Maharashtra: How Political Ambitions Fuel Rising Onion Prices

Nasik, Maharashtra: One of India's biggest onion mandis, Pimpalgaon, is an hour's drive from Nasik, the lush heart of India's onion belt. Last year, an estimated four million tonnes of onions were traded here and in the 13 other mandis nearby, a third of India's total onion crop. The prices determined here impact prices across India of this politically sensitive vegetable.

And yet as we saw first hand, the auction of onion in Pimpalgaon was conducted only by a handful of traders. The price, it seems, was already determined. The lone official of the mandi receiving bids was simply going through the motions. Local onion farmers we met outside the mandi told us that the traders, many of whom have community or family links, act as a cartel. "They are a union," said a farmer. "If we don't like the price, they ask us to leave."

Only 55 traders have been licensed by the Pimpalgaon's Agricultural Product Marketing Committee, or APMC, the body that supervises the running of the mandis, a small number given that nearly 20,000 quintals (2000 tonnes) arrives here every day.

It's for this reason that the Centre asked onions to be placed under the Essential Services Maintenance Act (ESMA) which means its taken out of the mandi, and can be sold anywhere, a reaction to protests by Opposition parties against rising prices. The only state to reject the move: Maharashtra. The state government claims its because farmers do not have an alternative forum to sell their produce.

But some say that the real reason is the control of Nasik's onion mandis by politicians, mainly of the ruling Congress-NCP.

Dilip Bankar, ex-MLA of the NCP, is chairman of the Pimpalgaon mandi. He has supervised the building of  spanking new mandi, a few kilometres from the old one, named after NCP boss and former agriculture minister Sharad Pawar.
     
At Nasik's other big onion mandi, in Lasalgaon, chairman Nanasaheb Patil is from the Congress. Nine out of the 13 mandis are controlled by the Congress-NCP; one of them by the BJP.

Both Bankar and Patil claim that onion prices will rise because of unseasonal hailstorm earlier this year in Nasik which caused crop damage.

But despite the hailstorm, Maharashtra has seen an increased output of more than 1 million tonnes from last year, pushing India's onion harvest to a record 19.2 million tonnes in 2013-14. If anything, prices should fall or at least remain steady. But Bankar says, "Prices will rise. No one, not even the Centre, can do anything about it."

With assembly elections in Maharashtra around the corner, are mandi-president-cum-netas acting in public interest, or in the interests of onion traders, known to fund their campaigns?

Bankar is planning to contest again from the Niphad assembly seat, in which the Pimpalgaon mandi falls. In 2009, he had lost to the Shiv Sena. We asked the traders at Pimpalgaon whether Bankar will win this time. "Of course," said Atul Shah, one of the top traders at the mandi, adding, "such a person deserves to win. Kakaji (Bankar) has the support of all the traders."