Farmers hardly get Rs 2 per kg for onions, crops allowed to rot

PUNE: Onion prices have plunged from last year’s high levels, thanks to a bumper production, making consumers happy, although farmers across the country are having a hard time.

They are forced to sell their produce at as low as Rs 2/kg to Rs 3/kg or let the crop rot in the fields. “With prices so low, I could not afford to pay the labourers during harvest. So, I offered them half the crop as remuneration,” said Barki, a small farmer from Devas district of Madhya Pradesh. Average onion prices at Indore range from Rs 1/kg to Rs 5/kg.

Onion farmers in Maharashtra are a little more fortunate, getting Rs 7/kg to Rs 8/kg, with the lowest price of Rs 3/kg at the benchmark Lasalgaon APMC. “Farmers from Maharashtra are getting a relatively higher price thanks to exports from here, procurement by central government agencies and the large number of storage units in the state,” said RP Gupta, director of the National Horticulture Research & Development Foundation at Nashik.

Wholesale onion prices climbed to Rs 46/kg during August-October last year, while retail prices ranged from Rs 50/kg to Rs 90/kg. Encouraged by the rise in prices, farmers across the country increased the area of onion cultivation. Their efforts were aided by the absence of unseasonal rainfall, resulting in increased productivity and better quality.

Onion production in 2016 is expected to increase 8% to 203 lakh tonnes from 189 lakh tonnes last year. Arrivals, however, haven’t gone up and are stable because trade veterans say farmers and traders are holding back stocks. Some traders are confident that prices will remain stable till July or August.

“Wholesale onion prices will not go higher than Rs 15/kg to Rs 17/kg this year,” said Danish Shah, an onion exporter from Maharashtra. Exporters said outbound onion shipments declined 30% to 35% in 2015-16. “Inconsistency in the export policies of the central government has damaged the reputation of Indian exporters,” said a top official of the Maharashtra state government, who did not wish to be identified.

Traders claim that even at current price levels, Chinese onions are cheaper than Indian onions. Agitating farmers, political leaders and traders have demanded incentives to boost exports.

“The recession in onion trade normally sows the seeds of the next round of inflation as farmers turn away from the crop. It is a vicious circle and the current recession needs to be tackled wisely to prevent future shortages,” said commodity analyst Dipak Chavan.