Potato is one of the most important cash crops and occupies a place of pride in the vegetable kingdom. In MP Chhindwara is one of the important potato growing districts, which has surplus of potato production and supply to other states. Keeping in view the important role played by potato cultivation in farmer’s economy, its cost analysis will pin-point the possibilities of increasing return by reducing the cost factors and increasing the yield. Study portrays that on an average the cost of cultivation found to Rs.35099.89, as cost ‘C1’ followed by Rs.37447.51 as cost ‘C2’ and Rs.40957.49 as cost ‘C3’ per hectare respectively. The overall average gross income per hectare found to Rs 65268.32. The price spreads found vary through various marketing channels and place, at local (Chhindwara) market and at distance (Nagpur) market respectively. The producer received 78.77 per cent of price paid by the consumer i.e considerable gap of about 21 per cent. The study suggests it is desirable that efforts should direct towards lowering this spread. This can be possible if the potato growers form there co-operative and sale their produce after grading and standardization.