Why Onion Prices Bring Tears To Farmers

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The prices of onion have fallen over 40 per cent in the last one month

Mumbai:

Onion prices have crashed in Madhya Pradesh's Mandsaur district. A Farmer selling 1 kg of onions to the retailer is getting only 50 paise, but the customer has to pay Rs 20-25 to the retailer for that same 1 kg of onion.

In the past as well, farmers in Mandsaur have extensively protested for a minimum support price or MSP for their produce; six farmers were killed in police firing.

"This time onion price is Rs 300-400 per quintal. And our input costs are Rs 1,100 per quintal, hence we are in loss this year," said Bhagwan Chavan, a farmer at Lasalgaon in Maharashtra.

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With onions being sold for as little as 50 paise a kilo, onion farmers are in tears. From Madhya Pradesh to Maharashtra, the price of this kitchen staple has sharply fallen. This is the lowest price for onions since 2011.

According to the National Horticultural Research and Development Foundation, in November 2017, the average price for every quintal of onion was Rs 2,852. This month, it has fallen to as little Rs 879 per quintal. This, especially since production has fallen this year.

According to the Agriculture Ministry, the production of onion for 2017-18 is 22.07 million quintal against 22.47 million quintal a year ago.

According to the Agriculture Ministry, the production of onion for 2017-18 is 22.07 million quintal against 22.47 million quintal a year ago

"Earlier, when prices had shot up, traders horded the stock in anticipation of higher prices which has created a bumper stock now," said Amit Sanas, a trader in Mumbai.

As the prices of onion have fallen over 40 per cent in the last one month, traders and farmers are rushing in to clear the old stock. In Nashik, which has the country's biggest onion market, a local farmer sells his stock for as little as Rs 2 per kilo.

The middlemen then bring it to the wholesale markets in all major cities and they sell their stock for Rs 8 per kilo. From the wholesaler, local market retailer buys it for Rs 12 per kilo.

And then the consumer finally buys it for Rs 20 per kilo. From Rs 2 to Rs 20, the Nashik-to-Mumbai 167 km journey raises the price by almost 500 per cent.

"We buy in wholesale at Rs 8-10 per kg, but sell at retail for Rs 15-18 per kg as we also have to take care of the transportation cost," said Saroj, retailer, Mumbai.

With new stock arriving in the coming months, many fear the prices may fall even further.

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