Onion traders make a killing

Tear jerker Farmers get much less, consumers pay through their nose

Hit hard by a sharp production fall of up to 50 per cent due to heavy late monsoon rain, average onion growers are finding that their produce is not fetching them any premium rate though the retail price has shot up dramatically over the past few weeks.  

Onion growers staged a protest demonstration in Belgaum on Wednesday after finding their limited produce was not fetching them even half of what it commands in the retail market.

The reason: traders dropped the procurement price, presumably because of increased inflow of onions.

The farmers, who had come to the local Agricultural Produce Marketing Committee (APMC) yard hoping to get good returns for their produce, were angry at the development, prompting them to go on a flash protest. They attempted to close the APMC gates.

APMC officials and the police intervened and persuaded the farmers from closing the
gates. Later, after prolonged discussions between the farmers and traders, the farmers were assured reasonable rates for their supplies.

In Gulbarga too, the growers were unhappy as they found that retail onion price was between Rs 50 to Rs 60 a kg while they were not getting more than Rs 30 at the wholesale market. They complained that middlemen were taking advantage of the situation at the cost of both the producer and the consumer. There were reports on Wednesday of lack of fresh onion supplies over the past three days, leading to more worries on the price front.

It was apparent that middlemen, wholesale dealers and big farmers were all cashing in on the crisis.

If wholesalers from other States were guilty in Hubli,  onion growers were at the mercy of a monopolised system of auction by certain powerful elements in Gulbarga.

Manipulation

While it was not clear if the traders and middlemen were manipulating the situation to their advantage, Union Industries and Commerce Minister Anand Sharma came out in public in New Delhi blaming  the hoarders for the crisis. However, the Union Agriculture, Food and Civil Supplies Ministry is yet to initiate action against hoarders. On the contrary, the ministry, along with traders and big farmers has added fuel to the spiraling prices, suggesting that the situation would not ease until the next onion crop cycle in the country.  Though APMC in Karnataka appeared to be intent on controlling the spiralling price, indications are that it may not yield the desired results in the immediate future.

While there were no fresh arrivals in the market in the desired quantity, “what is happening is even second or third quality onions, which would not have stood a chance otherwise, are selling at Rs 50 to Rs 60 a kg,” said an official at APMC.

From the consumer’s point of view, in a late intervention, the Horticultural Producers’ Co-operative Marketing and Processing Society Ltd (Hopcoms) on Wednesday decided to reduce the price by Rs 25 a kg. But there was no immediate relief to the consumers as they continued to pay a hefty Rs 60 a kg. 

But there were assurances from the Hopcoms that prices would moderate to Rs 55 per kg on Thursday. This was decided during the day after a meeting between the director of the Horticulture Department, Hopcoms MD, the chief secretary and other stakeholders. The rate fixed was the highest in nearly a decade. The last time Bangalore saw such high prices was during 1996-97.

 “We are looking at reducing the price over the next few months, since we anticipate a good yield from Maharashtra towards January and February 2011,”said Hopcoms Managing Director K M Parashivamurthy.

He attributed the high onion rates in the State to the excess rainfall this year. “The yield we expected was 14 lakh tonnes, but the actual yield was only around 8 lakh tonnes,” he said. Some Hopcoms insiders blamed the big farmers hoarding the onions, for the crisis.