Onion Price: The Great Indian Tearjerker

Aug 26 2013, 17:35 IST
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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

cent. This is ostensibly for handling and storage charges. “Often the traders do not pick up the produce for a few days. When they come for the crop, they again reduce the price as they claim the weight has gone down,” says Dadaji Shevale, another farmer in Chandwad.

Being a perishable commodity, the trading community counters, loss in transit is unavoidable. Other than packing, transportation, commission for the agents of the APM, there are other costs which the crop has to encounter before it goes out to the market. “With diesel prices skyrocketing, we have to shell out Rs 500 for transportation of the crop from the APMs to the wholesale markets. We also have to pay 6-7 per cent to the commission agents at the wholesale markets. On an average, if we buy onions at Rs 3,500 per quintal, by the time it reaches the wholesale markets, the price of the produce, including our cuts, increases to Rs 5,000 per quintal. These days, without any steady supply and increase in demand, the prices are touching Rs 6,000-7,000 per quintal,” says a trader in Chandwad.

This year, the traders say, the price hike is due to the reduction in production as major parts of the onion growing region of Maharashtra were hit by drought. However, Holkar and other farmers deny this. “There was a marginal decline in production, but it can’t substantiate the stupendous price rise,” he says. Over the last two weeks, supply has picked up steadily, bringing about a marginal decrease in price.

The journey of the onion from the farm to the wholesale market is four-pronged, with the traders and the commissioning agents holding maximum clout over the process. Govind Pagar, district president of Swabhimani Shetkari Sangthana, the farmers’ party by MP Raju Shetty, says, the maximum and minimum price of the crop paid to the farmers has ranged between Rs 100- Rs 450 per quintal in the last three years. “There have been cases of farmer suicides in Nashik over the issue of onion price, but no one is ready to look into the problem,” he says.

If farmers are at the receiving end of traders, in the cities the commission agents act as the conduit between the traders and the retail suppliers. BS Dighe, a commissioning agent in the Gultekdi wholesale market in Pune, says, “Instead of an auction, we charge 6 per cent of

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