Nashik onion traders on strike: What are their demands, and could this affect onion prices?

Why are Nashik’s onion traders on strike?

On September 21, the traders and commission agents of the 15 wholesale markets in Nashik decided to start their indefinite strike, to protest against a recent government decision where a 40 per cent export duty was imposed. The duty’s removal is an important demand of the traders.

Additionally, traders wanted government agencies like the National Cooperative Agricultural Marketing Federation (NAFED) and the National Cooperative Consumer Federation (NCCF) to not sell the onions that they procure from farmers in wholesale markets in retail destinations. Unlike NAFED and NCCF, they say they can’t cut their costs and are unable to compete with them in terms of prices.

Traders have also demanded a reduction of the market cess, which is levied by the wholesale markets for services extended to traders. However, traders said the cess levied in Nashik – 1 per cent of the transaction fee – was too high.

When meetings with the market committees failed, the traders decided to boycott auctions in all 15 markets of Nashik. More than 10 days have passed but there is no headway into the strike, with multiple levels of talks having been held with the state ministers and also Piyush Goyal, the Union Minister of Commerce and Industry and Minister of Consumer Affairs, Food and Public Distribution.

And what are the government’s arguments?

Government officials said the 40 per cent export duty was meant to control onion exports and ensure enough availability in the domestic markets, due to the lower-than-normal levels of stock available at present. Earlier in the year, around 40 per cent of the onions meant for storage were destroyed due to untimely rain and hailstorms. Onion acreage in the country has also dipped, with the country reporting 2.31 lakh hectares of land seeing sowing this year as compared to 2.53 lakh hectares last year.

The government said that the demand for NAFED and NCCF to not participate in offloading their wares in the open market is untenable. “We had taken the conscious decision to offload our wares in the markets, where price escalation was high, to control the price. Also, we do not have any separate retail channels to offload our procured onions,” said an officer from the Ministry of Consumer Affairs.

What would be the immediate effect of the strike?

For traders, the decision to boycott the auctions of onions in mandis does not mean the end of business. The Devendra Fadnavis-led BJP government, in its earlier tenure, had irregularised onion from the list of commodities in the Agricultural Produce & Market Committee (APMC). It meant that traders could buy onion directly from the farmers who were outside the APMCs which was not possible earlier.

Traders said this was a preferred option for them as they would be spared the 1 per cent cess that market committees charge on transactions. “Even if we buy from outside we can deal with the traders in the retail markets, so overall our trade would continue,” said a trader from Nashik. On the other hand, the mandis would lose out on the cess – their only source of income.

Mandis, on their part, have already started issuing show cause notices to the traders and it was being contemplated that their trade licenses could be cancelled, but the traders said they have already surrendered their licenses. At present only the Vinchur market, which is a sub-market of the Lasalgaon wholesale market in Niphad taluka, is operational.

How has the onion traders’ strike affected the prices?

Retail prices of onions have not seen much difference due to the strike. Traders say there are two main reasons for this. One, the strike is only in the Nashik district, which feeds the retail markets of north and northeast India. And two, stored onions in Madhya Pradesh, Gujarat and other states are feeding these markets currently. Further, retail markets in south India are being fed by onion growers from Pune, Ahmednagar and also those from Karnataka. However, exports have come to a grinding halt.

But the present calm might not last for long. Other than reduced onion acreage, the condition of the present crop is not very satisfactory. This crop that was supposed to be planted in June was planted a month late and would thus only arrive by the end of November. By then, the stored onions in all other districts and states would be over and only the Nashik farmers would have some onions left.

That being so, price rises cannot be ruled out till the time the new crop arrives in the market – which would prove to be a challenge to the government.