Farmers to dump onions if prices fall further

Seek government intervention, minimum export price removal, restoration of farming incentives

Onion farmers are preparing to destroy truckloads on the streets of Pimpalgaon and Lasalgaon, Asia’s two leading mandis of the product, in protest if prices fall further.

Data compiled by the National Horticulture Research & Development Foundation (NHRDF) showed onion price in the Lasalgaon market had fallen 30 per cent this month to Rs 6.2 a kg on Monday against Rs 8.7 a kg on February 1. In Pimpalgaon, the price dipped from Rs 8 a kg to Rs 5.5 a kg.

From Rs 60-80 a kg in the wholesale market and Rs 80-100 a kg in the retail market in October, prices have plunged to Rs 3-12 and Rs 8-16 a kg, respectively,  across the country in four months. The wholesale price of the fair average quality is moving between Rs 3 and Rs 6 a kg across all these markets, with the late summer crop quoted the lowest due to a short shelf life and the normal winter one the highest on export quality.

“Farmers are desperate as they brought in more area this year due to the retail price of Rs 100 a kg last year,” said Atul Shah, director, Agricultural Produce Market Committee, Pimpalgaon.

The climatic conditions being favourable this year on adequate soil moisture, the agriculture ministry estimated a 13 per cent rise in output at 19 million tonnes this year against 16 million two years ago.

“If the government does not incentivise exports, prices will fall further to Rs 1-2 a kg, equivalent almost to the transport cost, making no sense to bring the commodity to mandis. Therefore, the government must lift the minimum export price (MEP) as importers see that as a hurdle,” said Ajit Shah, president of the Horticulture Exporters Association.

From $1,150 a tonne, the government cut the MEP in phases to $150 a tonne. According to sources, the ministry has forwarded the MEP suggestions from exporters to the commerce ministry. The decision for lifting may be announced soon.

Exporters are facing problems in terms of non-availability of containers and congestions of ports. Also, these were availing incentives earlier under the Vishesh Krishi Gram Upaj Yojana (VKGUY).

"Exports are exempted from mandi tax. Despite that, when exporters come to mandi for booking the required quantity, APMC officials harass them with a penalty of up to Rs 60,000 a truck. Also, mandi officials drag exporters into litigations," said Shah.

R P Gupta, director of NHRDF, says prices have been falling on a sudden spurt in arrivals. In the Mumbai mandi, total arrivals have surged to 1,375 tonnes on Monday from 885 tonnes early this month. Arrivals are going to intensify from new regions.

"Even after government measures and large quantity purchases from warehouse keepers, prices are unlikely to move up in the near future," said Gupta.