08 Aug Bangladesh: Potato growers suffer from lack of gov’t. incentives
While potatoes usually play a significant role in the export market of Bangladesh, this season the Bangladeshi potato sector has been in a rut. According to Saifur Rahman of the export company Friends Eximp Enterprise, the current negative trend is related to the lack of incentives from the Bangladeshi government.
“Last year, the government gave potato growers a 20% incentive for their production. This year, that percentage has been lowered to only 10%. Because of that, we can’t compete on the world market for potatoes. As we can’t cover our costs with the current prices in the market, most companies won’t export potatoes.”
The potato sector of Bangladesh also had to deal with adverse weather, which has caused delays for the potato harvest. The main problem is however the lack of funding from the government.
The system for incentives is usually pre-fixed at the start of the season. Without this, most growers are unable to get a profitable turnover for their production. As most growers are small scale companies that lack education to improve their methods. Most growers end up keeping their land barren or changing their production to other types of fruit and vegetables.
As potatoes are commodity products that aren’t influenced by seasonal factors like Ramadan, the export of potatoes should be a year round stable source of income for Bangladesh. However, as most Bangladeshi potatoes end up being rebranded in target markets and being re-exported to other countries, the prices are always plagued by low profit margins.
The main markets for Bangladeshi potatoes are usually Malaysia, Singapore and sometimes Russia. The main variety that is being cultivated is the Granola potato. Currently, these potatoes are sold in the domestic retail sector for 12 to 15 taka (€0.14 to €0.18).