Know your onions

India has 3,27,000 hectares under onion cultivation and produces about 42 lakh tonnes per annum in three seasons: kharif, late kharif and rabi.For the kharif season, the seeds are sown in May-June, transplanted in July-August and harvested between September and December. The kharif crop is grown in the rainy season and is vulnerable to adverse weather conditions. It has a very low shelf life of about a month and has high moisture content. The country has about 70,000 hectares under kharif onions, producing about 9 lakh tonnes.

For the late kharif season, seeds are sown in August-September, transplanted in September-October and harvested in January-February. There are only three states which grow onions in this season: Maharashtra,Gujarat and Orissa. Orissa, incidentally, does not grow onion in the kharif season. The total area under the late kharif crop in the country is about 50,000 hectares and the production is around nine lakh tonnes.

For the rabi season which is the main season for onion production, seeds are sown in October-November, transplanted in December-January and harvested in April-May. The rabi crop has low moisture content and can be stored for five to six months. The country has about two lakh hectares under rabi onions, producing about 23.5 tonnes.

The peak supply season is after the rabi harvest, usually from May to September. The prices are lowest during this period. Traders who have storage facility buy the crop in bulk and store it for five to six months after curing, grading and sorting.

The lean supply season is from October to December. During this period, the stocks of the rabi crop is usually over and the fresh kharif crop is expected to take care of the demand. The problem begins when the kharif cropis damaged by rains or adverse weather. On such occasions, the lean supply period extends up to January-February, till the late kharif crop is harvested.

PRICES

In Maharashtra, which tops onion production in the country, the cost of production for the farmer is between Rs 250 to Rs 300 per quintal Rs 2.50 to Rs 3.00 per kilo. The farmer has to bear the brokerage, handling and weighing charges, which are in the range of 8.5 to 10 per cent of the total value auctioned at the wholesale market. The trader who buys the crop from the farmer has to bear 12 per cent market fees, one-per cent on supervision charges and transportation to retail markets in other towns and cities. The overheads for the trader are around 15 per cent of the value transacted. The crop is transported to other cities, where a fresh chain of wholesalers and retailers take over, increasing the price at each stage.

The crisis began in the kharif season last year. Untimely rains and adverse weather destroyed the kharif crop. InMaharashtra, the major producer, the kharif production decreased from 1.5 lakh tonnes to 40,000 tonnes. The overall production in the kharif season fell from about nine lakh tonnes to about 5.5 lakh tonnes. The next crop, late kharif was also hit by adverse weather and its overall yield declined from 8.7 lakh tonnes to 7.1 lakh tonnes. In Maharasthra itself, the production of the late kharif crop fell from 4.8 lakh tonnes to 3.6 lakh tonnes.

The prices have been rising since then. And, when the rabi crop entered the markets in April-May, it was a traders8217; market. The wholesale prices were about Rs 4 per kilo in October 1997. There was a steady rise in the prices, which went up to Rs 6.50 per kilo in the first week of November 1997. In the second week of the same month, the prices went up to Rs 8.50 per kilo. By the end of November, the prices had shot up to Rs 12 per kilo. The rising trend continued in the month of December. By December end the prices had gone up to Rs 17 per kilo.

In February 1998, thewholesale prices were around Rs 18 per kilo. The arrival of the rabi crop in April-May brought a marginal fall in prices to around Rs 10 in July. The prices then picked up in August to Rs 12 per kilo and then to Rs 17 per kilo. By the second week of September, prices had reached Rs 23 per kilo. In the first week of October, prices were Rs 33 per kilo. And, as the stocks of the old rabi onions started disappearing, the prices were at an all-time high of Rs 40 per kilo last week.

REASONS FOR RISING PRICES

Heavy rainfall and cloudy weather during the kharif cultivation for two successive years. Onions require bright sunshine during the bulb formation stage and adverse weather leads to diseases, elongation of necks and rotting.Traders had foreseen the shortfall in production and hence in the last rabi season, they bought onions in bulk and stored them. The rabi crop incidentally, can be stored up to six months, unlike the kharif crop which rots within a month. There are about 15 to 20 big traders inthe Nashik region, the country8217;s onion heartland.

As the prices kept increasing, wholesalers and retailers tried to earn as much as possible. For instance, even as the new kharif crop started arriving in the market along with the stored summer crop, retailers continued to sell the new crop priced at Rs 10 to Rs 12 per kilo in the wholesale market at a high rate of Rs 40 onwards per kilo.

The Government did too little and too late to arrest the prices. The ban came in too late. There was no control on hoarding onions. According to an estimate, about two lakh tonnes to about 2.5 lakh tonnes of onions were bought and stored by traders in the onion growing pockets of Maharashtra during summer, when the prices were around Rs 10 per kilo.

The decision to import onions came in very late and a major chunk imported by NAFED went straight to Delhi, where the ruling BJP wanted to face the election with a smile.

No attempt was made to reduce the loss of onions in handling, storage and transportation.According to conservative estimates, about 30 to 35 per cent of the crop is damaged in transit.

The Bhabha Atomic Research Centre, Trombay has planned an irradiation plant in Nashik to prevent sprouting of onions and extend their shelf life. The project is yet to take shape.

SOLUTIONS

Increasing the area under late kharif onions to take care of supply in event of the failure of the kharif crop.

Preventing loss of onions in handling and storage.

Forming a link between consumer fora and wholesale markets or between voluntary bodies and markets for procuring and selling onions and other commodities in cities.

Crisis will continue till mid-8217;998217;Union Minister of State for Agriculture Som Pal tells SHARAD GUPTA

Onion prices are unlikely to fall until May next year when the rabi crop is expected. But with 30 to 40 per cent damage being reported to the late kharif crop 8211; expected in January 8211; due to inclement weather, the Government will have to continue imports even after December, whenthe deadline for Open General License OGL imports ends.

Union Minister of State for Agriculture, Som Pal blames bad weather conditions for the poor kharif and late kharif crops which, in turn, have sent onion prices skywards.

First, it was intensive heat in Maharashtra and Gujrat during May which affected sowing of the Kharif crop, then excessive rain in August-September hampered its harvest and sowing of the late kharif. At least 30-40 per cent bulbs of late kharif are reported to have been damaged.

The country will thus have to wait for the Rabi crop expected in April-May 1999 to get onions on cheaper rates.

8220;Extent of flood could be gauged from the fact that all 17 tributaries of Brahmaputra were in spate for about three months from May 22 and half of Eastern U.P. was submerged for about two months July and August,8221; Som Pal says.

8220;The Government had hoped for a better onion crop this year than last year but weather has wreaked havoc not only on common man but on farmer as well,8221; says theminister. Thus, instead of an expected kharif and late kharif yield of 13 lakh tonnes, the actual produce is likely to be only 8.65 lakh tonnes, further precipitating the crisis.

The minister, however, appears optimistic about the rabi crop and claims that the Government has prepared elaborate plans to meet such problems in future. 8220;We are trying to increase production of onions from 10 tonnes per hectare to 15 tonnes per hectare, besides increasing the onion storage capacity by another 4.5 lakh tonnes and increase annual production from 40 lakh tonnes to 50 lakh tonnes by next year and to 65 lakh tonnes by the end of Ninth Five-year plan,8221; he says.

The Government was also intending to encourage farmers in non-traditional areas to grow onions, he added.