Potato farmers bear brunt of exorbitant seed prices
Saturday, 22 November 2008
FE Report
The country's potato farmers are bearing the brunt of manipulated price hike of a particular high yield variety of seed, sources said.
According to the sector insiders, the 'diamant' variety of seed potato is selling at abnormally high prices at the farmers' level because of the syndication. However, importer of the seed dismissed the allegation as baseless.
Farmers are counting around Tk 7500 for a 50-kilogramme (kg) box of seed potato as against its import cost of Tk 3300, they said.
"With the calculation of other costs and business commission, the maximum price of diamant potato seeds should be around Tk 3700 a box at the farmers' level," a market observer told the FE.
But the sole importer of the Holland-based Agrico Company, in association with some traders is allegedly making windfall profit by marketing the diamant variety of seed potato at a high price in the local level, he claimed.
Such an abnormal price of seed potato has put a huge burden on the local potato growers, who are already counting losses on account of selling their produce at a much lower price than the production costs, sources said.
They also feared that the exorbitant price of seeds would deal a blow to the country's potato cultivation.
According to sources, the importer and traders are taking advantage of an increased demand of the popular variety of diamant seed potato.
Other varieties of potato seeds namely 'Fensila' and 'Granula' are selling at Tk 3500 per 50-kg box in the market, they added.
Admitting the presence of an active syndication, the President of Bangladesh Cold Storage Association (BCSA), Jasim Uddin, said the particular variety of potato seeds is being sold at much higher than the expected prices at the farmers' end.
He also blamed the importer concerned and a section of traders for it.
"The sole importer and a section of traders are charging arbitrary prices of the diamant variety of seed potato through creating an artificial supply crisis of the imported item in the market," Jasim Uddin said.
Taking the situation into account, the BCSA has already urged the authorities concerned to take necessary steps against the traders concerned for the greater interest of the local potato farmers, he mentioned.
When contacted, the importer and distributor of diamant potato seeds, A R Malik, ruled out the allegation about the price manipulation of the seed potato.
"We are supplying the diamant variety of seed potato at a rate of Tk 5000 a box to our distributors with a reasonable profit margin after calculating the import costs, customs duties and other marketing costs," said Mr. Malik, the proprietor of Iram Afroza.
He went on, "We have written agreements with our distributors, under which they are to sell the diamant potato seeds at the rate not beyond Tk 5400 per 50-kg box."
Responding to a query, Mr. Malik said some retailers might have charged arbitrary prices of the diamant seeds, taking advantages of its sharp demand among the potato growers.
"It is not possible for his company to check the retail-level prices of the potato seeds," he said.
He, however, emphasised the need for strengthening the monitoring systems by the government agencies concerned in order to check the price manipulation of the particular seeds.
Mr. Malik expressed his willingness to provide all necessary information to the authorities in this respect.
The country's potato farmers are bearing the brunt of manipulated price hike of a particular high yield variety of seed, sources said.
According to the sector insiders, the 'diamant' variety of seed potato is selling at abnormally high prices at the farmers' level because of the syndication. However, importer of the seed dismissed the allegation as baseless.
Farmers are counting around Tk 7500 for a 50-kilogramme (kg) box of seed potato as against its import cost of Tk 3300, they said.
"With the calculation of other costs and business commission, the maximum price of diamant potato seeds should be around Tk 3700 a box at the farmers' level," a market observer told the FE.
But the sole importer of the Holland-based Agrico Company, in association with some traders is allegedly making windfall profit by marketing the diamant variety of seed potato at a high price in the local level, he claimed.
Such an abnormal price of seed potato has put a huge burden on the local potato growers, who are already counting losses on account of selling their produce at a much lower price than the production costs, sources said.
They also feared that the exorbitant price of seeds would deal a blow to the country's potato cultivation.
According to sources, the importer and traders are taking advantage of an increased demand of the popular variety of diamant seed potato.
Other varieties of potato seeds namely 'Fensila' and 'Granula' are selling at Tk 3500 per 50-kg box in the market, they added.
Admitting the presence of an active syndication, the President of Bangladesh Cold Storage Association (BCSA), Jasim Uddin, said the particular variety of potato seeds is being sold at much higher than the expected prices at the farmers' end.
He also blamed the importer concerned and a section of traders for it.
"The sole importer and a section of traders are charging arbitrary prices of the diamant variety of seed potato through creating an artificial supply crisis of the imported item in the market," Jasim Uddin said.
Taking the situation into account, the BCSA has already urged the authorities concerned to take necessary steps against the traders concerned for the greater interest of the local potato farmers, he mentioned.
When contacted, the importer and distributor of diamant potato seeds, A R Malik, ruled out the allegation about the price manipulation of the seed potato.
"We are supplying the diamant variety of seed potato at a rate of Tk 5000 a box to our distributors with a reasonable profit margin after calculating the import costs, customs duties and other marketing costs," said Mr. Malik, the proprietor of Iram Afroza.
He went on, "We have written agreements with our distributors, under which they are to sell the diamant potato seeds at the rate not beyond Tk 5400 per 50-kg box."
Responding to a query, Mr. Malik said some retailers might have charged arbitrary prices of the diamant seeds, taking advantages of its sharp demand among the potato growers.
"It is not possible for his company to check the retail-level prices of the potato seeds," he said.
He, however, emphasised the need for strengthening the monitoring systems by the government agencies concerned in order to check the price manipulation of the particular seeds.
Mr. Malik expressed his willingness to provide all necessary information to the authorities in this respect.