May 22 - The cost of food continues to soar around the world. Intense competition for reduced international supplies of wheat, maize and rice, and many other agricultural commodities, shows little sign of abating, bringing with it risks of food shortages and social unrest in low-income countries. An urgent need then arises for the adoption of strategies, both in the short- and long-term to combat such risks. One of the longer-term strategies that could help ease the strain of food price inflation, especially in future times of crises, is to look toward diversifying the crop base with focus on nutritious and versatile staple foods that are much less susceptible to the temperament of international markets. One such crop is potato.
Fact: Potato price inflation is lower. FAO recently surveyed the depth and breadth of food price inflation in over 70 of the most vulnerable countries in the world. Cereal price inflation was overwhelmingly higher and far more widespread than for potato and other root crops.
Unlike major cereals, potato is not a globally traded commodity. Only a fraction of total production enters foreign trade, and its prices are determined usually by local demand and supply conditions, not the vagaries of international markets. Moreover, being absent in the major commodity exchanges, there is no risk of potato bearing the ill-effects of speculative activity, which cannot be said of cereal commodities. It is, therefore, a highly recommended food security crop that can help low-income consumers rideout any repeat of the current turmoil in world food supply and demand.
Growing importance
Potato is the world's number one non-grain food commodity. Cultivated on almost 20 million hectares, production reached a record 320 million tonnes in 2007. Potato production is expanding strongly in developing countries, which now account for more than half of the global harvest. This is a remarkable achievement, considering that just 20 years ago their share in global production stood at just over 20 percent. The rapid growth of potato production is in sharp contrast to slowing rates of expansion of other major food crops, such as maize and wheat. Projections show that over the next decade, worldwide potato production could expand between 2 and 3 percent annually, with developing countries, especially those situated in Sub-Saharan Africa as the main engine of growth.
Fact: Emerging countries realize potato’s potential. Recently, in China, the world's biggest potato producer, authorities are reviewing proposals for potato to become the country’s major food crop, while India is considering plans to double potato output in the next five to ten years.
Potato and food security
Already many of the poorest producers in developing countries and most undernourished households depend on potatoes as a primary or secondary source of food and nutrition. In part, these farm households value potato because the crop produces large quantities of dietary energy and has relatively stable yields under conditions in which other crops may fail. In this respect, the crop is ideally suited to places where land is limited and labour is abundant, resource endowments that typically characterize many of the poorest developing countries.
Fact: Potato is a superior food security crop. Potato produces more nutritious food more quickly, on less land and in harsher climates than most other major crops, up to 85 percent of the plant is edible human food, compared with around 50 percent in cereals.
Its broad adaptability to a wide variety of farming systems is also noteworthy. For instance potato’s short and highly flexible vegetative cycle, high yields within a 100 days, fits well with rice in double cropping systems and is suited for intercropping with crops such as maize and soybeans. Potatoes can be grown at almost any altitude or climate: from the barren highlands of the Andes Mountains to the tropical lowlands of Africa and Asia.
Beyond security
More and more potatoes now enter processing to meet the rising demand of the fast food, snack and convenience food industries. The major stimulus behind this development includes growing urban populations, rising incomes, the diversification of diets and the high time needed to prepare the tuber for consumption. The structural transformation of rural agricultural based economies into more urbanized societies opens up new market opportunities to potato producers and to their trading and processing partners in the value chain. Such opportunities can foster greater income generation and employment creation in the sector.
Fact: Potato has great potential for income generation. More than a simple food crop for the rural poor, potato can also serve as a source of cash for low-income farm households and as a raw material for further processing into value-added products for both rural and urban consumption.
Potato’s adaptability to a wide range of specific uses lies behind the potentially important role that potato can play in developing country food systems. To tap such potential, however, an efficient value chain for the commodity needs to be established (see below).
Rising to the challenge of a better functioning potato value chain
Learning to innovate and engage with markets, and to become more competitive are the main challenges for farmers in developing countries. However, in many poor developing countries, potatoes are typically marketed through fragmented chains with little coordination and poor information flows, giving rise to high supply risks and high transactions costs. Average yields remain far too low to enable small-scale potato producers to produce a marketable surplus, preventing them from increasing their participation in potato marketing systems. In addition, limited storage facilities and insufficient transport facilities can adversely affect the quality of the tubers after harvest.
Much needs to be done. Potato seed producers arguably constitute the most critical link in the potato chain. For it is their role to ensure that the chain has access to sufficient quantities and qualities of planting material to meet the needs of potato growers, processors and traders. In order for this group to successfully participate in the value chain, they need yield-improving and input-saving technologies to help close the persistent yield gap and to reduce cost per tonne. Production initiatives can be greatly bolstered by germplasm research on specific end uses, tissue culture, rapid multiplication of planting material, pest and disease resistance (including enhancing resistance to prevalent diseases such as late blight by combining conventional plant breeding techniques with biotechnology) and the formation of producer groups to share expertise and to strengthen bargaining power. The continuous generation and diffusion of improved varieties is important if potato sectors are to flourish. The expansion of potato cultivation will also be facilitated by improved irrigation supply, chemical fertilizers, cold storage facilities, and transport infrastructure. In addition, the market price of potato is often subject to very limited negotiation and is often decided at the farm gate. Inefficient and unfair pricing can result in producers failing to respond to market incentives, none more so than stifling drives to increase productivity and undermining the necessary on-farm investments in production.
Efforts to enhance the value chain will only prove successful provided there are substantial levels of public and private investment in the sector, especially breeding programmes, infrastructural improvements and initiatives to support and coordinate activities along the chain. Indeed, policy-makers are required to provide more support to the sector, which might require a shift of emphasis, as much of their policies and resources traditionally focused on cash crops for export and on cereals, leaving potato and other root crops at the periphery. Readdressing this imbalance is important if potato sectors are to thrive.
Key beneficiaries
Those countries with low levels of dietary diversity and a high level of dependency on cereal imports could greatly benefit from expanding potato cultivation.
Fact: Potato flour can easily be blended with wheat flour. Taking the lead from cassava, governments have launched initiatives to reduce costly wheat imports, for instance by encouraging the consumption of bread that is made of wheat and potato flour.
Other countries with low dietary diversity and high export dependence could also benefit. For instance, several countries recently imposed export bans on rice in order to protect against shortages and to shield their economies from domestic food inflation. However, such actions only served to exacerbate global rice price inflation. If consumers had relied on a broader base of staples in their food basket, such restraints, probably, would not have been necessary.
An important challenge facing the sector would be to provide the necessary incentives to sustain potato production, without thwarting drives for greater cost efficiency and productivity, even in less favourable economic contexts, than the one prevailing today if and when the world returns to the ‘low food price era’. It is too easily forgotten in the current high price climate, that until recently, international prices for cereals had reached historic lows when adjusted for inflation. A boom followed by bust in cereal prices could easily undermine investments in potato sectors, if consumers revert back to purchasing cheap, subsidized imported cereals. Any investment in potato cultivation must be considered as an insurance against international market turbulence and more so, as a food security safeguard.
Potato has great potential in this regard. The world's population is expected to grow by a third over the next 30 years with more than 95 percent of that increase concentrated in the developing countries, where pressure on land and water is already intense. With such strain on world’s resources, it is plausible that high price events will always be around the corner. A key test facing the international community is, therefore, to ensure food security for present and future generations, while protecting the natural resource base on which we all depend. It is quite clear that potato can be an important part of efforts to meet those challenges.