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As Onion prices soar over Apples, Nashik farmer reports theft of his Stock

Wed, 25 Sep 2019 07:53:53 +0000

Govt. finds it difficult to manage fluctuations in prices

Image Courtesy: TOI

Pyaaz, Mirch, Bhakri, the sustenance of India’s toiling agrarian class. A raw onion, a green chilly and a Bhakri (bhākri, bhakkari) is a round flat unleavened bread often used in the cuisine of the states of Maharashtra, Gujarat, Karnataka, Uttar Pradesh and Goa. But with the unchecked crisis in the agrarian economy, this basic and nutritious vegetable is denied to millions.

September 2019, as the prices of this most essential commodity, an important ingredient of almost every Indian meal, onions touched sky rocketing prices, a bizarre incident of theft of onions worth Rs. 1 lakh in Nashik district of Maharashtra also added a touch of black humour to an unfolding crisis. The retail prices of onion prices have touched as high as Rs. 60-80 per kg mark in cities such as Delhi and Mumbai. Even in Chennai the prices are around Rs. 60 per kg.

In the midst of this, onion farmer Rahul Bajirao Pagar approached the Nashik police on Monday and informed that he had kept a ‘summer stock’ of 25 tonne onions in 117 plastic crates at his storehouse in Kalwan taluka, as per police inspector Pramod Wagh.

However, on Sunday evening, to his utter dismay, he found that the entire stock worth nearly Rs. 1 lakh was missing, Pagar said in his complaint. Inspector Wagh said that based on his complaint a case of theft has been registered and search is on.

At the Agriculture Produce Market Committee (APMC) in Nashik, the summer onion stocks are being auctioned for around Rs. 3,500 to Rs. 5,000 per quintal (per 100 kg), as per a source.

Meanwhile in another incident, some unidentified persons allegedly mixed urea (fertiliser) in the onion stock of farmer Vishnu Aher in Bhaur village, an official at Devla police station said. The farmer in his complaint alleged that the mischief resulted in rotting of about 120 tonnes of his onions worth Rs 5 lakh, he said.

Not only has the price rise added to a common person’s burden, but also has shown the gaps in the management of such essential commodities by the government. The government, in order to curtail prices, issued tenders to import onion from Pakistan. This decisions has been opposed by farmers.

Maharashtra and Haryana Assembly elections are weeks away, just around the corner, even as the states were grappling with other problems such as the floods in Maharashtra, this onion crisis has posed several challenges for masses of our people.

The recent rise in onion prices has been a result of last year’s drought and a delayed monsoon this year. The situation is exacerbated by excessive rainfall in onion-growing areas, which has delayed the harvest period by a week or so.

About 90 percent of India’s onion comes from the states of Karnataka, Maharashtra, Madhya Pradesh, Gujarat, Rajasthan, Uttar Pradesh, Bihar and West Bengal. Of this, Maharashtra contributes to nearly one-third of the country’s production of the vegetable.Nashik, Pune, Ahmednagar, and Aurangabad form the onion-growing belt of Maharashtra.

The onion crop is grown in three phases throughout the year, -Kharif (which is sown in May-July and harvested in October-December); late kharif (which is sown in August-September and harvested in January-March); and Rabi (which is sown in October-November and harvested in April).

To prevent the crop form sprouting and getting spoilt, farmers usually store their onion produce in moisture-proof and dust-proof structures, called kanda chawl. They release their produce steadily depending on the price of onion in the market, which enables continuous supply.

This year, the cultivation of onion in the rabi crop cycle decreased in Maharashtra – from 3.54 lakh hectares in 2017-18 to 2.66 lakh hectares in 2018-19.

As if this wasn’t enough, Karnataka received unprecedented and heavy rainfall during the harvest period of the onion grown in kharif season. In addition, the arrival of kharif onions from Karnataka has been delayed after the state was lashed with heavy rains a couple of weeks ago.

While markets saw the arrival of 35,000 quintals per day in September last year, the amount has dropped to 25,000 quintals this year. The new batch of kharif onion crop grown in Maharashtra would not hit the market before the end of October this year. Until then, the stored rabi crop will be supplied to the market.

Currently, the Centre has a buffer stock of 56,000 tonnes of onion, of which 16,000 tonnes has been offloaded so far. In Delhi, 200 tonnes a day is being offloaded, news agency PTI reported.However, most worrying is the fluctuation that this commodity’s prices face in the market. For example, just this February the onion prices kept plummeting to an all time low. This caused a serious distress among farmers, so much so that many committed suicides.

In 2018, Maharashtra faced an oversupply of the kitchen staple due to excessive holding of kharif onions or Gavthi onions, which have a longer shelf-life and usually arrive by March. That year, there was a massive storage of such onions. Farmers retained their stock for over six months in the expectation that prices would rise. But they never did, and by December, panic-stricken farmers literally dumped the onions.

History of onion cultivation

Interestingly, onions are one of the oldest cultivated vegetables in human history. Although most scientists agree that onion cultivation started around 5000 BC in Asia, some believe that it was Central Asia that pioneered this, while other believe that it originated from Iran and West Pakistan. Archeological evidence shows that onions were planted by ancient Egyptians about two thousands year later.

