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Onion farmers in Maharashtra have been grappling with another price crash of the kitchen staple, with many not even able to recover the production costs. The procurement price at mandis has fallen by 65 per cent in the last two weeks.
Every week, since the beginning of December, the price of onions has been falling drastically at most of the mandis in the state, including Lasalgaon mandi, Asia’s largest onion market.
The prices have plummeted from Rs 3,500 per quintal at the start of December to Rs 1,200 per quintal (Rs 12 per kilogramme) on average now. Some farmers have reported selling their crop at even Rs 800 per quintal, whereas the cost to cultivate a kilogramme of onions is Rs 2,200-2,500 per quintal on average.
The sudden dip happened with the arrival of the new onion crop in the mandis, increasing its supply. Meanwhile National Agricultural Cooperative Marketing Federation of India Ltd has also been selling its stock at subsidised rates, further dragging down prices.
However, farmers are angry with the 20 per cent export duty on onions and have been demanding its removal to boost exports and improve their margins.
“Countries which usually import onions from India are now buying from other nations like Pakistan because of the export duty imposed by our government. If this export duty is removed, there will be competition during onion auction and the prices that farmers get will increase. Right now, let alone profit, many farmers are not even being able to recover their cultivation cost,” said Bharat Dighole, president of Maharashtra State Onion Grower’s Association.
He said that on December 27, the association will try to meet Union Commerce Minister Piyush Goyal, who will be in Nashik for a government programme and present their demands.
Goyal is scheduled to visit Nashik to participate in a programme under the Pradhan Mantri Samastiva Yojana.
“Maharashtra state onion growers' association welcomes Commerce Minister Piyush Goyal, but before his arrival in Nashik we demand that he should completely remove the 20 per cent export duty on onions,” said Dighole.
Onion growers’ frustration with the government is rooted in its many policy flip-flops over the past year that favoured consumers over farmers.
In December 2023, the government banned onion exports to address domestic supply shortages and to ensure that it is available to domestic consumers at reasonable prices. Initially set to end on March 31, 2024, the ban was extended indefinitely before being lifted on May 4.
However, the government then imposed a 40 per cent export duty, which further eroded farmers’ margins. This was reduced to 20 per cent in September.
While the duty was imposed to ensure enough supply for domestic consumers, farmers say that it should be removed now as with the new arrivals from Madhya Pradesh, Gujarat and Maharashtra, there is no shortage of onions in the market.
Deputy Chief Minister Ajit Pawar has also called on the BJP-led central government to remove the export duty.