There is huge pressure on the government to bring down onion prices. (AFP)
What has caused India's onion price spike is now a matter of concern as prices are hovering around Rs 150 a kilogram in several places. NDTV visited Lasalgaon in Nashik district of Maharashtra which is a hub for procurement of onions from farmers and supplies from here are sent across the country. NDTV found out that farmers continue to lose money due to crop damage and how poor supply has led to price hike and more worries for farmers as the government plans import of onions to tackle rising prices.
The agricultural produce market in Lasalgaon is one of the major wholesale onion trade hubs in the country which on an average handles around 15,000 to 20,000 quintals of onions a day. But empty spaces at the market tell you the story of why onion prices are so high. There simply isn't enough agricultural produce of onions in the market pushing up prices steeply. In November this year the market handled an average of 6,000 quintals and that figure has further dropped to 3,500 quintals a day this month. Unseasonal rain inundated massive tracts of the onion growing areas leading to crop damage that has resulted in this shortage of supply.
However, in spite of the high prices, onion farmers are still staring at a prospect of huge losses. After a glut last year resulting in losses, even high prices this year aren't helping them as they have only about 20-30 per cent of the crop to sell. The rest has been damaged by rain. Ramesh Khodke says in his crop he has hardly anything left and even with the current price of onions at the agricultural produce market, he won't be making any money. He tells us 70 per cent of his standing crop was damaged by unseasonal rain and the rise in onion prices is the only way he'll manage to recover some of his money. His grouse with the media is no one complains when farmers are forced to sell their produce cheap and no one reports from the markets at that time.
"From one acre crop we used get three to four trolleys of onions. Today we are getting only ten quintals due to unseasonal rain as our crops have been ruined. Everyone today is complaining about high prices and they want prices to come down. I want to ask my friends in the city this. Last year we sold onion for Rs 2 a kilo! Where was the media then? Did anyone complain then?" Mr Khodke tells NDTV.
Mr Khodke is right. Onion production has drastically fallen with the standing crop damaged and with Nashik suffering huge damage the impact is being felt across the country. The Chairperson of the Lasalgaon agricultural produce market, Swarna Jagtap, told NDTV, "We supplied 15,000 to 20,000 quintals from Lasalgaon a day last year at this time. Now we are supplying 4,000 quintals. Most of the crop has been lost and even with these prices the farmers won't make a profit as they don't have much crop to sell." The Lasalgaon market accounts for 28 per cent of Maharashtra's onion produce and the state accounts for 35 per cent of the country's onion requirements.
Onion farmer Shankar Shinde says his loss has run into lakhs and observes that the only way to recover some of his money is to sell at the current prices which is Rs 10,000 for a quintal. Last December he sold his crop for Rs 1,500 a quintal. Ishwar Shinde, another onion farmer says, "Right now farmers have lost 70 per cent of their crops. Now we are getting some money and even that we won't get if the government imports onion. Those who are screaming about onion prices have a point but farmers are still losing money. They should hold the decision of importing onions to bring down prices as that will create a glut and prices will crash."
Manoj Jain, an onion trader echoes this view. "After 15th December there will be fresh supply and you won't have complaints about onion prices. There is no need to panic and prices will come down soon," he told NDTV.
With huge pressure on the government to bring down onion prices, an import seems to be the only solution to bring down retail prices but that has now become a major worry for farmers as with fresh crop set to arrive in a fortnight, they will have to sell their remaining crop at throwaway prices as the market will be flooded with imported onions.