As glut hits prices in Maharashtra onion hub, farmers lose hope, brace for bleak new yearhttps://indianexpress.com/article/india/as-glut-hits-prices-in-maharashtra-onion-hub-farmers-lose-hope-brace-for-bleak-new-year-prices-5492887/

As glut hits prices in Maharashtra onion hub, farmers lose hope, brace for bleak new year

By all accounts, 2018 has been a year of deep losses for Maharashtra’s onion growers.

As glut hits prices in Maharashtra onion hub, farmers lose hope, brace for bleak new year
At an onion farm in Kalwan, Nashik. (Express photo by Nirmal Harindran)

IT HAS been a couple of weeks since Sanjay Balkrishna Sathe, 44, sent Prime Minister Narendra Modi an online money order of Rs 1,064 — the proceeds from the sale of 750 kg of his “top quality” onions at the Niphad marketplace in Nashik, home to half of India’s onion crop. The money order was returned unpaid on December 3, followed by a call from the District Collector’s office regarding his plight. An avid follower of Mann Ki Baat, Sathe says when he felt gutted that his crop would fetch a maximum price of Rs 1.51 per kg, he remembered the Prime Minister once responding to a child’s letter in his radio address.

“I thought perhaps I might get a similar response, too. I wanted to draw attention to the devastation that we are facing in Nashik,” says Sathe. Last week, an onion farmer in Ahmednagar sent Maharashtra Chief Minister Devendra Fadnavis the Rs 6 he was left with after deducting transport and labour costs from the proceeds of a large batch of onions. That was just days after two onion growers killed themselves in Nashik district in separate incidents. Across the region, there has been a surge in agitations and petitions to local officials by onion farmers.

By all accounts, 2018 has been a year of deep losses for Maharashtra’s onion growers. Prices that were above the Rs 28-per-kg mark at the start of the year have dipped to below Rs 7 per kg. As farmers destroy their carefully preserved stock that is beginning to spoil, there is no sign of the market improving soon.

Jaydutt Holkar, chairman of the wholesale market in Nashik’s Lasalgaon, cites a number of reasons for the price crash. First, he says, is the huge stock of stored onions coming to the markets along with the newly harvested kharif crop. Moreover, the arrival of the state’s kharif crop has coincided with Karnataka’s kharif crop, thus closing the doors for Maharashtra’s onions in southern markets.

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Lasalgaon has the largest onion market in the country, with daily arrivals between 15,000-20,000 quintals. Ironically, daily arrivals in December are over — 10,000-15,000 quintals — and yet prices have crashed in comparison to last year. In addition to the Karnataka crop, Rajasthan and Gujarat, too, have seen a pick-up in onion arrivals. This means prices may drop some more till January, until the stored onions run out.

“We are never able to time the market correctly, is there a scientific way to do that?” asks Vinod Khairnar of Juni Bej village in Nashik’s Kalwan taluka. He stored about a hundred quintals when prices were hovering around Rs 1,500 a quintal, buoyed by his newly built storage chawl for which the government provided assistance. That was in May. Prices in Lasalgaon market were Rs 698 a quintal then, down from Rs 2,849 per quintal in January.

Around Diwali, Khairnar began to sell in batches — he needed the cash around festival time even though prices had improved to only about Rs 1,310 per quintal. Since then, however, prices rapidly slipped and Khairnar sold at Rs 945 a quintal in November and Rs 350 in December. Average prices in Lasalgaon are currently Rs 600-700 per quintal. The cost of production is pegged at Rs 1,000 to Rs 1,200 per quintal.

Maharashtra’s farmers grow three crops of onion. The crop sown in June-July and harvested post-September is the kharif crop, while the late kharif crop is planted post-October and harvested December onwards. The rabi crop is sown in December-January and harvested post-March — by far the most important crop as it is amenable for storage through summer.

Normally, such stocks are liquidated before the arrival of the new crop, but this year Holkar says the farmers held on. “There are around 2-3 lakh tonnes of stored onion, and this is dragging the price down,” he says. The long storage period has also deteriorated crop quality.

The trend comes at a time when rabi sowing is underway. Maharashtra has reported 1.79 lakh hectares of rabi sowing, which is not expected to cross the over 2 lakh hectares of 2017. The sowing is also set to be affected by severe moisture stress due to a failed monsoon, and traders feel prices may be bullish once the effects of the drought begin to be felt strongly.

“I’ve sown for a rabi onion crop,” says Sathe of Niphad, whose son is completing his BA in a Lasalgaon college and simultaneously doing a course to get inducted into the military. “We don’t have another option to farming, however poor the prices. But the next generation doesn’t want to be caught forever in this poor prices-drought spiral.”

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