Maharashtra farmers face drought and low prices at same time

For Maharashtra’s farmer, 2018-19 has seen a double whammy of both drought and unremunerative prices. Ironically, the spectre of low prices is haunting predominantly the very areas that are reeling under drought.

Thus, while Maharashtra, in 2018, received only 939.4 mm of rainfall, as against its normal yearly quota of 1,278.1 mm, the corresponding numbers were worse for the Marathwada region (Aurangabad, Beed, Jalna, Latur, Hingoli, Parbhani, Osmanabad and Nanded districts: 533.2 mm versus 847.6 mm) and Nashik division (Nashik, Ahmednagar, Dhule, Nandurbar and Jalgaon districts: 482 mm versus 819.2 mm). It is the chana and onion growers of Marathwada and Nashik, respectively, who are also facing both crop loss as well as dismal price realisation.

The lower crop area and production not helping bolster prices has left farmers like Kulkarni totally foxed. Maharashtra, last year, reported chana sowing at 19.77 lakh hectares (lh), which has fallen to 13.13 lh this time. Traders are attributing the prices not recovering from last year’s lows — which could be explained by an all-time-high crop — mainly to the large unsold inventories lying with government agencies.

In 2018, the National Agricultural Cooperative Marketing Federation of India (Nafed) procured a record 27.24 lakh tonnes (lt) of chana under the Centre’s Price Support Scheme (PSS). It still has 19.37 lt of stock from those purchases. “The offloading of that chana now, when the crop has already started arriving in Latur, Akola and other markets, is having a negative impact on prices. If Nafed continues to sell and there is no government procurement (at the minimum support price of Rs 4,620/quintal), the bearish trend will continue,” says Nitin Kalantari, CEO of Kalantary Foods, a leading Latur-based dal miller and pulses trader.

Around 400 km from Latur, onion growers in Nashik, too, are under the spell of low prices, even as drought stalks their area. Santosh Gorade, a farmer from Takali Vinchur village in the district’s Niphad taluka, sold around 290 quintals of late-kharif onions from three out of his total 7.5-acre holding in January, at an average rate of Rs 450/quintal. He still has an acre of the crop to harvest. “Prices at Lasalgaon (India’s largest market for the bulb) are still at the level when I sold my last lot on January 29. I dread going there again,” notes Gorade, who also cultivates grapes on 3.5 acres.

Just over a year ago, he, like other onion farmers, was a much happier man, as the average modal price at Lasalgaon ruled at Rs 2,849 per quintal in January and Rs 1,544 in February. These have plunged to Rs 531 and Rs 421 for the same months of this year. Like in chana, prices have dipped despite moisture stress leading to the area under late-kharif onions (sown in September-October and harvested post January) in the state falling from 1.21 lh to 90,840 hectares this year. The area sown under the rabi season (late-November to January), too, is much lower at about 2 lakh, as against the 2.76 lh of 2017-18. Vijayraj Bafna, an onion trader who operates out of the neighbouring Pimpalgaon market, blames the present price drop to lacklustre exports. After peaking at 24.16 lt in 2016-17, India’s onion shipments fell to 15.89 lt in 2017-18 and 15.22 lt in April-December 2018. The repeated banning of exports whenever domestic prices have gone up had led to India’s share in global markets being captured by rival countries such as China and Pakistan. Only recently did the Centre start giving a 10 per cent subsidy on onion exports under the Merchandise Export from India Scheme. “If the subsidy was not there, prices would have tanked further,” admits Bafna.

Whether the double whammy of drought and low prices will have a bearing on the coming Lok Sabha elections is anyone’s guess.