Crashing onion prices have got eyes watering once again, and angry farmers from Nashik’s Dhindori region, the country’s onion basket, are on a Long March to Mumbai. For the political class, the timing isn’t right. The Maharashtra Legislative Assembly’s budget session is on, and the Eknath Shinde-BJP government is on the back foot. Last Monday, to buy peace, Chief Minister Shinde announced a Rs 300-per-quintal subsidy for onion, but the farmers want a minimum of Rs 600 a quintal.
High output, lack of storage and general government apathy has made the onion and potato crop a source of misery almost every year. In December 2018, the prices in the country’s onion mandi Lasalgaon, Nashik crashed to Rs 1 a kilo forcing a dejected Nashik farmer, Sanjay Sathe, to send Rs 1,064, his total earnings after selling 750 kg of his onion crop, to the Prime Minister’s Office (PMO).
When the production cost is about Rs 800-900 per quintal, and the auctions at Lasalgaon are paying Rs 300-400 per quintal, then it is better to let the crop rot in the ground rather than add to the losses with transport costs.That was what the Nashik farmers did this year. Mounds of ripe onion became the fuel of Holika bonfires on March 6 as a mark of protest.
The cycle of protest is unending as there is no lasting solution. The current Long March by the CPM-led All India Kisan Sabha (AIKS) is the third big rally of farmers in Mumbai for remunerative prices in 5 years. In March 2018, a sea of 70,000 tribal folk and farmers paralysed Mumbai for the very same issues. Little has moved since.
In the north, it is the hot potato that is giving planners and politicians sleepless nights. In Punjab and Haryana, table varieties of potato, selling at Rs 1,400 to Rs 1,500 per quintal in the previous season, are now fetching just Rs 350- Rs 400 a quintal. Premium varieties have crashed to Rs 550 from Rs 1,800 a quintal.Sambhal district, a potato growing hub in UP, is reporting sales at Rs 3.25 to Rs 3.50 per kilo when production cost is above Rs 8 per kilo. Farmers are queuing up to stock them in cold storages.
They hope to postpone sales and bring their crop into the market when prices firm up. But cold storage owners are demanding up-front payments fearing the farmers may abandon their produce if prices don’t improve.The government’s stock justification of the farm crisis is ‘over-production’.
However, ‘over-production’ is a relative ‘situation’. Scratch the surface and the problem may be more one of transportation, storage and lack of timely government intervention.The crops we are talking about have a limited window for sales; and if not stored well, perish quickly. Onion has two seasons – the rabi crop, which can be stored for 4-6 months, which comes in March and April; and the Kharif sales, which has a very short shelf life, that reaches the market in the September-November period.
The irregular supply and the inability to stock it for long periods gives onion the yo-yo we see in prices.
Prices shoot up too. Unseasonal winter rains in 2020 pushed up onion prices in the western region of the country to Rs 90-120 a kilo forcing the government to relax import restrictions.
When onion prices shoot up, there is a hue and cry. In 1980, rising onion prices was one of the factors that helped Indira Gandhi topple India’s first non-Congress government. Again, in 1998, the BJP had to pay a heavy price in Delhi due to a sharp increase in onion prices. Urban outrage has more political weight. However, when prices plummet and the poor farmer pays, barely a leaf stirs.
This year, while there is a glut of supply of onions and potato in the Lasalgaon and Pimpalgaon in Maharashtra, ironically from Morocco to Turkey and for most of Europe, onions and tomato prices are on fire because of a lack of supply.
From the Ukraine war that has broken supply chains to mafia cartels hoarding and jacking up prices, has left supermarket shelves devoid of onions, carrots and other vegetables. What then is preventing India, which produces 20% of the world’s onions, reaching its stocks to those crying for supplies?
Timely bailouts through market intervention schemes (MIS) is another way to stave off a crisis. The FY2023 budget had a budget of Rs 1,500 crore for providing support when prices of commodities such as onion and potato or fruits fall below a sustainable level. But money for MIS in the current FY2024 budget is as good as nil.
The National Agricultural Cooperative Marketing Federation (NAFED), as an emergency measure, has been asked to step up procurement to stabilize onion prices. But we have to move beyond knee-jerk measures. Intervention will only work if it kicks in well in time and b fore the crisis has ballooned to a point when farmers begin to take their own lives.