While onion prices continue to decline in Nasik because of huge arrival of late kharif and rabi yield, Babulal Devram, a farmer from Shirsoli village in Jalgaon district, who has sown white onions in his two-acre land, is not unduly worried about the falling prices. By entering into the ‘minimum guarantee price’ mechanism with Jain Irrigation Systems (JISL), Devram is assured of a price which the company would pay him even if prices drop in local mandis.
Onion prices, which were ruling at around Rs 1,200 per quintal just a few months back in Nasik, the hub of country’s onion trade, have crashed to almost Rs 500-Rs 650 per quintal because of bumper harvest.
The story of Anil Hiraman Tade, another farmer from Shirsoli village, is similar to that of Devram, as JISL is ready to lift his white onion crop as well. After procuring onion from farmers at an assured price, JISL produces various products such as medium and large chops, mince, big and powder granules, powder, etc by dehydrating the crop. The products are exported to countries like Germany, France, the USA, Australia and the UK.
Devram and Tade are not the only farmers who have tied up with JISL for onion supplies. More than 2,300 farmers from 52 villages of Jalgaon, Dhulia and Nasik districts in Maharashtra and a few districts in Madhya Pradesh have been supplying white onions to the company since the last few years.
JISL buys onions from farmers at about Rs 3-5 a kg. In case the onion prices go up in local markets, the company pays the difference so that growers do not miss profits.
?Farmers are not only assured of a price, but they also save on market fees as we do not charge anything for buying their onions,? GH Desarda, in charge of contracting farming in JISL, told FE. Besides, the company provides farmers with high quality seeds, technical support, micro-irrigation system, chemical and organic fertilisers. As a result, member-cultivators of JISL get at least 15-20 tonne per acre yield every season in rainfed conditions.
JISL exported 2,294 tonne of dehydrated onions in 2001-2. The volume stood at almost 11,177 tonne onions in 2009-10. The company processed 11,541 tonne of onions in 2008-09.
Farmers in Maharashtra usually grow red onions and the lack of planning had often led to glut in prices. Moreover, red onions have less export demand because of limited shelf life.
The company does contract farming in over 4,000 acres of land. Exports of dehydrated white onion account close to 98% of its revenues from this segment, a senior company official said, adding that the domestic market in also growing.
Exports revenue from dehydrated onion increased by 52% to Rs 133 crore in 2008-09 due to rising demand abroad.
JISL has six fruit and vegetable processing plants in India and one in the US. It processes over 3, 50, 000 tonne of fruits and vegetables a year.
Globally, the market for dehydrated vegetables is estimated to be more than 9, 00,000 tonne and onions account for a major portion of this demand.
India is the second largest producer of dehydrated onions in the world. JISL accounts for 40% of the total dehydrated onion exports from the country.