Decline in onion production in Maharashtra, not in profits
A five-year decline in onion production and nearly 50-60% hike in the price by the time the produce gets to the consumer are playing a major role in the ongoing onion crisis, which has brought many homemakers to tears.mumbai Updated: Oct 25, 2013 10:20 IST
A five-year decline in onion production and nearly 50-60% hike in the price by the time the produce gets to the consumer are playing a major role in the ongoing onion crisis, which has brought many homemakers to tears.
What is worrying is that f ar mers don’t see the situation improving till next March, even though traders feel the prices will stabilise post-Diwali.
“T he crop cultivated in July to harvest post-monsoon has been spoilt because of t he extended rains,” said Datu Sangale, a farmer from Lasalgaon, India’s biggest onion market.
The data maintained by the Agricultural Produce Market Committee (APMC) at Lasalgaon in Nashik shows a sharp drop in the arrival of onions since May this year.
In May 2012, the total number of onion arrival was 4.20 lakh quintals, while this year it reduced to 3.13 lakh quintals. Similarly, it declined to 2.55 lakh quintals in June 2013, as compared to 3.68 lakh in the corresponding period last year.
“September and October had the sharpest decline in the arrival of the crop in the past five years,” said Nanasaheb Patil, chair person, APMC Lasalgaon.
“Since onion isn’t easily available, the supply-demand ratio is not matching and the prices are going up. It is not because farmers are hoarding onions,” he said.
The long supply chain comprising various agents, wholesalers, middlemen and dealers is also contributing to the consumer’s burden.
By the time the onion reaches consumers in the city, there is a significant addition to the cost, depending on the profit margin at different levels.
The onion cost at Lasalgaon itself goes up by 10% because of several overheads such as market fee, association fund, levy, labour cost, packing, sorting, loading and wastage.
The transport charges are further added by bulk traders while delivering the crop to the wholesalers, along with his profit margin.
Further, the local wholesale agent charges 6% commission to supply the crop to the wholesalers, who pockets his profit while selling it to dealers, subdealers and retailers.
In many cases, wholesalers act as commission agents and garner both commission as well as profit on the sale of onions.