Onion Price: The Great Indian Tearjerker

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On an average, small and medium-scale farmers invest Rs 30,000 -40,000 on each acre of land to yield around 150 quintals of onion. On an average, small and medium-scale farmers invest Rs 30,000 -40,000 on each acre of land to yield around 150 quintals of onion.
SummaryThe price of the onion swings wildly in its journey from Maharashtra’s fields to wholesale markets in other Indian cities

and other cities were selling onions at Rs 80 per kg,” says Deepak Pagar, another farmer.

The auction Pagar mentions is the key determinant in the price of onions. It is held at the APMs across the state, where farmers bring their ware for the traders (or the first rung of middlemen) to buy. To ensure fair pricing, this is done through open auctions in which traders bid on per quintal of the produce, after inspecting the onions, which are brought to the market either in tractors or trailers or small tempos. Before the start of the auction, the tractor or the trailer carrying the produce is weighed on the scales of the APM. On an average, a tractor can bear 20-30 quintals of the produce. Traders invariably reduce the price if the crop is brought in a tempo, on the ground that a tempo cannot be weighed on the scales at the market. This automatically puts small-scale farmers, without a vehicle of their own, at a disadvantage.

Although on paper, this process is above board, Pagar and other farmers claim the stakes are heavily tilted against them. “Auctions are controlled by a coterie of traders who vary the prices at will. The APMs, formed to ensure transparency and fair practices, have failed to address the grievances of farmers,” says another farmer Dinesh Jadhav. In particular, the farmer is often left to bleed as there is no minimum support price (MSP) for onions. In its absence, bids called by traders are open to manipulation, which in turn are responsible for the wild speculation in the market.

Since early 2000, onion production in India has seen a significant spurt, increasing per hectare yield handsomely. But the APMs have refused to update arcane laws governing the sale of agricultural produce, giving rise to trade cartels that maximise their own profit. Jaydutt Holkar, president of the Lasalgaon Agriculture Market Committee — the largest and most important market for onions in Asia — lays the blame squarely on the traders. “It was just a single tractor of one particular farmer which got the price of


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