Onion prices on fire, here is what Maharashtra government has done to douse it

Published On: 01, Dec 2017 | Source: financialexpress.com

The Maharashtra government has decided to offer direct marketing licences and ease the process for traders to keep onion prices in check. A decision to this effect was taken at a meet chaired by Maharashtra cooperation minister Subhash Deshmukh. The minister told FE that giving direct marketing licences would end the monopoly of few traders who enjoy access to the agriculture produce market committees and easing up the process would lead to healthier competition among traders and thereby benefiting both farmers and consumers.”If we study the markets for the past 8-10 years, it may be noticed that when the production is good farmers end up distress selling their produce to traders. A lot of volatility has crept into the market which is dominated by few traders and therefore more traders need to be brought into the chain,” he said. The minister said instead of waiting for the situation to worsen, there is a need to take preventive measures to ensure the well being of farmers. Sunil Pawar, MD, Maharashtra State Agriculture Marketing Board ( MSAMB) said that around 600 direct marketing licences have been given to traders and there is a move to speed up the process. The objective is to end the monopoly of few traders, he said adding that more private markets will be opened for commodities as well. At present there are around 48 private markets in the state of which around 35 are for cotton, he said.

The minister said that more than 70-80% of the country’s onion export happen from Maharashtra and onions from Lasalgaon and Nashik are known for their quality.To end the monopoly of agents, brokers and commission agents, it is important to make the process of licences easier. Deshmukh who had also called Railway officials for the meet said that since there is huge demand from the North, North East and Kolkata, the Railways should be prepared to offer more wagons. Farmer Produce Companies (FPCs) should also pitch in and purchase onions from the ground level and also hire railway wagons to send onions in other states, he said. Average wholesale onion prices at Lasalgaon have increased thrice in the past two months from Rs 1,250 per quintal on September 19 to `3,200 per quintal on November 23 due to short supply. The retail prices of good quality onions in Nashik have touched Rs 50 per kg, while the retail prices in major cities like Mumbai and Delhi have touched Rs 60 per kg.

On Wednesday, stating that the onion yield this year is expected to be lower, the Centre expressed its helplessness in controlling the rising prices of onions, which crossed `60 per kg this week in Delhi. Union food minister Ram Vilas Paswan said the production this year was expected to be lower since the area under onion cultivation had reduced to 1.90 lakh hectare in 2017-18 from 2.65 lakh hectare in 2016-17. “We have taken several measures, such as procurement by agencies from areas such as Nashik and Alwar where the cost is lower, as well as import of onions. But it is not in our hands,” Paswan said. Once the supply from (late) kharif starts, prices may come down, he added. The current onion crisis, triggered by an almost 30 % drop in kharif onion acreage in Maharashtra and Karnataka, two major onion-growing states, is expected to be short-lived. In Karnataka, 2017-18 kharif onion acreage is around 21 % less than last year, while in Maharashtra, the area is around 32% less.

Onion is cultivated usually thrice in a year. The biggest is the rabi crop, sown in December and January and harvested around April-May. This biggest onion crop in India contributes over 60% to the total output. As it is storable, it sustains the country’s onion demand till the kharif harvest comes around October-November. In 2014-15, India produced 189 lakh tonne of onion; this rose to 209 lakh tonne in 2015-16 and further to 217 lakh tonne in 2016-17. In Maharashtra, supplies got exhausted as large quantity of exports were undertaken in the first four months of this fiscal. The country exported 12.29 lakh tonne in April-July of this fiscal, up by 56 % from the year-ago period. Also, the new 2017-18 kharif crop, which is being harvested is expected to be less owing to fall in acreage. As per reports from the consumer affairs ministry, the new kharif crop is likely to be lower by 10 % as area sown is less by 30 %. Around 40 % of the country’s total onion crop is produced in the kharif season, and the rest during the rabi season.