Record onion production likely

Convinced by govt's open market procurement last year, farmers bring 9-12% additional area under onion cultivation this year

Record onion production is likely this year with farmers diverting cropping of oilseeds and cotton in favour of the vegetable after assured positive returns in the past few years.

According to National Horticultural Research and Development Foundation (NHRDF), total acreage under rabi season crop would increase by 15-20 per cent this year. The rabi sowing season of onion contributes nearly 60 per cent of India's annual output. The kharif and late-kharif sowing seasons contribute 20 per cent each to the annual cycle of onion production.

Based on this estimate, India's annual onion output would set a new record at over 20.6 million tonnes this year, breaching the previous record of 19.40 million tonnes in 2013-14.

"The overall onion production during 2015-16 is expected to increase 10-15 per cent, provided the current favourable climatic conditions continue throughout the rest of the season till harvesting," said R P Gupta, director, NHRDF.

Meanwhile, transplanting of rabi onion seedlings in Maharashtra started from mid-December and will continue for a month. Indications are that transplantation of onion seedlings has been robust in major centres like Nasik, Beed, Latur and Aurangabad in Maharashtra. The state contributes around 30 per cent of India's annual production.

Transplanting of onion in drought-prone districts including Marathwada, Solapur, Sangli and Parbhani, however, has been slow due to the lack of soil moisture. As a consequence, sowing in these centres might be affected, albeit marginally.

Overall onion sowing area is also estimated to be record high at 1.26 million hectares in the current crop year (July 2015 - June 2016), 9-12 per cent more than last year's 1.49 million hectares.

"Farmers are getting advantage from both sides. While the government has provided a safety net to arrest the price fall beyond a level, farmers received very good returns last year which encouraged them to bring additional area under onion this year. Therefore, India is heading for a sharp increase in onion sowing area and its output this year," said Ajit Shah, president, Horticulture Exporters' Association.

In a major relief for farmers, onion prices have not fallen below Rs 6 a kg (estimated cost of production) in the wholesale markets over the past five years, despite bumper production. Farmers, therefore, are convinced that the government would come to their rescue if the market is unfavourable to them. Last year, agencies like Small Farmers' Agribusiness Consortium and National Agricultural Cooperative Marketing Federation of India (Nafed) were told by the government to procure onion from Nasik. "Farmers are diverting sowing area from other cash crops like oilseeds and cotton to onion," said Shah.

Meanwhile, onion prices shot up to Rs 44 a kg in the benchmark Lasalgaon mandi last year, prompting the government to import the essential vegetable. Onion prices saw sudden price spurt in the lean season between August and October which ensured farmers for healthy returns this year as well.

To prevent a free fall of onion prices during the ongoing harvesting season, the government abolished minimum export price (MEP).

As against the prevailing price of $350 a tonne in destination countries like West Asian nations and Sri Lanka, the government fixed MEP at $400 a tonne on December 24, significantly lower than $700 a tonne earlier.