ONION – WHY INDIA FACE SHORTAGE

OnionONION TEARS 

It is so wacky that how 1.25 Billion people can’t control the mighty power of insignificant product like ONION? The Small red bulb has power to bring down the government to its knees, be it BJP or Congress, it does not differentiate. We have seen governments crashing in year 1980, 1998 and 2010 mainly due to onion shortage. 

Year 2015 onion prices rocketed to the level of Rs.100 per kg which  never ever seen before.

It is very easy to blame the infamous channels because world believes it easily.  Same is the story of Shortage of onions in India.  It is easy to blame it on bad weather and nefarious network of small onion Traders. But the real masterminds of this game enjoy this shortage havoc from their well-guarded positions. 

REACTION OF GOVERNMENT 

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The knee jerk reaction of government is to ban the exports and raid onion traders. Which simply leads to unreliability of Indian exports in international markets and dissuading of small onion traders to exit the onion trade.

Government tries to controls the prices through various measures by setting Minimum Export Price’ (MEP) and including onions in the ‘Essential Commodities Act’ while reducing stock holding limits. But all such measures fail to pay any results when it come to the real shortage. 

REASON FOR SHORTAGE 

IMG_0018The Demand and supply situation do cause the volatility but we cannot put entire blame on onion trader. There is constant increase in demand for onion in the country which means the production has to increase in line with the demand.

When the onion season begins the prices for onion dips to the level of Rs.2 to Rs.7 per kg in the local mandi’s and these prices are way lower than the cost of growing onions. One of the farmer commented “When we don’t get the fair price for our crops than why should we grow them in first place”.

In order to control situation Government do take stop gap measures of  abolishing Exports and Raid onion traders. But  these sudden measures taken by the Government has major issues . In both the cases it discourages farmers to grow Onion because there is no mechanism to check the price fall when there is over production. It also discourages small onion traders to trade in Onion.  This also effect the Exports of Onion from the country .

Both the conditions are not favourable of consumers as it leads to price instability.

Maharashtra being the  biggest producer of Onions in India and Lasalgaon – Nashik District  is the largest hub of onions in Asia which contributes 80% of the total onion export of the country.

ONION SUPPLY CHAIN

REASON FOR GROWING DEMAND 

Growing population, fuelled with increase in per capita income is pushing the nation wide demand for good quality onions. Onion is King of all the vegetable, which can’t we replaced with any other vegetable, which leads to completely tenacious demand for onions. 

Per capita consumption of onions across all of India has been increasing due to many reasons including lifestyle changes. In l 10 years consumption of onions boosted to 40% in rural India and 20% in urban India. But the production has not increase in India to that degree. 

“The question lies who is getting benefit from this price volatility?”

SIGNIFICANCE OF ONION FOR INDIA 

As per world ranking Onion stand as the third most important vegetable. China is number and India stands second in the global production with 18 million tonnes annually 20% of global production.

Onion Export from IndiaIndia exported about 12.5 lack metric tonnes of onion in year 2014-15 which is on an approx. value of Rs.2300 crores. Last year it was about Rs.3177.00 crores 

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DOMESTIC SCENARIO 

No preparation is complete without onion in India. Be it rich or poor every household consumes onion so one can imagine the significance it carries.

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onion-pakoda

 

 

 

 

 

 

 

 

PRODUCTION SHARE IN INDIA 

The four major states which produces the onion Maharashtra, Madhya Pradesh, Karnataka and Gujarat.

Maharashtra tops to in the production and controls the balance of onion supply in the country. 

Sowing and harvesting of onion is done twice a year. Once in  Kharif which harvested between September to Jan and Rabi which is harvest between March and June. 

prices fluctationThe Rabi crop comprises approximately 60% of the total production which is available till October November and also for exports.   Prices are hiked mainly when the Rabi crops fails . 

Due to this harvesting pattern we have seen the prices fluctuating to dangerously low or unrealistic high.  

In 2015 alone prices swayed in retail market from Rs.10 to Rs.100 per Kg, this kind of fluctuation is not seen in any other commodity.

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PROBLEM THE FARMERS FACE

FARMER IN INDIA

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Even after being a significant player in the world the per hectare yield in India is lowest in the world.

Farmer in onion cultivation face various challenges which are very unique to India alone.

So the problem looks like this

  • Poor Productivity
  • High prices for good quality seeds
  • Abnormal occurrence of pest and diseases
  • High cost of quality fertilizers and pesticides
  • Irrigation and cultivation problems
  • Poor post harvest management
  • High moisture stress.
  • Short rains or disproportionate rains
  • High cost of Transportation
  • High volatility in prices making it a precarious crop
  • Prices and Supplies controlled through AMPC markets 
  • High charges by AMPC commission agents and  traders
  • Prices controlled by the Mafia and Cartels 

Due to such a problem farmers get discourage from intensive production and Good Farming practices, which leads to lower productivity and unrest among the farmer and traders.

TEARS OF JOY 

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Encouraged with last years results farmers have diverted the cropping of other cash crops towards the onion cultivation hoping to cash healthy returns from onion.

According to NHRDF the total cultivation under onion has gone up to extent of 15% to 20% in the current summer – 2016 crop season. Seeing at current harvesting scenario it is being predicted that onion production will cross the mark of 20 million tonnes this year.  

So lets hope both farmers and common man will enjoy this year.

Author  MANISH BEHL  welcome your comments 

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