologetic when he discussed the potato price issue with the newsmen last Tuesday.
He admitted that it was beyond their imagination that prices of potato would go up by such a huge margin. The minister also reportedly hinted at importing potato to help cool off the overheated market.
The talk of potato import sounds strange, particularly when the country produces the item nearly 3.0 million tonnes more than its requirement every year.
Farmers have been complaining for many years that they are not getting a fair price for their potato harvest. Even photos were published in newspapers in the recent past showing the disgruntled farmers feeding potatoes to their cows.
The country ventured into the potato export market some years back. It exported around 30,000 tonnes of potato in each of the last three financial years. In the last fiscal (2019-20), it fetched more than Tk 670 million from its export.
Even after export, the country does have 2.7 million tonnes of surplus potato. This year, according to the Bangladesh Cold Storage Association (BCSA), around 4.0 million tonnes of potato have been stored in 369 cold storages.
Potato growers and traders usually preserve potato in cold storages with a hope of selling the same at higher prices during the post-harvest months, between May and December.
The potato-price situation has been like this in recent years: After the full harvest, potato is sold between Tk 15 and Tk 20 a kilogram (kg) at the retail level. As time progresses, the prices go on rising steadily with the gradual entry of potato kept in the cold storages. In the months of November and December, the prices reach the peak--- between Tk 35 and Tk 40 a kg.
But, this year potato has broken all past records, in terms of price at the retail level. It is now being sold between Tk 50 and Tk 55, depending on the variety.
The price-hike has come at a time when all other vegetables are costlier than ever. The BCSA leaders tend to link the ruling prices of vegetables with that of potato, claiming that the demand for potato has gone up under the prevailing circumstances.
A sympathetic price-rise is possible as it happens in many cases. But, by any measure, the current price tag of potato is hugely abnormal.
The DAM has done arithmetic on the cost of potato at the wholesale level. According to the state farm marketing agency, the average potato price this year was Tk 14 a kg when it was stored in the cold storages during the months between February and April. Adding cold-storage charge at the rate of Tk 3.66 a kg, weight loss of Tk 0.88, selection cost Tk 0.46 and interest and other costs of Tk 2.0, the price of potato at the cold storage level comes to around Tk 21 a kg. But, the item is now being sold between Tk 38 and Tk 42 a kg at the wholesale level. No explanation is available for such a wide gap in prices at the wholesale level.
The situation is almost identical in the case of rice prices. There is no plausible reason for the hike in rice prices. Yet prices of all varieties of rice gone up to record-high.
The government cannot shy away from its duty of disciplining the market by saying it does not have any role in the market economy. Then what is the use of constituting the Directorate of National Consumers Rights Protection (DNCRP), the Competition Commission and relevant other organisations?