Onions grow easily and are easy to plant! That is the reason why onions were among the first vegetables to be consumed and domesticated.

They can grow in multitude of soils and climates. They are less perishable than other vegetables and can be dried and stored for long periods as well as consumed when food is scarce.

In addition to their culinary use, onions are cherished for their antiseptic and medicinal use. Ancient Egyptians used onions in art and mummification and buried their Pharaohs with onions. Onions were cultivated and used by other civilizations like the Chinese (5000 years ago), the Sumerians (2500 BC), the Babylonians, the Greek, the Romans, and among ancient Indians.

The post As Onion prices soar over Apples, Nashik farmer reports theft of his Stock appeared first on SabrangIndia.

What is Behind Sky-High Onion Prices?

Wed, 25 Sep 2019 05:50:26 +0000

More than ‘short supply’, profiteering by traders is behind the ongoing high prices. But why is the government beating around the bush instead of acting fast?

Within weeks – in fact days – onion prices have gone through the roof across the country, reminding everybody of the periodic spikes in the past that caused governments to fall. In Delhi, for instance, the price of onions at the local sabziwala is ranging at Rs 60-80 per kilogramme, almost three times what it was a couple of months ago.

It is being said that the complex crop cycle has been disrupted, first due to last year’s drought in Maharashtra and Karnataka (two major onion producing states) followed by floods in both regions. Onions are sown three times in one year and supply is sustained round the year by storing some portion of the harvest (especially the winter one) to tide over lean months. There is some truth to this, as we will see later.

But first, have a look at another aspect. Taking Delhi as an example, onion was sold at the Azadpur mandi at a wholesale price of just Rs. 27.74 per kg but big traders and distributors sold it onwards at a retail price of Rs.42 per kg to small retailers. These in turn transported it to various local shops which sold onions at an average of Rs.60 per kg.

In other words, there was a 51% mark-up at the first stage, followed by a hefty 48% mark-up at the second stage. This, in a nutshell, is the way the onion price rise is playing out, whether in Delhi or elsewhere. Middlemen, especially big traders are making a huge killing in just a few days.

Having said this, let us look a bit deeper into the onion problem that keeps popping up every once in a while.

According to the third advance estimate of horticulture crops for 2018-19, issued by the agriculture ministry, onion production was 23.28 million tonnes in the agricultural year ending June 2019. This was practically the same as last year. So, it can’t be that onion supply has fallen drastically leading to a demand supply problem.

Yet, there is a sharp fall in the arrival of onions in wholesale markets, as per latest data from the National Horticulture Board (NHB). As the chart below comparing monthly arrival between January and September for 2018 and 2019 shows, last September, saw arrival of 3.98 lakh tonnes of onion while this year, till September 23, onion arrivals were less than half at 1.63 lakh tonnes.

In fact, the current year is marked by a steady declining trend in onion arrivals, which is quite the reverse of last year. Given the fact that last year’s production was practically the same as this year, this is bizarre.

The only explanation is that the supply of onions from the two major producing regions is being artificially restricted. This is not something that is unknown – in the past there have been multiple complaints against cartels operating out of Mumbai and Bengaluru that corner and hoard huge onion stocks in order to drive up prices.

In addition, there is also some disruption caused by flooding – damage to stored onions from winter, and transportation difficulties. But these would not have caused supply to halve.

The effect of this restricted supply [See chart below] has been dramatic. Last year, onion prices fell till May then increased till July and then dipped slightly till September. But this year, there has been a steady rise throughout the year, according to NHB.

What is notable about the prices, and can be see clearly in the chart above, is that retail prices are consistently above wholesale prices by a considerable margin – upward of 40%. The farmers are thus getting much less prices while the consumers are paying through their nose.

Which brings us to the heart of the whole maze. In times of shortage, the absolute profit made by big traders rises phenomenally. They do pay slightly higher prices to farmers (or their proxies), but the mark-up goes up much more than in times of normal supply. As shown in the chart below, the difference between retail and wholesale prices has inexorably increased this year from about Rs.727 per quintal (or Rs.7.27 per kg) in January 2019 to a breathtakingly high of Rs.1,372 per quintal (Rs.13.72 per kg) currently, in September this year, according to NHB. That’s a near doubling of the margin that traders are making out of the onion trade.

Note that last September the margin was Rs.808 per quintal, from which it has increased almost 70% to its present Rs.1,372 per quintal level.

That’s the real face of this Great Onion Robbery. And, what is the government doing about it? One has not heard of any raids on warehouses in Pune or Mumbai or Nashik or Bengaluru, although there are reports of thieves making off with tonnes of onions. Till date, the government has hiked up the minimum export price to prevent onion exports and issued a tender for import (withdrawing Pakistan’s name from it after protests). What was needed was swift and strong action against hoarders, breaking up of cartels and release of onions into the market to bring down prices. Also, onions could be procured and sold at affordable prices till the next crop comes in. All this would have saved people from unnecessary expenditure. The government’s inaction, especially in Maharashtra, which is the big centre of onion production, may have been driven by the impending Assembly polls in that state, many are speculating.

Courtesy: News Click

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