Onion farmers get just 50% of retail price: APMC chief

Farmers growing onions in Asia’s largest onion market Lasalgaon, Nashik, want consumers to pay ₹50 for a kg as the cost of onion cultivation, excluding labour, has gone up three times in the last eight years.

The price of onion seeds alone has more than doubled to ₹3,200 a kg during this kharif season, as compared to ₹1,200 last year, while rabi seeds have shot up by three times at ₹5,000 a kg (₹1,600 a kg).

Similarly, the price of all inputs including fertiliser, weedicide, insecticide, fungicide and plant growth regulator haves seen a steady rise.

Nanasaheb Patil, Chairman, Agriculture Produce Market Committee (APMC), Lasalgaon and Director, Nafed, said if onion prices touch ₹50 a kg at the retail level, farmers would get to realise ₹25 for their produce.

While the cost of production has gone up 93 per cent to ₹1.85 lakh a hectare in 2012-13 from ₹95,959 a hectare in 2008-09, the yield per hectare has moved up marginally to 112 quintal from 100 quintal, he said.

“The Government reacts sharply whenever onion prices go up. This time around, they brought it under the Essential Commodity Act. They fail to understand that farmers are facing high inflation in several other commodities that are used for farming activities, just like other consumers,” he added.

The Essential Commodity Act prescribes that the Government announce a minimum support price (MSP) to protect farmers’ interest, before including any commodity under the Act.

The Government also gets the power to procure any commodity under the Act, at a price lower than the market rate. The Government also has to announce a concession on freight rates for commodities under the Act.

However, for onions, railway freight has shot up by 18-22 per cent, as the Railways reclassified it to LR3 category from LR4.

In its rush to bring down onion prices, the Government has neither announced an MSP, nor clarified whether farmers would be exempted from the storage limit enforced under the Act.

Since onion is not grown between March and September, there would be a huge shortage if it is not allowed to be stored.

Storage of onion for a longer period results in 30 per cent weight loss as the essence tends to evaporates, said Patil.

According to data collated by APMC, farmers have sold 46 per cent of their produce at less than cost of production in 2012-13, while 33 per cent was sold below 50 per cent profit.

Another 21 per cent was sold at over 50 per cent profit.

In 2011-12, farmers sold 66 per cent of their produce below the cost of production, data showed.