Problem of plenty: Why farmers are shedding tears over onion prices

Onion prices are once again making people cry. Only this time, it’s not the consumer but the farmer who is reeling in despair.

india Updated: May 28, 2016 14:34 IST
HT Correspondents
HT Correspondents
Hindustan Times
Onion prices,Wholesale prices,Vegetable markets
Onions are selling for Rs 17-18 a kg in Chandigarh.(Shankar Mourya/HT Photo)

Onion prices are again making people cry. Only this time, it’s not the consumer but the farmer who is shedding tears.

A bumper production this year in Maharashtra and other states has sent crashing the wholesale prices of onions at vegetable markets across India.

“This is the worst year for onion growers as the prices have fallen to Rs 4-6 a kg from Rs 15-20 a kg. The loss is huge,” lamented Jagmal Kamboj, a farmer of Ratangarh village of Haryana’s Yamunanagar district.

“There are no buyers of onion in the markets of Kurukshetra and most of the farmers are selling onion in villages like vendors at Rs 200 per bag of 50 kg”, he added.

Ironically, prices of onions have periodically skyrocketed in the past and often caused distress to consumers and politicians. Abnormally high price of the staple triggered an uproar in the late 70s and was said to have contributed to the fall of the Charan Singh-led Lok Dal government. In 1998, a similar outcry over rising onion prices hastened the fall of the then BJP government in Delhi.

Earlier this month, a farmer in Pune made headlines after he claimed to have made a net profit of only R1 by selling 950 kgs of onions in the wholesale market.

“There is a slump in the market and customers are expecting that prices will fall further, hence they are not placing big orders,” said Balbir Singh, chairman of Chandigarh’s Sector 26 market association.

Onions are selling for Rs 17-18 a kg in Chandigarh. The prices are far less in places such as Madhya Pradesh, where onions were selling for just 20 paise a kg last month at the Ratlam mandi. In Bhopal, good-quality onion is being sold at Rs 7 to Rs 8 a kg while small onions cost Rs 2 to Rs 3 a kg.

A farmer packs onions for sale in market in a field some 30km north of Chandigarh. (AFP)

The low prices have landed farmers in debt as they are unable to recover even their input cost.

But some farmers say it is the result of an artificially created scarcity. “The prices have not crashed and these rumours are being spread by traders. A week ago, I sold my crop of medium quality at Rs 9.50 a kg,” said Patiala farmer KVS Sidhu.

“The traders know that farmers have grown the crop on a large scale this year, and now the traders are exploiting the farmers by creating panic and spreading the word that rates have crashed so that farmers sell the produce in distress,” he said.

“For the past four years, prices of onion touched triple digits and Rs 40-Rs 50 a kg was the average cost. So this year, farmers gave preference to sowing only onion. Hence, farmers themselves are responsible for this situation,” said Hariom Khatik, a retailer of Bittan market in Madhya Pradesh’s Hoshangabad district.

“We are storing as much onion as we can so that during the rainy season we can at least realise the production cost,” said a farmer at the Bhopal mandi.

(With inputs from Chandigarh, Karnal, Pune, Chennai and Bhopal)

First Published: May 27, 2016 13:46 IST