Onion farmers point fingers at traders for soaring price

Onion prices, which have been high for several weeks now, seem to have gone through the roof. And with Agriculture Minister Sharad Pawar saying that there will be no relief for the customer before Diwali weekend, it seems the festival season is well and truly jinxed.

But why are onion prices so high? How much of the high prices actually accrue to the farmer? A conversation with onion growers in Nashik, India’s largest wholesale market for the humble bulb, is illuminating.

Farmer Nilesh Vadge says, “I have not made a single rupee on the current price rise. I don’t have any onion stock. I will get my next harvest only in May-June 2014.

“Last May I sold onions for just Rs 10 a kilo and it was selling for Rs 12 in the open market. Even now, while the market for onions is 80 and 90 rupees a kilo, farmers are getting only 30 to 40 rupees a kilo.

“Farmers don’t have stocks and they don’t have godowns. We need godowns to keep the onion dry. But traders have lots of stock.

“Raw onions got spoilt in excess rain. The red ones get spoilt easily and so we sold immediately on harvesting. I always sell in end-May, before the monsoons start in June.

“Traders buy from us, dry it and stock, they make all the money.”

Another farmer from the same area, Bapu Deshmukh, echoes his lines. “We have no onions, they are with the traders now. I sold a month ago for Rs 30 a kilo, the last tractor-load I sold was for Rs 35 a kilo.

“My next crop will come only after Diwali. Onions take between three months to 105 days to mature. The best time to harvest onions is summer. We cannot harvest in rains and during rains the onions remain small.

“But traders are smart. They don’t sell from their godowns. They sell in the farmer’s mandi. In the big mandis you will notice that 100 tractor-loads of onion are brought there by farmers. But traders fill 200 trucks from there. Where does the extra onion come from? It comes from their own godowns.

“Take Peepulgaon nearby, for example. It’s a small mandi. This morning only 20 tractor-loads of onions arrived. But I counted. Every trader left with 20 tuck-loads of onions. They have huge stocks and they have made a killing”.

“Hoarders are the Kings today,” he adds wryly.

“Yes! I too have a godown but it’s empty. Traders have money, we don’t. Ours is a hand-to-mouth existence. Every day we need money for something or the other. We have to sell at the prevailing rate.”

Santu Patil, a big farmer and landlord, says a similar story. “I sold onions from my godown, not from my field. I sold from Rs 10 to Rs 30 a kilo. Rains spoiled half the onions. In one acre I got only 10 quintals. That I had to sell on the field for Rs 21 as it was wet and could not be stored.

“Rain has destroyed this year’s red onion crop. Only rotten onions are in the market now.

“Next year there will be a bumper harvest thanks to the bountiful rains this year. The output will be very high. Prices will be low.

“We don’t have stocks now because of excess rains. Traders have old onions and they are earning from those old onions. The new ones you cannot stock as they are wet, harvested in rain.

“Just now good onions will sell for Rs 60 a kilo but we don’t have it”.

Another farmer, Dhage, said, “Farmers never get anything. Traders and brokers make profits every years. I sold two months ago for Rs 15 a kilo. Traders fix low prices when we are selling. They form cartels.

“They then hoard them in godowns and sell much later. They have the money and the labourers to dry and store. Traders control the market. They shut the market and open it when it suits them. They make sure they benefit and we cannot do anything.”

“A few farmers are still bringing a little onion to the mandis but traders are filling many lorries. You do the math, you will understand,” he concluded.  

Kailash Thakker, an onion trader whose family has been in the business for 90 years, says, “Last year there was a deficit of 30 per cent and this year the first crop got spoilt in the rain. That is why the price rose.  

“The next crop will come after Diwali. The main harvest is after Diwali so the crunch situation is only for 20 days. Onions rot when they are harvested in excess rain. The crop after Diwali will be very good quality as the rains have stopped.”

But he refused to talk about hoarding by traders and told us to look at the National Horticultural Research and Development Foundation website for further answers.

NHRDF director, Dr R P Gupta, explains the crisis: “There was very little excess rain in the onion-growing areas of Maharashtra, Andhra and Karnataka. We lost 10 pc of production to insect disease and not to rain. Harvest is not possible in rains as the onions have to be dried for three to four days before being packed and transported.

“After Diwali the output will increase. Even now the prices are falling. In the rural market you get onions for Rs 35 a kilo,” he states.