Farmers reel under low onion prices
Moneylife Digital Team 23 March 2012

While onion prices could rise from June, experts highlight the urgent need for government intervention to safeguard the interest of the farmers

Thanks to record production, onion growing farmers in Maharashtra are reeling under losses due to crashing prices in the wholesale markets. While prices could rise from June onwards, experts highlight the urgent need for government intervention to safeguard the interest of the farmers.

“The government’s own cost of onion production is Rs897 and the current price of onion is Rs350 per quintal. Farmers have to bear huge losses,” said Raju Shetti—leader of Swabhiman Shetkari Sanghatana (SSS) and a Lok Sabha member from Kolhapur—who led a strike by farmers, in Nashik, demanding that the government revise the MSP (minimum support price) and intervene in the market.

Mr Shetti told Moneylife that, “Apart from MSP, the government should give transport subsidy. Due to the duty on onion exports, there was poor offtake by exporters and hence we have arrived at the situation of excess supply. Plus there should be special internal railway rakes from transporting onions to other parts of the country. We have temporarily called off the strike till 31st March as officials have requested for some time to discuss our demands. If they are not met, we are going on indefinite strike.”

With the arrival of the late Kharif crop, onion production has increased. “The production is 10%-15% higher compared to last year. The total production for this year is pegged at 155 lakh metric tonnes. The market is flooded with arrivals from Maharashtra and Gujarat. Prices are drastically fallen to Rs300-Rs400 per quintal in Lasalgaon market. Farmers can’t even recover their cost of production. Prices from the consumers’ point of view are stable but the government should intervene to support the farmers,” RP Gupta, director, National Horticultural Research and Development Foundation (NHRDF) told Moneylife.

On Thursday, in the Lasalgaon market, a key producing market in India, wholesale prices were in the range of Rs161-Rs474 per quintal. While in other important retail markets in the country onion prices are in the range of Rs6-Rs10 per kg.

Ashok Walunj, director, onion-potato market, APMC (Agricultural Produce Marketing Committee), Vashi says that, “Currently the wholesale prices are in the range of Rs3-Rs4 per kg. They might go up from May once the current stock is consumed. The government has to come out with minimum support price in the interest of onion growers.”

Prithviraj Chavan, chief minister of Maharashtra recently announced in the state legislative assembly that he would request the central government to reduce the minimum export price (MEP) to stabilise falling prices in the interest of onion farmers. Currently the MEP is $125 per tonne after it was reduced from $600 per tonne last year.

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